Bombay High Court
Kantilal K. Haria And 7 Ors vs Sanyam Realtors Pvt. Ltd. And Anr on 27 July, 2023
Bench: Shri Arif Doctor
Digitally signed
by LAXMIKANT
2023:BHC-OS:7364-DB
LAXMIKANT GOPAL
GOPAL CHANDAN
CHANDAN Date:
2023.07.27
16:10:05 +0530 APPL-13134.23-AW-IA-14622.23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO. 13134 OF 2023
IN
NOTICE OF MOTION NO. 1361 OF 2013
IN
SUIT NO.672 OF 2013
1] Kantilal Khimji Haria, ]
]
2] Jayesh Khimji Haria, ]
]
3] Varun Kantilal Haria, ]
]
4] Jayant Padamshi Shah, ]
]
5] Kusum Nitin Shah, ]
]
6] Anantrai Ghelani, ]
]
7] Raj Anantraj Ghelani ]
]
Applicant Nos. 1 to 7 are all ]
adults, Indian Inhabitants and ]
members of Association of ]
Persons carrying on business ]
in the name and style of ]
Sheetal Realtors, having their ]
office at Sheetal Smruti, 4 ]
Swatik Society, N. S. Road ]
No.1, Opposite Bhaidas Hall, ]..... Appellants/
J. V. P. D. Scheme, Vile Parle ] Original Applicants/
(West), Mumbai - 400 056 ] Plaintiffs.
Vs.
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1] Sanyam Realtors Private ]
Limited, a Company registered ]
under the provisions of ]
Companies Act, 1956 and ]
having its registered office at ]
B-5, Parekh Apartment, ]
Sarojini Road, Vile Parle ]
(West), Mumbai - 400 056. ]
]
2] EDMD Infracon Private ]
Limited, A Company ]
registered under the provisions ]
of the Companies Act, 1956 ]
and having its registered office ]
at Panchratna, Ground Floor, ]
Opp. Panchvati Tower, Off. ]
Yari Road, Versova, Andheri ]..... Respondents/
(West), Mumbai - 400 061 ] Orig.Defendants.
WITH
INTERIM APPLICATION (L) NO. 14622 OF 2023
IN
APPEAL (L) NO. 13134 OF 2023
IN
NOTICE OF MOTION NO. 1361 OF 2013
WITH
INTERIM APPLICATION NO.293 OF 2022
IN
SUIT NO.672 OF 2013
Kantilal Khimji Haria : Applicants/
and others Orig. Appellants
In the matter of
Kantilal Khimji Haria and others : Appellants
Vs.
Sanyam Realtors Private Limited : Respondents/
and others Orig. Defendants.
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Dr. Virendra Tulzapurkar, Senior Advocate a/w Mr. Rajiv Narula, Ms. Shweta
Doshi & Mr. Milind Mane i/by M/s Jhangiani Narula and Associates for the
Appellants/Applicants.
Mr. Dinyar D. Madon, Senior Advocate a/w Mr. Aditya Shiralkar, and Mr. Vijay
Poojari i/by Shiralkar and Co. for the Respondents.
CORAM : NITIN JAMDAR, ACTING CJ. &
ARIF S. DOCTOR, J.
RESERVED ON : 6 JULY 2023
PRONOUNCED ON : 27 JULY 2023
JUDGMENT :- (PER ARIF S. DOCTOR, J.)
1. The present Appeal impugns an Order dated 12 th April 2023 by
which the Learned Single Judge has been pleased to dismiss Notice of Motion
No. 1361 of 2013 ("the said Notice of Motion") and Interim Application No.
293 of 2022 ("the said Interim Application") taken out by the Appellants -
Plaintiffs in Suit No.672 of 2013.
2. The Learned Single Judge has in the Impugned Order set out both
the broad facts of the case as also the circumstances in which the said Notice of
Motion and Interim Application came to be filed. We therefore do not propose
to reiterate the same except to the extent relevant for the purposes of deciding
this Appeal.
3. The Appellants claim to be an Association of Persons ("AOP")
engaged in the business of acquiring and developing properties and carry on
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business in the name Sheetal Realtors. Respondent No.1 ("the Respondent")
claims to be the owner of a piece and parcel of land being Plot No. 4,
admeasuring about 2477 square meters, situate, lying and being at CTS No.128,
128/1 to 8 Revenue Village and City Survey Ghatkopar, Taluka and
Registration Sub-District: Kurla ("the said land") more particularly described in
the plaint. It is not in dispute that the said land had various cattle-sheds which
were tenanted structures.
4. On 15th December 2005 the Appellant No. 1and the Respondent
executed a document titled "Terms Agreed" ("the said MOU"). The execution
of this MOU is not disputed, however both Parties are at variance as to the
agreement that was arrived at as recorded in the said MOU. It is the Appellants
contention that by the said MOU the Appellants were entitled to certain built
up area of the development which was to be carried out in the said land.
Conversely, it is the Respondents contention that the said MOU contemplated
only sale of the said land. It is however not in dispute that the MOU
contemplated reciprocal obligations on both Parties thereto.
5. The Respondent by its Advocate's letter dated 17 th January 2012
terminated the said MOU and called upon the Appellants to either purchase the
said land at its market value or then accept a refund of the amount paid by the
Appellants to the Respondent. The termination notice issued by the Respondent
was contested by the Appellants vide their Advocate's letter dated 31 st January
2012.It was thus the Appellants filed the captioned Suit seeking inter alia
specific performance of the said MOU. The Appellants also took out the said
Notice of Motion in which the Appellants sought the following reliefs;
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indicating an injunction against Respondent No.1 from in any manner
encumbering, alienating, dealing with, disposing off and/or creating any third
party right title and interest in respect of the said land.
On 31st October 2012 when the said Notice of Motion was heard for Ad-
interim relief, this Court passed the following order:-
"P.C. :-
1. The Plaintiffs have filed the above suit seeking specific
performance of the MOU dated 15th December 2005
(Exhibit B to the plaint) and the purported
supplemental Agreement annexed as Exhibit M to the
plaint. The learned Advocate appearing for the
Defendant has pointed out that the Agreement has
been terminated by their Advocate's letter dated 17th
January 2012. According to the Plaintiffs themselves,
the plinth which was put up by the Plaintiffs on the
suit plot was destroyed/demolished by the Defendant
in June 2005. The suit is filed on 23rd October 2012
and an application is now made for urgent ad-interim
reliefs. The learned Advocate appearing for the
Defendants has also pointed out that the
Development Agreement is already entered into by
the Defendant with M/s. EDMD Infracon Pvt. Ltd. on
27th September 2012. The said M/s. EDMD Infracon
Pvt. Ltd. will have to be brought on record. In view of
the aforestated facts, no ad-interim relief can be
granted. However, the Plaintiffs shall be at liberty to
move for reliefs, if any, after seeking/carrying out
amendments to the plaint. All applications taken out
by the Plaintiffs shall be decided on its own merits.
2. Place the Notice of Motion for hearing and final
disposal on 27th November 2012."
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Thereafter, the Appellants took out a Chamber Summons (being Chamber
Summons No.768 of 2013) in which the Appellants sought to implead
Respondent No.2. On 5th November 2012 this Court was pleased to allow the
said Chamber Summons and list the said Notice of Motion for final hearing and
disposal. After hearing the Notice of Motion, this Court by Order dated 20 th
May 2013 framed a preliminary issue of limitation under Section 9A of The
Code of Civil Procedure, 1908 ("the CPC"). When the Notice of Motion came
up for hearing on 21st August 2015, the Respondent raised the contention that
the Appellants who claimed to be an AOP were infact an unregistered
partnership firm and therefore the Suit itself was barred under the provisions of
Section 69(2) of the Indian Partnership Act, 1932 ("the Partnership Act"). This
led the Court to frame an issue whether the Suit was therefore maintainable in
view of the bar contained in Section 69(2) of the Partnership Act.
6. The Order dated 21st August 2015 assumes relevance since it
records that Ad-interim relief had been refused on merits. It is the contention of
the Appellants that, this order erroneously records that Ad-interim reliefs were
refused on merit whereas it is the Respondents contention that the said Order
was correctly passed.
7. Thereafter, by an Order dated 30th October 2015, this Court was
pleased to hold that the Suit was not barred under Section 69(2) of the
Partnership Act. This order was carried in Appeal by the Respondent and by an
Order dated 7th June 2016, the Division Bench of this Court was pleased to
order stay of the further proceedings in the Suit keeping open the liberty to seek
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modification of the Order dated 21st August 2015 to the extent that the same
recorded that the Ad-interim relief had been refused on merits. The Appellants
thereafter on 14th October 2016 filed a Review Petition, being Review Petition
(L) No.37 of 2016 in which the Appellants had sought a review of the Order
dated 21st August 2015.
8. This Court thereafter on 14th November 2019, with the consent of
the parties, was pleased to dispose of Commercial Appeal No. 8 of 2016 by
recording that the Order dated 30th October 2015 passed by the Learned Single
Judge be treated as a prima facie view, and the same was subject to being tested
in trial.
9. The Appellants thereafter, in October 2021 filed the said Interim
Application seeking interim relief on the ground of changed circumstances since
the date of filing of the said Notice of Motion. The Interim Application
essentially set out that the construction had proceeded during pendency of the
Suit and despite registration of the lis pendence notice, construction had been
carried out and the Respondent was dealing with the flats. It was thus that the
Appellants sought various interim reliefs including for appointment of Court
Receiver and stay on further construction.
10. Dr. Tulzapurkar, Learned Senior Counsel appearing on behalf of
the Appellants, at the outset invited our attention to the Impugned Order. He
pointed out that the Learned Single Judge had correctly come to the prima facie
conclusion that there existed a concluded contract between the parties which
was capable of specific performance. Basis this, Learned Senior Counsel
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submitted that the issue of whether or not specific performance could be
granted was one which would necessarily have to be tested at the time of trial.
11. Dr. Tulzapurkar then submitted that the findings of the Learned
Single Judge that "the termination of the agreement by the Defendant No.1
cannot be said to be prima facie wholly unsustainable " were not only contrary to
the terms of the MOU but also made apparent that the Learned Single Judge
was not wholly satisfied with the Respondents justification for the termination.
In support of his contention that the findings of the Learned Single Judge were
contrary to the terms of the said MOU, he invited our attention to Clauses 3, 5
and 7 of the said MOU and pointed out therefrom that the obligations of the
Appellants to purchase TDR would arise only after the Respondent had first
obtained the Commencement Certificate ("CC") in respect of the entire plot of
land. He submitted that it was only thereafter, that within a period three
months, that the Appellants were required to purchase T.D.R. He pointed out
that the said MOU did not contemplate purchase of the T.D.R. upon issuance
of a part CC Given this, he submitted that the obligation of the Appellants to
purchase the T.D.R. had infact never arisen once the Respondent had not
obtained a CC as contemplated in the MOU, and therefore the Appellants could
not be said to be in breach of their obligation to purchase T.D.R.
12. Dr. Tulzapurkar then submitted that the MOU was a commercial
document, which was required to be interpreted in commercial sense/manner.
He submitted that both parties being business entities were aware of the nature
and requirement of land development, wherein it was common practice that
T.D.R. was purchased only when a final CC was issued as it was only then, that
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it would become known as to how much T.D.R. was required to be purchased.
13. Dr. Tulzapurkar then invited our attention to Clause 15 of the
MOU and pointed out that the same clearly provided the time frame within
which the Respondent was to obtain a CC. He submitted that admittedly the
Respondent had not obtained a CC within the time prescribed in clause 15 and
therefore the obligation of the Appellants to purchase T.D.R. had never arisen.
14. Dr.Tulzapurkar then invited our attention to clause 10 of the MOU
and pointed out that, in terms thereof, the Respondent was only entitled to the
area mentioned therein and nothing more. He submitted that the Appellants
were entitled to the entire balance area of the proposed development. He
submitted that the Appellants not having failed in the discharge of any of their
obligations under the MOU were therefore entitled to this area and the MOU
was thus capable of specific performance.
15. He then invited our attention to Clause 12 of the MOU and pointed
out therefrom that the time for completion of the said project was between the
18 to 24 months after the Respondent had obtained the CC. He pointed out
that since the CC had not been obtained by the Respondent, this obligation /
time frame also had not commenced.
16. Basis the above, he submitted that the Learned Single Judge gravely
erred in concluding that the Appellants were in breach of their obligations
under the said MOU and that the termination thereof by the Respondent was
somewhat justified.
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17. Dr. Tulzapurkar then pointed out that the conduct of the
Respondent was a factor which was required to be noted and taken into
consideration when considering the Application for interim reliefs and question
of balance of convenience. He pointed out that while the Respondent had in
the termination letter dated 17th January 2012 accepted the factum of existence
of an Agreement between the Parties, the Respondent had in the subsequent
letter dated 18th April 2012 taken a diametrically opposite stand by contending
that there was infact no Agreement between the parties. He then pointed out
that the Respondent also managed to thereafter obtain a final CC and clear the
plot of all the tenants namely the cattle-shed owners. He, therefore, submitted
that the termination of the MOU by the Respondent was not bonafide but was
with the malafide and premeditated motive to deprive the Appellants of their
entitlement under the said MOU.
18. On the aspect of delay, Learned Senior Counsel submitted that the
Learned Single Judge had failed and neglected to appreciate that the delay was
not on account of the Appellants but was on account of mainly the exigencies of
the Court. He submitted that the Respondent had raised various objections first
on the issue of limitation and then on the issue of maintainability under Section
69 of the Partnership Act, which also delayed the hearing of the Notice of
Motion. He thus submitted that delay could not be attributed to the Appellants.
He then submitted that the time taken in deciding the Notice of Motion could
not prejudce and/or affect the bonafide rights of the Appellants. He submitted
that the flat purchasers had purchased their respective flats with notice of the
pendency of the present proceedings and after lis pendens had been registered
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and thus the Respondent could not claim any equities based thereon. He
submitted that the Appellants had duly registered a lis pendens and therefore
the flat purchasers could not claim any equity in respect of the said flats. In
support of his contention, he placed reliance upon a Judgment of a Division
Bench of this Court in the case of Prakash Gobindram Ahuja Vs. Ganesh
Pandharinath Dhonde and Ors.1 to submit that the alienation of the said flats
would be subject to the outcome of the present Suit.
19. Per contra, Mr. Madon, Learned Senior Counsel appearing on
behalf of the Respondent, at the outset, submitted that the Learned Single Judge
had correctly exercised his discretion and dismissed the Notice of Motion and
the Interim Application.
20. He then submitted that the very identity of the Appellants was not
clear and infact no MOU entered was into with the Appellants at all. In support
of his contention, he invited our attention to the said MOU and pointed out
therefrom that the same was entered into by the Respondent with " K.K. Haria
& Others" and had been executed only by K.K. Haria. He then invited our
attention to the names written in hand appearing at the last page of the MOU
and pointed out that only three of the said persons were arrayed as Appellants.
He pointed out from the cause title of the Plaint that some of the Plaintiffs were
persons other than those whose names appeared on the said MOU. Basis this, he
submitted that there was infact no MOU entered was into with the Plaintiffs.
21. Mr. Madon then submitted that the Agreement by which the
1 MANU/MH/1952/2016
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Appellants had constituted themselves as an AOP was itself a backdated
document. In support this contention, he pointed out that in the police
complaint filed by the Appellants against the Respondent, the Appellants had
stated that they had made full payment as agreed in the said MOU, after which
the AOP Sheetal Realtors was formed. He then pointed out that in fact on the
date of the said MOU only an amount of Rs.1,40,00,000/- had been paid by the
Appellants and not the entire amount as stated in the said MOU. He then
submitted that the entire amount of Rs.3,00,00,000/- was infact paid in the year
2007, which was well after the date on which the AOP was formed as also the
said MOU was executed.
22. Learned Senior Counsel then submitted that the Agreement
between the Parties was for purchase and sale of land and nothing more. He
pointed out that by termination letter, the Respondent had infact called upon
the Appellants to purchase the said land at the market value or then to accept a
refund of the monies advanced by the Appellants to the Respondent under the
said MOU, despite which the Appellants had chosen to do neither . He then
submitted that since the Appellants did not want to complete purchase of the
land, the Appellants had raised all sorts of false contentions. He submitted that
the said MOU had therefore been validity terminated by the Respondent.
23. Mr. Madon then submitted that the contention of the Appellants
that the Respondent had failed to obtain a CC and was therefore in breach of
its obligations under the said MOU was plainly false and contrary to the terms
of the said MOU. In support of his contention, he invited our attention to
Clause 2 of the said MOU and pointed out that the same specifically provided
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that the Appellants could carry on work on the balance vacant land as also evict
the tenants and deduct such amount spent for such purpose the Respondent's
share of built up area. He pointed out that despite the fact that the CC was
granted beyond plinth level, the Appellants had not carried out the construction
beyond plinth level. He submitted that the MOU clearly provided that if the
Respondent did not evict the tenants, then it was incumbent upon the
Appellants to do so . He submitted that despite this, the Appellants neither
proceeded with the construction in terms of the part CC's which had been
obtained by the Respondent nor did the Appellants take any steps to vacate the
tenants. He therefore submitted that it was the Appellants who were in breach
of their obligations under the said MOU and not the Respondent.
24. He then submitted that clause 6 of the MOU made clear that it was
the Appellants obligation to purchase the T.D.R. which the Appellants had
failed and neglected to do. He pointed out that it was commonplace in an
Agreement of this kind that a CC was always issued in part and therefore the
Appellants were bound and liable to load/purchase the T.D.R. on the said plot.
He therefore submitted that before granting a CC, T.D.R. was to be made
available by the Appellants which they did not do so. He submitted that the
Municipal Corporation had sanctioned the premium for removal of cattle sheds
referred to as "cattle premium" which also the Appellants did not pay.
25. Learned Senior Counsel then invited our attention to Clause 12(a)
of the said MOU and submitted that the question of the Respondent taking over
the project in terms thereof, did not arise as the Appellants had not purchased
the T.D.R. as contemplated under the said MOU and thus the question of
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Respondent completing the contract in terms of Clause 12(a) did not arise. He
submitted that the Appellants had abandoned the said project. He pointed out
that this was clear from what was stated in the Appellants' Advocate letter dated
31st January 2012. wherein it was categorically stated that the Appellants did
not want to put in extra money and get stuck.
26. He then submitted that a plain reading of Clause 16 of the
said MOU made clear that the MOU was not a concluded contract but was
merely an agreement to agree. He pointed out that Clause 16 did not mention
any price or consideration and therefore the said MOU was inchoate and
incapable of specific performance.
27. Learned Senior Counsel then invited our attention to the CC issued
by the Mumbai Municipal Corporation (MMC) and pointed out that despite the
CC having been granted up to the third floor, the Appellants did not carry out
any construction beyond the plinth. Learned Senior Counsel then invited our
attention to the letter dated 31 January 2012 addressed by the Appellants' then
advocate and pointed out that the Appellants had plainly stated therein that the
Appellants had refused to put an extra money and get stuck. He submitted that
this amounted to a clear refusal on the part of the Appellants for performing
their obligations under the terms of Clause 12(a) of the MOU.
28. On the aspect of delay, Learned Senior Counsel submitted that Ad-
interim reliefs had been refused to the Appellants vide Order dated 31 st
October 2012 on the ground of delay. He submitted that the Learned Single
Judge had in the said Order recorded the reasons for which Ad-interim reliefs
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were rejected. He then submitted that the Order dated 21 st August 2015 had
correctly recorded that Ad-interim relief had been rejected. He therefore
submitted that the delay was purely on account of the Appellants' inaction and
thus the Appellants could not now contend to the contrary.
29. Mr. Madon then submitted that, the Appellants had not taken any
steps to pursue the Review Petition and the same was still pending. He therefore
submitted that it was clear that Ad-interim reliefs had, in fact been refused as
correctly recorded in the Order dated 21 August 2015. He additionally pointed
out that the Appellants could have appealed from the said Order but had chosen
not to do so. In light of this, he submitted that there could be no dispute as to
the fact that Ad-interim reliefs had been rejected on merits. He then submitted
that the other reason stated by the Appellants for delay in moving the said
Notice of Motion and filing the said Interim Application, namely that there was
a lock-down was also ex facie untenable. He pointed out that there was no lock
down between November 2019 and March 2020 despite which fact, the
Appellants did not move the matter for reasons, best known to them. He also
pointed out that the reason cited by the Appellants, that the first Appellant was
a senior citizen was also untenable, since the Appellants were an association of
several persons, anyone of whom could have taken steps to prosecute the present
matter but did not do so. He pointed out that the Appellants despite appointing
a "new advocate" in February 2021 had filed the said Interim Application only
in October 2021. He also pointed out that the new advocate appointed by the
Appellants for filing of the Interim Application was the same advocate who the
Appellants had engaged in 2016 for filing of the Review Petition. Mr. Madon
submitted that there was absolutely no reason or explanation as to why the
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Appellants did not take steps to file the Interim Application earlier. He
submitted that construction had been going on since the year 2014 which fact
the Appellants were well aware of. He pointed out from paragraph 3 of the
Interim Application that the reasons stated therein for filing the same, namely
that the Respondents had proceeded with the construction on the subject
property and sold flats to certain purchasers, was entirely untenable since
construction was being carried out since the year 2014. He therefore submitted
that the Learned Single Judge was right in taking into account the intervening
factors and holding that the balance of convenience was against the Appellants
and therefore rejecting the said Notice of Motion and Interim Application
30. Learned Senior Counsel then submitted that the Appellants had
made a false statement in the Interim Application inasmuch as in paragraph
4(viii) the Appellants had stated as follows: -
"(viii) On the said day viz.5th November, 2012 it was only
in view of the said Notice of Motion No. 1361 of
2013 being fixed for final hearing by this
Honourable Court, on 27th November 2012, that a
statement came to be recorded on behalf of the
Applicants that they would not press for ad-interim
reliefs at "that juncture". Hereto annexed and
marked as Exhibit " C " is a copy of the Order dated
5th November, 2012 allowing the Chamber
Summons (L) No. 1604 of 2012."
He invited our attention to the Order dated 5 November 2012 and pointed out
therefrom that the words "that juncture" do not appear in the Order.
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31. Mr. Madon then submitted that reliance by the Appellants upon
the judgement in the case of Prakash Ahuja was entirely misplaced. He
submitted that apart from the fact the contention of lis pendens was never raised
before the Learned Single Judge, lis pendens would apply only on the passing of
a decree and not at the interlocutory stage.
32. He submitted that the Impugned Order was an interlocutory order
passed by the Learned Single Judge in the exercise of his discretion. He
submitted that the principles of interference in such matters was well settled and
that in the facts of the present case, none of the grounds for interference were
made out by the Appellants. In support of his contention, he placed reliance
upon a division bench judgment of this Court in the case of Stoughton Street
Tech Labs Pvt. Ltd. Vs Jet Skyesports Gaming Pvt. Ltd.2 .
33. He then pointed out that the plans for the said construction had
been duly approved and that construction had been ongoing since the year 2014
and all the necessary permissions and requite NOC's had been issued in respect
of the same. He pointed out that construction in respect of Tower B and C was
completed and the construction in respect of Tower A had reached upto the 11 th
slab and the work in respect of the same was in progress. He pointed out that
approximately 59 flat purchasers had made bookings in the said project and
around 80% of the flat purchasers had taken possession of the said flats after
registering their respective Agreements for Sale. He pointed out that some of the
customers/flat purchasers had also availed of housing loans from various banks
to facilitate the purchase of their flats. He submitted that construction cost
2 Unreported Judgment in Appeal (L) No.16492 of 2022 dt.06/06/2022.
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incurred upto 30th June 2023, in respect of all three wings was approximately
Rs.39,00,00,000/- out of the total project cost of Rs.86,00,00,000/-. He
therefore submitted that the balance of convenience in the present case was
entirely against the Appellants and was in favour of the Respondent.
34. Dr. Tulzapurkar learned Senior Counsel in Rejoinder submitted
that the contention of the Respondent that there was no privity between the
Appellants and the Respondent was completely misplaced. In support of his
contention, he invited our attention to the letter dated 10 January 2007
addressed by the Appellants to the Respondent in which the Respondent had
specifically acknowledged that the payments made to the Respondent were by
the Appellants.
35. In response to the contention that the said AOP agreement was
backdated, he submitted that this contention was never raised before the
Learned Single Judge and had the same been raised, the Appellants would have
produced the PAN card and other relevant proof to dispel this contention.
36. In response to the contention that the Appellants had failed to
purchase T.D.R., he once again invited our attention to the MOU more
particularly Clause 1 and 5, and pointed out that the CC was to be in respect of
the area mentioned therein, namely 2477 sq. mts which the Respondent
admittedly, had not obtained. He, therefore, reiterated that the obligation of the
Appellants to purchase the TDR had never arisen.
37. He then submitted that, the fact that the Respondent had managed
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to evict the tenants after issuance of the termination letter made apparent that
the Respondents had used the monies advanced under the MOU for purposes
other than for which they had been advanced. To highlight the conduct of the
Respondent, he then invited our attention to the stand taken by the Respondent
in the Written Statement wherein the Respondent had specifically pleaded that
it was impossible to proceed with the construction on account of the various
tenants who were on the said land. He pointed out that while the Respondent
had taken this contention, the Respondent had infact evicted the tenants and
had commenced construction on the land. He therefore, submitted that the
termination of the MOU by the Respondent was entirely malafide and done
with the sole motive to deprive the Appellants of their rights under the MOU.
38. He then submitted that the balance of convenience was infact in
favour of the Appellants since the Respondent was in breach of its obligation
under the said MOU. He submitted that the contention of balance of
convenience was not one which the Respondent could raise since the
Respondent's entitlement in the said redevelopment was limited to what was set
out in Clause 10 of the said MOU. He then invited our attention to the BMC's
letter dated 16th August, 2007 and pointed out that the payment of "cattle
premium" required a vacant plot and admittedly the said plot was not vacant
hence the obligation of the Appellants to make payment of the said premium
did not arise.
39. We have heard the learned counsel for the parties, considered the
rival contentions, advanced as also the case law cited. However, before we
proceed further, we must note that the Order appealed against is an
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interlocutory order passed by the Learned Single Judge in the exercise of his
discretionary jurisdiction. The scope of interference with such orders in Appeal
is now well settled as has been held in the judgment of the Hon'ble Supreme
Court in the case of Wander Ltd and Anr. vs. Antox India P. Ltd. 3 The Appeal
Court cannot interfere with the exercise of discretion exercised by the Court of
first instance, except where the discretion is shown to have been exercised,
arbitrarily, capriciously, perversely or the Court of first instance, had ignored the
well settled principles of law, regulating the grant or refusal of grant of
interlocutory injunctions. It is, therefore not open to us to reassess the material
based on which the Order was passed and see if we would have come to a
different conclusion from the Learned Single Judge, but to see as to whether the
Learned Single Judge had exercised the discretion vested in him judiciously and
whether the conclusion reached by him was plausible in the facts of the case. It
is also useful at this stage to set out the observations of a coordinate bench of
this Court in the case Stoughton Street Tech Labs Pvt. Ltd. which was relied
upon by Mr. Madon wherein this Court observed as follows in the context of
the scope, approach and jurisdiction of the Appellate Court when considering
an Appeal filed from an interlocutory order, viz.
"3. It is also well settled that when considering an
application for interim relief, a Single Judge is not
expected and is in fact not permitted to conduct a
mini-trial. It is the prima facie case that is to be
assessed.
4. Further, as the Supreme Court said in Monsanto
Technology LLC v Nuziveedu Seeds Ltd, the
appeals court must not 'usurp the jurisdiction of the
3 1990 (Supp) SCC 727
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Single Judge'; it must confine itself to an
adjudication of whether the impugned order was or
was not justified in the facts and circumstances of
the case. Where there are complicated mixed
questions of law and fact, these cannot be dealt with
in a summary adjudication, but must be examined
on evidence led in the suit.
5. In the very recent decision of 14th March 2022 in
Shyam Sel & Power Ltd & Anr v Shyam Steel
Industries Ltd, the Supreme Court reiterated the
law in Wander Ltd and Monsanto. The Shyam Sel
court went on to hold that the appellate court must
assess whether the discretion exercised by the
learned single Judge was arbitrary, capricious or
perverse.
6. It is with this in mind that we approach the Appeal.
Once we find that the decision of the learned Single
Judge is a plausible one - not arbitrary, capricious
or perverse - then we cannot substitute our view
for that of the learned single Judge.
It is therefore with these principles in mind that we proceed to consider the rival
contentions advanced.
40. The main plank of Dr. Tulzapurkar's arguments to assail the
Impugned Order was that the findings arrived at by the Learned Single Judge
were plainly contrary to the terms of the MOU. On a careful and considered
reading of the Impugned Order as also the MOU, we find that the findings
reached by the Learned Single Judge in the Impugned Order are clearly
plausible and certainly cannot be said to be arbitrary, capricious or perverse. We
find that the Learned Single Judge has in great detail dealt with the various
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clauses of the MOU and after considering the same has come to a prima facie
finding in the exercise of his discretionary jurisdiction. The Learned Single
Judge was well entitled to do so. We find that the exercise which Dr.
Tulzapurkar now wants us to undertake would infact amount to requiring us to
re-appreciate the material based on which the Learned Single Judge has come to
a prima facie finding. We cannot do so in our limited Appellate Jurisdiction
from an interlocutory order.
41. We also do not find any merit in the submission of the Learned
Senior Counsel for the Appellant that the finding of the Learned Single Judge
that "the termination of the agreement by the Defendant No.1 cannot be said to
be prima facie wholly unsustainable " as being a perverse finding. We note that
the said finding was arrived at after the Learned Single Judge had in detail
considered the various clauses of the MOU and come to a prima facie view in
respect of the reciprocal obligations of the Parties thereto. Merely because the
Learned Single Judge had used the words "wholly unsustainable" does not mean
that the Learned Single Judge was not satisfied that the termination was
justified. As has been laid down by this Court in Stoughton Street Tech Labs
Pvt. Ltd. the Learned Single Judge is not at the interim stage required to
conduct a mini trial. On a careful and considered reading of the Impugned
Order, we find nothing in the same much less the conclusion reached to be in
any manner arbitrary, perverse, or capricious. We infact find that the Learned
Judge has rejected interim relief taking in view the intervening circumstances
and has passed the Impugned Order after giving due weightage to intervening
circumstances and factoring in the balance of convenience. There is nothing to
our minds anything even remotely wrong with the course adopted by the
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Learned Single Judge in disposing of the said Notice of Motion and Interim
Application in the facts of the present case.
42. Additionally, we find and must note that the Learned Single Judge
has not proceeded to reject the said Notice of Motion and Interim Application
based only on interpretation of the terms of the MOU and the respective
obligations of the parties. The Learned Single Judge has rejected interim reliefs
in view of the intervening events that have transpired which according to him
have tilted the balance of convenience completely against the Appellants. The
Learned Single Judge in the Impugned Order has recorded the following
reasons :-
"64. Evidently, the aforesaid propositions have been
enunciated in the facts of the given cases. One cannot
lose sight of the fact that grant of injunction or
appointment of a receiver is a discretionary relief. It
has to be exercised keeping in view the fact situation
of the matter. In the case at hand, the passage of time
has brought in its strain many factors which are of
critical salience. The suit property has been developed
in a proportion which far exceeds the terms of the
MOU. Security interest of significant bearing has
been created. A multitude of third party rights have
been created. In fact, the physical character of the suit
property has been substantially altered. The
contention that the defendant No.1 carried the
development by resorting to litigative stratagem is
required to be appreciated in the light of the fact that
there has been no restraint order against the
defendant No.1. In the circumstances, at this stage,
the balance of convenience clearly tilts in favour of
defendant No.1.
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65. Irreparable loss, in the circumstances of the case, in
the event of grant of injunction would be suffered not
only by the defendant No.1 but the parties in whose
favour rights have been created."
We are in complete agreement with the findings of the Learned Single Judge
reproduced above.
43. Additionally, we find that the conduct of the Appellants in the
present matter, even prior to filing of the Suit, is such that would not entitle the
Appellants for interim reliefs. The Appellants have been anything but vigilant
in approaching this Court and seeking interim reliefs. We say so because the
Respondent admittedly issued the Letter of Termination to the Appellants on
17th January 2012. The Respondent thereafter demolished the plinth which was
constructed on the said land by the Appellants somewhere in June 2012. The
Respondent thereafter commenced construction on the said land in October
2012 and the present Suit was filed only thereafter. It is therefore to be noted
that a party who claims to be in possession of the said land as the Appellants
have claimed they were ought not to have waited and moved the Court only
after construction had commenced. We find no explanation much less
satisfactory explanation for the Appellants inertia during this crucial period. To
our minds, the completely unexplained delay from 17 th January 2012 to the
date of filing of the Suit is a factor which by itself would militate against the
grant of any interim relief to the Appellants. It was clearly this position that
weighed the Learned Single Judge when the Notice of Motion came up for Ad-
interim reliefs on 31st October 2012. Clearly therefore to our mind, the Ad-
interim reliefs were rejected on merits on that date. The Appellants took no
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steps to challenge this Order.
44. Also the conduct of the Appellants, even post the filing of the
present Suit, has been anything but vigilant. The Appellants seem to have been
content with the registration of the Lis Pendens notice on 10th April 2013. The
Appellants thereafter have not taken any proactive steps to in the Suit to secure
their interest or rights under the said MOU thereafter. We say so because the
Appellants, who filed a Review Petition seeking review of the Order dated 21 st
August 2015 which, it is their contention, wrongly recorded that the Ad-interim
reliefs had been refused on merits, took no steps to either promptly file this
review or to thereafter move the same. The Review Petition was filed well over
one year after the date of passing of the order and the same is still pending
hearing. Additionally, had the Appellants been so aggrieved by the Order dated
21st August 2015, there is no reason why the Appellants did not move an
Appeal from the said Order.
45. To our mind by filing Interim Application 293 of 2022 the
Appellants were merely attempting to take a second chance for interim relief
have failed once already. There was no new or compelling circumstance which
arose in the year 2021 to warrant the Appellant to take out the said Interim
Application. The construction had been ongoing since the year 2014. The
Appellants had sat by and watched three buildings come up in which admittedly
flats had been sold and third-party rights had been created. We find absolutely
no adequate explanation as to why the Appellants did not move earlier. We
therefore find that the Learned Single Judge is wholly justified in concluding
that grant of an injunction would cause irreparable loss not only to the
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Respondents but the parties in whose favour the flats have been sold. We,
therefore, pass the following order :-
:ORDER:
(i) The Appeal is dismissed.
(ii) In view of the dismissal of the Appeal, Interim Application (L)
No.14622 of 2023 is also dismissed.
(iii) The Appellants are permitted to withdraw a sum of
Rs.3,39,00,000/- along with interest accrued thereon without
prejudice to the rights and contentions of the parties and subject to
the final decision of the Suit.
(iv) It is made clear that the observations in this Order are made only for
the purpose of deciding this Appeal and shall not be relied upon or
influenced by the Learned Single Judge while hearing the Suit on
merits.
(v) Appeal is disposed of in above terms.
(ARIF S. DOCTOR, J.) (ACTING CHIEF JUSTICE)
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