1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINRY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMMONS NO. 1113 OF 2006 IN SUIT NO. 1021 OF 2006 Rajendra Ambalal Jhaveri .... Plaintiff. Vs. Madhani Developers Pvt. Ltd. And Shyamlal B. Rohara. .... Defendants. Mr. M.V.Pandey for the Plaintiff. Mr. Birendra Saraf i/by Kishore Thakordas & Co. for the defendant. Mr. Rajesh Sawant for respondent No. 3 & 4. Mr. Rupesh Mandhave i/by S. Wassoodev for respondent Nos. 5 and 6 & 8. Mr. Jagannath for respondent Nos. 12 to 14. CORAM : A.A. SAYED, J DATE : JUNE 29, 2009. P.C.:- 1. The above Chamber Summons is taken out by the plaintiff to add the respondents as party defendants to the suit and for other amendments to the plaint as per schedule annexed to the Chamber Summons. 2. It is the case of the plaintiff that he had taken out Notice of Motion No. 1144 of 2006 in the above suit, wherein by an ad- interim order dated 3.5.2006, Court Receiver, High Court, Bombay came to be appointed in respect of the two flats on the fifth floor (hereinafter referred to as `the said flats') of the building more particularly 2 described in the plaint (hereinafter referred to as `the said building') and further the Court Receiver was directed to take possession of the said flats and hand over possession of the same to the plaintiff. By the said order, directions were also given to measure the area of the said flats. Accordingly, measurements of the said flats were taken and the carpet area of the said flats was found to be 2575 sq.ft. (carpet). 3. According to the plaintiff, under the Development Agreement dated 14.2.2004 between the plaintiff and Pandyas on one hand and the defendant on the other hand as also under the MOU dated 20.02.2004 between the plaintiff and the defendant, an area of 3090 sq.ft. was to be given to the plaintiff by the defendant, however, it was during the pendency of this suit, it came to light that there is a shortfall of 515 sq.ft. in the total area of the said flats, inasmuch as the plaintiff thereafter during the pendency of this suit, engaged the services of Title Investigator, who prepared a report dated 12th July, 2006 in respect of the transactions of all the flats in the said building. From the report of the Title Investigator it is revealed that the defendant instead of executing Tenancy Agreements, had executed Agreements for Sale in respect of the flats in the said building in favour of 3 respondent Nos. 2 to 12. 4. It is the further case of the plaintiff that under the Development Agreement the defendant was allowed to develop the said plot by demolishing the existing structures and the defendant was permitted/ authorized only to let out the flats on tenancy basis. The Power of Attorney of the same date i.e. 14.2.2004 which was executed in favour of the directors of the defendant also speaks about only Tenancy Agreements to be executed in respect of the flats in the said building which were to be constructed and no authority was given or conferred upon the defendant, under the Development Agreement or under the Power of Attorney for executing Agreement for Sale of the flats in the said building. Thus, according to the plaintiff, the act on the part of the defendant of entering into Agreements for Sale of the flats was illegal. It is further pointed out that the defendant had executed a Deed of Lease only in respect of one of the flats with the respondent No. 2 and insofar as rest of the flats are concerned, Agreements for Sale were executed by the defendant with the respondent Nos. 3 to 12. Thus, according to the plaintiff, he is entitled to challenge the Agreements for Sale executed by the defendant which is in excess and/or contrary to the power conferred by Power of Attorney dated 14.2.2004. According to the plaintiff the 4 respondents, who are flat purchasers, are therefore required to be added as party defendants to the suit and the plaintiff is entitled to challenge the said Agreements of Sale executed by the defendant in favour of the respondents. It is further stated that the defendant was not aware of the above facts before the filing of the above suit and it is only after the report of the Title Investigator, that the plaintiffs came to now about the subsequent events as stated above and hence the above Chamber Summons. 5. The Chamber Summons has been opposed by respondents, who are the flat purchasers, as well as by the defendant, who is the developer, on the ground that the Chamber Summons is not maintainable inasmuch as the plaintiff, by virtue of the amendment is seeking to change the entire tenor and the cause of action of the suit. It is the case of the defendant and the respondents that the suit as originally filed, is for specific performance of the Agreement for Development dated 14.02.2004 against the defendant, wherein the plaintiff has admitted the receipt of entire monetary consideration and sought possession of the said flats which were allotted to him. However, by way of present Chamber Summons, the plaintiff is now seeking to challenge the right and entitlement of the defendant to allot the 5 remaining flats/ premises in the said building and seeks to challenge the Agreements for Sale made in favour of the respondents, which are separate and distinct cause of action and that no privity of contract exists between the plaintiff and the respondents. It is further stated in the affidavits in reply of the defendant/respondents that the construction of the said building is completed in or about January/February, 2006 and Occupation Certificate was issued on 8th March, 2006 and that the respondents are accordingly handed over the possession of their respective flats in the said building and the respondents are in use and occupation of the same. It is further stated that the dispute between the plaintiff and the defendant as set out in the plaint is essentially in respect of the area of the two flats on the 5th floor of the said building, however, the plaintiff is now seeking to drag the respondents into this litigation so as to try and pressurize the defendant/respondents to settle the dispute relating to the area with the plaintiff. It is further stated that the proposed amendment and joining of the respondents is not essential for disposing of the controversy between the parties and that the plaintiff is seeking to introduce a totally different and inconsistent case and is seeking to introduce a complete new cause of action and change the character of the suit. Thus, according to the defendant/respondents, the Chamber 6 Summons is taken out with malafide intention and plaintiff is seeking to introduce a fresh plea and, therefore, the Chamber Summons ought to be dismissed. 6. The property in question was initially owned by the Pandyas. Thereafter in view of certain agreements/arrangements between the Pandyas and the plaintiff, out of the 3 units, the plaintiff was allotted one independent unit and two units on the property were allotted to the Pandyas. As per the Development Agreement dated 14.2.2004 executed between the Pandyas and the plaintiff on one hand and the defendant on the other hand, the property was agreed to be developed by the defendant as per the terms and conditions mentioned in the Development Agreement. Thereafter, there were slight variations in the terms, insofar as the flats which were to be given by the defendant to the plaintiff were concerned and Memorandum of Understanding, dated 14th February, 2004 came to be executed between the plaintiff and the defendant under which the plaintiff was to be given flats on 5th floor, instead of 3rd floor of the said building. It is was further agreed that the plaintiff would be given two flats of the area aggregating 3090 sq.ft.(carpet) Under the said MOU certain other variations were also agreed to between the plaintiff and the defendant. 7 However, certain disputes arose between the plaintiff and the defendant and the above suit came to be filed by the plaintiff against the defendant for specific performance of the Development Agreement and the MOU, as according to he plaintiff, the defendant had resiled from their agreement and had reduced the area of the said flats. The gievance of the plaintiff in the suit was also that inspite of the fact that development of the property and the construction was completed, the plaintiff was denied possession of the said flats. Accordingly, the above suit came to be filed by the plaintiff for specific performance of the Development Agreement and the MOU and for further reliefs as prayed for in the suit including that of appointment of Court Receiver. 7. The learned Counsel for the plaintiff drew my attention to the Agreement for Development and Power of Attorney, both dated 14.02.2006, as well as the MOU, dated 20.02.2006 and submitted that the property is lease-hold property and that one Hatkesh Co-op. Housing Society is the owner of the land consisting of various plots, out of which plot No. 2 was allotted by way of lease to the Pandyas. The plaintiff thereafter became co-owner of the said plot alongwith Pandyas. The learned Counsel pointed out that it was only after the 8 filing of the suit that the plaintiff became aware of the fact that contrary to the Development Agreementand the Power of Attorney, the flats in the said building were disposed of by the defendant on Agreements for Sale basis instead of Tenancy basis, except for one flat which was given on tenancy basis. He took me through various clauses in the Development Agreement and Power of Attorney which specifically state that the flats are to be disposed of by the defendant only on tenancy basis. The learned Counsel submitted that with a view to incorporate the subsequent events in the plaint as well to bring on record the respondents, who are the flat purchasers, as party defendants, it is necessary that the amendments be allowed. He submitted that the basis on which the cause of action arose was the Development Agreement and that under the said Development Agreement, the defendant has, instead of giving the flats on tenancy basis, sold away the flats to the respondents. He submitted that the defendant has misled the plaintiff by selling the suit flats instead of giving the flats on tenancy basis. The learned Counsel pointed out that the Agreement for Sale in respect of the individual flats specifically records that the respondents, who are the flat purchasers, have taken inspection of the documents executed between the plaintiff and the defendant and, therefore, the respondents are deemed 9 to have knowledge that they ought to have entered into an Agreement of Tenancy instead of Agreement for Sale. The learned Counsel further submitted that the cause of action is based on the breach of terms of the Development Agreement, which breach is committed by the defendant as also by the respondents in view of the fact that the respondents, who are the flat purchasers, were aware of the Development Agreement. The learned Counsel pointed out Order 1 Rule 3 of the CPC and submitted that all such defendants can be joined in the suit, if any right arises out of the same act or transaction. He submitted that in the present case the transactions flows from the Development Agreement and in view of Sec. 19(2) of Specific Relief Act, 1963, the plaintiff is entitled to enforce specific performance of the Development Agreement against the respondents and the respondents therefore should be permitted to be added as party-defendants. The learned Counsel further referred to Order 1 Rule 10(2) of the CPC to submit that the respondents are necessary parties for effectively and completely adjudicating all the questions in the suit. The learned Counsel further adverted to Order 2 Rule 3 of the CPC to submit that the plaintiff was entitled to unite in the same suit several causes of actions against the same defendant/defendants jointly or severally. The learned Counsel for the plaintiff submitted 10 that it is only after filing of the suit and the report of the Title Investigator, that the plaintiff came to know that the flats in the said building were sold on Agreement for Sale basis and not Tenancy basis by the defendant to the respondents and therefore these subsequent events are required to be brought on record and the respondents are required to be added as party-defendants to the suit. 8. The learned Counsel relied upon the following case laws - (1) 2007(1) MH.L.J. 331 in the case of BHARAT PETROLEUM CORPORATION LTD. VS. PRECIOUS FINANCE INVESTMENT PVT.LTD. (2) AIR 2001 SC 699 in the case of RAGHU THILAK D. JOHN VS. S.RAYAPPAN AND ORS. (3) AIR 2004 SC 4102 in the case of PANKAJA AND ANR. VS. YALLAPPA (D) BY LRs and Ors. (4) AIR 2008 SC 2139 in the case of NORTH EASTERN RAILWAY ADMINISTRATION GORAKHPUR VS. BHAGWAN DAS (D) by LRs. These cases essentially deal with the issue that courts in deciding such Applications for amendment, should not adopt hyper technical approach but a liberal approach and multiplicity of the litigation should be avoided. 11 9. The learned Counsel for the defendant, on the other hand, submitted that the suit is for specific performance of the Development Agreement and MOU. The learned Counsel took me through the prayers in the plaint and submitted that the plaint and prayers are primarily in respect of the said flats on the 5th floor of the said building and the suit as filed was restricted to the flats on the 5th floor. However, by the amendment, the plaintiff wants to bring a new cause of action and change the entire character of the suit by raising issues with regard to other flats in the said building. He submitted that this is not permissible inasmuch as the respondents, who are the flat purchasers, have no privity of contract with the plaintiff. He pointed out Section 15 and 19 of the Specific Relief Act to submit that specific performance cannot be enforced against the respondents, who are bonafide flat purchasers without notice and no action for specific performance can be brought against them by the plaintiff. He submitted that the entire tenor of the suit will be changed if the amendment as prayed is allowed and by the amendment the plaintiff now wants to convert the suit, which was in fact for specific performance of the Development Agreement and MOU, to a suit on title. He further submitted that the trial of the suit would become complicated and the title of the third parties i.e. the 12 respondents cannot be impeached in the suit for specific performance between the plaintiff and the defendant. He further submitted that the action of the plaintiff is malafide and the proposed amendment is only to bring pressure upon the defendant to agree to illegitimate demands of the plaintiff. The learned Counsel has also pointed clause 29 in the plaint, which deals with valuation of the reliefs for the purposes of court fee and jurisdiction, in support of his argument that the subject matter of the suit is restricted to the two flats on the 5th floor of the said building. He contended that as the suit is restricted to the two flats on 5th floor, the plaintiff cannot be allowed to extend the scope of the suit thereby changing the entire character of the suit to include other flats in the said building and to add 3rd parties, who are the respondents, in the present suit and that this would only tantamount to converting the suit into a suit on title. The valuation clause in the plaint at paragraph 29 also reflects the subject matter and the limited scope of the suit which only is in respect of the two flats on the 5th floor of the said building. 10.The learned Counsel for the defendant relied upon the following rulings :- (1) Order dated 23.6.2008 in Chamber Summons No. 561 of 2008 in Suit No. 1248 of 2007 passed by Single Judge of this Court, 13 in the case of YUSUF MOHAMED LAKDAWALA VS. SUDHAKAR K. BOKADE & RICHIE RICH RESORTS LTD, (2) (2005) 6 SCC 733 in the case of KASTURI VS. IYYAMPERUMAL AND ORS. (3) (1995) 3 SCC 147 in the case of ANIL KUMAR SINGH VS. SHIVANATH MISHRA ALIAS GADASA GURU; (4) (2008) 10 SCC 708 in the case of RAMESH CHANDRA PATTNAIK VS. PUSHPENDRA KUMARI AND ORS. These cases essentially lay down the tests to determine who are necessary parties to the suit and also hold that in a suit for specific performance, if an amendment is sought by which the nature and character of the suit would change from being a suit for specific performance of the agreement to one for declaration of title and possession, such amendment should not be granted. 11.The learned Counsel for the various respondents supported the arguments of the larned Counsel for the defendant. 12.I have heard the ld. Counsel for the parties and perused the material on record. 13. At the outset it would be necessary to examine what is the scope of 14 the present suit and what is being sought by the above Chamber Summons by way of amendment. On a perusal of the plaint and the prayers thereof, it discloses that the plaintiff is seeking specific performance of the Agreement of Development dated 14-02-2004 which was entered into by the plaintiff and Pandyas on the one hand and the defendant on the other hand, as also that of MOU dated 20-04-2004 between the plaintiff and the defendant. The primary grievance of the plaintiff is in respect of his entitlement for possession of the two flats on the 5th floor of the said building and in respect of his entitlement to the deficit area by providing to him the deficit area on the 4th or 6th floor of the building. The deficit area as it now transpires is 505 sq ft (carpet). This quantum of deficit area was arrived at in pursuance of the ad-interim order dated 3-05-2008 whereby a Court Receiver came to be appointed and the plaintiff was put in possession of the said flats on the 5th floor as an agent of the Court Receiver and the Court Receiver was further directed to take steps to measure the carpet area of the said flat. Accordingly now the plaintiff is in possession of the said flats. 14.Thus, the subject matter of the suit is restricted to the two flats which were to be provided to the plaintiff by the defendant. 15 15.Para 29 of the Plaint which deals with the valuation of the reliefs claimed in the suit is relevant and reads thus: "29. The plaintiff value the reliefs that claimed in the suit for the purpose of court fee and jurisdiction at Rs. 21,45,000/- being prayer (a) of the plaint being the cost of construction to be incurred by the defendant for 3090 sq.ft. carpet area in Khokha form at Rs.500/- per sq.ft.being to Rs. 15,45,000/- and for money decree at Rs. 6,00,000/- for prayer (b). The plaintiff values the reliefs claimed by prayer (d) and (e) separately at Rs. 1000/- each. The plaintiff has paid separate court fees for each of the prayers (a), (b), (d) and (e) above and other prayers are not required to be valued separately. The plaintiff undertaken to pay the court fees on the amount of Decree for damages/mesne profits/ future compensation being prayer (c) and plaintiff has paid court fee of Rs. 49,260. 16 16. Now by way of the above Chamber Summons, the plaintiffs are essentially seeking two-fold amendments to the plaint. One is to add respondents to the suit as party defendants and second is interalia to bring on record events in connection with the execution of Agreement for Sale of the other flats in the said building by the defendant to the respondents. The plaintiff has also sought to add a prayer in the suit to declare the Agreements for Sale between the defendant and the respondents, who are flat purchasers, as illegal and bad in law and not binding on him. 17. To my mind, if the Chamber Summons is allowed, it would alter the nature of the suit. Though it can be said that the rights of the plaintiff are derived essentially from the Agreement for Development of which specific performance is sought, however by allowing the Chamber Summons the entire character and tenor of the suit would change. The rights of the respondents in the present suit cannot be adjudicated and be made a subject matter of inquiry in the above suit which is a suit for specific performance restricted to the two flats agreed to be given by the defendant to the plaintiff. The scope of the above suit is limited to the entitlement of the flats agreed to be given to the plaintiff by the defendant under the Development Agreement 17 and the MOU, and cannot be enlarged to convert the suit into a suit for title in respect of other flats in the building which has been sold by the defendant to the respondents. 18. The plaintiff by the proposed amendment wants to impeach the title of the respondents and seeks to challenge the power of the defendant to sell the other flats under various Agreements for Sale to the respondents, which would unnecessarily complicate the issues in the suit. The issues and evidence in the above suit and the issues and evidence, in the event the proposed amendment is allowed, would be quite different. In the latter case the primary issue which would arise is whether the sale of the flats in the building by the defendant to the respondents was illegal having regard to the power of the defendant under the Power of Attorney dated 14-02-2004. This would be alien to the inquiry to the issue whether the plaintiff would be entitled to his two flats and the deficit area. It would tantamount to adjudication of collateral matters resulting in multifarious proceeding involving several issues. Thus the simple issues in the above suit, which would otherwise entail no elaborate evidence would unnecessarily get complicated and result in prolonged and complicated trial involving an inquiry with regard to the title of the respondent flat purchasers. It 18 cannot be said that the respondents are necessary parties to the above suit inasmuch as an effective decree can very well be passed in the suit in absence of the respondents. It also cannot be said that any common questions of facts and law would arise inasmuch as even the issues and the evidence would be substantially different. Merely for the reasons that if the Chamber Summons is rejected, it may lead to another suit being filed would be no ground for allowing the Chamber Summons. Pertinently, no possession is sought in respect of the other flats in the proposed amendments by the plaintiff, for reasons which I need not go into. 19. The Hon’ble Apex Court has in the case of PANKAJA VS. YALLAPPA (Supra) relied upon by the plaintiff, held that there can be no straight jacket formula for allowing or disallowing amendments and each case depends on the factual background of that case. Thus on complete evaluation of the facts of the present case as discussed above, in my view, the Chamber Summons cannot be allowed. The decisions relied upon by the defendant would squarely be applicable tothe present case. There can be no two opinions on the propositions laid down in the decisions relied upon by the plaintiff, however, in view of the facts involved in the present case as discussed above, 19 those decisions would not be of any assistance to the plaintiff