Sumitra Shashikant Khokhani And ... vs M/S. Westbury Finvest Pvt. Ltd. ...
2021 Latest Caselaw 10083 Bom

                                    Sumitra Shashikant Khokhani & Ors v Westbury Finvest Pvt Ltd & Ors
                                                                   1-nms259-2015-in-s180-2015-J.docx




                        Shephali



                            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                   ORDINARY ORIGINAL CIVIL JURISDICTION
                                      NOTICE OF MOTION NO. 259 OF 2015
                                                              IN
                                                 SUIT NO. 180 OF 2015


                         Sumitra Shahikant Khokhani & Ors                 ... Applicants/Plaintiffs

                                   ~ versus ~

                         Westbury Finvest Private Limited &                          ...Defendants
                         Ors



                        A PPEARANCES
                        For the Plaintiffs:
                        -- Mr Sharan Jagtiani, Senior Advocate
                            with Pradeep J Thorat, i/b Prabhanjan Gujar
                        For Defendants Nos. 1 to 3
                        -- Mr Karl Tamboly
                            with Sanjiv Sawant & Abhishek Matkar, i/b Sanjiv Sawant
           Digitally
           signed by    For Defendant No. 4
           SHEPHALI
SHEPHALI   SANJAY       - Mr Mayur Khandeparkar
SANJAY     MORMARE
MORMARE    Date:
           2021.08.09
                            with Dushyant Lilani, i/b Lilani Shah & Co.
           10:09:22
           +0530        For the MCGM
                        - Smt Yamuna Parekh
                            with Sagar Patil




                                                    Page 1 of 15
                                                  2nd August 2021
          Sumitra Shashikant Khokhani & Ors v Westbury Finvest Pvt Ltd & Ors
                                        1-nms259-2015-in-s180-2015-J.docx




                     CORAM : G.S.Patel, J.

(Through Video Conferencing) DATED : 2nd August 2021 ORAL JUDGMENT:

1. I have heard Mr Jagtiani -- at least to the extent I think necessary. For reasons that will shortly become evident, I have not thought it necessary to call on Mr Tamboly for Defendants Nos. 1 to 3 or Mr Khandeparkar for Defendant No. 4.

2. This is the Plaintiffs' Notice of Motion for interim relief in a suit for specific performance of a Memorandum of Understanding dated 11th July 2009. Mr Jagtiani, in fairness, presses --with such modifications as the Court thinks fit -- prayers (c) or (d) or (e). These prayers are:

"(c) without prejudice to the aforesaid and in the alternative, till such time that the Defendants Nos. 1 to 3 and/or Defendant No. 4 specifically perform their obligations under the suit agreement dated 11.07.2009, the said Defendants Nos. 1 to 4 be ordered and directed by a mandatory order and injunction of this Honourable Court to reserve for the Plaintiffs, an area agreed to be given to them under the suit agreement;

(d) that pending the hearing and final disposal of the suit, and till such time that the Defendant Nos. 1 to 3 and/or Defendant No. 4 perform their obligations under the suit agreement, the Defendants Nos. 1 to 4 be restrained from creating any third party rights in respect of the suit property or in any construction that they may put up thereon, and/or from putting any one in possession of any of the units in the new construction on the said property;

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(e) that pending the hearing and final disposal of the suit, or pending the performance of the suit agreement by Defendants Nos. 1 to 4, the status quo in respect of the suit property be preserved by an order and injunction of this Hon'ble Court, and the Defendant No. 4 be restrained by an order and injunction of this Hon'ble Court from executing and/or enforcing the said eviction decree dated 31.08.2013, "Exhibit AA" herein, against the concerned Plaintiffs."

3. The Plaintiffs are the legal heirs of one Shashikant Khokhani.

He died intestate on 24th February 2011. Defendant No. 1 is a developer company. Defendants Nos. 2 and 3 are its directors. Defendant No. 4 ("Jyotindra") heads another branch of the Khokhani family. He is related to the Plaintiff and Defendants Nos. 5 and 6. Defendants Nos. 5 and 6 are the daughters of the 1st Plaintiff and the deceased Shashikant Khokhani. They are joined as formal parties; no relief is claimed against them. Defendant No. 7 is the MCGM and Defendants Nos. 8 and 9 are officers of the MCGM.

4. The Khokhani family is divided and fractured. That may be a mild way of putting it. They are at war over, unsurprisingly, property in Mumbai.

5. This is a plot of land, Survey No. 260, CTS No. 5019 to 5034 in Ghatkopar. The plot is sizeable: about 2424 square meters. On this stands even now a bungalow known as Amrut Bhavan. Jyotindra occupies the ground floor of the bungalow. The Plaintiffs and some other members were also occupants. The plot of land had four chawls on it labelled A to D. In addition, there was a one-room structure E,

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two sheds numbered E-I to E-M and a toilet block at the rear of chawl D.

6. Chawls C and D, the one room structure E, the two sheds E-I to E-M and the toilet block occupied an area of about 1455 sq mts from the larger plot of 2424 sq mts.

7. The Plaintiffs had other premises spread out between chawls A and B and some part of chawl D. These were rooms A3, A9, A10, A15, A16, A17, B4 and D4.

8. The situation with the occupant or tenant of room D4 may be slightly different from the others because the tenant/s of D4 also has or have some interest in one or more of the premises in chawls A and B. But about the entitlement of the tenant/s of D4 to re- accommodation by the developer and the owner there appears to be no dispute between Plaintiffs and the developer, although the owner may have something to say on the subject. That need not detain us today.

9. Jyotindra filed RAE Suit No. 942/163 of 2001 against the predecessor of the Plaintiffs, Shashikant Khokhani, and the head of another branch of the family, Chandulal, for eviction from these premises. In 2002, Jyotindra filed another RAE Suit No. 345 of 2002 for possession of tenement D4 on the ground of non-user.

10. The tenement numbered D4 was the subject matter of a notice issued by the Municipal Corporation for Greater Mumbai

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("MCGM") under Section 354 of the Mumbai Municipal Corporation Act, 1888.

11. For this Notice of Motion, only three documents are to be considered. The first is the Development Agreement ("DA") of 14th May 2008. The second is a Power of Attorney ("PoA") of 5th August 2008.The third is a Memorandum of Understanding ("MoU") dated 11th July 2009.

12. Jyotindra entered into a DA with the 1st Defendant ("Westbury"). Mr Jagtiani for the Plaintiffs maintains that this DA granted Westbury rights in respect of the entire larger property of 2424 sq mts and must be read to have empowered Westbury to have dealt with all the tenants on the entire property. Mr Khandeparkar for Jyotindra would have it otherwise. He maintains that Jyotindra did not intend and, in fact, did not permit the development to extend to chawls A and B. Jyotindra had already obtained eviction decrees for those chawls. Though execution is stayed in appeal, Jyotindra reserved himself the rights to proceed and to do with the remaining property as he wished.

13. The Plaintiffs also contend that the PoA that Jyotindra granted Westbury was extremely wide and authorised Westbury and its directors to bind Jyotindra in all dealings even with the tenants of chawls A and B. The answer is that there is a specific clause that limits the power of the Constituted Attorney to chawls C, D and E and does not extend to chawls A and B.

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14. Mr Jagtiani's submission is that the Plaintiffs must have protective orders as these are necessary to enforce the MoU admittedly and undeniably signed by the Plaintiffs and by Westbury. It may be true, he says, that Jyotindra did not sign that MoU, although there is a clause that speaks of his signature being appended to it. But this matters not, he argues, for Westbury had the necessary authority from Jyotindra and could validly engage in such a transaction with the Plaintiffs and all occupants or tenants of chawls A and B. Once, therefore, it is shown that Westbury had the necessary authority, then Jyotindra -- the land owner -- is bound by the MoU too. He too cannot refuse to acknowledge the Plaintiffs' contractual rights. An injunction must follow, he submits, for the Court will hold the parties to the bargain they struck and not permit them to act otherwise.

15. No one can quarrel with the generality of proposition Mr Jagtiani advances on contractual enforcement. Yet, it seems to me that the documents in question do not support his case.

16. I believe it to be more advantageous to consider these documents in reverse chronological order to gain an accurate understanding of what it is exactly Westbury could or could not do as the developer.

17. The MoU is the principal document on which the case is based. This is between the Plaintiffs (and their predecessor Shashikant) and Defendants Nos. 1 to 3. A copy of this is at Exhibit 'H' at page 110 of the Plaint. I am leaving aside for the present all considerations of whether or not the document is registered or

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adequately stamped. It will make little difference to the view I have preferred.

18. The MoU begins by referring to the registered DA dated 14th May 2008 between Jyotindra and Westbury. It then refers in Recital 2 to the PoA. Then in Clause 4, the MoU says that Westbury has offered permanent alternate accommodation on ownership basis to the Shashikant Khokhani group in lieu of that group delivering possession of their existing premises to Westbury. The MoU then says that both parties would enter into the necessary alternative accommodation agreement. The principal features of the contemplated agreement are set out and sub-clause (a) at page 112 mentions rooms A3, A9, A10, A15, A16, A17, B4 and D4. There are other provisions and clause (f ) speaks of a corpus fund. At page 118 (internal page 9) and page 119 (internal page 10) we have the Execution Clause. The text above the actual signatures reads thus:

"The Owner, Jyotindra Ishwarlal Khokhani has consented to all the aforesaid terms agreed by and between Shashikant Khokhani Group and the Developers and in view thereof has appended his signature here under."

19. But Jyotindra had not in fact appended his signature to this document. The place for his signature at internal page 10 (brief page

119) is blank. Above the space for his signature is yet another line which says that he confirms these terms and conditions agreed between the Shashikant Khokhani Group and Westbury. Had Jyotindra signed this, things might have been very different. But he has not. Mr Jagtiani's task, therefore, is to show that Westbury could

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and in fact did bind Jyotindra -- and it is therefore immaterial whether or not Jyotindra actually signed the MoU.

20. This immediately takes us back to PoA in question at Exhibit 'E' from page 85. For that is the source of Westbury's authority derived from Jyotindra. The PoA speaks of the larger area of 2424 sq mtrs and it mentioned all the chawls that stand on it. It then speaks of 14th May 2008 DA. Then come the operative clauses from page 87 onwards. I reproduce clauses 1, 2, 3 and 6:

"1. To carry out the development of the said property as contemplated by the said Development Agreement and in accordance with the layout plan sanctioned by the Municipal Corporation of Greater Mumbai (hereinafter referred to as "the MCGM") and as per the requirements as laid down by the MCGM for development of the said property.

2. To take all effective steps under the provisions of the said Development Agreement in respect of the said property and to take all steps for the purpose of enforcement of the said Development Agreement for development of the said property against any other person, party, Body or Authority and for that purpose to carry on correspondence, make representations, meetings and discussions with any person or party or Body or Authority and to arrive at any Agreement, arrangement, writing, contract or commitment with them or any of them and to lodge the same for registration with the concerned Sub-Registrar of Assurances and to admit execution thereof and to do all acts, deeds, matters and things as the said Attorneys may desire or deem fit.

3. To negotiate and settle with the tenants on the said property as the said Attorneys may deem fit by either causing them to give vacant possession of their respective tenements

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to me against receipt of compensation or surrender their tenancy rights in or by giving them alternative accommodation either in the proposed new building or in any other property and for that purpose to sign and execute the necessary agreements, documents and/or writings with the tenants and if required to register the same with concerned Sub-Registrar of Assurances and to demolish structures existing on the said portion admeasuring 1455 sq. meters presently in my possession including the tenements/structures vacated by tenants in terms of the said Development Agreement.

6. To sign for and on my behalf Alternate Accommodation Agreement or any other agreement, document and writing entered into with the tenants of Chawls 'C', 'D' and 'E' for surrender of tenancy and for obtaining vacant and peaceful possession of their tenanted premises and admit execution of the same with the concerned Sub-Registrar of Assurances and do all acts, deeds, matters and things for the purposes of registration."

21. Mr Jagtiani submits that because Clauses 1, 2 and 3 refer to 'the said property', therefore, Westbury had authority from Jyotindra to deal with all tenants, including the occupants of chawls A and B. This, he submits, is further emphasized in Clause 3 because by it Jyotindra gave Westbury the authority to negotiate and settle with 'the tenants on the said property' as Westbury deemed fit. But Clause 6 is worded very differently. It speaks of an alternate accommodation agreement or any other agreement, document or writing with the tenants and says that Westbury may execute these so as to bind Jyotindra, but specifies that these are to be with the chawl tenants of chawls C, D and E. It does not include Chawls A and B. Further, these

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agreements must be for surrender of a tenancy and for obtaining vacant and peaceful possession of the tenanted premises. There is no such authority in regard to chawls A and B. Specifically, the developer has no authority to accept a surrender of tenancy for chawls A and B.

22. But this PoA was not a stand-alone. It could not have been. It was tied hand and foot to the DA of 14th May 2008 between Jyotindra and Westbury.

23. The DA has the usual recitation of the history of this property. Recital J speaks of all these chawls. It says that most of these premises of Amrut Bhavan are occupied by Jyotindra. The ground floor and a small part of the first floor of chawl A, three units in chawl B, two units in chawl C and seven units in chawl D are tenanted. Then, Recital K accepts that there is the scope to develop 'the said property' (meaning the larger property) by consuming available FSI and by loading transferable development rights ("TDR"). Recital K itself makes it clear that by then Jyotindra had vacant possession of the tenements in chawls C and D, one room in E, the two sheds E-I to E- M. Except for two tenements in chawl C and seven tenements in chawl D, which were with tenants, the rest were with Jyotindra. The tenants were in occupation of about 2000 sq ft . Then Recital L noted that Jyotindra had filed eviction suits against eight of these nine tenants under Section 16(1)(i) of the Rent Act, i.e. for eviction for the purposes of reconstruction. I am told, incidentally, that the decree that came to be passed combines this ground along with a ground for eviction on the basis that some tenants purported to deny the tenancy of the landlord.

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24. Clause M is crucial. Here we find a representation by Jyotindra to Westbury. It is specific. It says that Jyotindra has conveyed to Westbury a representation that a multi-storey building can be constructed -- and the next part is important -- on a part or portion of the said property by consuming available FSI including the FSI that will become available on demolition of chawls C and D, the one- room structure E, the sheds E-I to E-M and the toilet block. After this is done, the maximum TDR is to be loaded. Recital M does not contemplate the development of the entire property, that is, the rest of the bungalow and chawls A and B. There is not the slightest ambiguity about this.

25. The disconnect or the discrepancy between the MoU and the DA are now immediately obvious. The MoU clearly purports to be of a scope larger than the DA contemplated.

26. But Recital M of the DA is not the only clause in question. Recital N confirms that Westbury showed its inclination to construct and develop only a part of the property, i.e., 1455 sq mts. This was shown in a map annexed to the DA. This recital also mentioned the demolition of chawls C, D, the one-room structure E, two sheds E-I to E-M and the toilet blocks and the loading of TDR. In the operative portion, Clause 1 contains a grant by Jyotindra to Westbury of the right and authority to construct on and develop the entirety of the plot of 2424 sq mts. But that is not to be read in isolation, because the latter part of this very same clause tells us how that development is to be done. It clearly says that this development right, albeit granted for 2424 sq mts is to be done over the portion admeasuring 1455 sq mts

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by demolishing these named structures, chawls C, D, the one-room structure E, two sheds E-I to E-M and the toilet blocks.

27. Conspicuous by its absence in all this is any mention of chawls A and B. But it does not stop at Clause 1. Clause 4 then says that the reconstructed area is to be shared between the developer and the owner in 63:37 ratio. Clause 5 puts this beyond the pale because it reflects Jyotindra's representation that the proposed plan of re- development could be approved without the demolition of chawl A and chawl B.

28. Clause 12 casts upon Westbury the responsibility to settle with the 'remaining nine tenants', i.e., those against whom Jyotindra had not already obtained possession of tenements in Chawl C and Chawl D. It is best that that clause is reproduced in full with the next Clause 13:

"12. It is agreed that the Liability and responsibility to settle with the said remaining 9 tenants of the Chawl-C and Chawl-D shall be that of the Developers. The Developers shall be absolutely entitled to deal with the said Nine Tenants and to obtain their consent for demolition of the said two Chawls and for development of the said property, on such terms either by providing alternative accommodation or by paying the proper compensation in lieu thereof as the Developers shall deem fit and proper and at their own cost and on their own account. However, if any monies are payable or required to be paid to the tenants who have already been settled by the Owner prior thereto (i.e., save and except the said nine tenants) for whatsoever reason, then the same shall be borne, paid and discharged by the

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Owner alone and the Owner shall indemnify and keep indemnified the Developers in respect thereof.

13. If the said 9 Tenants or any of them despite the Developers having offered to them the monetary compensation refuse to cooperate and thereby are required to be provided alternate accommodation on the said property by the Developers, then in that event, the Owner shall permit the Developer to construct a separate wing on the rear side of the said new building as shown in the plan hereto earmarked and thereon marked by green colour boundary line at the cost of the Developer for the purpose of providing such alternate accommodations to the said 9 tenants or any of them which shall not exceed the actual area at present in their respective occupation and/or the area directed to be given to the tenants by the orders of Hon'ble Court and only on monthly tenancy bases so that the said tenants continue to remain as monthly tenants of the Owner. The said separate Wing to a maximum of 2000 sq.ft of carpet area shall be constructed by the Developers at their own costs, after getting the Plan for construction thereof approved from the M.C.G.M. The area to the maximum of 2000 sq. ft of carpet area to be allotted to the said nine tenants or to any of them as alternative accommodation shall be allotted by developers out of and from developer's 63% portion."

29. Obviously, the PoA that followed would have to be read with this DA. It is only on this conjoint reading that we can actually make sense of Clause 6 of the PoA. If there was any doubt about this, it is put to rest by Clause 14 and 15 of the DA. These are entirely and solely specific to the named premises. There is no equivalent provided for Chawls A and B. On the question of the dovetailing of the DA with the PoA, Clause 19 makes it abundantly clear that the

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PoA granted to Defendants Nos. 2 and 3 is a requirement of the DA itself.

30. It is for this reason that I do not think it is possible to accept Mr Jagtiani's effort at constantly expanding the universe of Westbury's rights and obligations from the DA to the PoA to the MoU. If anything, we must adopt an interpretation that does not strike at the root of the restrictions in the PoA and the DA.

31. What Mr Jagtiani's submission really amounts to is this. Chawl A and B may have been left out of the development. There is no reservation for them in the developer's area. But since there is an MoU, it makes no difference whether the Plaintiffs' reconstructed tenements are carved out of the developer's share or the owner's share, so long as they come out of someone's share. That, he submits, is the only way to consider the MoU.

32. But before signing the MoU, three things were necessary. First, the positive assent and signature of Jyotindra. It is missing. It was necessary because throughout Jyotindra has been very careful to limit the rights that he has granted to the Westbury and he has confined the development of a small portion occupied by named structures. He has not extended this right to the entire property. Second, it required the Plaintiffs to satisfy themselves before signing the MoU, possibly on a further enquiry, for they seem to have had very legal sound advice that the PoA granted Westbury the necessary authority to transact with the Plaintiffs for Chawls A and B even if Jyotindra did not join in signing the MoU. Third, that the DA itself extended to

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Chawls A and B, and entitled Westbury to deal with the Plaintiffs for the surrender of their rights. If the DA --the inception of this entire enterprise -- did not extend to Chawls A and B, and gave Westbury no rights over those Chawls, then no amount of MoUs could give Westbury rights that it never had in the first place.

33. If the matter is viewed from this perspective, then I am quite unable to see how the Plaintiffs can be said to have made out a prima facie case for the grant of interim relief. These are of course prima facie views.

34. I have not thought it necessary to hear Mr Jagtiani on the point of limitation raised by Defendants Nos. 1 to 4. In any event, this seems to me to be a mixed question of fact and law. All questions are left open to the final hearing of the Suit.

35. The Notice of Motion is dismissed. In the facts and circumstances of this case, there will be no order as to costs.

36. At this stage, both sides request that the Suit be taken up for framing issues. It is a suit of 2015. It is over-ripe for that purpose.

37. List the Suit for framing issues on 17th August 2021.

38. This order will be digitally signed by the Private Secretary of this Court. All concerned will act on production of a digitally signed copy of this order.

(G. S. PATEL, J)

2nd August 2021