-: 1 :- HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL No. 139 OF 2008 IN NOTICE OF MOTION No. 3062 OF 2007 IN SUIT No. 2316 OF 2007. Loreal India Private Limited, ] A company incorporated under the] Companies Act, 1956 having ] its registered office at ] 2nd floor, Peninsula Tower, ] Ganpatrao Kadam Marg, ] Lower Parel,Mumbai – 400 013. ] ..Appellant. V E R S U S 1. Global Earth Properties & ] Developers Pvt. Ltd., (Formerly ] known as Global Insurance ] Products Marketing Ltd.) ] a company incorporated under the ] provisions of the Companies Act, ] 1956 and having its Corporate ] Office at 102, Arihant Building, ] 15th Road, Khar (West), ] Mumbai – 400052. ] ] 2. Piramal Holdings Ltd.,also ] a Company having its registered ] office at Corporate Crossroads, ] 28, Pt. M.M. Malviya Road, ] Haji Ali, Mumbai 400 034 ] and also having its office at ] 106, Peninsula Centre, ] -: 2 :- Dr. S. S. Rao Road, Parel ] Mumbai – 400 012. ] ..Respondents. ALONG WITH APPEAL No. 182 OF 2008 IN NOTICE OF MOTION No. 3062 OF 2007 IN SUIT No. 2316 OF 2007. Global Earth Properties & ] Developers Pvt. Ltd., (Formerly ] known as Global Insurance ] Products Marketing Ltd.) ] a company incorporated under the ] provisions of the Companies Act, ] 1956 and having its Corporate ] Office at 102, Arihant Building, ] 15th Road, Khar (West), ] Mumbai – 400052. ] ..Appellant. V E R S U S. 1. Loreal India Private Limited,] A company incorporated under the] Companies Act, 1956 having ] its registered office at ] 2nd floor, Peninsula Tower, ] Ganpatrao Kadam Marg, ] Lower Parel,Mumbai – 400 013. ] 2. Piramal Holdings Ltd.,also ] a Company having its registered ] office at Corporate Crossroads, ] 28, Pt. M.M. Malviya Road, ] Haji Ali, Mumbai 400 034 ] and also having its office at ] -: 3 :- 106, Peninsula Centre, ] Dr. S. S. Rao Road, Parel ] Mumbai – 400 012. ] ..Respondents. ----- Mr. Pravin Samdani, Sr. Advocate a/w Ms. Soumya Shrikrishna a/w Darshan Mehta i/b M/s. Dhruve Liladhar & Co., for the appellants in Appeal No. 139 of 2008 and Respondents in Appeal No. 182 of 2008. Mr. Darius Khambhatta, Sr. Advocate a/w Chetan Kapadia, Parimal Shroff, Subodh Joshi, Sanjay Kotak and Radhika Kalpatrai i/b M/s. P. K. Shroff & Co., for the appellants in Appeal No. 182 of 2008 and Respondents in Appeal No. 139 of 2008. ------ Coram: S. B. MHASE & PRASANNA B. VARALE, JJ. Date of reserving judgment : 8th August 2008. Date of pronouncement of judgment : 16th March, 2009 ORAL JUDGMENT (Per S. B. Mhase, J.) 1. Both these appeals are directed against the judgment and order passed by the learned Single Judge of this Court on 17th January 2008 in Notice of Motion No. 3062 -: 4 :- of 2007 in Suit No. 2316 of 2007. Against the said order original Plaintiff has filed Appeal No. 139 of 2008 wherein the Respondents are original Defendant nos. 2 & 3 respectively. Appeal No.182 of 2008 has been filed by original Defendant no.1 wherein the Respondents are original Plaintiff and original Defendant no.2. It is clarified that original Defendant no.2 has not filed any appeal and in both the appeals original Defendant no.2 is the Respondent No. 2. For the sake of convenience and in order to avoid ambiguity and confusion, the Appellant in Appeal No. 139 of 2008 and the Respondent No. 1 in Appeal no. 182 of 2008 has been referred to as “the Plaintiff”, while the Appellant in Appeal No. 182 of 2008 and the Respondent No. 1 in Appeal No. 139 of 2008 has been referred to as “the Defendant No. 1”. So also the Respondent No. 2 in both the appeals has been referred to as “the Defendant No. 2”. 2. Suit No. 2316 of 2007 has been filed by the Plaintiff in the High Court seeking specific performance of the -: 5 :- agreements at Exhibits -“A” to “D” to the plaint, and prayed that a decree be passed against the Defendants or such of them as may be determined by the High Court to sign and execute all such deeds and documents and writings for effectively renewing the leave and licence agreement upto 30th November 2012 in terms of Exhibits “A” to “D” and in particularly, Exhibit-“D”, interalia by, but not limited to signing requisite leave and licence agreement in terms of Addendum [Exhibit-“D” hereto] upto the period of 30th November 2012 and not interfering with the Plaintiff’s possession in respect of the said premises upto 30th November 2012. In the alternative, the Plaintiff has prayed that the defendants and/or such of them as may be determined by this Court be ordered and declared to pay to the Plaintiff a sum of Rs. 66,13,87,400/- together with interest thereon at the rate of 18% per annum from the date of the filing of the suit till payment and/or realization. The Plaintiff then has made interim prayer restraining the defendants from interfering and obstructing the Plaintiff’s -: 6 :- possession and also prayed for stay of the proceeding pending in the Small Causes Court bearing Suit No. 133/150 of 2007 filed by the Defendant No. 1. 3. On filing the said suit, the Plaintiff has moved notice of motion no. 3062 of 2007 thereby making interim prayers pending suit No. 2316 of 2007. They are as follows : “(a) that pending the hearing and final disposal of the Suit, the defendants by themselves, their servants and agents be restrained by an order and injunction of this Hon'ble Court from in any manner interfering with, obstructing or disturbing the Plaintiff’s possession in respect of the said Premises; (b) that pending the hearing and final disposal of the Suit, this Hon'ble Court may be pleased to stay the proceedings in the Hon'ble Court of Small Causes bearing Suit No. 133/150 of -: 7 :- 2007 and the Defendant no.1 be restrained by this Hon'ble Court from in any manner proceeding further with the said Suit No. 133/150 of 2007;” 4. It appears that initially having found that the Defendant Nos. 1 & 2 are absent in spite of service of notice, the learned Single Judge has passed ad-interim orders. [Though there is a dispute raised by the Defendants that the service was not effected and the ad-interim orders were obtained without service.] 5. The above referred notice of motion was decided by the learned Single Judge after hearing both sides on 17th January 2008. Though the learned Single Judge has found that the documents annexed to the plaint, viz., Exhibits – “A” to “D”, may have been executed between the parties, the same is not enforceable at law since the compensation is a remedy available to the Plaintiff. Thus, the learned Single Judge has observed that the contract of leave and licence -: 8 :- between the Plaintiff and the Defendant for a period of 33 months is irrevocable unless a breach of any of the conditions of the said contract has been committed, but the further relief of specific performance, especially extension, prima facie, cannot be granted because compensation is the appropriate remedy. The learned Single Judge has also observed that the claim of extension/renewal is based upon the document at Exhibit– “D”, namely, the Addendum. The period of licence as per the agreement of leave and licence has come to an end and the learned Single Judge observed that the suit filed by the Defendant No. 1 in the Small Causes Court, Mumbai bearing No. 133/150/2007 is not based on breach of conditions of the terms of agreement of leave and licence, but it is based on the ground that the period as stated in the said agreement of leave and licence has been consumed by the Plaintiff, and the said agreement of leave and licence has come to an end by efflux of time and thereby beyond a period of 33 months as stated in the leave and licence agreement, the Plaintiff is not entitled to -: 9 :- stay in and enjoy the said premises. Thus, the learned Single Judge observed that the suit in the Small Causes Court, Mumbai is different than the suit in the High Court, and thereby having found that the compensation is an appropriate remedy available to the Plaintiff and that the suit in the Small Causes Court, Mumbai is distinct and is based on different cause of action from the cause of action in suit no. 2362 of 2007 pending in this Court, the learned Single Judge has refused to grant the reliefs as prayed in Notice of motion No. 3062 of 2007. 6. Thus, in short Notice of Motion was rejected. However, while rejecting the said Notice of Motion the learned Single Judge has observed in paragraph no. 22 that needless to observe that till such time, the plaintiffs will be entitled to enjoy all the facilities and amenities associated with the suit premises which they were otherwise enjoying under the Leave and License agreement as if the same was in force. Indeed, the plaintiffs can do so on discharging their -: 10 :- obligations under the same agreement till the decree of eviction is passed. This observation however, is not an expression of opinion on the claim of the Defendant No. 1 for mesne profits if any, against the plaintiffs. While passing the final order the learned Single Judge in paragraph no. 33 observed and clarified that, however, it is clarified that the Defendant no.1 shall not take forcible possession of the suit premises, but will be free to pursue its legal remedy pending before the Small Causes Court for eviction and possession of the suit premises against the plaintiffs. In other words, the Defendant no.1 will be free to evict the plaintiffs by following due process of law. Till that time, the plaintiffs will be entitled to enjoy the suit premises and all facilities and amenities associated thereto in the same way as provided in the Leave and License agreement, on discharging its obligations provided under that agreement. 7. Thus, while rejecting the Notice of Motion the learned Single Judge has allowed the Plaintiff to enjoy the -: 11 :- suit premises and all facilities and amenities associated thereto as provided in the leave and licence agreement on discharging its obligations provided under the said agreement. Thus, the Plaintiff is aggrieved by the rejection of the Notice of Motion, and therefore the Plaintiff has preferred Appeal No. 139 of 2008. So far as the Defendant No. 1 is concerned, the Defendant No. 1 is aggrieved by an observation quoted above from paragraph no. 22 and the direction that till the Defendant No. 1 evicts the Plaintiff by following the due process of law, the Plaintiff will be entitled to enjoy the suit premises, facilities and amenities associated thereto, in the same way as provided in the leave and licence agreement on discharging the obligations provided under the said agreement, and thereby has preferred Appeal No. 182 of 2008. Both these appeals are heard together for final disposal at the stage admission since they were arising from the interim application. 8. Defendant No. 2 is a Developer of building known -: 12 :- as “Peninsula Tower-I” and were the owner of Unit Nos. 201, 202, 203, 204 on second floor in Peninsula Tower-I along with 27 car parking spaces situated at Peninsula Corporate Park, Ganapatrao Kadam Marg, off. Senapati Bapat Marg, Lower Parel, Mumbai – 400 013. [Hereinafter collectively referred to as “the suit premises.”] In respect of the suit premises on 18th November 2003 the Plaintiff and the Defendant No. 2 executed a Letter-of-Intent regarding the intention of the Defendant No. 2 to grant a licence to the Plaintiff. Thereafter on 21st June 2004, the Plaintiff and the Defendant No. 2 executed four documents, namely, (i) the leave and licence agreement (ii) Amenities agreement, (iii) Security deposit agreement, and (iv) a Side Letter containing the provisions for renewal. These four documents are at Exhibits “A” to “D” to the plaint. By the agreement of leave and licence, the Defendant No. 2 granted to the Plaintiff licence to use and occupy the suit premises for a period of 33 months at a consideration and on the terms agreed upon and recorded in the said leave and licence agreement. As -: 13 :- per the Amenities agreement, the Defendant No. 2 provided the amenities as stated in the said agreement in exchange of consideration recorded therein. Under the agreement for Security Deposit, the Plaintiff deposited with the Defendant No. 2 the sum of Rs. 2,12,69,016/- as security deposit. Both these agreements, namely, amenities agreement and security deposit agreement, were co-terminus with the leave and licence agreement. 9. Case of the Plaintiff, in short, is that the leave and licence agreement is irrevocable licence and as per the clauses in Addendum or Side-letter, which is at Exhibit –“D”, Defendant No. 2 has agreed to renew the said leave and licence agreement for further three terms – the first of which was for 15 months and was expressed to be automatic (with lock-in period) and the remaining two further renewals of 18 months and 33 months respectively were the options given to the Plaintiff which options were to be exercised by the Plaintiff. -: 14 :- 10. It appears that there was a Letter-of-intent between the Defendant Nos. 1 & 2 executed on 29th January 2004 recording the intention of the Defendant no.2 to sell the suit premises to the Defendant No. 1. The Defendant No. 1 was made aware of the commitments with regard to the licence period in the Letter-of-Intent dated 18th November 2003 between the Plaintiff and the Defendant No. 2. It is alleged that the Defendant No. 1 had agreed to be bound as per the terms and conditions of the said Letter-of-Intent dated 18th November 2003. It is further alleged that after the execution of four documents referred to above between the Plaintiff and the Defendant No. 2, by sale-deed dated 30th November 2004, the Defendant No. 2 sold and transferred the suit premises to the Defendant No. 1 subject to the rights and entitlement of the Plaintiff in terms of the aforesaid agreements (being Exhibits - “A” to “D” to the plaint.). The Defendant No. 1 only accepts the document at Exhibits – “A” to “C”. However the document at Exhibit –“D” to the plaint, -: 15 :- namely, the Side-letter or Addendum is disputed by the Defendant No. 1. It further appears that by correspondence dated 2nd December 2004 there was an attornment of the leave and licence agreement and the plaintiff was directed to deposit the licence charges with HDFC Bank in the Escrow Account. However, the dispute started between the parties round about the time when the period stated in the leave and licence agreement dated 21st June 2004, namely after 33 months was likely to expire. The said period was to expire on 31st May 2007 and therefore by a letter dated 9th April 2007 the defendant no.1 directed that the leave and licence agreement shall expire by 31st May 2007, and therefore by 1st June 2007 the Plaintiff shall remove themselves from the suit premises. By letter dated 19th April 2007 the Plaintiff forwarded a copy of the Addendum dated 21st June 2004 and three drafts of the leave and licence agreement, the amenities agreement and the agreement for security deposit and requested to execute them so that the Plaintiff can remain into possession and enjoyment of the -: 16 :- said property till 2012. There was exchange of letters between the parties. However, ultimately the Defendant No. 1 filed suit No. LE-133/150/2007 before the Small Causes Court, Mumbai on 4th July 2007 claiming that the period of the leave and licence agreement for 33 months, as agreed between the Plaintiff and the Defendant No. 2, is over, and therefore the Plaintiff shall hand over the possession of the suit premises to the Defendant no.1 Thereafter on 16th August 2007 the Plaintiff filed suit No. 2316 of 2007 in the High Court seeking specific performance of the leave and licence agreement, amenities agreement, agreement for security deposit and the Addendum, all dated 21st June 2004, in respect of the suit premises. On 17th August 2007, Notice of Motion No. 3062 of 2007 for interim reliefs was moved. It was heard and decided by the learned Single Judge on 17th January 2008 as stated and referred to above and thereby the Notice of Motion was rejected and while rejecting the said Notice of Motion certain observations were made and certain directions were given to the Defendant -: 17 :- No. 1, and therefore the original Plaintiff and the Defendant No. 2 respectively, as stated above, have filed the present appeals. 11. So far as the execution and existence of the agreement to leave and licence, the amenities agreement and the agreement in respect of the Security deposit is concerned, there is no dispute between the Plaintiff and the Defendant No. 1. The Defendant No. 1 respects these three agreements. The claim of the Defendant No. 1 is that the Letter-of-Intent dated 18th November 2003 has been ultimately relegated, after negotiations, to document of agreement of licence, amenities agreement and the Security Deposit Agreement, and therefore, it is the case of the Defendant No. 1 that though the Letter-of-Intent dated 18th November 2003 provided that the licence period was 66 months with initial 48 months commencing from the date of possession being lock-in period, is ultimately the leave and licence agreement which was executed between the Plaintiff -: 18 :- and the Defendant No. 2 on 21st June 2006 was for a period of 33 months, and therefore the period of the leave and licence agreement between the Plaintiff and the Defendant No. 2 was only for 33 months. It is further case of the Defendant No. 1 that the Side-Letter or the Addendum which provides for automatic extension for a period of 15 months and further two renewals of 18 months and 33 months was never disclosed by the Defendant No. 2 and/or by the Plaintiff to the Defendant No. 1 and therefore the said Side Letter is not binding on the Defendant No. 1. Thereby, the simple case of the Defendant No. 1 is that the plaintiff was entitled to remain in possession and enjoyment of the suit premises on the basis of leave and licence agreement for 33 months coupled with the Amenities agreement and Security Deposit Agreement and on the expiry of the said period of 33 months, the Plaintiff shall vacate the suit premises and that the Addendum letter dated 21st June 2004 issued by the Defendant No. 2 to Plaintiff is not binding upon the Defendant No. 1, and therefore simplicitor on the basis of -: 19 :- expiry of the period of 33 months, as provided in the leave and licence agreement dated 21st June 2004, by efflux of time the Defendant No. 1 has filed a suit in the Small Causes Court, Mumbai bearing No. LE-133/150/2007. At the initial stage what we find is that, that the said suit is not based on breach of conditions of the leave and licence agreement dated 21st June 2004 thereby entitling the Defendant No. 1 to get possession of the suit premises on termination of the leave and licence agreement. The period of 33 months is over as per the Defendant No. 1, and therefore the Defendant No. 1 is claiming possession of the suit premises. In short, the suit is based on efflux of time of the leave and licence agreement and thereby the entitlement of the Defendant No. 1 for possession of the suit premises. As against this, the Plaintiff’s suit is for specific performance of the agreements annexed to the plaint as Exhibits “A” to “D”, more specifically of the performance of an agreement called Addendum which provides for an automatic renewal for a period of 15 months and thereafter the renewal of the -: 20 :- leave and licence agreement for 18 months and 33 months at the option of the Plaintiff. In any circumstance, for the extended period, fresh agreement of the leave and licence coupled with the amenities and security deposit agreement is necessary for being valid and legal possession, and therefore on 19th April 2007, the Plaintiff has forwarded the documents for further renewals as provided in the Addendum dated 21st June 2004. However, the same was not signed by the Defendant No. 1 and instead the Defendant No. 1 proceeded in the Small Causes Court, Mumbai for getting the possession of suit premises. In the suit which is filed by the Plaintiff, therefore, the question is whether to direct the Defendant No. 1, its servants and agents to execute the documents extending the renewal of the leave and licence agreement initially for a period of 15 months and thereafter for a period of 18 months and 33 months as per the letter addressed on 19th April 2007. Thereby on plain reading of the relief and the case of the Plaintiff it is crystal clear that the relief claimed in the suit for -: 21 :- specific performance filed in the High Court is quite a distinct relief which has nothing to do with the relief claimed in the suit filed in the Small Causes Court, Mumbai. That means even if the decree is passed in the suit filed in the Small Causes Court, Mumbai on efflux of time of the leave and licence agreement dated 21st June 2004, and that if the decree is passed in a suit for specific performance the said decree cannot be enforced, since the Plaintiff will be entitled to get renewal of the leave and licence agreement and amenities agreement and security deposit agreement by way of specific performance. If the suit is dismissed the said decree can very well be executed and therefore what we find is that, that the learned Single Judge was right after considering the submissions on both sides to hold that the suit in the Small Causes Court, Mumbai can proceed independently and that it is not necessary to stay the said suit pending for specific performance of the agreement. One thing is very much clear that even if the suit for specific performance is dismissed, yet in order to get possession of -: 22 :- the property the Defendant No. 1 will have to approach to the Small Causes Court, and the dismissal of the suit itself will not entitle the Defendant No.1 to directly enter into possession of the suit premises, and therefore on proper analysis we find that the suit in the Small Causes Court, Mumbai filed by the Defendant No. 1 can independently proceed and it is not necessary for this Court either to stay the suit in the Small Causes Court or transfer that suit to this Court invoking the powers under Section 24 of the Code of Civil Procedure, 1908. We are aware that the suit from the Small Causes Court can be transferred to this Court and this Court can dispose it of as the Small Causes Court, but as a result of that the remedies available against the said judgment will be prejudiced. Because this Court being the highest Court, once deals with the matter, the further remedies available against the judgment and order of the Small Causes Court will not be available to the parties. 12. Apart from that, since we find that it has a distinct -: 23 :- cause of action, which has nothing to do with the cause of action in the suit for specific performance of the agreement, we find that the decision taken by the