1 PGK IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICDTION Notice of Motion No.3049 of 2008 IN Suit No.2509 of 2008 Suresh G. Kumar .. .. Plaintiff v/s. M/s.Metro Development Corporation & ors. .. Defendants Mr.S.U.Kamdar with Mr.R.D. Suryawanshi for Plaintiff. Mr.V.R.Walawalkar with Mr.V.S.Kapse for Def.No.1. Mr.P.K. Samdhani with Mr.Anirudha Joshi i/by M.Srivastava for Defendant No.2. ----- CORAM : SMT.ROSHAN DALVI, J. DATED : 22nd March, 2010 P.C. : 1.The Plaintiff and Defendant No.1 have entered into 4 Agreements / Memoranda of Understanding (MOU) for development of the suit property. Defendant No.1 initially purchased the suit property from one Gertrude Constance @ Mohinin. Part of the property was agreed to be taken over by the Plaintiff for development under the first MOU between the parties dated 11.4.2006, Exhibit-B to the Plaint. Under that agreement, a sum of Rs.60 Lakhs was taken to be payable by the Plaintiff to Defendant No.1. Defendant No.1 has admitted receipt of that consideration. In fact, there is no dispute 2 raised by Defendant No.1 about such receipt. 2.The parties thereafter entered into a second MOU on 29.8.2006, Exhibit-C to the Plaint, for a further property to be developed by the Plaintiff. The Plaintiff was to pay Defendant No.1 Rs.1.64 Crores under the second MOU. Both the parties mutually agreed to develop and to put up construction on the suit property. The second MOU confirmed receipt of Rs.60 Lakhs already paid by the Plaintiff in April 2006 (when the first MOU was executed between the parties). The said MOU shows two receipts aggregating to Rs.20 Lakhs by Defendant No.1 from the Plaintiff. 3.The parties entered into the third MOU on 14.6.2007, Exhibit-G to the Plaint, for cancellation of the second MOU between the parties. Under that MOU, the Plaintiff paid Rs.1.25 Crores to Defendant No.1 and Defendant No. 1 agreed to pay Rs.2.6 Crores to the Plaintiff for not fulfilling the Plaintiff s obligation under the second MOU dated 29.8.2006. Hence under the third MOU, the second MOU stood cancelled. A sum of Rs.2.6 Crores was paid by the Post Dated Cheques (PDCs) to be executed within 3 months i.e. by 31.8.2007. The agreement was subject to the PDCs being honoured. It was agreed that until the cheques were honoured the Plaintiff would have absolute rights in the suit property as per the 3 second MOU dated 29.8.2006. 4.Hence only upon Defendant No.1 paying Rs.2.6 Crores to the Plaintiff, the Plaintiff s rights would be terminated. Though the Plaintiff s rights were to be terminated and not required to be fulfilled, that was only under the Agreement dated 29.8.2006, which is the second MOU and not under the Agreement dated 11.4.2006, which is the first MOU between the parties. 5.The Plaintiff and Defendant No.1 entered into the fourth MOU on 1.3.2008, Exhibit-1 to the Affidavit-in- reply of Defendant No.1-Firm. That MOU titled as the Deed of cancellation of the Agreement recited that the Plaintiff had paid Rs.70 Lakhs (instead of Rs.60 Lakhs shown therein) against the first MOU dated 11.4.2006. The parties mutually agreed to cancel that Deed and terminate the agreement on full and final settlement of Rs.1.82 Crores. They agreed to cancel the first MOU dated 11.4.2006. 6.The agreements are not happily worded. They do not reflect any unambiguous term, the precise amounts initially payable, the amounts paid and receipted, the amounts agreed to be paid for cancellation of the initial agreements and the final agreement between the parties. Though the fourth MOU was entered into on 4 1.3.2008 and the Plaintiff filed his Suit on 26.6.2008, the Plaintiff did not refer to or rely upon the said MOU in the Plaint. After filing of the Suit, Defendant No.1 has conveyed the suit property under the registered Conveyance dated 28.12.2007 to Defendant No. 2. Defendant No.1 has relied upon that MOU, execution of which is not denied by the Plaintiff. 7.A reading of the four agreements shows that under the first two agreements the Plaintiff was to pay Defendant No.1 the consideration amounts mentioned therein and under the last two MOUs, Defendant No.1, upon admitting receipt of the total amount of Rs.1.25 Crores, which included Rs.60 Lakhs under the first agreement, agreed to pay off the Plaintiff to take over rights of the Plaintiff by the Plaintiff not fulfilling his obligations under the earlier MOUs. Under the last MOU, the parties agreed to fully and finally settle their claim by Defendant No.1 agreeing to pay the Plaintiff a sum of Rs.1.82 Crores in full and final settlement. 8.It is argued on behalf of the Plaintiff that the third MOU cancelled the second MOU and the fourth MOU cancelled the first MOU. It is contended on behalf of the Plaintiff that Defendant No.1 breached its obligation for payment under the third MOU so that the second MOU remains subsisting between the parties. It 5 is further contended that the Plaintiff is entitled to further payment mentioned in the fourth MOU of Rs.1.82 Crores for cancellation of the Plaintiff s rights and obligations under the first MOU. 9.A sum of Rs.1.82 Crores is shown to be paid as per the receipt annexed to the fourth MOU dated 1.3.2008. Upon receipt of Rs.1.82 Crores, under the receipt signed by the Plaintiff, the Plaintiff relinquished all rights of whatsoever nature in the Agreement dated 11.4.2006. 10.It is contended on behalf of the Defendants that the Plaintiff has been fully paid off and has no rights and obligations in the suit property whatsoever. 11.A sum of Rs.2.60 Crores payable by Defendant No.1 to the Plaintiff was admittedly not paid as some of the PDCs have been dishonoured and separate criminal prosecutions have been lodged under Section 138 of the Negotiable Instruments Act by the Plaintiff. However, 9 months after the execution of the third MOU, the parties entered into the fourth MOU, hitherto suppressed by the Plaintiff in the Plaint, for full and final settlement . That amount having been admittedly paid and shown to be receipted, constitutes the novatio between the parties, by which obligation for payment under the earlier MOU is fully and finally 6 settled. 12.It may be mentioned that Defendant No.1 was itself to develop the property of Gertrude Constance. That is how Defendant No.1 claims ownership rights. The Plaintiff took over those rights initially. 13.Thereafter Defendant No.1 took over the Plaintiff s rights. The parties are businessmen. Since they entered into two separate agreements for two parts of the suit property initially, they entered into the third agreement for taking over the rights by Defendant No.1 in respect of the second MOU. However, when the obligation to make payment thereunder was not discharged the parties entered into a further MOU. Though that MOU shows and refers to only the first MOU dated 11.4.2006, it specifies settlement finally arrived at between the parties. For the property worth Rs.60 Lakhs, which amount was shown to be paid initially and for which Rs.70 Lakhs are shown to be paid in the MOU, Defendant No.1 cannot be expected to pay off the Plaintiff Rs.1.82 Crores by way of full and final settlement. Only that portion of the property was agreed to be developed under the first MOU dated 1.4.2006. The settlement was arrived at because there were defaults earlier. The defaults were in payment by Defendant No.1 to the Plaintiff under the third MOU, 7 which rescinded the second MOU. When the parties fully and finally settled the dispute between them, the Plaintiff would be expected not to develop any part of the suit property. The full and final settlement would show lesser amount payable by Defendant No.1 than was earlier agreed since Defendant No.1 did make defaults in the payment. If Defendant No.1 had to continue to be liable to pay Rs.2.6 Crores under the third MOU, the parties would not fully and finally settle by payment of Rs.1.82 Crores. 14.There is, therefore, a lot of force in the contention of Mr.Samdhani on behalf of Defendant No.1 that for only a part of the suit property for which initially the sum of Rs.60 Lakhs was paid, Defendant No.1 would agree to or would be required to pay further sum of Rs. 1.82 Crores to the Plaintiff in addition to the payment of Rs.2.60 Crores earlier agreed. 15.The various agreements admittedly executed by and between the parties show that after payment under the last MOU dated 1.3.2008 was made to the Plaintiff, the plaintiff has no right in the suit property as the parties had fully and finally settled their dispute. Hence the Plaintiff suppressed the last MOU in the Plaint and claimed reliefs based upon the third MOU. 8 16.The Plaintiff is, therefore, not entitled to any relief. Consequently, the Notice of Motion is dismissed. 17.No order as to costs. (SMT.ROSHAN DALVI, J.)