1 abs IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 461 OF 2007 IN SUIT NO. 282 OF 2007 Mrs. Jyoti Bhatia & Anr. .. Plaintiffs V/s Mrs. Farhat Mehdi Mandil & Ors. .. Defendant Mr. D.H. Mehta i/b Mr. N.H. Shukla for the plaintiffs. Mr. Rahul Narichania i/b Mulla & Mulla & Craigie Blunt & Caroe for the defendants. CORAM : D.G. KARNIK, J. DATE : 8TH JULY 2009 P.C. : 1. Heard the learned counsel for the parties. 2. By this motion, the plaintiffs seek to restrain the defendants from selling, transferring or alienating their flat bearing flat no. 84 situated on the 8th floor of Mehr-Dad Co-operative Housing Society Ltd., Cuff Parade, Mumbai (for short "the suit flat"). 2 3. The motion arises in a suit filed by the plaintiffs for specific performance of an agreement for sale dated 21st June 2006. According to the plaintiffs, by the agreement dated 21st June 2006, the defendants agreed to sell the suit flat to them for a consideration of Rs.1 crore. Though the plaintiffs are and always were ready and willing to perform their part of the contract, the defendants have failed and neglected to perform their part of the contract. The plaintiffs have therefore filed the suit for specific performance of the agreement for sale. 4. The suit was filed on 18th December 2006 and the ad-interim relief was granted by this Court on 22nd December 2006 without court issuing any notice to the defendants and in the absence of the defendants. 5. The defendants have subsequently appeared and contested the motion. According to the defendants, there was no concluded contract between the parties and the price of Rs.1 crore offered by the plaintiffs being too low was not agreed upon by them. There were only negotiations between the parties and the price was not agreed upon and, therefore, the plaintiffs were not entitled to the relief of specific performance nor were entitled to an injunction. 6. Learned counsel for the plaintiffs invited my attention to various documents, copies of which are annexed as Exhibits A to Q to the plaint. He 3 submitted that on 17th April 2006, the defendants had written a letter (Exhibit-B) to the housing society in which the suit flat is situated seeking its "no objection" to sell the suit flat and had annexed forms 20(1) and 20(2) to the letter. Form 20(1) was a formal application by the defendants addressed to the Secretary of the society seeking permission to sell the suit flat. Form 20(2) was a formal application by the plaintiffs addressed to the Secretary of the society seeking permission to purchase the suit flat and become member of the society. Learned counsel for the plaintiffs submitted that this letter and the accompanying two forms clearly show that there was a concluded agreement between the parties. He submitted that without there being a concluded agreement, the plaintiffs could not and would not have written such a letter to the society. In pursuance of the said letter, the society applied to the Collector for grant of permission to sell as his permission was necessary in view of the fact that the land on which the building stands has belongs to the Government and leased to the society. Counsel for the plaintiffs also invited my attention to the fact that the draft agreement was also prepared and the defendants had paid stamp duty of Rs.3,82,600/- thereon. The agreement was thus ready to be executed between the parties. The plaintiffs had also obtained the demand drafts/manager's cheques for the total amount of consideration of the suit flat which showed the readiness and willingness of the plaintiffs to perform their part of the contract. Ex- facie, if these documents are believed without reference to the defence of the defendants, they would prima facie show that there was a concluded 4 agreement between the parties. 7. The position however would be otherwise if the reply of the defendants and the documents produced along with it are perused. Learned counsel for the defendants submitted that the negotiations between the parties had started before 13th January 2006. The plaintiffs wanted to investigate the title of the defendants before the concluded agreement could be reached. The plaintiffs therefore sought permission of the defendants to investigate their title. Accordingly, the defendants issued a letter to the plaintiffs on 13th January 2006. Contents of the letter are eloquent are quoted below in extenso: “We confirm that you are entitled to investigate and issue a Public Notice as per the draft enclosed herewith at your own cost and expense and satisfy yourselves with regard to the marketable title to the aforesaid flat, on clear understanding that the matter is still at the stage of negotiation only and till the terms, conditions and price is agreed upon and reduced into writing on requisite stamp paper and signed by the parties there should not be deemed to have any concluded contract either oral or written between us in respect of the aforesaid flat. Please further note that if for any reason whatsoever the price and/or the terms and conditions are not agreed upon and 5 not reduced into writing and signed on a requisite stamp paper on or before 15th April 2006, the negotiations shall be treated at an end and neither of us shall have any claim against other. This is to further record that these writing supercedes any understand either oral or written prior to the date hereof. Kindly confirm the aforesaid on the duplicate of this letter.” The plaintiffs have signed office copy of the letter after making the following endorsement:- "We confirm what is stated above." It is clear that till then the parties had not agreed upon the terms and the plaintiffs were only granted permission to investigate the title. The letter further clearly states that any for any reasons the price and/or the terms and conditions are not agreed upon and not reduced into writing and signed on a requisite stamp paper on or before 15th April 1996, the negotiations should be treated to have ended. The letter leaves no doubt that the parties never intended to enter into an oral agreement but the agreement, if any, was to be in writing. Admittedly, no written agreement is signed by the defendants till date. 6 8. As regards the application made by the defendants to the society for obtaining no objection for sale and submission of Forms 20(1) and 20(2) referred to above, learned counsel for the defendants invited my attention to another letter dated 13th January 2006 written by the plaintiffs to the defendants. The letter is also eloquent and reads thus: “This is to confirm that an Application to Mehradad Co- operative Housing Society Ltd. and to the Collector of Mumbai for their respective permission for sale and transfer of the aforesaid flat and the relevant share certificate of the Society, will not be treated concluded contract between us and we will not make any such claim on the basis of such Application being made. We also confirm that the price and other terms and conditions for sale and transfer of the aforesaid flat and shares are to be discussed and finalised only after receipt of the required permission from the Society and the Collector of Mumbai and after satisfying with the title. sd/ plaintiffs" This letter clearly shows that though the defendants had made an application for "no objection" to the society, but that was not to be treated as a concluded contract between the parties. Interestingly, it may be noted that this letter 7 was suppressed by the plaintiffs when they sought an exparte injunction. Copy of this letter was not annexed by the plaintiffs to the plaint or to the motion for interim relief. In this connection, I may refer to proviso to Rule 4 of Order 39 of the Code of Civil Procedure which reads thus: "Provided that if an application for temporary injunction or in any affidavit supporting such application, the party has knowingly made a false or misleading statement in relation to a material particular and the injunction was granted without giving notice to the opposite party, the court shall vacate the injunction unless for reasons to be recorded it considers that it is not necessary so to do in the interest of justice." 9. In my view, the suppression of the letter dated 13th January 2006 (copy of which is at page 30 of the affidavit in reply) by the plaintiffs was a deliberate act. The plaintiffs have annexed the other letter of the defendants of the same date, but omitted to annexe a copy of this letter because that would have made it clear that the applications made to the society for "no objection certificate" were not to be treated as concluded contract. The exparte injunction was obtained by the plaintiffs by suppression of material facts amounting to misrepresentation and is liable to be vacated on this ground alone. 8 10. Even otherwise, I am not inclined to vacate the order of injunction on merits. The letter dated 13th January 2006 clearly shows that the application for obtaining "no objection certificate" was not to be treated as a concluded contract. On the other hand, the other letter of 13th January 2006 clearly shows that the parties had intended that the agreement, if any, was to be in writing and not oral. Admittedly, there is no written agreement between the parties. On being asked, learned counsel for the plaintiffs stated that the agreement dated 21st June 2006 was oral and was not in writing. If the parties had agreed that the concluded contract would only be in writing, there is no reason to believe that the parties varied that term and entered into an oral contract on 21st June 2006. In any event, there is no averment in the plaint that though it was initially agreed that the contract was to be in writing, the parties subsequently varied it and entered into an oral agreement. 11. There is yet another reason why I am not inclined to grant the relief of injunction to the plaintiffs. Section 16(c) of the Specific Relief Act provides that the plaintiff must plead and prove that he continuously was and is ready and willing to perform his part of the contract. On 17th June 2009, the plaintiffs through their counsel made a statement that the plaintiffs were ready to deposit the entire amount mentioned in the agreement after deducting the amount already paid to the defendants. Time was granted to the plaintiffs to comply with this statement made to the court. The plaintiffs 9 have not deposited the amount. On being asked today, learned counsel for the plaintiffs states that the plaintiffs are not willing to deposit the amount. The plaintiffs have not shown that they presently possess the necessary funds and continuously possessed the necessary funds to show their continued readiness and willingness to perform their part of the contract. 12. In the circumstances, the motion is dismissed with costs. 13. Learned counsel for the plaintiffs prays that the ad-interim order may be extended for some time to enable the plaintiffs to approach the appellate court. Learned counsel for the defendants strongly opposes the request. In my view, since the ad-interim injunction has been in force for a considerable time, it would be appropriate to grant some time to the plaintiffs to approach the appellate court. Accordingly, the ad-interim order shall remain in force for a period of 2 weeks. (D.G. KARNIK, J.)