1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. Notice of Motion No.4053 of 2007 IN Suit No.2994 of 2007 Abdul Haque Khan Abdul Khalid Khan .. Plaintiff v/s. Hertbert Wilfred D'Souza & anr. .. Defendants Mr.Chirag Balsara i/by M/s.Divya Shah Associates for Plff. Mr.Sandeep Padwal for Defts. ----- CORAM : SMT.ROSHAN DALVI, J. Dated : 24 th March 2009 P.C. : 1. The Plaintiff has sued for specific performance of the Agreement dated 9.3.2006, but admittedly executed on 15.7.2006, Exhibit- B to the Plaint. The Agreement requires the Plaintiff to redevelop the Defendants' property. The suit property is a structure of Ground floor plus 1st floor. It has 3 tenants on the ground floor viz. 2 shops and 1 residence. The owners reside on the 1st floor. The Plaintiff was to redevelop the suit property to put up an additional floor and terrace. The Plaintiff had to offer an alternate accommodation to the 3 tenants as well as the owners. The relevant consideration clause of the agreement is as follows:- 2 (i)A sum of Rs.50,000/- (Rupees Fifty Thousand Only) upon execution hereof and the balance Rs.25,000/- (Rupees Twenty Five Thousand Only) at the time of shifting. If for any reason the Developers do not go ahead of twelve months, the owners shall not be liable to refund the said amount of Rs.25,000/- already paid to the owners by the Developers and the owners shall be entitled to forfeit the same as earnest money and the developers shall have no right whatsoever over the said property. The Plaintiff had to pay consideration of Rs.50,000/- at the time of execution of the agreement (which has been paid) and Rs.25,000 /- at the time of shifting. The consideration clause itself shows that the Plaintiff, as the developer, was to go ahead with the agreement which provides the consequences for the Plaintiff not going ahead. The consequences are forfeiture of Rs.25,000/- already paid to the owners and for the developers to have no right whatsoever over the said property. 2. The Defendants contend that the expression “go ahead” and the period of 12 months specified shows that the time was made of the essence of the contract and that the Plaintiff, as the developer, was to go ahead with the redevelopment work within that time. The Plaintiff contends that time was not made of the essence and that after execution of the Agreement, Exhibit- B to the Plaint, he negotiated with the 3 tenants. 3. Clause- 2 of the Agreement, Exhibit- B to the Plaint,which deals with what the Plaintiff was required to do to “go ahead ” reads as follows:- “ 2) The said property consists of 2 shops and one residence on the ground floor in occupation of the tenants and the owners reside on the entire first floor along with their family. One shop named “Ronson” is presently in litigation in Court. The developer shall negotiate and get the said matter settled legally to the satisfaction of the tenant and the owner with the settlement and withdrawal of the Court case and get the same vacated and handed over to the owners . The developers shall give back to the respective tenants their premises in their respective present possession in the reconstructed property. The owners as well as the residential tenant will be provided an alternate accommodation in nearby locality at the entire cost of the Developer for the duration of reconstruction period (from demolition till handing over reconstructed premises), the owners do hereby APPOINT, NOMINATE and CONSTITUTE the developers as their constituted attorney to undertake and complete all the formalities and procedures that may be required to undertake the development /reconstruction of the said property. The Developer is also hereby authorised by the owners to represent him to negotiate legally with the said tenant /s.” Hence under the above clause the first obligation to act was of the Plaintiff. The Plaintiff was to negotiate and settle with 4 the tenants and the owners. The Plaintiff was to initially provide alternate accommodation to them as the first of the reciprocal promises to be performed by the parties. To do these acts and deeds, the owners authorised the Plaintiff as the developer to represent the owners to negotiate legally with the tenants. 4. It is the case of the Plaintiff that the owners actually hampered the negotiation by misguiding the tenants. There is no correspondence in that behalf, no complaint made and no evidence shown. The fact remains that admittedly the Plaintiff has not fully negotiated and offered alternate accommodation to the tenants or the owners. Hence the tenants and the owners could not give vacant possession of their respective premises to the Plaintiff. 5. A reading of the aforesaid clause of the agreement shows that the Plaintiff was not put in possession at the time of the execution of the agreement. The Plaintiff had to provide alternate accommodation; first temporary in the nearby locality and later permanent accommodation in the newly constructed building. The Plaintiff could have obtained vacant possession only if and when he offered temporary alternate accommodation to all the occupants, including the tenants and the owners. The Plaintiff was already given 5 authority to represent the owners with the tenants. 6. On 22.5.2007 i.e. 10 months after the execution of the agreement, the Plaintiff, by his letter, called upon the Defendants to hand over possession of the premises to him to proceed with the redevelopment work. It cannot be understood how possession could be “handed over” to the plaintiff in the circumstances of this case unless the Plaintiff offered the alternate accommodation. The Plaintiff's letter itself shows that upon the Plaintiff's request to hand over possession, the Defendants requested the Plaintiff to first negotiate and settle with the tenants after which they would be handed over possession. The Plaintiff put on record that the tenants were agreeable for redevelopment but did not show the offer of alternate accommodation despite tenants' co-operation and agreement. 7. In the next letter dated 16.6.2007, the Plaintiff stated that he had started negotiating with the tenants and the tenants had agreed for redevelopment and he had got a plan prepared from his architect for redevelopment which he enclosed with the letter. He wanted a meeting for further discussion. He requested the Defendants to hand over possession of the premises. 6 8. The first of the reciprocal promises of the Plaintiff was to negotiate with the tenants an offer of alternate accommodation. Mere negotiations would be only an abstract formality. Admittedly, the tenants were amenable to settlement and redevelopment. The Defendants had already executed the agreement for redevelopment. The Plaintiff desired to have possession. The very first thing that the Plaintiff had to do was to offer alternate accommodation to the tenants as well as owners. 9. It may be mentioned that even at the time of hearing, I called upon the Plaintiff's Advocate to show me the alternate accommodation that has been arranged by the Plaintiff. That is not shown. 10. Since from July 2006 to June 2007, no alternate accommodation was shown or offered, despite the admitted position that the tenants were amenable to redevelopment, the Defendants have sent their notice of termination. The Defendants stated that litigation with the tenant, which was mentioned in the agreement, was withdrawn and hence the negotiation with the tenants was redundant. The Defendants called upon the Plaintiff to show a copy of the agreement executed with the tenants, if any. The Defendants also pointed out that the shop of the tenant 7 against whom the litigation was pending was to be handed over to the owners upon settlement with that tenant which was not done. The development work was delayed because the Plaintiff had not fulfilled any of the conditions of the agreement. 11. The notice of termination is challenged. However to show the challenge, the Plaintiff has not produced anything to refute any of the statements in the notice of termination. The Plaintiff has not shown that the litigation was not withdrawn and was pending; the Plaintiff has not produced copies of the agreement with the tenants, though the tenants had even earlier agreed for redevelopment; the Plaintiff has not handed over vacant possession of the shop to the owners as per the agreement. The Plaintiff did not do anything under the agreement. 12. In reply to the notice, the Plaintiff called upon the Defendants to arrange a joint meeting to discuss the project and execute the Power of Attorney instead. Hence without offering alternate accommodation, the Plaintiff was interested in proceeding with the construction work. 13. All that the Plaintiff has done is to pay the consideration at the time of execution. The consideration is a paltry figure of 8 Rs.50,000/- mentioned in the agreement. The Defendants' Advocate states that the Plaintiff has in fact paid Rs.40,000/- . The substantial part of the consideration was for construction of the 1st floor for the owners. No construction would be put up until the tenants and owners were given alternate accommodation. That having not been done the seminal obligation is not performed. The only result is stalemate. 14. The Notice of Motion is dismissed. No order as to costs. 15. Mr.Balsara submitted that the ad- interim order be continued. The ad- interim order was passed ex-parte when the Defendants were not represented. No case for continuation of the ad- interim order is also made out. (SMT.ROSHAN DALVI, J.)