: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION APPEAL FROM ORDER NO.1228 OF 2008 WITH CIVIL APPLICATION NO.1499 OF 2008 Ganesh Velji Patel, Proprietor, Gurkrupa Developers .. Appellants V/s. Shree Krishna Trading Co. & Ors. .. Respondents ALONG WITH APPEAL FROM ORDER NO.288 OF 2009 WITH CIVIL APPLICATION NO.339 OF 2009 Lahu Dagdu Kadu & Ors. .. Appellants V/s. Shree Krishna Trading Co. & Ors. .. Respondents Mr. Pesi Modi with Ms. Ashwini Fal, Sunita J. Masani, P.G. Kinikar i/b. M/s. N.C. Dalal & Co. for the Appellants in A.O. No.1228 of 2008 Mr. P.S. Dani i/b. Mr. A.P. Mhatre for Respondent Nos.2 to 7 in A.O. No.1228 of 2008 and for the Appellants in A.O. No.288 of 2009. Mr. V.A. Thorat, Sr. Counsel, with Mr. Birendra Saraf, Mr. T.N. Tripathi and Ms. Sapana Rachure i/b. T.N. Tripathi & Co. for Respondent No.1 in A.O. No.1228 of 2008 and A.O. No.288 of 2009. CORAM : SMT. NISHITA MHATRE,J. RESERVED ON : 8 TH MARCH, 2010. PRONOUNCED ON : 23 RD APRIL, 2010. : 2 : JUDGMENT : 1. These two Appeals from Order have been filed against the decision of the Civil Judge, Senior Division, Panvel dated 17th October, 2008. By this decision, the trial Court has granted the interim relief prayed for by the plaintiffs. Defendant Nos. 1 to 7 have been restrained from carrying out any construction in the suit plot and from transferring the suit plot to any third party till the disposal of the suit. The defendant No.8 has also been temporarily restrained, from permitting defendant No.7 to reassign its rights acquired from defendant Nos.1 to 6 in respect of the suit plot, and further, from according sanction to the plan submitted by defendant No.7 for development of the suit plot. 2. The Appeal from Order No.1228 of 2008 has been preferred by the defendant No.7 and Appeal from Order No.288 of 2009 has been preferred by defendant Nos.1 to 6. For the sake of convenience, the parties will be referred by the nomenclature used before the trial Court. : 3 : 3. Defendant Nos.1 to 6 were allotted the suit plot by CIDCO, i.e. defendant No.8, under the 12.5% scheme. They entered into an agreement with M/s. Papriwal Realtors on 3rd March, 2003 in respect of the suit plot. The plaintiffs claim that they entered into a registered agreement for development of the suit plot with defendant Nos.1 to 6 on 21st March, 2003. That agreement was cancelled by a Deed of Cancellation dated 20th April, 2003, according to the plaintiffs and fresh terms were agreed upon by the parties. The agreement with M/s. Papriwal Realtors was also cancelled on 16th February, 2007 by defendant Nos.1 to 6 by issuing a notice of termination of the agreement through their Advocate. Defendant No.7 entered into a tripartite agreement with defendant Nos.1 to 6 and defendant No.8 on 2nd April, 2008. By this agreement, all rights in respect of the suit plot were assigned by defendant Nos.1 to 6 to defendant No.7 with the concurrence of defendant No.8 i.e. CIDCO. : 4 : 4. The plaintiffs filed Special Civil Suit No.255 of 2008 for specific performance of the agreement dated 21st March, 2003. An application for interim relief was also filed by the plaintiffs. All the defendants contested the suit and resisted the application for interim relief at Exhibit-5. However, after considering the documents on record and the arguments of the parties, the trial Court granted the interim relief by allowing Exhibit-5, as aforesaid. Being aggrieved by this decision of the trial Court, the defendant Nos.1 to 6 and defendant No.7 have filed these separate Appeals. 5. Mr. Mody appearing for defendant No.7 submitted that although the plaintiffs claimed that their agreement is of the year 2003, no construction has been carried out by the plaintiffs since then. The learned Counsel then submitted that the agreement on the basis of which the suit has been filed is of the year 2003 while the suit has been filed in April, 2008 and is therefore barred by limitation. According to him, the question of limitation has not been dealt with by the trial Court while : 5 : granting interim relief. He then pointed out that the plaint does not disclose any pleadings with regard to the readiness and willingness of the plaintiffs to perform their part of the contract. Mr. Mody fortifies his submissions by relying on the judgment of the Supreme Court in the case of Bal Krishna and Anr. v/s. Bhagwan Das & Ors., reported in AIR 2008 SC 1786 He also pointed out that the trial Court had not considered the contentions of defendant No.8 that, the suit plot could not be developed by a third party without its sanction, while granting the interim relief. He urged that unless the defendant No.8 had accorded sanction to the development of the plot through the plaintiffs the alleged agreement could not be specifically enforced. He supported this contention by relying on the judgment of the Division Bench of this Court in the case of Lokhandwala Estates and Development Company Limited and Anr. v/s. Goregaon Siddharth Nagar Sahakari Griha Nirman Sanstha Limited in Appeal No.1145 of 1996 decided on 8 th December, 2005.The learned Counsel further submitted that the main reason for granting the : 6 : interim relief appears to be that the plaintiffs relied on their Bank statement which indicated that certain amounts were paid to defendant Nos.1 to 6. The learned Counsel submitted that the Bank statement had not been proved and, therefore, this by itself could not lead to the inference that defendant Nos.1 to 6 had been paid any amount by the plaintiffs. The learned Counsel also relied on the judgement of the Division Bench of this Court in the case of Chheda Housing Development Corporation v/s. Bibijan Shaikh Farid and Ors., reported in 2007 (2) Bom.C.R. 587 and of a learned Single Judge of this Court in the case of The Peerless General Finance and Investment Company Limited v/s. Swan Mills Limited & Ors., reported in 2000 (1) Bom.C.R. 48 to fortify his submission that the development agreement could not be specifically enforced. 6. Mr. Dani appearing for defendant Nos.1 to 6, while supporting the submissions of Mr. Mody, added that M/s. Papriwal Realtors, who were the purchasers of the suit plot from the defendant Nos. : 7 : 1 to 6, had obtained their signatures on many sheets of paper, which were typed in English, and the contents of which were not disclosed to them. He pointed out that from the total area of 1750 sq. meters, the agreement with M/s. Papriwal Realtors was for an area of 1100 sq. meters and the rest of the land was to be retained by defendant Nos.1 to 6. M/s. Papriwal Realtors were expected to take steps to have the suit plot sub divided. Since no steps were taken by M/s. Papriwal Realtors, the defendant Nos.1 to 6 terminated the contract between themselves and M/s. Papriwal Realtors on 16th February, 2007. According to Mr. Dani, the signatures of defendant Nos.1 to 6 were misused by M/s. Papriwal Realtors in connivance with the plaintiffs. He contended that in any event, the defendant Nos.1 to 6 had no transaction with the plaintiffs and, therefore, the interim relief granted by the trial Court must be vacated. 7. Unfortunately, though defendant No.8, i.e. CIDCO, had been served, nobody appeared for it before this Court. However, before the trial Court : 8 : CIDCO had opposed the application for interim relief by contending that no transaction could be carried out in respect of the suit plot without its sanction. It had contended that a tripartite agreement had been executed by defendant Nos.1 to 6 and defendant No.7 and CIDCO. No such agreement was signed with the plaintiffs and therefore CIDCO had not sanctioned the agreement with the plaintiffs. 8. Mr. Thorat, the learned Counsel appearing for the plaintiffs submitted that despite the categoric pleading in the plaint to the effect that certain amounts were paid to defendant Nos.1 to 6, no explanation was furnished by the defendants in their written statement with respect to these payments. He submitted that the trial Court has rightly granted interim relief considering the fact that defendant Nos.1 to 6 had entered into an agreement with the plaintiffs for development of the plot allotted to them by CIDCO. Possession of the plot was also handed over to the plaintiffs and a letter to that effect has been issued by defendant Nos.1 to 6 on 21st March, 2003. According : 9 : to the learned Counsel, there is no need for this Court to interfere in the order passed by the trial Court. He pointed out that the Supreme Court in the case of Wander Limited v/s. Antox India Private Limited, reported in 1990 (Supp.1) SCC 727, has held that when interim relief has been granted by the trial Court, the High Court should not normally interfere, unless, there is some perversity in the finding recorded by the trial Court. 9. In the case of Wander Limited v/s. Antox India Private Limited (supra) the Apex court has held that the Appellate Court should not interfere with the exercise of discretion by the trial Court, except where the discretion has been exercised arbitrarily, capriciously, perversely or when the Court has ignored a settled principle of law regulating the grant or refusal of an interlocutory injunction. The Appellate Court is not expected normally to interfere with the exercise of discretion by the trial Court. The principle of law enunciated in this judgement is clear and unambiguous. However, in my opinion, when this : 10 : exercise of discretion ignores settled principles of law, the Appellate Court is duty bound to correct the injustice caused to a litigant. 10. As mentioned earlier, the main contention raised on behalf of the defendant No.7 as well as defendant Nos.1 to 6 is that the suit is barred by limitation. They contend that assuming the agreement was executed by the defendant Nos.1 to 6 in favour of the plaintiffs, it had been executed in the year 2003, whereas the suit for specific performance was filed in April, 2008. Apparently, the trial Court has not considered the question of limitation at all while deciding the application for grant of interim relief. Although a full fledged decision is not expected at the interim stage the trial court must consider the issue prima facie. Had the trial Court considered this issue in all probability, it would have not granted the interim relief that it has. Undisputedly no construction work has been carried out by the plaintiffs on the suit property after the agreement of 2003. In fact, besides allegedly executing the : 11 : agreement, the plaintiffs have taken no steps to perform their part of the contract. Moreover, the tripartite agreement executed between the defendant Nos.1 to 6 on the one hand and defendant No.7 on the other and confirmed by defendant No.8 in April, 2008, was arrived at after terminating the contract that defendant Nos.1 to 6 had entered into with M/s. Papriwal Realtors. That contract was terminated on 16th February, 2007. The agreement was executed after defendant No.7 had published a notice in the local newspaper “Dhawte Nav Nagar” on 23rd February, 2008, inviting objections from the members of the public in respect of the proposed agreement between the defendants. There is no document on record indicating that the plaintiffs had raised any objection with respect to the notice which was published in the local newspaper. The suit was filed only after the tripartite agreement was executed in April, 2008. Therefore, in my view, the trial Court has erred in granting interim relief to the plaintiffs. : 12 : 11. Mr. Mody appearing for defendant No.7 rightly pointed out that the pleadings contained in the plaint do not disclose that the plaintiffs were ready and willing to perform their part of the contract allegedly executed by them with defendant Nos.1 to 6 on 21st March, 2003. In the present case, the trial Court has not considered the pleadings with respect to “readiness and willingness on the part of the plaintiffs” to perform their part of the contract. These questions ought to have been considered prima facie before granting any relief to the plaintiffs. The Supreme Court in the case of Bal Krishna and Anr. v/s. Bhagwan Das & Ors. (supra) has held that an averment in the plaint in a suit for specific performance regarding the plaintiffs’ readiness and willingness to perform the contract is mandatory. This principle has been ignored by the trial Court. 12. It appears from the impugned order that the trial Court was impressed by the fact that the plaintiffs had produced Banks statements which allegedly indicated that some monies were paid by : 13 : the plaintiffs to defendant Nos.1 to 6. However, there is nothing on record to indicate that the amounts which are mentioned in the Bank statement were paid to defendant No.1 towards the transaction mentioned in the agreement of 2003. Assuming that the aforesaid amounts were paid to defendant No.1, there is no document on record to indicate that the other defendants being defendant Nos.2 to 6 had received any amounts from the plaintiffs. Had such an agreement been signed by the plaintiffs with defendant Nos.1 to 6, it does not indicate why the plaintiffs had paid certain amounts to defendant Nos.1 to 6 prior to the execution of the agreement. Apart from this, the defendant Nos.1 to 6 had pointed out that they were given to understand that it was M/s. Papriwal Realtors with whom they were executing an agreement for development of 1150 sq. meters of land out of the total 1750 sq. meters. Whether the plaintiffs had entered into the transaction with defendant Nos.1 to 6 instead of M/s. Papriwal Realtors or had misused the signatures of defendant Nos.1 to 6 obtained on several sheets of paper which were typed in English : 14 : is a question which can be decided only after evidence is led before the trial Court. Suffice to say that the agreement itself of 2003 allegedly executed by defendant Nos.1 to 6 with the plaintiffs is not beyond doubt and in these circumstances, in my view, no interim relief ought to have been granted to the plaintiffs. The trial Court ought to have considered the fact that there was a categoric pleading in the written statement filed by defendant Nos.1 to 6 that they had not executed any agreement on 21st March, 2003 with the plaintiffs. 13. Reliance has been placed by the plaintiffs on the Commencement Certificate granted by the CIDCO in the name of defendant Nos.1 to 6. This document by itself would not indicate that CIDCO had no objection to the transaction between defendant Nos. 1 to 6 and the plaintiffs. The Commencement Certificate has been issued in favour of defendant Nos.1 to 6 and not in favour of the plaintiffs for developing the property in the name of defendant Nos.1 to 6. Therefore the trial court has erred in : 15 : placing emphasis on these documents as they do not, even prima facie, establish that the plaintiffs have any right to interim reliefs. 14. In the case of Chheda Housing Development Corporation v/s. Bibijan Shaikh Farid and Ors. (supra), the Division Bench of this Court considered the types of agreements which could be entered into by the parties for developing their property. After taking a conspectus of the judgments cited before it, including in the case of Lokhandwala Estates and Development Company Limited and Anr. v/s. Goregaon Siddharth Nagar Sahakari Griha Nirman Sanstha Limited (supra), the Division Bench spelt out the following three types of agreements : “(a).An Agreement only entrusting construction work to a party for consideration; (b).An Agreement for entrusting the work of development to a party with added rights to sell the constructed portion to flat purchasers, who would be forming a Co-operative Housing Society to which society, the owner of the land, is obliged to convey the : 16 : constructed portion as also the land beneath construction on account of statutory requirements. (c).A normal agreement for sale of an immovable property.” 15. The Division Bench further observed that an agreement of type (a) would not normally be enforceable and compensation would be an adequate remedy. An agreement, as described in (c), would be specifically enforceable unless the contrary is proved. The Court further held that a mere agreement for development which creates no interest in the land could not be specifically enforced. While dealing with the second type of agreement that is contained in paragraph (b), the Court observed that mere payment of stamp duty on the instrument would not change or alter the nature of agreement. The agreement has to be read considering its terms. On the basis of the agreement before the Court, the Division Bench held that a case for granting an injunction had been made out by the plaintiff. Therefore, in essence each agreement has to be considered on its own merits. Now in the present case, in my opinion, it is not necessary to : 17 : go into the terms of the agreement since the agreement itself was not a tripartite agreement which is mandatory when dealing with property which has been allotted by CIDCO. In any event, the alleged agreement between defendant Nos.1 to 6 and the plaintiff is a agreement for development without creating any interest in the land. Clauses 17 and 27 in fact make it clear that no interest was created in the property as a Deed of Assignment of the leasehold rights to complete the title in favour of the plaintiffs or their nominees including, a Co-operative Housing Society was yet to be executed. In my opinion, the plaintiffs are not entitled to any injunction. They could be adequately compensated in terms of money in the event they succeed at the trial. 16. In these circumstances, therefore, in my opinion, the order passed by the trial Court is perverse. It does not take into account the fact that defendant No.7 has paid over Rs. 3 crores to the defendants Nos1 to 6, while deciding the interim application. : 18 : 17. Apart from this, the question of granting specific performance of a contract, which was not a tripartite agreement with CIDCO, would in my opinion be untenable. No transaction in respect of the suit property could have been effected without the permission of CIDCO which was admittedly the lessor of the suit property. There is no document on record to establish that such permission was granted by CIDCO to defendant Nos.1 to 6 to contract with the plaintiffs to develop the land allotted to them by CIDCO. Under the agreement of April, 2008, the defendant Nos.1 to 6 had assigned their rights in the suit plot to defendant No.7, which transaction was approved by CIDCO. The reliance placed by Mr. Mody on the judgment of the Division Bench of this Court in the case of Lokhandwala Estates and Development Company Limited and Anr. v/s. Goregaon Siddharth Nagar Sahakari Griha Nirman Sanstha Limited (supra) is apt. The Division Bench was considering a matter where the property belonged to MHADA and was vested in MHADA. That property was allotted for development to one : 19 : of the parties before the Court on certain terms and conditions. The Court has held as follows : “57. .............................. Prima facie, therefore, when the land is belonging to MHADA and MHADA gives a conditional allotment stipulating that the lease itself is subject to compliance of the conditions by the respondents, then what the respondents could have agreed to transfer and/or hand over is something which would fructify after compliance of the terms and conditions imposed on them. Neither the respondents nor the appellants claiming through them can say with any degree of certainty that right, title and interest is created in their favour in respect of the said land. 58. The terms and conditions of the letter of allotment as referred to above contemplates stagewise development of the land. That it is stagewise and that subject to the compliance of the terms and conditions and in a phased manner, is something which is accepted by the respondent society. Therefore, it cannot be said that the respondent society seeking permission of MHADA for allotment of the property and thereafter a lease in its favour can confer any right higher than the same on the appellants.” : 20 : 18. Similarly, in the present case, the plaintiffs could not have said with any degree of certainty that they had a right, title and interest in respect of the suit property without there being a tripartite agreement or the consent of the CIDCO. This fact has been ignored by the trial Court. In these circumstances, in my view, the injunction granted by the trial Court must be vacated, however, on the following terms : (i). The order of the trial Court is set aside. (ii).The injunction granted by the trial Court is vacated. (iii).The defendant Nos.1 shall deposit in the trial Court the amount received by him from the plaintiffs within a period of eight weeks from today. 19. In view of the above, Civil Applications pending in these Appeal from Orders do not survive and the same are dismissed as infructuous. : 21 : 20. The learned Advocate for the appellants seeks a stay of this order and continuation of the interim order that had been granted earlier. This application is opposed on behalf of the respondents. However, considering the circumstances, the stay granted earlier shall continue for a period of four weeks from today.