1 NMS.866.2006 mst IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.866 OF 2006 IN SUIT NO.323 OF 2006 Aristo Realty Developers Limited Plaintiffs versus Rama Shashikant Mehta and others Defendants Mr.Shailesh Shah a/w M.P.Wamorkar i/by Maravoor Wamorkar & Co. for plaintiffs. Mr.Dr.Birendra Saraf i/by M/s.Shah & Singhavi for defendant nos.3 to 6. Mr.J.Reis with Mr.Kunal Cheema a/w Ms.Kejal Kamdar i/by Recha Salunkhe for defendant nos.1, 2 and 7. CORAM : S.J.KATHAWALLA, J. DATE : 25th November 2010 PC : 1. The above suit is filed by the plaintiffs inter alia for an order and decree against the defendant nos.1, 2 and 7 to specifically perform the agreement for sale dated 5th May 1994 (Exhibit-B-1 to the plaint) in respect of the immovable property situate at 7, Cuffe Parade, Colaba Reclamation and bearing Plot No.15 and Cadastral Survey No.110 of Colaba Division, Mumbai ("the suit property" for short). In the alternative, the plaintiffs have sought an order and decree against the defendants to pay to the plaintiffs a sum of Rs.78,16,603=98 Ps. as per the statement annexed as Exhibit-G to the plaint with further interest of Rs.25,02,093=87 Ps. @ 18% p.a. from the date of filing of the suit till payment or realization. 2 NMS.866.2006 The plaintiff has in the above suit taken out the above Notice of Motion seeking appointment of Court Receiver in respect of the suit property and have also sought an injunction against the defendants restraining them from selling, disposing of or in any manner creating third party rights or transferring the tenancies to any third parties or recovering the rent/ licence fees from the tenants in respect of the said property or any portion thereof. 2. Defendant nos.1, 2 and 7 are the legal heirs and representatives of Shri Shashikant S. Mehta who expired in October 1999 and who during his life time claimed to be the owner of the suit property. Defendant no.3 is a partnership firm of which defendant nos.4, 5, 6 and the deceased Shashikant Mehta were partners. Defendant no.4 filed a suit in this Court being Suit No.3460 of 1994 inter alia alleging that the suit property belonged to the partners of the firm (defendant no.3 herein) and Shashikant Mehta had no right to enter into any agreement with the plaintiffs in respect of the said suit property. The plaintiffs herein were joined as defendant no.15 in the said Suit No.3460 of 1994. 3. The plaintiffs after filing the present suit on 10th January 2006 have not moved the Court for any ad-interim reliefs. The Notice of Motion is now taken up for hearing and final disposal. 4. Briefly set out hereunder are some relevant facts in the matter. 3 NMS.866.2006 5. One Minocher D.M.Raja (the said Raja for short) entered into an agreement dated 19th July 1979 with Shri Shashikant S. Mehta to assign his leasehold right, title and interest in the suit property for a consideration mentioned in the said agreement. The said Shashikant Mehta paid the entire consideration amount to the said Raja. Consequent to the agreement for sale, late Shashikant Mehta was put in possession of the said property and he was recovering the rent from the tenants of the suit property. 6. By an agreement dated 5th May 1994 made between the said Shashikant Mehta and the plaintiff herein, the plaintiff agreed to purchase the suit property for a sum of Rs.1.70 crores. Clauses 1 to 3, 9 and 12 of the said agreement are reproduced hereunder :- "1) The Vendor shall sell and the Purchaser shall purchase on "as is where is" basis all and singular the land herediaments and premises situated at 7, Cuffe Parade, Colaba Reclamation Bombay and more particularly described in the schedule hereunder written (hereinafter called "the said property") free from all encumbrances but subject to the rights of the tenants of the building standing on the said property at or for the price of Rs.1,70,00,000/- (Rupees : One Crore Seventy Lacs); 2) The price of the said property as aforesaid shall be paid by the Purchaser to the Vendor in the following manner that is to say a sum of Rs.18,00,000/- (Rupees Eighteen Lacs) as deposit or earnest money shall be paid or before the execution of these presents (the payment and receipt whereof the Vendor doth hereby admit and acknowledge) and the balance shall be paid within four months of the date hereof time being of the essence of the contract. 3) Immediately, after execution of this Agreement the parties will apply for and obtain a "No Objection" Certificate 4 NMS.866.2006 from the Appropriate Authority by filing in and filing Form no.37-I under Rule 48-L under Section 269 UC of the Income Tax Act, 1961 in duplicate with the Appropriate Authority under Chapter XXC of the Indian Income Tax Act, 1961 for sale of the said property described in the schedule hereunder written in favour of the Purchaser. 9) The sale will be completed after permission is granted by the Municipal Corporation of Greater Bombay (who are the Lessors of the said property as successors to the Trustees for the Improvement of the City of Bombay and in whom the said property is now legally vested) to the Vendor for assignment of the said property to the Purchaser provided that the Vendor will not be bound to execute the deed of assignment unless the Purchaser has paid the full consideration moneys to the Vendors. 12. The Vendor shall after the execution of this Agreement apply to the Municipal Corporation of Greater Bombay for permission to assign the said property to the Purchaser. If such permission shall be refused or not granted this agreement shall be null and void and in that event the Vendor shall return to the Purchaser the earnest money without interest and each party shall bear and pay his own costs charges and expenses incurred herein. Neither party shall in that event be entitled to any damages or compensation whatsoever under these present/s or otherwise howsoever. In case such permission is granted by the said Municipal Corporation, the purchaser shall not be entitled to refuse to complete the sale on the ground that the terms and conditions stipulated for granting such permission are not acceptable to the Purchaser. If any premium or any consideration is demanded or conditions stipulated by the said Municipal Corporation for granting such permission, the purchaser shall pay the same and fulfill the said conditions at its own costs." 7. The plaintiffs paid the late Shashikant Mehta a sum of Rs.17.00 lakhs by cheque. The plaintiffs and the late Shashikant Mehta furnished to the appropriate authority a statement of Transfer of Immovable Property under section 269-UC of the Income Tax Act, 1961 and the appropriate authority granted a No Objection Certificate dated 19th August 1994. In the mean while, pending permission from the Municipal Corporation of 5 NMS.866.2006 Greater Mumbai to assign the suit property to the plaintiffs, the defendant no.4 filed a Suit bearing No.3460 of 1994 in this Court alleging that the 4th defendant was a partner in the partnership firm i.e. the third defendant herein along with deceased Shashikant Mehta and defendant nos.5 and 6 herein. In the said suit it was further alleged that the said Raja was paid full consideration for the suit property from the contributions made by the partners of the third defendant firm and therefore the said property belong to the said partnership firm and not to Shri Shashikant Mehta to the exclusion of other partners. In the said suit the 4th defendant took out a Notice of Motion being Notice of Motion No.2109 of 1994 seeking ad- interim and interim reliefs against the late Shashikant Mehta restraining the said Shashikant Mehta from transferring his rights under the said agreement for sale dated 19th July 1979 in favour of the plaintiffs herein under agreement for sale dated 5th May 1994. By an ad-interim order dated 5th September 1994 the said Shashikant Mehta was restrained from transferring his rights in the said property to the plaintiffs herein. The said Notice of Motion was dismissed by an order of this Court dated 19th September 1997. The plaintiffs herein (defendant no.15 therein) were allowed to take possession of the suit premises upon depositing a sum of Rs.27.00 lacs with the Prothonotary & SeniorMaster. At the request of the learned advocate appearing for the 4th defendant herein, the said order was stayed for a period of four weeks. The 4th defendant preferred an appeal being Appeal No.957 of 1997 against the order passed on 19th September 1997 in Notice of Motion No.2109 of 1994 which was disposed of by an order dated 4th November 1997. By the said order, the appeal 6 NMS.866.2006 filed by the defendant no.4 was dismissed and the ad-interim relief granted on 5th September 1994 was extended up to 3rd December 1997 to enable the defendant no.4 to file a Special Leave Petition before the Hon'ble Supreme Court. 8. According to the plaintiffs, the 4th defendant neither served any proceedings nor informed the plaintiffs whether any special leave petition was filed before the Hon'ble Supreme Court challenging the order passed on 4th November 1997 in Appeal No.957 of 1997. The plaintiffs by letter dated 4th February 1998 called upon the said Shashikant Mehta to perform his part of the obligation under the agreement for sale dated 5th May 1994 or refund the amount paid as earnest money along with interest and other charges. Shri Shashikant Mehta promised to transfer the said property as soon as the ad-interim relief granted on 5th September 1994 in Notice of Motion No.2109 of 1994 was vacated as the matter was carried to the Apex Court by the 4th defendant. 9. According to the plaintiffs, in or about June 2003, the plaintiffs came to know that Shashikant Mehta, defendant no.1 in Suit No.3460 of 1994, had expired in October 1999. However, no intimation of his demise was given by the advocate for the 4th defendant. The heirs of late Shashikant Mehta were also not brought on record. The plaintiffs through their advocates on 10th June 2003 served a notice on the advocates for the 4th defendant calling upon them to furnish the information as to whether any special leave petition was filed against the order dated 4th 7 NMS.866.2006 November 1997 passed in Appeal No.957 of 1997 and whether any order was passed therein and further pointed out that some of the defendants in Suit No.3460 of 1994 had died and no amendments were carried out by bringing their legal representatives on record. According to the plaintiffs, no response was received from the advocates for the defendant no.4 and the plaintiff therefore made independent inquiries and reliably learnt that the special leave petition was heard against order dated 4th November 1997 and the same was dismissed on 12th October 2000 with an observation that "any alienation will be subject to the principle of Lis Pendense". 10. According to the plaintiffs, they further came to know that the defendant no.6 had filed a suit against one Mr.S.S.Randhava, tenant of flat no.1 in the suit property for eviction wherein he alleged that he is the landlord of the said tenants. On coming to know about the said suit filed by the defendant no.6, the plaintiff took out Notice of Motion No.2899 of 2003 in Suit No.3460 of 1994 praying for an injunction inter alia against the 6th defendant restraining him from in any manner disposing of and/or alienating and/or transferring or parting with possession of the suit property. The Notice of Motion was heard and disposed of by an order dated 2nd December 2005 with an observation that the plaintiffs remedy lies in an independent action. The plaintiffs thereafter filed the above suit seeking the aforestated reliefs and also took out the above Notice of Motion seeking ad-interim and interim reliefs. However, as stated hereinabove, the plaintiff did not make any application for ad-interim 8 NMS.866.2006 reliefs in the last more than four years and the said Notice of Motion is now taken up for final hearing. 11. Shri Shailesh Shah, learned advocate appearing for the plaintiffs submitted that the plaintiffs had paid an amount of Rs.18.00 lakhs to the deceased Shashikant Mehta and have also paid an amount of Rs. 7,02,093=87 Ps. towards the taxes in respect of the suit property. Shri Shah submits that the plaintiffs had always been ready and willing to perform their part of the contract but the defendant nos. 1, 2 and 7 are not ready and willing to perform their part of the contract and are trying to wriggle out from the same and therefore the defendants be ordered and decreed to perform their part of the contract specifically. 12. Shri Reis appearing for defendant nos.1, 2 and 7 and Shri Birendra Saraf appearing for defendant nos.3 to 6 have submitted that the plaintiffs have made a false and incorrect statement that the plaintiffs were not aware of any proceedings being filed before the Hon'ble Supreme Court. The plaintiffs were always aware of the developments in the matter and were also aware that the order of stay granted on 5th September 1994 was continued from time to time upto 12th October 2000 when the special leave petition filed by the defendant no.4 was dismissed. It is pointed out that by their letter dated 4th February 1998 addressed to the late Shashikant Mehta the plaintiffs themselves have recorded that the litigation is pending in respect of the suit property and the matter is subjudice before the Hon'ble Supreme Court. The plaintiffs filed the suit 9 NMS.866.2006 only in the year 2006 on an incorrect pretext that he came to know about the dismissal of the special leave petition only in the year 2003. The present suit is therefore barred by the Law of Limitation. 13. It is further submitted by Shri Reis as well as by Shri Saraf that the plaintiffs who are seeking specific performance of the agreement are bound to show that they were always ready and willing to perform their part of the contract and abide by the agreement and if at any stage it can be shown that the plaintiffs were not ready and willing to abide by/pursue the agreement, the plaintiffs would not be entitled to specific performance of the agreement. In support of this contention reliance is placed on a decision of the Privy Council in Ardeshir H. Mama Vs. Flora Sassoon (AIR-1928-PC-208) and the decision of the Apex Court in case of Aniglase Yohannan Vs. Ramlatha ([2005]7-SCC-534). It is further submitted by Shri Reis and Shri Saraf that in fact it is the plaintiffs who were not ready and willing to perform their part of the contract and by a letter dated 4th February 1998 had called upon Shri Shashikant Mehta to return the money paid by the plaintiffs with interest @ 30% p.a. from the date of payment and to cancel the deal since the said Shashikant Mehta had allegedly not performed his part of the obligation to transfer the said property in the name of the plaintiffs. It is further submitted that the plaintiff has made a false and incorrect statement that the plaintiffs had given an option to Shri Shashikant Mehta to perform the obligation under the agreement for sale or to refund the amount paid by the plaintiffs with interest. The plaintiffs were well aware that by their letter dated 4th 10 NMS.866.2006 February 1998 they had not called upon Shri Shashikant Mehta to perform his obligation under the contract but had only asked for refund of the amounts paid by the plaintiffs and to cancel the deal. It is therefore submitted on behalf of the defendants that the plaintiffs are not entitled to specific performance of the agreement dated 5th May 1995 and nor are they entitled to any reliefs as sought for or otherwise in the above Notice of Motion. 14. I have perused the pleadings and have considered the submissions advanced on behalf of the plaintiffs as well as the defendants. The plaintiffs in paragraph no.13 of the plaint have stated that the 4th defendant had neither served any proceeding nor informed the plaintiff whether any special leave petition was filed before the Hon'ble Supreme Court challenging the order passed on 4th November 1997 in Appeal No. 957 of 1997 thereby meaning that the plaintiffs did not have any knowledge as to whether the order dated 4th November 1997 was impugned by way of an SLP before the Hon'ble Supreme Court. This statement on the part of the plaintiffs is belied by their own letter dated 4th February 1998 wherein it has been categorically stated in paragraph no.2 as follows :- "As you are aware that the litigation is pending about the above property and the matter is subjudice before the Supreme Court wherein the other claimants are Mr.Dalitchand and others". In view thereof, it is clear that the plaintiff was aware of the proceedings pending before the Hon'ble Supreme Court right from February 1998 but 11 NMS.866.2006 have made this incorrect statement in the plaint being conscious of the fact that the special leave petition was dismissed on 12th October 2000 and the plaintiff has filed the present suit only on 10th January 2006. The plaintiff's suit is therefore barred by the Law of Limitation and the plaintiffs are not entitled to any interim reliefs on this ground alone. 15. In any event, Section 16(c) of the Specific Relief Act, 1963 provides as follows :- "16. Personal bars to relief.- (a) ... ... (b) ... ... (c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation.- For the purposes of clause (c).- (i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction." In the decision of the Privy Council in Ardeshir H. Mama (supra) it is inter alia held that a person seeking specific performance of a contract was required to aver his readiness and willingness and that the contract was subsisting. If this fact was traversed he is required to prove a continuous readiness and willingness from the date of the contract to the time of the hearing, to perform the contract on his part. Failure to make 12 NMS.866.2006 good that averment brought with it the inevitable dismissal of his suit. The Hon'ble Supreme Court has in its decision in Anglase Yohannan (supra) has after reproducing section 16(c) of the Specific Relief Act and also relying on the observations of the Privy Council in the case of Ardeshir H. Mama (supra), in paragraph 12 of its judgment held as follows:- "12. The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. The provision imposes a personal bar. The Court is to grant relief on the basis of the conduct of the person seeking relief. If the pleadings manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief." 16. In the instant case the plaintiffs after coming to know of the proceedings pending before the Hon'ble Supreme Court pertaining to the suit property, by their letter dated 4th February 1998 categorically called upon the said Shashikant Mehta to refund the monies paid by the plaintiffs to him under the agreement dated 5th May 1994 along with 30% interest from the date of payment made by the plaintiffs to the said Shashikant Mehta till repayment by Shashikant Mehta to the plaintiffs and cancel the deal since the said Shashikant Mehta did not perform his part of the obligation of transferring the said property in the name of plaintiffs. The plaintiffs being conscious of this fact made an incorrect statement in paragraph 14 of the plaint that by letter dated 4th February 1998 they 13 NMS.866.2006 gave an option to Shri Shashikant Mehta to perform his part of the obligation under the agreement for sale dated 5th May 1994 or to refund the amount and the said Shashikant Mehta promised to transfer the said property as soon as the ad-interim relief granted on 5th September 1994 in Notice of Motion No.2109 of 1994 is vacated as the matter was carried in the Apex Court by the 4th defendant. The plaintiffs who were aware that they had not called upon Shri Shashikant Mehta by their letter dated 4th February 1998 to perform the obligation under the agreement and had only asked for refund of the amounts paid by them to Shashikant Mehta and to cancel the agreement, did not annex a copy of the said letter to the plaint nor have they craved leave to refer to and rely upon the said letter. In fact, it is the defendant nos.3 to 6 who have produced before this Court a copy of the said letter dated 4th February 1998 addressed by the plaintiff to Shri Shashikant Mehta. A perusal of the said letter shows that the plaintiffs by the said letter had not called upon the said Shri Shashikant Mehta to perform his obligation under the agreement for sale dated 5th May 1994, as wrongly alleged by the plaintiffs, but had only asked for refund of the amounts paid by them to the said Shashikant Mehta along with interest and to cancel the deal. Therefore, the plaintiffs themselves were continuously not ready and willing to perform the agreement and since by the said letter the late Shishakant Mehta was not called upon to perform his obligations under the agreement the allegation that Shri Shashikant Mehta made a promise as alleged also appears to be a false statement on the part of the plaintiffs. Though according to the plaintiffs they came to know in the year 2003 that the SLP filed by the 14 NMS.866.2006 defendant no.4 was dismissed in the year 2000 they are unable to explain why the above suit seeking specific performance was filed only in the year 2006. In the circumstances the conduct of the plaintiffs who are seeking benefit of the specific performance of the agreement is not blemishless throughout, entitling them to the specific relief as sought by them. The plaintiffs are, therefore, not entitled to any interim relief as prayed for. 17. However, defendant nos.1, 2 and 7 are directed to deposit an amount of Rs.25.00 lakhs (Rs.Twenty five lakhs only) with the Prothonotary & Senior Master of this Court within a period of four weeks from today. Upon such deposit, the Prothonotary & Senior Master shall invest the said amount in the fixed deposit of any nationalized bank initially for a period of two years and thereafter renew the same from time to time until further orders of this Court. In the event of the defendant nos. 1, 2 and 7 failing to deposit the said amount, there shall be an interim order of injunction restraining the defendants from disposing of, alienating, encumbering or creating third party rights in respect of the suit property. 18. Needless to add that the observations made in this order are prima facie and the above suit shall be decided being uninfluenced by the above observations. 19. The Notice of Motion is therefore disposed of in the above terms. (S.J.KATHAWALLA, J.)