1 mpt IN THE HIGH COURT OF JUDICATURE OF BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 1610 of 2008 IN SUIT NO. 1272 of 2008 M/s.Avdel Tools & Services .. Plaintiff versus M/s.Trufit Fasteners Pvt.Ltd. .. Defendant ... Mr.P. Sakseria i/b B. Munim & Co. for the plaintiffs. Mr.S.S. Purohit i/b M/s.FZB Associates for the defendants. CORAM : D.G.KARNIK, J DATED : 25th June 2008 P.C.: 1. By consent, taken up for final hearing. 2 2. By this motion, the plaintiff claims injunction restraining the defendant from selling, transferring, alienating or parting with the possession of the suit property. 3. The defendant is a lessee of Maharashtra Industrial Development Corporation (for short "MIDC") on the suit property. By an agreement styled as "Memorandum of Understanding" (for short "the MOU") dated 24th September 2007, the plaintiff agreed to sell, assign and transfer his leasehold interest in the suit property to the defendant for a total consideration of Rs.One crore seventy lakhs to be paid in three instalments. The parties also agreed that if the consent of MIDC for transfer was not received within 45 days from the date of the application, the defendant would refund to the plaintiff the advance of Rs.20 lakhs which was received by the defendant at the time of signing of the MOU. On 29th September 2007, the defendant applied to the MIDC for permission to transfer which was necessary under clause 2(s) of the lease deed. On 28th September 2007, the plaintiff also applied for permission of MIDC to acquire leasehold interest of the defendant in the suit property. The permission of MIDC has not so far been received. 3 4. Learned counsel for the plaintiff submitted that MIDC orally demanded certain documents and as the documents were not furnished by the defendant, the permission of MIDC could not be obtained. Learned counsel for the defendant refuting the allegation submitted that all the documents that were required in law were furnished to the MIDC and as permission was not received, defendant was entitled to terminate the MOU. As the permission was not received within 45 days, the defendant has terminated the MOU vide letter dated 24th November 2007 and returned the advance of Rs.20 lakhs by cheque. 5. Perusal of Exhibit-H to the plaint shows that the defendant had furnished to the MIDC 17 documents along with prescribed application for permission to transfer his leasehold interest in the suit property. According to the defendant however three more documents were necessary which were informed by the plaintiff to the defendant vide e-mail dated 1st December 2007. Learned counsel for the defendant firstly submitted that the e-mail was sent long after the termination by the plaintiff vide its letter dated 24th November 2007 and was of no consequence. Secondly, he submitted that the 4 documents called for in the e-mail dated 1st December 2007 were not at all necessary and the MIDC had never asked for those documents. No material has been placed on record by the plaintiff to show that those documents were asked for by the MIDC. He particularly pointed out that the first document mentioned in the plaintiff’s e-mail dated 1st December 2007 was "NOC from Commissioner of Labour" regarding full and final settlement of the labour dues by the defendant. Counsel submitted that the plaintiff wanted to cover himself against any labour dispute and was therefore denying the NOC which was not the obligation under the MOU. Plaintiff was wrongly asking for this document for his own reasons and the same was demanded by the MIDC. The plaintiff himself was not willing to perform his part of the contract without no labour dues and certificate from the Commissioner of Labour which was totally alien to the MOU. As the plaintiff was not willing to perform is part of the contract, agreement was validly terminated. In the alternative he submitted that in any event clause (10) of the MOU conferred on the parties unequivocal right to terminate the MOU if the permission of MIDC was not obtained within 45 days. Clause (10) of the Memorandum of Understanding reads thus: 5 (10) The Vendor doth hereby further declare that if the requisite consent from MIDC is denied or is not received within a period of 45 days from the date of application, the advance of Rs.20,00,000/- (Rupees Twenty lakhs only) received hereof from the Purchaser shall be returned to them without any interest within seven days of the receipt of denial from MIDC/expiry of 45 days from the date of application and shall be entitled to terminate the presents herein. Clause 10 of the MOU contemplates that if the permission of MIDC for the transfer was not received within 45 days (irrespective of any cause) the defendant was required to refund to the plaintiff the advance of Rs.20,00,000/- without interest within 7 days of the expiry of 45 days of the application. Since the application was made on 28th/29th September 2007, the defendant was under the obligation to return Rs.20,00,000/- which it returned by cheque along with its letter dated 24th November 2007. The fact that the plaintiff did not encash the cheque was immaterial. In any event, the defendant had a right to terminate the agreement by refunding 6 Rs.20,00,000/- if the permission of MIDC for the transfer was not received. Prima facie, the contention commends to me. If the permission was not obtained within 45 days the defendant was required to refund Rs.20,00,000/- to the plaintiff. In commercial transaction, where the consent of third party is required parties may agree that the transaction would not go through if the consent was not obtained within specified time. The parties had so agreed and the defendant was entitled to terminate the MOU, nay he was required to return the advance of Rs.20 lakhs if the consent of the MIDC was not obtained within 45 days. 6. Paragraph no.5 of the MOU states that plaintiff had paid to the defendant Rs.20,00,000/- on execution of the agreement and was to pay Rs.30 lakhs more on receipt of clearance from MIDC and further sum of Rs.1,20,00,000/- on or before 30th November 2007 against possession or in any event on or before 10th December 2007. Plaintiff was therefore required to have with him Rs.1,50,00,000/- in addition to the earnest of Rs.20,00,000/-. On the first occasion when the matter came up before me I orally directed the plaintiff to produce the material on record to show that it had the money of Rs.1,50,00,000/- was able to procure it. No such material has been 7 produced. Learned counsel for the plaintiff submits that it is irrelevant to show that the plaintiff had the money or could have procured the same. Counsel submitted that that was irrelevant and the plaintiff was not obliged to plead and prove that he had or could have procured the money. I am unable to agree. Section 16(c) of the Specific Relief Act, plaintiff requires the plaintiff to aver and prove his continuous readiness and willingness to perform his part of the contract. The only part which was required to be performed by the plaintiff, apart from obtaining the permission from MIDC, was to pay Rs.1,50,00,000/-. In my view, therefore it was necessary on the part of the plaintiff to show that he had Rs.1,50,00,000/- or was in a position to procure the money on the relevant date. This has not been done. In my view, therefore plaintiff has failed to prove his readiness and willingness which he was required to aver and prove under section 16(c) of the Specific Relief Act. Plaintiff is therefore not entitled to relief of injunction. Motion is dismissed. (D.G. KARNIK, J)