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. 474 OF 1990 SUIT NO. 474 OF 1990 SUIT NO. 474 OF 1990 Canara Bank, a Banking Company constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its Head Office at J.C.Road, Bangalore- 560 002 and one of its Branch office at Atlanta, Nariman Point, Bombay- 400 021. ... Plaintiff. V/s. Messrs. S.L.Hotels Private Limited, a Company incorporated and registered under the Companies Act I of 1956 and having its Registered Officer at 3/10, Alankar Cinema Building, Sardar Patel Road, Bombay- 400 004 and also carrying on business at Sharda Chambers, New Marine Lines, ... Defendant. Bombay- 400 020. U.J.Makhija with K.H.Mody i/b. Haridas & Co. for the plaintiff. None for the defendant. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. DATED: 28th February 2007. DATED: 28th February 2007. DATED: 28th February 2007. JUDGMENT : JUDGMENT : JUDGMENT : -------- -------- -------- . The plaintiff- Canara Bank ("Bank" for short) has filed this suit against defendants to seek declaration from this Court that agreement dated 21st March, 1984 followed by supplemental agreement dated 5th April, 1984 as also power of attorney are valid, subsisting and binding upon the defendants with order in the nature of decree directing the defendants to complete the transactions and transfer the title in respect of the premises bearing Nos.5, 6, 7 and 8 situate on 11th floor of the building known as "Atlanta" at Nariman Point, Bombay- 21 as also the parking lot Nos.32, 33 and 34 situate on the compound of the said building (hereinafter referred to as the "suit premises") with further order appointing any of the officers of this Court with necessary powers and authority to do all such acts, things and deeds as may be necessary and required to effectively complete the transfer of title in respect of the suit premises. The plaintiff has also claimed money decree in the sum of Rs.1,88,068.40 together with interest thereon in the sum of Rs.1,43,219.30 with future interest @ 18% per annum from the date of filing of suit till realisation. binding any of the Factual Matrix : Factual Matrix : Factual Matrix : -------------- -------------- -------------- 2. The plaintiff is a nationalised bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office in Bangalore and amongst others one Branch office at Atlanta, Nariman Point, Bombay- 400 021. - 3 - The defendant is a private limited company registered under the Companies Act I of 1956. By an agreement dated 21st March, 1984 entered into by and between the defendant as vendor and plaintiff as purchaser, the plaintiff agreed to purchase and the defendant agreed to sell the suit premises upon the terms and conditions more specifically set out in the said agreement. 3. The total consideration agreed to be payable was Rs.49,10,400/-. The plaintiff claims to have paid the entire amount of consideration as agreed. That the transaction was to be completed on or before 21st March, 1989. The defendant has failed and neglected to carry out their contractual and legal obligations under the said agreement. The relevant terms and conditions of the said agreement are reproduced in the plaint. 4. It is further case of the plaintiff that the defendant has acknowledged receipt of Rs.44,10,400/- paid by the plaintiff. The plaintiff has stated that they were put in possession of the suit premises by way of part performance of the said agreement and that they are in lawful and exclusive possession, use and - 4 - enjoyment thereof. As per the terms of the agreement, the purchase price of Rs.49,10,400/- was payable in three installments. Rs.20,00,000/- were payable as earnest money or deposit to vendor/ defendant prior to execution of the agreement. The said amount was paid by the plaintiff prior to the date of execution of the agreement, which the defendant has acknowledged in the agreement itself. The second installment was payable on the date of execution of the agreement, which the defendant has acknowledged in the agreement dated 21st March, 1984 and balance amount of consideration of Rs.5,00,000/- was to be paid by the purchaser to the vendor at the time of completion of sale. 5. The sale was to be completed after the expiration of five years from the date of agreement i.e. on 21st March, 1989 with exercise of firm option to the purchaser to purchase suit premises. In the event of plaintiff/ purchaser desiring not to exercise the said option to purchase the suit premises, the plaintiff was to give to the defendant/ vendor a notice in writing in that behalf at any time during three months immediately prior to the expiration of the said period of five years i.e. between 21st March, 1984 and 21st December, 1988. It was also - 5 - agreed that if the purchaser does not give such notice, the purchaser shall be deemed to have exercised the option for purchase of the suit premises. Thereupon the defendant/ vendor was bound to complete the sale in favour of the plaintiff/ purchaser. In such event, the plaintiff was to forthwith pay the defendant the balance consideration amount of Rs.5,00,000/- after adjusting their dues against the moneys payable by the defendant/ vendor to the plaintiff/ purchaser under any account whatsoever. 6. The defendant/ vendor has already put the plaintiff in possession of the suit premises. The plaintiff had agreed to bear and pay the municipal taxes, water and electricity charges and other outgoings including the maintenance charges payable to the Atlanta Premises Co-operative Housing Society Ltd. with all other incidental charges. The defendant/ vendor has agreed to discharge its obligations as set out in the agreement, the contents of which are reproduced in para-4 of the plaint. 7. In order to comply with clause 9 of the said agreement, the defendant, on 22nd March, 1984, also executed an irrevocable power of attorney in favour of - 6 - the plaintiff authorising the plaintiff to execute all necessary documents for effective transfer of the suit premises and to complete the sale and transfer in all respect in favour of the plaintiff as also to affect the requisite payment to the Society and obtain proper receipts in respect thereof. 8. On 5th April, 1984, a supplementary agreement came to be executed by and between the plaintiff and the defendant, in order to safeguard the possession, use and enjoyment of the plaintiff without in any way affecting their rights under the principal agreement dated 21st March, 1984. It came to be provided therein that during the completion of the sale as was contemplated under the said agreement the plaintiff will pay rent of Rs.50/- per year and shall continue to occupy premises during the period of agreement as tenant of the defendant. Maintaining the terms and conditions of the principal agreement as it is, the plaintiff amended their plaint correcting the mistake occurred in clause 8(x) of the agreement dated 21st March, 1984, whereby the third parking lot wrongly mentioned therein as "No.43" was amended and substituted with that of "No.34". The said amendment was allowed and incorporated in the plaint. - 7 - 9. It is further case of the plaintiff that pursuant to the request made by the defendant plaintiff had extended overdraft facility to the defendant to the tune of Rs.10,00,000/-. In consideration thereof, on 26th April, 1984, the defendant executed and addressed letter to the plaintiff irrevocably authorising the plaintiff to appropriate any or all the amounts payable to the defendant by the plaintiff in terms of the agreement for sale entered into by and between them in respect of the suit premises and to adjust towards the outstanding liability of the defendant in respect of the said overdraft facility. The plaintiff has set out number of acts done by them in order to demonstrate their readiness and willingness to complete transaction and to get the suit premises transferred in their name. 10. The plaintiff, by their advocate’s letter dated 1st March, 1989 gave intimation to the defendant setting out option to purchase suit premises as required by the said agreement dated 21st March, 1984. The plaintiff had also forwarded requisite Form 37-I to the defendant for being executed and submitted to - 8 - the appropriate Income Tax Authority under the Income Tax Act, 1961 for doing the needful in the matter. 11. The plaintiff states that they have given credit of an amount of Rs.5,00,000/-, payable to the defendant, being the balance amount of the consideration in the loan account of the defendant. That is how, the plaintiff states that entire agreed consideration of Rs.49,10,400/- was paid to the defendant and that they have discharged their obligation in true letter and spirit. 12. On 23rd March, 1989, The Deputy Commissioner of Income Tax, being the Appropriate Authority under the Income Tax Act has also issued no-objection certificate for transfer of suit premises by the defendant to the plaintiff for Rs.49,10,400/-. Copy of the said certificate is produced on record. 13. The plaintiff by their advocate’s letter dated 27th September, 1989 called upon the defendant to complete the subject transaction and to discharge their obligation. The defendant was also informed of the appropriation of Rs.5,00,000/- towards the - 9 - satisfaction of their loan liability due and payable to the plaintiff. The plaintiff has also informed that they were ready and willing and still ready to do all such acts which are required to be done for the performance and completion of the subject transaction. The plaintiff contends that in spite of receipt of the said notice, the defendant did not come forward to complete the transactions and failed to perform their act and discharge their part of obligations. 14. The plaintiff has also stated that the Society has also given no-objection certificate as the plaintiff has been treated as de facto member in place of the defendant. The plaintiff has also stated that they have paid Rs.1,88,068.40 on the basis of principles of quasi contract. The said liability of the defendant was discharged by the plaintiff. As such, on the factual matrix sketched hereinabove, the plaintiff has claimed specific performance of contract with other reliefs as prayed for in the plaint. 15. On being served with the writ of summons, the defendant, initially, appeared in the suit but did not file written statement. Consequently, suit proceeded ex parte against the defendant. The plaintiff was - 10 - directed to file documents and affidavit of evidence. 16. When the suit was called out for evidence, nobody was present on behalf of defendant. This Court having noticed absence of service of amended plaint on the defendant, vide order dated 4th December, 2007 directed service of amended plaint on the defendant within two weeks from the date of the order. The affidavit of service dated 18th December, 2007 was filed by the plaintiff. However, not satisfied with that service, this Court again directed the plaintiff to serve the defendant by substituted service through newspaper publication in local newspapers, namely, "Free Press Journal" and "Loksatta". Accordingly, service was effected through newspaper publication. In spite of newspaper publication, nobody appeared on behalf of defendant. Hence the suit was again ordered to proceed ex parte against the defendant. 17. The only issue that needs consideration is: whether plaintiff bank is entitled to the reliefs claimed in the suit. 18. The plaintiff in order to establish their right to claim reliefs claimed in the suit has filed - 11 - affidavit of one of its officers Mr.Vinod K. Sampat in lieu of evidence by way of examination-in-chief to support suit claim and also examined Mrs.Chhaya K. Virani and Mr.Bharat C. Raghani, their Advocates and Solicitors M/s.Haridas & Company. 19. Mr.Vinod Sampat, plaintiff- bank’s witness has deposed in consonance with the plaint pleadings and also proved some of the documents which were marked and exhibited as Exh.P-1 to P-4. Mrs.Chhaya Virani, Solicitor, who was examined on oath stated that all the exhibits and copies produced along with the plaint were prepared under her supervision. The third witness Mr.Bharat Raghani has proved Exh.P-5. 20. Since the defendant is ex parte and nobody has appeared on behalf of the defendant, the documentary as well as oral evidence brought on record by the plaintiff went unchallenged. 21. The plaintiff- Bank has proved their case and right to claim specific performance of the agreement (Exh.P-1). They have also proved that they have paid full consideration as per the agreement and that they - 12 - have discharged their part of legal and contractual obligations which they were bound to discharge to seek specific performance of the agreement. 22. Having gone through the affidavit of the plaintiff and the document produced, the plaintiff- Bank has paid Rs.1,43,219.30 to the Atlanta Premises Co-op. Society Ltd. towards arrears of differential from the period July, 1978 to June, 1984 without intending to do so gratuitously, which the defendant was bound and liable to pay. The defendant is, therefore, liable to reimburse the plaintiff the said amout with interest theron @ 18% per annum amounting to Rs.1,88,068.40 with future interest from the date of the suit till realisation as per the particulars of statement of account filed on record. 23. In the above view of the matter, since the plaintiff has proved its claim claimed in the suit, the suit deserves to be decreed. So far as money decree is concerned, the plaintiff shall be entitled to future interest on the decretal amount at the prevailing rate of bank interest. Hence the following order: ORDER - 13 - (i) The suit is decreed in terms of prayer clauses (a), (b) and (e). (ii) Decree be drawn in terms of this order. (V.C.DAGA, J.) (V.C.DAGA, J.) (V.C.DAGA, J.)