: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.3353 of 1986 SUIT NO.3353 of 1986 SUIT NO.3353 of 1986 Jamnadas Mathuradas Indian inhabitant, carrying on business at 34, Shanker Seth Building, 380/82, J.S.Road, Bombay - 400 002. .. Plaintiff. Versus 1. M/s.Baf Hira Builders Private Limited, a Company duly registered under the Companies Act having its registered office at Kamer Building, 1st floor, 38, Cawasji Patel Street, Fort, Bombay - 400 023 and presently carrying on business at C/o.Hiranandas Construction, 514, Dalamal Towers, Nariman Point, Bombay - 400 021. : 2 : 2. N.L.Hiranandani, Indian inhabitant, carrying on business at 514, Dalama-1 Towers, Nariman Point, Bombay - 400 021. 3. S.M.Bafna, Indian inhabitant, carrying on business at 710, Botawala Building, 2nd Floor, Room No.3, Horniman Circle, Fort, Bombay - 400 023. 4. Laxmi Builders, a firm carrying on business at 116, Keshavdas Nayak Road, Mavji Devsi Building, 3rd Floor, Room No.31, Chinchbunder, Bombay - 400 009. .. Defendants. Mr.A.M.Talreja for the plaintiff. Mr.Vivek Kantawala i/b.M/s.Vivek Kantawala & Co. for the defendants. Mr.Pankaj Kawli i/b.Kadam & Co. for defendant No.4. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. : 3 : DATE : 24th October, 2008. DATE : 24th October, 2008. DATE : 24th October, 2008. JUDGEMENT :- JUDGEMENT :- JUDGEMENT :- 1. The plaintiff has filed this suit to have specific performance of Agreement in regard to the suit flat bearing Flat No.20, Building No.5, "A" Wing, 4th Floor, Baf-Hira Nagar, Marve Road, Malad (West), Bombay (hereinafter referred to as the "suit flat") on the basis of receipt dated 3.7.1979 executed by defendant No.1. Plaintiff has also prayed that defendant Nos.1 to 3 should be asked to execute the Agreement. He has also sought an order of injunction restraining the defendants from creating third party rights and/or parting with the possession in respect of the suit flat. 2. The plaintiff has also sought refund of Rs.5,500/- being the amount paid towards the earnest money and Rs.360/- towards brokerage charges. The plaintiff has also prayed for damages to the tune of Rs.1,67,500/- and interest in the event of court declining to grant the specific performance of the Agreement in regard to the suit flat. 3. Few facts necessary for the disposal of this suit are as under :- : 4 : 4. According to the plaintiff, M/s.Laxmi Housing Agency published an advertisement in the newspaper on 1.7.1979 for sale of various flats at Baf Hira Nagar, Malad (W), Bombay contending that they are the sole agents (Said M/s.Laxmi Housing Agency shall hereinafter be referred to as the "said Agency"). Defendant No.1 is a private limited company and defendant Nos.2 and 3 are the Directors (for the sake of convenience, the word "defendants" shall be used for all the defendants taken altogether as the suit is filed for specific performance against all the defendants). 5. It is the case of the plaintiff that upon seeing the advertisement, the plaintiff approached the said Agency and the said Agency supplied to the plaintiff, a brochure at Exhibit-B Exhibit-B Exhibit-B and that the plaintiff had negotiations with one Mr.Motiram Chawala of the said Agency and that said Mr.Motiram Chawala, in turn had the talk with one Mr.Niranjan Hiranandani and agreed to sell to the plaintiff suit flat for a sum of Rs.36,000/- and that the sum of Rs.5,500/- was paid by the plaintiff by cheque drawn in the name of defendant No.1 and that the said cheque was handed over to the said Agency, who, issued a temporary receipt dated 3.7.1979 at Exhibit-C. Exhibit-C. Exhibit-C. That the said agency issued Pucca Receipt for the : 5 : brokerage charges at Exhibit-D Exhibit-D Exhibit-D to the extent of Rs.360/-. According to the plaintiff, defendant No.1 issued a Pucca Receipt for having received Rs.5,500/- as earnest money in regard to the suit flat at Exhibit-E. Exhibit-E. Exhibit-E. According to the plaintiff, it is in these circumstances, defendant No.1 through the said Agency entered into an Agreement in respect of suit flat on terms and conditions set out in the said brochure. The plaintiff claims that as the regular Agreement for sale was not forthcoming from defendant No.1, the plaintiff, by letter dated 3.11.1979 at Exhibit-F Exhibit-F Exhibit-F addressed to defendant, demanded the said Agreement. He also reminded defendant No.1 by another letter dated 17.1.1981 at Exhibit-G Exhibit-G Exhibit-G and complained about no work in regard to the suit flat and also demanded the Agreement. It is seen that a letter dated 9.2.1981 came to be addressed by the plaintiff to defendant No.1 at Exhibit-H-1 Exhibit-H-1 Exhibit-H-1 and that letter pertains to certain events which took place in the meeting which was arranged by defendant No.1 in connection with the flats in the Baf Hira Nagar. Another letter dated 9.5.1981 at Exhibit-J Exhibit-J Exhibit-J collectively is said to be issued by defendant No.1 to all the buyers of the flats thereby clarifying certain facts from the side of the defendant No.1. According to the plaintiff, his brother received a letter dated 14.8.1981 at Exhibit-K Exhibit-K Exhibit-K and that in the said letter, a call was given to the brother of the plaintiff, namely, Mr.Lalchand : 6 : Mathuradas informing him that the value of the flat is fixed at Rs.50,000/- and that arrangements should be made to pay the amounts accordingly. The plaintiff claims that said letter was not sent to him though he had entered into an Agreement with defendant No.1 and, therefore, plaintiff by his telegram dated 23.8.1981 informed the defendant No.1 that he is not agreeable to pay any amount more than Rs.36,000/- and that the defendant No.1 is required to fulfil the terms of the original Agreement and that he should perform the said Agreement. Copy of this telegram is at Exhibit-M. Exhibit-M. Exhibit-M. It seems that after realising that defendant No.1 is not proceeding further towards the performance of the Agreement on his part, plaintiff addressed a notice through his Advocate to the three defendants being Notice dated 18.10.1982 at Exhibit-N Exhibit-N Exhibit-N and called upon Defendant Nos.1 to 3 to perform their part of the Agreement and also warned them that if no steps are taken, criminal action would be taken against them. Plaintiff claims that defendant No.1 issued one letter dated 19.2.1981 addressed to the members of the Building No.5, "A" Wing, 4th Floor, Baf-Hira Nagar, Marve Road, Malad (West), Bombay and assured them that the construction work would be completed within 18 to 20 months. This letter is purported to be counter signed by Mr.Motiram Chawala of the said Agency and it is at Exhibit-O. Exhibit-O. Exhibit-O. The plaintiff, thereafter, visited the suit : 7 : site and learnt that somebody else other than defendant Nos.1 to 3 are proceeding with the construction and on making enquiries, the plaintiff learnt that the present defendant No.4 was going ahead with the construction. He, thereafter, looked into the matter and issued Notice dated 8.8.1986 i.e. Exhibit-P (Colly) Exhibit-P (Colly) Exhibit-P (Colly) to defendant Nos.1 to 4 and called upon them to perform their part of the contract. Defendant No.4 replied to the said letter. The said letter is dated 4.9.1986 at Exhibit-Q. Exhibit-Q. Exhibit-Q. By the said letter, defendant No.4 denied the liability to sell the suit flat, as according to him, there was no question of defendant No.4 selling the suit flat to the plaintiff as there was no Agreement between the defendant No.1 and defendant No.4 in regard to the Building No.5. Thereafter, certain correspondence ensued between the parties which is not very much relevant. The broad theme of the said correspondence is in regard to performance of the Agreement by defendant No.1 and defendant No.4. After all these developments, it appears that the plaintiff was convinced that the defendants are not performing their part of the contract and, therefore, the plaintiff instituted the present suit on 19.11.1986. 6. The writ of summons was served upon the defendants and defendant Nos.1 to 3 filed a written statement objecting to the claim of the plaintiff. Defendant Nos.1 : 8 : to 3 contended that the suit is barred by the period of limitation and that non-joinder of said Agency should be considered for the purposes of dismissal of the suit. According to defendant Nos.1 to 3, said Agency was one of the agents and that defendant Nos.1 to 3 denied having agreed to sell the suit flat to the plaintiff. Defendant Nos.1 to 3, no doubt admitted receipt of Rs.5,500/- from the plaintiff, however, according to them, that was for the purposes of booking and/or reserving a flat and that the price of the flat was not fixed. According to defendant Nos.1 to 3 as the construction had not been undertaken, there was no question of fixing the price in regard to the suit flat. Defendant Nos.1 to 3 admit that a meeting with the various purchasers in the month of February, 1981 was held but according to them, the plaintiff was not a party to the said meeting. According to defendant Nos.1 to 3 as the various purchasers did not pay the purchase price to defendant Nos.1 to 3, defendant Nos.1 to 3 sold a portion of the land on which Building No.5 was to be constructed to defendant No.4 and, therefore, defendant Nos.1 to 3 are not liable to sell the suit flat to the plaintiff. It is required to be mentioned that apart from the aforesaid specific stand, defendant Nos.1 to 3 have denied various allegations levelled against defendant Nos.1 to 3 and have disputed the claim of the plaintiff. : 9 : 7. Defendant No.4 has filed written statement and has raised various technical defences such as; suit being barred by the period of limitation, non-joinder of necessary parties. Defendant No.4 have also contended that identity of the property said to be sold to the plaintiff is not established and as such, specific performance cannot be granted. It has been contended by defendant No.4 that by Agreement dated 24.8.1984, defendant Nos.1 to 3 sold certain portion of the land which was with them to defendant No.4. They contended that perusal of the plan at Exhibit-D-2 Exhibit-D-2 Exhibit-D-2 would go to show that on the portion of the land which was agreed to be sold, nothing like building No.5 was to be constructed and, therefore, there is no question of defendant No.4 undertaking construction of Building No.5 and as such defendant No.4 are not liable to transact with the plaintiff in regard to any flat much less suit flat. The defendant No.4 has also taken a stand that defendant No.4 did not have notice of the earlier transactions and that defendant No.4 is a bonafide purchaser of the portion of the land for value paid and, therefore, defendant No.4 cannot be saddled with any responsibility whatsoever. Apart from raising the aforesaid objections, defendant No.4 has denied each and every allegation which is levelled against defendant No.4. : 10 : 8. Based on the pleadings aforesaid, my learned Predecessor had framed issues on 15.12.2007. Thereafter, the next learned Judge who took up the matter had framed 2 additional issues regarding the question of limitation and non-joinder of necessary parties. In view of the aforesaid, parties went to trial on the basis of following issues :- I S S U E S I S S U E S I S S U E S (a) Does plaintiff proves that the defendant No.1 has advertised to sell the flats at BAF-HIRA Nagar, Marve Road, Malad (West), Mumbai - 400 064 on 1.7.1979? .. In the negative. .. In the negative. .. In the negative. (b) Does plaintiff proves that he had agreed to purchase 1 (one) flat bearing No.75/A/20, two room kitchen area about 450 sq.ft. on 4th floor, building No.5, "A" Wing at Bafna Nagar, Marve Road, Malad (West), Mumbai - 400 064 or any other such number as per advertisement given by defendant No.1 and is ready and willing to pay the balance amount of price then fixed for the flat by the defendant Nos.1 to 3? .. In the negative. .. In the negative. .. In the negative. (c) Does plaintiff proves that in pursuance to the contract to sell the flat as per advertisement, the defendant No.1 accepted part of the sale price of Rs.5,500/- from the plaintiff on 3.7.1979? .. In the negative. .. In the negative. .. In the negative. (d) Does the defendant No.1 proves that he had increased the selling price and the plaintiff had agreed to pay the increased claim of sale price? .. Does not survive. .. Does not survive. .. Does not survive. (e) Does plaintiff proves that the change in selling price of the flat was unilateral by the defendant No.1 and was never agreed to by the plaintiff as a part of transaction? .. Does not .. Does not .. Does not : 11 : survive. survive. survive. (f) Does defendant No.4 proves that he was a bonafide purchaser of the building which was already sold by defendant No.1 which was already sold to plaintiff and others by defendant No.1 and its Directors? .. In the affirmative. .. In the affirmative. .. In the affirmative. (g) Whether plaintiff is entitled to decree for possession of the flat and for specific performance of the contract / agreement of sale to him by the defendants 1 to 3? .. In the .. In the .. In the negative. negative. negative. (h) To what reliefs the plaintiff is entitled to in lieu of decree for specific performance as loss and damages for the breach of agreement committed by defendant Nos.1 to 3 for sale in favour of plaintiff? .. Not entitled to receive .. Not entitled to receive .. Not entitled to receive damages. damages. damages. (i) Can defendant No.4 have better title for retaining possession of the flat subsequently purchased by them, that is subsequent to the prior sale of flat to the plaintiff by defendant Nos.1 to 3? .. Does not survive. .. Does not survive. .. Does not survive. (j) What reliefs if any plaintiff is entitled to in addition to seek specific performance of agreement to sale by damages? .. Plaintiff is .. Plaintiff is .. Plaintiff is not entitled to any relief. not entitled to any relief. not entitled to any relief. (k) Whether the defendant No.4 proves that this court has no jurisdiction to entertain the suit as claimed by him being the suit for not falling within pecuniary jurisdiction of this court? .. Does not survive. .. Does not survive. .. Does not survive. (l) What order and cost? .. As per final .. As per final .. As per final order. order. order. (m) Does the plaintiff proves that suit is within limitation? .. In the negative. .. In the negative. .. In the negative. (n) Whether the suit is bad for non-joinder of necessary parties? .. In the negative. .. In the negative. .. In the negative. 9. My answer to each of the issue is mentioned : 12 : against the respective issue. 10. At trial, the plaintiff stepped into the witness box as P.W.No.1. No other witness was examined on behalf of the plaintiff. On behalf of defendant No.3, Mr.Suresh Sumarmal Bafna, Director of defendant No.1 gave evidence. No other witness was examined on behalf of defendant Nos.1 to 3. No witness was examined on behalf of defendant No.4. In the course of trial, parties have produced various documents and they have been marked as exhibits. Some of the documents could not be proved by the plaintiff and, therefore, they have been marked for identification. 11. I have been taken through the entire record by the learned Advocate Mr.Talreja appearing on behalf of the plaintiff and Mr.Vivek Kantawala for defendant Nos.1 to 3 and Mr.Kawli on behalf of defendant No.4. 12. Considering the various issues which are framed on the basis of pleadings and the evidence which is on record, I am of the view that it would be proper to consider all the issues together and record findings of fact and then answer the issues based on the said findings. At the outset, it is necessary to record a finding on the point raised by the plaintiff as regards the question "whether said Agency was the sole selling "whether said Agency was the sole selling "whether said Agency was the sole selling : 13 : agent of defendant No.1". agent of defendant No.1". agent of defendant No.1". This is required to be done on the basis of argument advanced by the learned Advocate Mr.Talreja that said Agency was the sole selling agent. In support of this argument, learned Advocate Mr.Talreja had drawn my attention to the cross-examination of D.W.No.1 Mr.Suresh Bafna and in particular, question No.76. The said question is as under :- Question : Question : Question : These architects, solicitors and the sole selling agents were acting on your behalf for the BAFHIRA project, is it true? Answer : Answer : Answer : As far as Architect J.R.Soni is concerned, he was our architect for the project and M/s.Eastley Lam & Co. was our Solicitor and about Mahalaxmi Housing Agency and Laxmi Housing Agency were our Sole Selling Agents. 13. Learned Advocate Mr.Talreja had submitted that if this is the answer given to question No.76, the stand of the defendant No.1 that no Agreement was entered into between the plaintiff and defendant No.1 will have to be rejected and the matter will have to be considered from that angle. In reply to this, learned Advocate Mr.Kantawala had submitted that he had informed to the learned Commissioner about the typographical mistake and : 14 : that he wanted the Commissioner to add the word "not" after the word "were" appearing in the aforesaid answer and, according to him, such a correction has not been carried out. Learned Advocate Mr.Kantawala had drawn my attention to the question No.77 whereby he wanted to submit that the said Agency was a free lance agency and not their sole selling agent. As such, learned Advocate Mr.Kantawala wanted to suggest that the said Agency was not their sole selling agent. Learned Advocate Mr.Kantawala had also drawn my attention to a specific question asked to the witness Mr.Suresh Bafna, D.W.No.1 on this issue at question No.45 and he pointed out that a categorical answer in the negative given clearly goes to show that the contention raised by the plaintiff that the said Agency was the sole selling agent of the plaintiff is required to be rejected. The said question No.45 is as follows :- Question : Question : Question : Were Mahalaxmi Housing Agency and Laxmi Housing Agency, the sole selling agents of the Defendant No.1 as stated in the brochure? Answer : Answer : Answer : No. 14. I have perused the brochure which is at Exhibit-B. Exhibit-B. Exhibit-B. It is true, on the said brochure, an endorsement appears : 15 : that the said Agency are the sole selling agent of defendant No.1. With the aforesaid material on record, namely, the brochure at Exhibit-B, Exhibit-B, Exhibit-B, answer to question No.45, answer to question No.76 and 77 that of Suresh Bafna, D.W.No.1, I am inclined to observe that the case of the plaintiff that the said Agency was the sole selling agent of defendant No.1 is required to be rejected. The categorical answer given by Mr.Suresh Bafna, D.W.No.1 in question No.45 leaves no doubt in respect of the same. Merely because in the brochure, there is an endorsement that the said Agency is the sole selling agent, it cannot be accepted that said Agency was the sole selling agent of defendant No.1. It is pertinent to note that the plaintiff has not examined anybody from the said Agency in support of this proposition. No light is thrown by the plaintiff on the question as to how in the brochure, it is mentioned that the said Agency is the sole selling agent of defendant No.1. In my view, as the plaintiff has not examined anybody from said Agency, adverse inference is required to be drawn against the plaintiff and merely because the said Agency writes on their brochure that they are the sole selling agent does not make them sole selling agent of defendant No.1. With this discussion, I hold that the stand taken by the plaintiff that said Agency was the sole selling agent of defendant No.1 is required to be rejected. : 16 : 15. The plaintiff has approached this court with a positive case that on seeing the advertisement at Exhibit-A, Exhibit-A, Exhibit-A, he contacted the said agency and paid a sum of Rs.5,500/- to the said Agency. The Pucca Receipt which is issued by the said Agency is at Exhibit-D. Exhibit-D. Exhibit-D. It is required to be mentioned that defendant No.1 has admitted the Pucca Receipt which is issued by defendant No.1 at Exhibit-E Exhibit-E Exhibit-E to the extent of Rs.5,500/-. As a result of this, one need not go into the question of the said Agency receiving a sum of Rs.5,500/-. Defendant No.1 have admitted they have received a sum of Rs.5,500/- from the plaintiff and there is no dispute about it. Insofar as the circumstances under which the said sum of Rs.5,500/- came to be paid, the plaintiff alleges that the said amount was paid as and by way of earnest money; whereas defendant No.1 has come out with a categorical case that the said amount was paid towards the booking of the flat or the reservation of the flat and that a transaction in regard to the suit flat did not materialise as the construction had not started and there was no occasion for fixing the price of the suit flat. 16. The plaintiff rests his case on the advertisement at Exhibit-A, Exhibit-A, Exhibit-A, brochure at Exhibit-B, Exhibit-B, Exhibit-B, Temporary Receipt issued by the said Agency at Exhibit-C Exhibit-C Exhibit-C and the Pucca : 17 : Receipt at Exhibit-D Exhibit-D Exhibit-D and the Pucca Receipt executed by defendant No.1 at Exhibit-E. Exhibit-E. Exhibit-E. The plaintiff has placed reliance on the wordings appeared in Pucca Receipt issued by the said Agency where it is stated that the total consideration is Rs.36,000/- and the flat number is 20 containing Building No.5, "A" Wing, 4th floor, Baf-Hira Nagar, Malad (West), Bombay. According to the plaintiff, Pucca Receipt at Exhibit-E Exhibit-E Exhibit-E issued by defendant No.1 goes to show that defendant No.1 agreed to sell the plaintiff the suit flat and what remained to be done was execution of the Agreement between the parties and handing over the possession of the suit flat. 17. Insofar as the circumstances under which the Agreement came to be entered into, the plaintiff has stated in his examination-in-chief that on seeing the advertisement he went to the said Agency, showed his willingness to purchase the suit flat and then Mr.Motiram Chawala talked to the Director of defendant No.1, accepted Rs.5,500/- and, thereafter, the Pucca Receipt was issued by the said Agency as also by defendant No.1. In the evidence, the plaintiff has specifically stated that he had to pay the balance of consideration by instalments on every slab and the last instalment at the time of giving possession and the copy of the Agreement was to be sent to the plaintiff within 30 days. The plaintiff claims that : 18 : despite various demands, no Agreement was provided by defendant No.1 and that is how, the Agreement could not be executed. According to the plaintiff, he was ready and willing to perform his part of the contract and an averment to that effect is found in paragraph 9 of the plaint. It is pertinent to note that the plaintiff has not specifically stated in his examination-in-chief