1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION APPEAL FROM ORDER NO. 903 OF 2008 IN NOTICE OF MOTION NO.121 OF 2008 IN S.C. SUIT NO.110 OF 2008 WITH CIVIL APPLICATION NO. 963 OF 2007 WITH CIVIL APPLICATION NO. 1085 OF 2008 AND CIVIL APPLICATION NO.1224 OF 2008 IN A.O.NO.903 OF 2008 Arch Shelters Pvt. Ltd. ..Appellants. Vs. Jawahir Kapadia and ors. ..Respondents. Mr.P.K.Dhakephalkar along with Mohan Kumar for the Appellants. Mr.J. Reis with Mr.Amit Potnis forthe Respondent Nos. 1 to 6. Mr. Ashish Kamat i/by Mr. Mehul Shah for the Respondent Nos. 7 to 9. Dr. V.A.,Thorat with Tejas Vora i/by Bagkar & Co. for the Applicant. CORAM : R.S. MOHITE, J. DATE : Reserved on 22.7.2009 Declared on 23.7.2009. 2 PC : 1. This is a appeal filed by the original plaintiffs impugning an order dated 5.6.2008 passed by the City Civil Court rejecting the Notice of Motion filed by the plaintiffs in their suit. 2. The plaintiffs suit was for declaration that an Agreement for Sale cum Development dated 6.2.2007 and a power of attorney also dated 5.2.2007 executed by the defendant Nos. 1 to 9 in their favour and in respect of the suit property was subsisting, binding and enforceable against the defendant Nos. 1 to 9. The plaintiffs further sought a declaration that time to opt to proceed or not to proceed in furtherence of the agreement of sale cum development dated 5.2.2007 must be deemed to have been extended till defendant Nos. 1 to 9 got their names recorded in the record of rights. The last relief claimed in the plaint was a permanent injunction against the defendants from 3 transferring, alienating or executing any agreement of development in favour of any third party. 3. The brief facts of the case are as follows. a) That the defendant Nos. 1 to 9 are the members of a family known as Kapadia family . (hereinafter referred to as the owners). They are owners of land bearing CTS No.180, 180/1 to 133 admeasuring approximately 10932-sq.mtrs. situated at Village Ghatkopar in Mumbai Suburban District. b) Since they desired to develop this particular land, by an agreement of sale executed on 5.2.2007, all these members of the Kapadia family conferred certain rights of development on the present plaintiffs. The salient features of this agreement were that the owners were to execute a limited power of attorney in favour of the developers authorizing them to prepare a development scheme for housing slum dwellers 4 residing in about 400 hut-ments situated on the suit land. The agreement narrated that the plaintiffs were in the process of obtaining the consent of 70% of the slum dwellers which was required for submitting a scheme to the SRA authorities. The consideration for development was fixed at Rs.2.00 Crores, which was to be deposited with M/s.Kanga & Co., Advocates & Solicitors in escrow. It was agreed between the parties that they would meet 15 days prior to 31.3.2007 and that the developers at this meeting would apprise the owners regarding the progress made by the developers and intimate the owners as to whether the developers were in a position to proceed further with the development of the said property or not. It was agreed that if the developer intimated that he was in a position to proceed further then he was to seek approval and consent of the owners for extending the time for a further period of 60 days and the owners were given a discretion to extend the time for a period of 60 days from 1.4.2007. The 5 agreement contemplated that if, after expiry of the extended period of 60 days, the developer was not in a position to take on the work of development of the said property, then, in that event, the agreement would come to an end. That after the extended period of 60 days the developer was in a position to proceed with the work of development of the suit property then in that event M/s.Kanga & Co. was required to pay an amount of Rs.2.00 Crores with accrued interest to the owners. If after the period of 60-days, the developer was not in a position to develop the property, then M/s. Kanga & Co. was required to repay the amount of Rs.2.00 Crores with accrued interest back to the developer. Clause 6.1 of this agreement recorded that the owners had informed the developer that the property stood in the name of one Tricumdas Chhabildas and Ajitsinh Chhabildas. It is recorded that the developer would assist the owners to transfer the property in the joint names of the owners in Municipal and Collector records and the owners 6 agreed to send all the papers and documents as may be necessary and required for being submitted to the B.M.C. and the Collector. The developer had agreed to follow such an application and meet all costs, charges, expenses in relation thereof. On the same day, the said power of attorney was executed by the owners in favour of the developers empowering them to formulate, submit and pursue the said scheme with the SRA authorities. c) It is common ground that as contemplated by the agreement no meeting took place prior to 31.3.2008. d) On 26.4.2007, the plaintiffs company addressed a letter to M/s. Kanga & Co. informing them that due to frequent changes in the policy of the SRA, the progress of submission of development scheme has been delayed and that they had been able to obtain the requisite majority of slum dwellers after including some Government plots which were adjoining to CTS No.180 and it would remain to be 7 seen whether the scheme was accepted by the SRA after including those plots. They asked for extension of time and stated that the extension of 60 days may not be sufficient for taking the decision about the development of the property. e) On 9.7.2007, the plaintiffs addressed a letter to M/s. Kanga & Co. inter alia recording their feeling that the owners were not interested in the matter of development and requesting them to refund the excrow amount deposited along with the accrued interest. f) On 4.8.2007, one of the co owner addressed a letter to M/s. Kanga & Co. stating that their approval had not been taken for any changes in the SRA scheme. The letter called upon the Solicitor to enquire from the plaintiffs if they desired to execute the agreement and that the amount lying is escrow should only be refunded to the plaintiff on their surrendering the power of attorney along with 8 all other documents. g) On 13.7.2007, Mr. Pankaj A Kapadia and Nikhil A. Kapadia addressed another letter to M/s. Kanga & Co. making a grievance that they had not received any progress report or copy of the scheme submitted by the plaintiffs to the concerned authorities. The letter once again stated that if the plaintiffs wished or intended to withdraw the deposit amount, they should terminate the agreement and surrender the power of attorney and this must be done prior to the refunding of such deposit. h) On 14.7.2007, Mr.Jawahir Kapadia addressed a letter to M/s. Kanga & Co. inter alia requesting them to call upon the plaintiffs to submit all papers submitted to the authorities to enable them to take a decision regarding the termination of the agreement. i) On 23.7.2007, the plaintiffs addressed a letter to M/s.Kanga & Co. inter alia informing them 9 that the required documents had been handed over to their architects for preparation of the scheme and stating that they were agreeable to comply the terms and conditions of the agreement of sale cum development. j) On 6.8.2007, three members of the Kapadia family addressed a letter to M/s.Kanga & Co. asking them to call upon the plaintiffs to submit all the papers relating to the scheme for their scrutiny and stating that if they were satisfied, they would consider the question of grant of extension on revised terms. The letter further stated that if the plaintiffs wanted to withdraw from the scheme they should be called upon to return all the papers. k) On 17.8.2007, the plaintiffs addressed a letter to M/s. Kanga & Co. inter alia stating that they found contradictions in the demand made by the owners regarding scrutinizing the scheme papers and their stand that the development was the sole 10 concern and responsibility of the plaintiffs. They stated that the efforts for the framing of the scheme were vigorously being made but since another society was also pursuing similar development and had also applied for acquisition of the land, matter had been delayed. The letter stated that other factors such a policy changes made by the SRA and the complexities involved in the implemention of the SRA scheme were factors for consideration of the owners. l) On 29.8.2007, two of the co owners addressed a letter to M/s.Kanga & Co. inter alia contending that the right to execute the agreement was the sole discretion of the owners under the terms of the agreement. m) On 30.8.2007, the plaintiffs addressed a letter to M/s. Kanga & Co. making a grievance of the fact that the extension has not been given by the owners and stating that the owners were aware that the two names on record required to be changed 11 and the names of the present owners were required to be incorporated in the record of rights. The letter stated that they would be advising the owners in this regard. n) On 17.9.2007, the plaintiffs addressed a letter to M/s. Kanga & Co. enclosing all the documents as mentioned in the said letter. The letter stated that the owners should co-operate for entering their names in the Government record as per their promise dated 5.2.2007. o) On 20.9.2007, the co owners addressed a letter to M/s. Kanga & Co. stating that they were ready to give last and final extension upto 31.7.2008. p) On 26.9.2007, the plaintiffs addressed a letter enclosing a draft of intimation cum Declaration and Power of attorney for incorporating the names of the owners in the Government record. 12 q) On 19.10.2007, the plaintiffs addressed a letter to M/s. Kanga & Co. calling for a meeting with the owners and stating that there was no response from the owners as regards furnishing necessary documents. r) From a letter dated 17.11.2007 addressed by one of the co owner Sameer H. Kapadia to five other co owners, it is evident that there was a split in the Kapadia family about the further steps required to be taken. It appears from this letter that five members of the Kapadia family desired that the MOU should be terminated and the amount of Rs.2.00 Crores lying in escrow should be returned to the plaintiffs. Mr.Sameer Kapadia was not agreeable to termination of the said agreement. s) Ultimately, on 14.1.2008, the plaintiffs filed a suit for the reliefs as mentioned hereinabove and in the said suit took out a notice of motion for the interim reliefs as claimed. 13 4. To this notice of motion replies were filed on behalf of the various defendants. It may be stated here that a spilt in the Kapadia family is evident from the contents of the affidavits filed on record. On behalf of the defendant Nos. 1 to 6 an affidavit is filed wherein the grant of reliefs to the plaintiffs is opposed, whereas on behalf of the defendants 7 to 9 an affidavit has been filed supporting the case of the plaintiffs. 5. On behalf of the plaintiffs, it is admitted that till today the SRA scheme has not been submitted. They contended that the blame for this state of affairs lies solely upon the owners. By placing reliance on Clause 6.1 of the Sale cum Development agreement dated 5.2.2007, it was contended that the suit property admittedly stood in the names of Tricumdas Chhabildas and Ajitsinh Chhabildas who had expired. It is contended that the plaintiffs had agreed to assist the owners to get the property transferred in the joint names of 14 the owners in the Municipal and the Collector s record. In short, the submission is that since the owners did not perform their obligation by making any application for getting their names mutated in the Municipal and Collector s record, no scheme could have been submitted to the SRA authorities. This contention is without merits. The record indicates that, on the date when the sale cum development agreement was signed, a limited power of attorney came to be executed in favour of the plaintiffs and this empowered them to do several acts for framing, submitting and pursuing a slum rehabilitation scheme as per D.C. Regulation 33(10), A glance at this special power of attorney indicates that it conferred several different powers in this regard. In my view, notwithstanding the fact that in the record of rights the names of the two persons who had expired wrongly remained, it was still open for the developer to formulate the SRA scheme and submit the same to the authorities. Under the DC Regulation a right is 15 given to an owner of the property to submit a scheme. Indeed, it is an admitted position that the defendant Nos. 1 to 9 were the owners. In the circumstances, merely because the record of rights did not reflect their names as owners, this fact did not render the owners incapable of submitting a SRA scheme. Apart from this, in my view, this contention prima facie, is an after thought. The development cum sale agreement contemplated that the parties were to meet 15 days before 31.3.2007 so that stock could be taken as regards the progress made by the developers by that date. If the plaintiffs had any grievance regarding the owners not acting to get their names mutated in the record in the Collector s or B.M.C. Records, they could have immediately contacted the plaintiffs within this period. There is no document on record to show that they did so. The earliest document on record is a letter dated 26.4.2007 addressed on behalf of the plaintiffs to M/s. Kanga & Co. and in this letter there is no mention of any such 16 default on the part of the plaintiffs. Then again sale cum development agreement contemplated that if at this meeting, the owners were satisfied about the progress made by the plaintiffs, then they had a sole discretion to extend the period of agreement for 60 days. They were also given discretion to terminate the agreement. This period of 60-days would expire on 31.5.2007. The only letter before 31.5.2007 is the letter dated 26.4.2007 referred to hereinabove and this letter stated that an extension period of 60 days was not sufficient for taking the decision as regards the development of the property. The next letter on behalf of the plaintiffs was written much later on 9.7.2007 and by this letter the plaintiffs in fact requested M/s.Kanga & Co. to refund amount of Rs. 2.00 Crores lying in escrow along with accrued interest. It is noticed that, in so far as this request made on behalf of the plaintiffs for refund of the escrow deposit, the stand of the owners in the correspondence was that the deposit could be 17 refunded provided their power of attorney was cancelled and the various documents were returned. The plaintiffs never took the stand that the amount should never be returned. The further correspondence with Kanga & Co. on behalf of the plaintiffs indicates that they were keen on knowing the nature of the scheme and were asking M/s.Kanga & Co. to request the plaintiffs to furnish all documents and a copy of the scheme. It appears that after some correspondence, ultimately some papers pertaining to the scheme were furnished by the plaintiffs to M/s. Kanga & Co. along with their letter dated 17.9.2007. The letter forwarding these documents is placed on record and it is seen that, its enclosures included an agreement between the slum dwellers and the developers. This agreement however, has admittedly not been produced before the trial court. It may be stated here that there is no documentary evidence is placed on record even till today to indicate that the developers had acquired the consent of 70-per cent of the slum 18 dwellers from the suit property owned by the owners. On the contrary, it appears from the letter dated 26.4.2007 that the plaintiffs had been able to obtain the consent of requisite majority of slum dwellers after including some Government plots which were adjoining to CTS No.180. By relying upon Clause -21 of the Special Power of attorney , it was sought to be contended by the plaintiffs that power was given to them to amalgamate other plots and this term include Government plots. However, in my view, on a conjoint reading of the agreement for sale and power of attorney, prima facie, this contention appears to be incorrect. Both the agreement as well as power of attorney specify the suit property as property solely belonging to the owners. There is no reference to any adjoining property belonging to the Government. It appears from this letter that the plaintiffs were in the process of formulating a scheme which included not only the property of the defendants but adjoining Government property also. There is 19 nothing on record to indicate that the Government was agreeable to any such amalgamation or any scheme involving Government plots. At the end of the day, the situation as prevailing today i.e. more than two years i.e. 2 -years and 3-months from the date of the execution of the agreement that the scheme has not been submitted to the SRA authorities. Though, it was contended that there was no specific termination of the agreement, in my view, the agreement was self operative and, in view of the specific terms and even if normally time is not of essence of contracts for sale of immovable property, in view of the specific terms of the agreement, it is possible to take a view that by efflux of time the agreement came to an end. 6. It was sought to be contended that under the agreement in question the plaintiffs had an independent right to obtain a conveyance. Reliance was placed upon Clause 11 of the agreement. In this regard, it is noted that the plaintiffs have not 20 prayed for specific performance of the sale cum development agreement. They have also not sought a relief that a conveyance should be executed in his favour. Apart from this, in my view, if the agreement is read as a whole, it was really an agreement of development through an SRA scheme and prima facie it would not be proper to read clause 11 in isolation. Presently it can be seen that there is no uniformity amongst the owners. In my view, even the scheme is formulated today, it will not have the consent of all the owners and there will be several difficulties in its implementation, particularly since a majority of the owners had opposed to any development in accordance with the development agreement dated 5.2.2007. 7. Relying upon an admission contained in the affidavit filed on behalf of the respondent Nos. 1 to 6, it is contended that it was admitted position that agreement in question has been extended. It 21 was contended that the present suit was filed on 14.1.2008 within the extended period. It was contended that such extension is of novation of the agreement and the matter should be considered in the background that the suit was within the period extended by the novation. I find no substance in the argument. It appears that even after 1.1/2 years, after the filing of the suit, the SRA scheme has not been submitted. 8. In view of the above, in my view, no fault can be found with the reasoning of the trial court and the impugned order. Consequently, appeal from order is dismissed. It is however, made clear that the observations made in this order are only prima facie and will not influence the trial court while deciding the suit. 9. At this stage, the Advocate for the plaintiffs submitted that ad interim relief is running in favour of the plaintiffs since 22 21.1.2008. He states that they would like to approch the Apex Court. In the circumstances, the parties are directed to maintain Status quo as of today for six weeks from the date of this order. CIVIL APPLICATION NO.963 OF 2007 1. The Advocate appearing for the applicant states that since the applicant-society was not made party in the lower court, the applicant may be permitted to withdraw this application. Civil application is allowed to be withdrawn. It is however, made clear that the applicant is at liberty to apply to intervene in the suit and if an chamber summons for this purpose is made, it will be decided on its own merits. CIVIL APPLICATION NO.1085 OF 2008 . This is a civil application taken out by the plaintiffs for taking on record some Annexures to the letter dated 26.9.2007. In the interest of justice this application is allowed and stands 23 disposed off. CIVIL APPLICATION NO.1224 OF 2008 1. This is a civil application taken out by the original plaintiffs for a direction to the respondents to withdraw the letter dated 23.8.2008. It is alleged that the defendants, their officers and servants have committed breach of various orders granting Status quo. The contention is that, during the continuation of the status quo order, the defendants addressed a letter dated 23.8.2008 to the Additional Collector (Encroachment). On perusal of the letter, I find that it is not in breach of any status quo order. The letter was written by Nikhil Kapadia who is defendant No.6 in the suit. The plaintiffs seek to withdraw the same letter written by defendant No.6 and singed on behalf of the Tricamdas Chabildas. The writing of such a letter by itself would not entitle the plaintiffs to the relief sought for, 24 particularly, in the light of the observations made by this court while disposing of the A.O. Hence, civil application is dismissed. ( R.S.MOHITE, J.)