-: 1 :- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO. 233 OF 2009 IN SUMMARY SUIT NO. 1344 OF 2008 HCC Real Estate Limited. ... PLAINTIFF Vs. M/s. Swati Enterprises and ors. ... DEFENDANTS -------- Mr. Pankaj Sawant a/w Mr. Samindara Surve i/b M/s Little and Company, Advocates for Plaintiff. Mr. Kedar Patil a/w Ms. Neeta Madhwani, Advocate for Defendants. -------- CORAM : R.V. MORE, J. DATE : 04th February, 2010. P.C. 1. Heard learned counsel for the respective parties. The present suit is filed for recovery of an amount of Rs.25,98,410.84/- together with further interest on the sum of Rs.20,00,000/- at the rate of 12% per annum from the date of filing of this suit till payment and/or realization and for the costs of the suit. The Plaintiff is a company incorporated under the provisions of the Companies Act, 1956 carrying on business inter-alia as developers of the property. The Defendant Nos.2 and 3 are the parters of Defendant No. 1 – Firm, which, inter-alia deals in property. In pursuant of the negotiations between Plaintiff and Defendants, the Defendants agreed to sell Plaintiff about 500 acres of lands situated at Villages Anjur, Diva (Dive Pada) and Alimgarh, Taluka Bhiwandi, District Thane for the -: 2 :- consideration and on the terms and conditions as recorded in the Memorandum of Understanding executed between the Plaintiff and the Defendants on 19th October, 2005. The Plaintiff paid an amount of Rs. 20,00,000/- to the Defendants by a cheque dated 19th October, 2005 towards earnest money. The Defendants agreed to utilize the said amount towards disbursement to the original land owners to secure the lands. It is the case of the Plaintiff that the Defendants neglected to provide to the Plaintiff village forms covering entire area of 500 acres as agreed, but provided the same only in respect of 389 acres of land. The Defendants could not even satisfy the Plaintiff regarding the title to the said land and failed to comply with the various obligations undertaken by them under the Memorandum of Understanding. The Plaintiff by its notice dated 21st March, 2006 called upon the Defendants to comply with their obligations under the said Memorandum of Understanding. The Defendants failed to give response to the said notice and therefore, again by the notice dated 6th April, 2006, the Defendants were called upon to perform their obligations under the Memorandum of Understanding. By the letter dated 13th April, 2006, the Defendants confirmed that the villagers i.e. the owners of the land are not interested in going ahead with the sale of the said land to the Plaintiff and further conveyed that they would be returning to the Plaintiff the said sum of Rs.20,00,000/- within a period of sixty days. It is the case of the Plaintiff that by virtue of the letter dated 13th April, 2006, the -: 3 :- Defendants admitted their liability to pay an amount of Rs.20,00,000/- to the Plaintiff and also confirmed that it was not possible for them to complete the transaction as agreed. Since the amount as agreed was not paid by the Defendants despite of repeated demands, the Plaintiff constrained to file the suit and thereafter filed Summons for Judgment. 2. The defendants by filing reply contested the summons for judgment on various grounds and claimed unconditional leave to defend. The main ground being that by the letter dated 13th April 2006 the defendants agreed to return an amount of Rs. 20 lacs after deducting therefrom all costs, charges and expenses incurred by them for procuring all the land records and advocates fees etc. The learned counsel also relied upon the Apex Court’s Judgment in Chairman and M.D.. N.T.P.C. Vs. M/s. Reshmi Construction reported in AIR 2004 Supreme Court 1330 and Judgment of the learned Single Judge of the Orissa High Court in Bauribandhu Mohanty Vs. Suresh Chandra Mohanty reported in AIR 1992 Orissa 136. 3. The plaintiff by filing rejoinder brought on record defendants’ letter dated 4th April 2007 and pointed out that the defendants again agreed to pay an amount of Rs. 20 lacs unconditionally. 4. The defendants firstly by letter dated 13th April 2006 agreed to pay an amount of Rs. 20 lacs to the plaintiff subject to deduction therefrom all cost, charges and expenses incurred by them for procuring land records as well as advocate’s fees, and secondly again by letter dated 4th April 2007 -: 4 :- showed willingness to repay the said amount of Rs. 20 lacs. The plaintiff on the basis of the letter dated 13th April 2006 cannot claim that the defendant agreed to repay an amount of Rs. 20 lacs unconditionally inasmuch as by the said letter the defendants agreed to refund an amount of Rs. 20 lacs only after deducting their cost, expenses and charges incurred by them for various purposes. So far as the letter dated 4th April 2007 is concerned, the same is issued without prejudice which reads as follows : REF.NO. N/ FN//2007 4th April, 2007 WITHOUT PREJUDICE To, HINCON REALTY LTD., Hincon House, Lal Bahadur Shastri Marg, Vikroli (West), Mumbai – 400 023. KIND ATTN : MR. AMOL SHIMPI Dear Sir, RE: M.O.U. DATED 19TH OCTOBER, 2005 BETWEEN YOURSELVES AND OURSELVES. We refer to the previous correspondence herein, the meeting held with your solicitor Mr.Sidhwa of Little and Co., about two months ago, our meetings with your officers as also the meeting of 3rd April, 2007 with your Mr. Amol Shimpi in respect of the above matter, when we have been reiterating that :- (a) we are desirous of settling the dispute between ourselves and yourselves. (b) at the time of signing the MOU we were under the erroneous -: 5 :- belief that the Bhoodan lands which comprise – acres i.e. the entire frontage of the site offered, were transferable. However, we have been advised that the same are not legally transferable. We are certain that a company of your stature would not like to deal with illegal transfers; (c) we are not in a position to complete the transaction as envisaged in the abovementioned MOU, particularly in view of the fact the the Public Notice issued by yourselves interalia against Panchaganga Farmers Samiti, has soured our relations with the villagers who are now neither desirous of selling their land through us nor selling the same to yourselves; (d) the issuance of the Public Notice against us, wherein our names are mentioned, has been a source of embarrassment to us, and is affecting our other transactions in respect of land at Panvel; (e) we are a small entity and can ill afford a legal battle with a colossal company of your stature; (f) we are desirous of settling the dispute once and for all by repaying the sum of Rs.20,00, 000/-(Rupees Twenty Lakhs Only) received from yourselves under the above MOU, despite the fact the a major portion of the same was paid by us to the Panchaganga Farmers Samiti and the remaining for obtaining the voluminous records and maps which were made available to yourselves; (g) to maintain our goodwill in the realty market, we are seeking a loan to repay the aforesaid amount, so that the matter is closed once and for all; (h) in the event the matter is not settled, we will be facing major hardship by way of legal suits from the villagers, which are not affordable to an entity as small as ours. Keeping in mind our aforesaid difficulties we have to request you to consider our proposal favorably and to release us from this controversy. Thanking you, Yours faithfully, FOR SWATI ENTERPRISES SD/- PARTNER. 5. If the clauses (a) to (h) of the above letter are perused, it is clear that the plaintiff was not required to perform any obligation and the defendants unilaterally agreed to repay an amount of Rs. 20 lacs to the -: 6 :- plaintiff. Learned counsel for the defendants submitted that since the letter dated 4th April 2007 was issued “without prejudice”, the same cannot be taken into consideration in view of the decision of the Apex Court in Chairman and M.D.. N.T.P.C.(supra) and decision of the Orissa High Court in Bauribandhu Mohanty (supra). 6. The Apex Court in Chairman and M.D.. N.T.P.C.(supra) referred to the English decisions in Cutts v/s. Head (1984) 1 ALL E R 597, Rush & Tompkins Ltd v/s. Greater London Council (1988) 1 ALL ER 549 and earlier decision of the Apex Court in the matter of Superintendent (Tech-I) Central Excise, IDD, Jabalpur v/s Pratap Rai reported in AIR-1978 SC 1244 and definition of the term “without prejudice” as given in Wharton’s Law Lixicon and observed that the correspondence marked as “without prejudice” may have to be interpreted differently in different situations. 7. Similarly, the learned Single Judge of the Orissa High Court in Bauribandhu Mohanty’s case (supra) after referring to the decisions of various High Courts observed that where the compromise is not binding on the parties, any recital is of no much value as evidence. The parties are often willing to make admissions for the purpose of affecting a compromise to which it would be unfair to hold them if the compromise falls through. 8. Since under the letter dated 4th April 2007 the defendants unilaterally accepted their liability to refund an amount of Rs.20 lacs to the plaintiff without the plaintiff requiring to perform any obligation, prima -: 7 :- facie I am of the opinion that by the said letter the defendants have accepted their liability. In that view of the matter, I find the defence raised by the defendants is dishonest and afterthought, however, it is pointed out by the learned counsel for the defendants that the partner of the defendants has recently undergone one surgery and is supposed to undergo another surgery of leg. He further submitted that the defendants have no source of income. In these facts and circumstances and in order to give an opportunity to defendant, I am inclined to grant conditional leave to defend. The summons for judgment is, therefore, disposed of by passing following order. -: O R D E R :- (1) On depositing in this Court an amount of Rs.10 lacs within four months from today the Defendants shall have the leave to defend the suit. (2) If the amount as stipulated above is deposited, the Defendants shall be entitled to file their written statement within four weeks of the deposit and the suit shall stand transferred to the list of commercial causes suits. (3) If the amount as stipulated above in clause (1) is not deposited, the suit shall stand decreed. (4) If the amount is deposited by the defendants, the plaintiff is at liberty to withdraw the same after furnishing solvent security to -: 8 :- the satisfaction of the Prothonotary & Senior Master of this Court. (5) Summons for judgments stands disposed with no order as to costs. (R.V. MORE, J.)