1 caf936.sxw ssp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELATE JURISDICTION CIVIL APPLICATION NO.936 OF 2008 IN FIRST APPEAL NO.347 OF 2008 M/s.Godrej & Boyce Manufacturing Company Pvt.Ltd.& Ors. ...Applicants vs. Dhansukhlal Amritlal Parekh (since deceased through L.Rs) and others ...Respondents Mr.Aspy Chinoy, Sr.Counsel with Mr.Nitin Thakkar, Sr.Counsel and Mr.Zal T.A. i/b Shri Bachubhai Munim & Co. for the Applicants Mr.V.A.Thorat, Sr.Counsel with Mr.Pankaj Savant, Pradip Kapadia, Ms Deepa and Mr.Bhavin Savla i/b Vigil Juris for the Respondents CORAM : A.S.OKA,J. DATE : MARCH 10,2011 P.C.: 1 The submissions of the learned counsel for the parties were heard yesterday. This Civil Application no. 936 of 2008 has been filed by the original Defendants. This Civil Application is taken out in First Appeal no. 347 of 2008 preferred by the Defendants. The prayer in the application is for stay of the execution and operation of the impugned Judgment and decree. In the alternative, a prayer is made for directing the plaintiffs to furnish adequate security in favour of the Defendants to secure the amount that may become due by them to the Defendants on account of prejudice sustained and damage that would be caused to the Defendants by the continued operation of the impugned Judgment and Decree. 2 The suit was filed for injunction simplicitor 2 caf936.sxw restraining the Defendants from selling, transferring, alienating, parting with possession or in any manner dealing with the suit property and from creating third party rights and from developing the suit property. The suit property is described in paragraph 1 of the plaint being lands bearing old survey no.12 and New Survey Nos. 61 (Part), 63(Part), 64(Part) and 65 (Part) at village Vikhroli, Mumbai. According to the case of the Plaintiffs, there was an agreement for sale by and between the Defendants and Plaintiffs in respect of the suit property. The said Agreement was allegedly made in the year 1970. According to the Plaintiffs, M/s.Pyne & Company, Solicitors of the first Defendant Company recorded the agreement for sale dated 12 th December 1970 on a stamp paper. Various averments have been made regarding alleged transaction between the parties. A reference is made in the suit to the letter dated 2 nd August 1972 sent by the Advocate for the Defendants to the Respondents by which the agreement was allegedly cancelled. It is stated in the plaint that the title of the Defendants is under cloud as the State of Maharashtra has filed a suit for declaration that the suit lands vest in the State Government. The suit was contested by the Defendants by filing a written statement. Various contentions were raised in the written statement. By the impugned Judgment and Decree, a perpetual injunction was granted against the Defendants. The operative part of the decree reads thus : The defendants are hereby restrained from alienating or disposing the suit property in any way to any third person, till the date of taking appropriate steps by filing the suit within time by the plaintiffs, after marketable title of the defendants to the suit property is 3 caf936.sxw cleared. . In the circumstances, no order as to costs. . A decree be drawn up accordingly. 3 The First Appeal no.347 of 2008 preferred by the Defendants has been admitted. The Plaintiffs have preferred First Appeal no.56 of 2008 for challenging the same decree as the entire prayer (a) in the suit was not granted. Even the said Appeal has been admitted. In the appeal preferred by the Plaintiffs, an application for temporary injunction was made by the them. The said application being Civil Application No.6671 of 2007 along with the present Civil Application No.963 of 2008 were heard by this Court on 28 th March 2008. The prayer in the Civil Application no.6671 of 2007 was for grant of interim injunction in terms of the interim injunction which was operating during the pendency of the suit. As pointed out earlier, while passing the impugned decree, only a limited perpetual injunction was granted restraining the Defendants from alienating or disposing of the suit property in any way to any third party till the date of the Plaintiffs taking appropriate steps of filing the suit for specific performance by within time after marketable title of the Defendants is established. While passing the order dated 28th March 2008 on Civil Application no.6671 of 2007, in paragraph 2, this Court observed thus : 2 The appeal preferred by the Appellants/original plaintiff Nos.1,3 and 4 has been already admitted for final hearing. When a query was made by this Court to the learned senior Counsel for the Appellants/Applicants whether the Appellants intend to file a suit 4 caf936.sxw for specific performance of the agreement pleaded in the suit, on instructions he makes a statement that the Appellants/Applicants will file a suit for specific performance within a period of 4 months from today. The learned Senior Counsel for the Applicants pointed out that there was interim relief operating in favour of the Applicants during the pendency of the suit and after the admission of the Appeal, the said interim relief deserves to be continued till the final disposal of the Appeal. In paragraphs 4 and 5 of the Order, this Court observed thus : 4 My attention has been invited to the paragraph 3 of the application which shows that there was interim injunction operating in favour of the Appellants during the pendency of the suit. Prayer (a) of this application seeks more or less same relief which was operating during the pendency of the suit. Now, a statement has been made by the learned senior counsel for the Applicants that a suit for specific performance will be filed within a period of four months from today. It is obvious that the Applicants will have to pray for the interim relief which is prayed for in this application in the substantive suit. However, as the interim relief was operating till the final disposal of the suit, I am inclined to continue the same till 29th August 2008 to enable the Applicants to apply for appropriate interim relief in the suit which they propose 5 caf936.sxw to file. 5 It is made clear that the protection which is granted by this Court in this Civil Application is only on the basis of the statement made by the learned counsel for the Applicants that within a period of four months from today, they intend to file a substantive suit for specific performance. After making above observations, this Court disposed of the said Civil Application of the Plaintiffs by directing that interim order which was in force till final disposal of the suit will continue operate till 29 th August 2008. On the same date, on the present application, this Court passed order making a reference to the order passed in the Civil Application in appeal preferred by the Plaintiffs. In paragraphs 2 and 3 this Court observed thus : 2 In the said order, it is observed that it will be open for the plaintiffs to apply for interim relief in the suit for specific performance which may be filed by them. Interim protection granted by the said order will come to an end on 29 th August 2008. 3 In case the original plaintiffs are unable to secure any order of interim relief on or before 29th August 2008 in the suit which is proposed to be filed by them, the prayer (a) of this application will have to be considered. Therefore, this application shall be placed high on board for hearing on 29 th August 2008. 6 caf936.sxw 4 The learned senior counsel for the Applicants/Defendants submitted that though a solemn statement was made by the Respondents/Plaintiffs before this Court on 28th March 2008 that a suit for specific performance of the alleged agreement for sale will be filed within a period of four months from the said date, in fact, no such suit has been filed. He pointed out that the Respondents filed Civil Application no.3971/2008 in First Appeal no.58/2008 in which one of the prayers was for relieving the Respondents from the earlier statement made before this Court that a suit for specific performance will be filed within a period of four months from 28th March 2008. He submitted that the said prayer was rejected by this Court by a detailed order which is not disturbed by the Apex Court in a Special Leave Petition filed by the Plaintiffs. He submitted that though the Respondents claimed on the basis of the oral agreement for sale of the year 1970-71, till today not a single farthing has been paid by the Plaintiffs to the Defendants. Inviting attention of the Court to the cross examination of the first respondent, he submitted that on the date of cross examination, the value of the suit land was above Rs.1800 crores. He pointed out the various affidavits filed in this Court and submitted that the Respondents have given up their earlier case that the sale deed was not be executed till the title of the Applicants was cleared. He submitted that the Respondents have not filed a suit for specific performance in spite of giving express assurance to this Court and in any event, such suit is already barred by limitation. He submitted that but for the assurance given by the Plaintiffs on 28 th March 2008, the present Application would have been heard by this Court on the very day. He submitted that the present suit simplicitor for injunction was filed by the Respondents in the City Civil 7 caf936.sxw Court nearly 17 years after the alleged agreement for sale. He submitted that though not a single farthing is paid by the Plaintiffs to the Applicants, a decree for perpetual injunction has been passed which prevents the Defendants from creating third party rights. He submitted that in view of the law laid down by a Division Bench of this Court in case of Yashwantrao Martandrao Mukane since deceased through his legal representatives and another Vs. Khushal K. Bhatia [1986 (1) Bombay Cases Reporter 533], the suit itself was not maintainable. He, therefore, submitted that execution and operation of the impugned Judgment and decree will have to stayed. 5 The learned senior counsel for the Respondents (original plaintiffs) invited the attention of the Court to the order dated 12 th November 2008 passed by the Apex Court. He submitted that all issues which were raised by the Respondents in Civil Application no. 3971/2008 including the issue regarding the statement of the learned senior counsel for the Respondents recorded by this Court in order dated 28 th March 2008 in Civil Application no.963 of 2008 have been kept open. He submitted that the Apex Court has directed this Court to expeditiously hear the First Appeals and therefore, the First Appeals deserve to be heard immediately. He submitted that the specific case of the Respondents is that the sale was to be executed after the defect in the title of the Applicants was cleared. He pointed out that the title suit filed by the State Government in respect of the suit property is pending in this Court and therefore, there is a cloud over the title of the Applicants. While admitting that the Respondents have not paid any amount to the Applicants towards consideration, he submitted that the stage for payment of consideration has not arrived yet and the same will be 8 caf936.sxw payable at the time of execution of conveyance only after the title of the Applicants become clear. When this order is being dictated, the learned counsel for the Respondents states that a part of the suit lands has been acquired by the State of Maharashtra and the Applicants have received a substantial compensation on account of acquisition. He, however, admits that no such contention is raised in any affidavits filed on record of this Court. 6 The learned senior counsel for the Respondents submitted that granting stay to the execution of the decree will amount to virtually allowing the appeal preferred by the Applicants/Defendants. He submitted that in the application, nothing is set out by the Applicants to indicate whether they want to develop the suit property or they want to transfer the same. He submitted that the suit cannot be allowed to become redundant by staying the decree for perpetual injunction. He submitted that the statement that a suit for specific performance will be filed was made in the cross appeal preferred by the Respondents/Plaintiffs and that the Respondents have already suffered the consequences of not complying with the said statement in as much as ad- interim relief of injunction which was granted in the Civil Application no.6671 of 2008 filed in the cross appeal of the Respondents stands vacated. He submitted that the statement made by the Respondents and non compliance may not have any relevance while deciding the present application for granting drastic relief of stay. 7 I have carefully considered the submissions. The Plaintiffs filed a suit in the year 1988 based on an alleged oral agreement of sale of the year 1970-71. The perusal of the plaint shows that there is an averment 9 caf936.sxw made that by letter dated 2nd August 1972 sent by the Advocate for the Defendants, the agreement stood cancelled. While passing the decree in the suit, a perpetual injunction was granted restraining the Applicants from alienating or disposing of the suit property in any way to the third person. The trial Court directed that the said perpetual injunction will operate till the Plaintiffs file a suit for specific performance within stipulated time after marketable title of the Applicants is cleared. 8 As stated earlier, the present application for stay of execution of the decree filed by the Applicants- Defendants and application for interim injunction filed by the Respondents/Plaintiffs came up for hearing on 28 th March 2008. As stated earlier, the prayer in the application made by the Respondents was for grant of temporary injunction in terms of the wider order of interim injunction granted during the pendency of the suit. A solemn statement was made by the Respondents/Plaintiffs through their counsel that they will file a suit for specific performance within four months from that date. This Court in paragraph 4 of the order passed on 28th March 2008 specifically observed that the relief prayed for in the Civil Application no. 6671 of 2008 can only be granted in a substantive suit for specific performance. In paragraph 5 of the order, this Court observed that only on the basis of the statement made by the Respondents/plaintiffs that they intended to file a suit for specific performance within a period of four months on that day, interim relief was being granted for a limited duration,. 9 On the same day, on the present application, an order was passed by this Court recording that in the 10 caf936.sxw application for interim relief filed by the Respondents, this Court has granted interim injunction till 29th August 2008 to enable the Respondents to file a suit for specific performance. Only on the ground that a statement was made by the learned senior counsel for the Respondents that a suit for specific performance will be filed, this Court postponed the consideration of prayer for stay in this Civil Application till 29th August 2008. If the learned senior counsel for the Respondents had not made a statement that the Respondents intended to file a suit for specific performance, this Court would not have postponed the consideration of prayers in this application and the same would have been taken up for hearing on the very day. Thus, this Court postponed the consideration of prayer for stay on the basis of the statement made by the learned senior counsel for the Respondents and that is how the present application has remained pending for such a long time till today. 10 In the meanwhile, the Respondents made Civil Application no.3971/2008 in First Appeal no.58/2008 filed by them. The said application was rejected by the order dated 28th August 2008. The prayers made in the Civil Application read thus : b) to permit the Applicants/Appellants to withdraw the First Appeal. (First Appeal no. 58/2008) with liberty to file a Review Application in the Bombay City Civil Court. (b-1) that this Hon ble Court be pleased to cancel the order dated 18th January 2008 passed by this Hon ble Court admitting the First Appeal no.56/2008. (c)to relieve/release the Applicants/Appellants from the statement made on their behalf, namely 11 caf936.sxw that the Applicants would file a suit for specific performance within a period of four months, as recorded by this Hon ble Court in the order dated 28.3.2008 passed in Civil Application no.6671 of 2007 in First Appeal no. 58/2008. 11 Perusal of the order of this Court passed on the said Application shows that elaborate submissions were made before this Court on the said prayers. This Court considered the various statements made in the affidavits filed on record and in particular statements made by the Respondents in this application and in paragraphs 13 and 14 of their rejoinder. In paragraph 18, this Court held thus : 18 Reading of the said pleadings therefore inter-alia discloses that the Applicants had given up their case that the sale deed was not to be executed till future date. There is therefore substance in the submissions made by Shri Chinoy, the learned senior counsel for the Respondents that the said statement recorded in the order dated 28th March 2008 was a well considered statement which was in keeping with the case of the Defendants in the said Civil Application. (emphasis added) 12 Thus, this Court recorded a finding that the pleadings of the Plaintiffs disclose that the Plaintiffs have given up their case that the sale deed was not to be executed till a future date. This Court also observed that the statement of the Respondents regarding filing of suit for specific performance recorded in order dated 12 caf936.sxw 28th March 2008 was a well considered statement which was consistent with the case of the Respondents in their Civil Application for interim relief. In paragraph 19, this Court observed that the statement made regarding filing of the suit was a statement of facts. This Court thereafter proceeded to observed that the Respondents will have to be pinned down to the statement made on oath as well as the statements made before the Court and they cannot be permitted to approbate or reprobate. As stated earlier, the said Civil Application no.3971 of 2008 was rejected by this Court by declining to relieve/release the Respondents from their statement regarding filing of a suit. The said order was challenged before the Apex Court. The said order was not disturbed by the Apex Court. . The order of the Apex Court reads thus : Having heard learned counsel for the parties, we dispose of the Special Leave Petition by directing that the pending First Appeal filed by the petitioner herein be heard along with the appeal filed by the Plaintiffs, at any early date, if possible. While disposing of the appeals, the Appellate Court will given both the parties, an opportunity of dealing with the observations made in the order impugned before us, since the observations have been made at an interim stage. . Mr.Salve, learned senior counsel appearing for the petitioner, states that the petitioner will not file any suit at this stage. 13 It is obvious that the Apex Court has not disturbed 13 caf936.sxw the order passed by this Court on 28th August 2008. The net effect of the order of the Apex Court is that the contentions which were raised by the Respondents in the said Civil Application and observations made in the order dated 28th August 2008 will have to be considered at the time of final hearing of the appeals. Thus, as far as this Court is concerned, the orders dated 28th March 2008 and 28th August 2008 have become final and the said orders will continue to bind this Court till the stage of final hearing of the appeals. It is needless to say that all contentions of the parties will remain open at the stage of final hearing of the appeals. However, suffice it to say that aforesaid orders will bind this Court till the final hearing of the appeals. Thus, prima facie finding recorded in paragraph 18 of the order dated 28 th August 2008 that the Plaintiffs have given up their case that the sale deed was not to be executed till a future date continues hold the field even as of today. As stated earlier, a suit simplicitor for injunction was filed on the basis of the alleged agreement for sale. Though the learned counsel for the Respondents made a grievance that the submission of the learned counsel for the Defendants that the suit lands are worth Rs.1800/- crores is not correct, it cannot be disputed that the suit lands are very valuable. Apart from the fact that the suit for specific performance of the alleged agreement of the year 1970-71 has not been filed till the year 2011, it is an admitted position that the Plaintiffs on the basis of the alleged agreement have not paid any consideration whatsoever. The interim order or final decree passed in the suit is operating from the year 1988 restraining the Applicants from creating third party rights in respect of the suit lands. The Respondents/Plaintiffs have admittedly not paid even a Rupee to the Applicants towards the price of the suit lands. As pointed out 14 caf936.sxw earlier, the plaint discloses that the agreement was terminated by the Defendants way back in the year 1972. As stated earlier, a submission was sought to be made during the course of the dictation of this order that the Defendants have received compensation from the State Government on account of acquisition of the part of the suit land. However, the said submission has no relevance. Suffice it to say that as of today, not a single farthing has been paid by the Respondents to the Applicants by way of consideration. Till today, there is no suit filed by the Respondents to enforce the agreement. In case of Yashwant Martandrao Mukane (supra) this Court dealt with the section 41(h) of the Specific Relief Act,1963. The Division Bench of this Court held thus : 17...Similarly, when a suitor of such type would have equally efficacious relief available so as to enforce the contract by taking appropriate remedy, without recourse to it, it would be indeed difficult to extend the discretionary relief of permanent injunction. Clause (h) of section 41 of the Specific Relief Act, would require the Court to refuse such a type of prayer for injunction. It is not as if that in a suit to enforce the agreement itself, such a relief is sought. On the other hand, although the plaintiff came to the Court with the allegation that the other party has repudiated the agreement for sale, he has omitted to seek its enforcement and is trying to hold the property obviously without seeking to complete his title by enforcing the agreement for sale. To such a case, the principles underlying clause (h) of section 41 of the Specific Relief Act can be extended so 15 caf936.sxw as to refuse such an ancillary relief. (emphasis supplied) 14 The statement made by the Respondents on 28th March 2008 which is held to be a well considered statement prevented this Court from hearing this application for stay on 28th March 2008. Considering the fact that there is no attempt made by the Respondents of specifically enforcing the agreement of 1970 for such a long period, the Respondents are disentitled to injunction especially when for last 41 years they have not paid any consideration. Thus, the impugned decree is prima facie illegal. Considering all these aspects, a case is made out for grant of stay. 15