Calcutta High Court
Vidyut Saraf And Anr vs Edenic Propbuild Private Limited And ... on 21 May, 2025
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
OD-2 wt. 3
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
APO/92/2024
WITH
CS/162/2024
IA NO: GA/1/2024
VIDYUT SARAF AND ANR
VS
EDENIC PROPBUILD PRIVATE LIMITED AND ORS.
WITH
APOT/241/2024
VIDYUT SARAF AND ANR.
VS
EDENIC PROBUILD PRIVATE LIMITED AND ORS.
BEFORE:
HON‟BLE JUSTICE SABYASACHI BHATTACHARYYA
-A N D-
HON'BLE JUSTICE UDAY KUMAR
Date : 21st May, 2025.
Appearance:
Mr. Abhrajit Mitra, Sr. Adv.
Mr. Soumyadeb Sinha, Adv.
Mr. Sayak Mitra, Adv.
Mr. Raunak Bose, Adv.
...for the appellant
Mr. S.N. Mookherjee, Sr. Adv.
Mr. Padam Khaitan, Adv.
Mr. Soumabho Ghose, Adv.
Mr. Naman Chowdhury, Adv.
Mr. Anunoy Basu, Adv.
Ms. Deeptipriya, Adv.
...for the respondent Nos. 2 & 3
The Court:- The two appeals are taken up together for hearing, in view of
the identity of the suit from which the two arise. In a suit, primarily for specific
performance of a development agreement, filed by the plaintiffs /appellants, vide
Order dated June 6, 2024, the learned Single Judge refused to grant ad interim
injunction, being aggrieved by which, the first of the two appeals, being APOT
226 of 2024 (renumbered as APO 92 of 2024), has been preferred. On a
subsequent occasion, when the injunction application came up for hearing,
directions for affidavits were granted by the learned Single Judge. It is the case
of the appellants that by the said order dated June 20, 2024, the learned Single
Judge ought to have deemed to refuse the prayer for injunction. Hence, the
other appeal has been filed against the said order.
Learned Senior Counsel appearing on behalf of the appellants argues that
despite best efforts, the appellants could not obtain the necessary approval from
the West Bengal Heritage Commission (WBHC), due to gross inaction on the part
of the said Commission.
It is argued that despite the appellants having written several letters and
communicated to the WBHC, although virtually approval was granted by the
said Commission, subsequently the matter got stuck up in the department of
the MIC (Mayor-in-Council) of the Kolkata Municipal Corporation.
It is submitted that further approval is not required as per law. Thus,
learned senior counsel submits that on such count, the appellants were
prevented from obtaining the said permission within the stipulated time within
the ambit of the Force Majeure clause in the agreement.
Learned senior counsel further contends that sub clause (f) of clause (xvi)
of the definition clause in the agreement (Clause 1) clearly provides that non-
functioning of any existing or new appropriate Government authorities due to
any reason whatsoever comes within the purview of Force Majeure. In the
present case, a complete shutdown of the concerned authority, that is, the
Heritage Commission was not necessary to bring the parties within the fold of
the said clause. The palpable inaction on the part of the Commission itself
should be construed as non-functioning and as such, the same provides a valid
defence within the contemplation of the agreement for non-obtaining of the said
approvals from the Heritage Commission within time.
Learned senior counsel next argues that insofar as the allegation that the
appellants failed to obtain the Urban Land Ceiling approval concerned, the law
does not provide for any such further approval. By placing reliance on the
Kolkata Municipal Corporation Building Rules, it is contended that Rule 4(4)
merely contemplates a ceiling beyond which an approval for development is
necessary. It is submitted that in the year 2005, there was already an approval
to that effect granted by the Urban Land Ceiling Authorities which would suffice
to that extent.
Learned senior counsel next argues that the general provisions of law as
laid down by the Supreme Court in respect of development agreements do not
apply to the present case in view of there being a specific definition of Force
Majeure in the agreement, which is attracted herein.
Learned senior counsel next contends that there were several
negotiations, discussions and meetings between the parties even after the
timeline stipulated in the agreement for obtaining the initial approvals expired.
By placing reliance on the correspondence between the parties in such
context, it is submitted that the respondents themselves had extended the
timeline on several occasions, as such, giving a go-bye to the mandatory
timeline as stipulated in Clause 19.2 of the agreement. Thus, it is argued that
the said stipulated time limit ought not to be taken as mandatory in view of the
conduct of the parties themselves. It is argued that the subsequent negotiation
between the parties gave a new lease of life to the said period.
Learned senior counsel appearing on behalf of the respondents, on the
other hand, contends that a bare perusal of the definition of Force Majeure in
Clause 1 (xvi) in the agreement shows that the non-functioning of any existing
or appropriate Government authority is the criterion, and not delay in
functioning of such authority. It is submitted that the said clause could only be
attracted if an authority is not in place or is not functioning at all. In the present
case, the gamut of the submissions of the appellants is that the authorities,
although functioning, were delayed in their action in dealing with the
applications of the appellants for granting approvals.
Learned senior counsel appearing for the respondents cites Vidya and
others, reported at (2024) 9 SCC 651, where the Hon‟ble Supreme Court, by
relying on DLF Home Developers Limited versus Capital Greens Flat buyers Assn,
reported at (2021) 5 SCC 537, held that in case of development agreements, a
delay in sanctioning layout plans could not be a Force Majeure defence for the
developer.
Learned senior counsel also places before us paragraph 7 of DLF (supra),
where it was categorically held that it is evident that a delay in the approval of
building plans is a normal incident of a construction project and a developer in
the position of the appellant therein would be conscious of these delays and
cannot set this up as a defence to a claim for compensation where a delay has
been occasioned beyond the contractually agreed period for handing over
possession.
It is next contended by learned senior counsel that it will be evident from
the conduct of the parties that the parties themselves construed the timeline
stipulated for obtaining initial approvals to be mandatory and not coming within
the Force Majeure clause. It is such perception of the parties, it is argued, which
prompted the appellant themselves to apply for extension of the timeline on
several occasions. Although initially such timelines were extended, the last
extension was up to February 11, 2024, beyond which the same was refused. As
such, subsequently the agreement itself was formally terminated.
It is pointed out from the several correspondence between the parties that
on all occasions after the expiry of the timeline in question, the respondents
made their stand specific to the effect that the discussions which would be held
and were being held after the expiry of the timeline were without prejudice to the
rights and contentions of the parties. As such, it is argued that the so-called
subsequent negotiations were not „negotiations‟ in the true sense at all, but
merely a consideration by the respondent of the further requests for extension
made by the appellants.
Learned senior counsel further argues that the reliance of the appellants
on the 2005 Urban Land Ceiling permission cannot be relied on, for the simple
reason that the same was granted for the limited purpose of development of the
portion of the property in question where the club itself is situated and cannot
extend to subsequent development of a residential building on a different
portion of the property.
The said stand is further sought to be strengthened by senior counsel for
the respondents by relying on the portion of the agreement where the
appellants, knowing fully well about the previous permission of 2005, agreed
afresh to obtain clearances, including Urban Land Ceiling clearances as well.
Thus, it is argued that the learned Trial Judge,in any event, was justified
in refusing ad interim injunction.
Learned senior counsel further argues that the appeal which has been
preferred against the order dated June 20, 2024 is not maintainable at all, since
there was no occasion of even any deemed refusal, as no prayer for ad interim
injunction was made at all on the said date by the plaintiffs /appellants. As
such, the appeal preferred before this Court is not maintainable since merely
affidavits were directed and there was no judgment passed on the said date.
Insofar as the first challenge to the initial refusal of ad interim injunction
is concerned, the appeal against the same is also not maintainable according to
the appellants, since at the said instance, the ad interim injunction prayer had
been refused ex parte. Subsequently, on June 20, 2024, the matter having come
up in the presence of the defendants/respondents, the ex parte character of the
order / prayer was lost. As such, the initial order having merged into the
subsequent orders and in view of the pendency of the injunction application
itself for being heard now, which application has been fixed for hearing and
affidavits directed to be exchanged, nothing remains in the challenge against the
initial refusal of the ex parte ad interim injunction.
Heard learned counsel for the parties.
Taking first thing first, we deal with the objection as to maintainability at
the outset.
Insofar as the challenge against the order dated June 20, 2024 is
concerned, we find substance in the contention of learned senior counsel for the
respondents inasmuch as we do not find any prayer for ad interim injunction
having either made or renewed on the said date. The appellants had merely
sought for adjournment and the Court had granted leave to file affidavits.
Moreover, in view of the prior refusal of ad interim injunction vide order
dated June 6, 2024, there was no occasion for making the self-same prayer
afresh, since the principle of res judicata operates at the same level. Although
the ad interim refusal would not be binding at the final hearing of the injunction
application, at the same stage, the self-same prayer could not have been made
on June 20, 2024, before the injunction application was finally heard out. As
such, we do not find that any rights of the parties were decided by the order
dated June 20, 2024, to prompt us to entertain an intra-court appeal against
the said order.
Thus, APOT No. 241 of 2024 is dismissed as not maintainable without
any order as to costs.
However, insofar as the challenge against the initial ex parte ad interim
refusal of injunction is concerned, we find that the same is maintainable, since,
as the injunction application has not yet been heard out, the ad interim stage of
the matter has not yet culminated in a final order of grant/refusal of temporary
injunction.
While construing the agreement, which is the genesis of the issue
between the parties, we find certain important definitions being given there.
The most important of those is the definition of Force Majeure as provided
in Clause 1 (xvi) of the said agreement. The relevant portions of the definition is
that Force Majeure shall mean any event or combination of events or
circumstances which are "beyond the control of a party, which cannot be
prevented or caused to be prevented and which materially and adversely affect a
party's ability to perform obligations under the agreement".
Certain instances have been given there. Two of such instances are
germane in the present context. In sub-clause (f), non-functioning of any
existing or new appropriate Government authorities due to any reason
whatsoever has been mentioned one of the instances of a Force Majeure
situation. Again, sub-clause (h), which is a residuary provision, stipulates that
any other event or circumstance which is beyond the control of the parties shall
also be construed as Force Majeure.
In the present context, we find that in clause 19.2 of the agreement, it is
stipulated that in the event the Initial Approvals are not obtained within a
period of 18 months from the Effective Date or the owners do not receive the
security deposit and the annual payments as per the timelines stated in the
agreement, subject to delays attributable to any Force Majeure events, the
owners shall have the right to terminate the agreement.
In the case at hand, although subsequent extensions have been given by
the respondents at their discretion, ipso facto, grant of such extensions does not
extend the period of 18 months otherwise than at the discretion of the
respondents and/or render the same to be merely directory.
To constitute a valid defence against not meeting the timeline, the
applicants are required to be armed with an attribution of the delay to any Force
Majeure event, which in turn is defined in Clause 1(xvi) of the agreement.
As discussed above, the relevant portion of the said provision would be
sub-clause (f). However, in our considered opinion, contrary to the arguments of
the appellants, non-functioning of a Government authority cannot be construed
to include partial functioning or laches on the part of the Government
authorities. It is nobody's case here that the West Bengal Heritage Commission
is not functioning or was not functioning during the relevant period. The
appellants contend that despite having applied to the commission, it sat tight
upon the matter and although virtual approval was obtained, the matter got
stuck up at the office of the Mayor-in-Council of the Kolkata Municipal
Corporation. Be that as it may, we cannot read non-functioning of the authority
into such inaction of the authority, at least on a prima facie footing.
Since a specific instance in respect of non-functioning of an authority has
been given as an example within the Force Majeure definition, while dealing with
the present defence which pertains to the functioning of an authority itself, we
cannot go beyond the said sub-clause, that is sub-clause (f), and resort to the
residuary provision in clause (h) and look in a blanket fashion to fish out any
other event beyond the circumstance of the parties as a Force Majeure event.
Even in clause 19.2 of the agreement, the delays, to constitute a valid
defence, have to be attributable to the Force Majeure events as provided in the
relevant definition clause. Thus, we do not find that delay simpliciter on the part
of the authority, without being related to total non-functioning of the concerned
Government authorities, would bring the appellants within the ambit of the
defence of Force Majeure.
The ratio laid down in DLF Home Developers Limited (supra) and Vidya's
case is also squarely applicable, since the present dispute arises out of a
development agreement which was entered into by the appellants/developers
with their eyes fully open and they took a calculated business risk, taking the
responsibility of obtaining the necessary initial approvals despite being fully
aware of the procedural wrangles involved in obtaining permissions and
approvals from the Government and quasi-Governmental authorities.
Hence, prima facie, we do not find much force in the Force Majeure
defence of the appellants.
In so far as the non-compliances are concerned, we give this much to the
appellants that in so far as the Urban Land Ceiling compliance is concerned, an
arguable case has been made out by the plaintiffs as to whether the 2005
permission could extend to or be read as a permission for the purpose of the
present development agreement. Although strong arguments have been made on
both sides on the said issue, such position undoubtedly lends the character of a
triable issue to the said question.
However, in so far as the Heritage Commission part of the compliances is
concerned, it is an admitted position that no such approval has yet come forth,
for whatever reason.
The other bone of contention is the subsequent "negotiations" between the
parties. However, from the correspondence between the parties throughout the
subsequent period after the expiry of the stipulated 18 months as per Clause
19.2, we find that the respondents, at each stage, categorically mentioned that
they were ready to discuss the matter but without prejudice to their rights and
contentions. In fact, in the letters as annexed at pages 357 and 372 of the
present stay application, we find that the respondents minced no words in
expressing their intention that they were not extending the timeline beyond
February 11, 2024 and as such, we cannot say that after the said period, there
was any further possibility of compliance within the contemplation of Clause
19.2.
That apart, the agreement was also formally terminated subsequently in
pursuance of Clause 19.2.
Hence, merely by virtue of subsequent correspondence, the colour of a
„negotiation‟, which would dilute the rigour of Clause 19.2 insofar as the non-
compliance of the timeline for obtaining initial approvals is concerned, cannot
be attributed to the conduct of the respondent.
Thus, on a prima facie basis, we find that even otherwise, although the
order dated June 6, 2024 was somewhat wanting in detailed reasons, the
conclusion arrived at by the learned Single Judge was justified in law and in
facts even at the ex parte ad interim stage.
Hence, we do not find any need or scope of interfering with the impugned
order dated June 6, 2024, particularly within the limited window of an intra-
court Letters Patent appeal.
Accordingly, APO 92 of 2024 is also dismissed. The connected
application being GA 1 of 2024 also stands disposed of accordingly.
Needless to say, we make it abundantly clear that we have not entered
conclusively into the merits of the contentions of the parties insofar as the final
hearing of the injunction application and any further stage of the suit is
concerned. All the observations rendered above are only tentative, arrived at for
the limited purpose of adjudicating on appeals at the ad interim stage of the
injunction application, and shall not be considered as binding at any further
stage of the injunction application or the suit.
No order as to costs.
(SABYASACHI BHATTACHARYYA, J.)
(UDAY KUMAR, J.)
D.Ghosh
AR(CR)
