Mohd Arif vs M/S Dnd Buildcon & Ors
2015 Latest Caselaw 3702 Del

16
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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CS(OS) 2616/2014 & I.As. 16548/2014, 19992/2014 & 7770/2015

       MOHD ARIF                                  ..... Plaintiff
                          Through: Mr. Gaurav Mitra, Advocate with
                                   Mr. N. Raja Singh and Ms. Deepal
                                   Dwivedi, Advocates.
                          versus

       M/S DND BUILDCON & ORS               ..... Defendants
                    Through: Mr. Piyush Prabhakar, Advocate for
                            defendants No.1 and 2.
                             Mr. Dinesh K. Gupta, Advocate with
                             Mr. Vidit Gupta, Advocate for
                            defendants No.3 and 4.


%                               Date of Decision : 07th May, 2015

CORAM:
HON'BLE MR. JUSTICE MANMOHAN

                             JUDGMENT

MANMOHAN, J: (Oral)

1. Present suit has been filed for specific performance, damages, mandatory and permanent injunction.

2. On 29th August, 2014, this Court granted an ex parte ad interim injunction order restraining the defendants from selling, alienating, transferring or parting with possession of the suit property i.e. second floor of property bearing No.17, Shyam Enclave, Delhi-110092.

3. Today, Mr. Dinesh K. Gupta, learned counsel for defendant No.3 presses his I.A. 19992/2014 for vacation of stay. He states that though the defendant No.3 had entered into a Collaboration Agreement dated 6th May, 2012 with defendants No.1 and 2 with regard to construction of suit property No.17, Shyam Enclave, Delhi-110092 and had given liberty to defendants No.1 and 2 to get his second floor transferred in their names, yet the said Agreement confers no right, title and interest in favour of the defendants No.1 and 2.

4. Mr. Gupta also states that plaintiff had only made a monetary investment with defendants No.1 and 2 and consequently the plaintiff is entitled to refund of principal sum along with profit of Rs.80 lacs as agreed upon between the parties. In support of his contention, he draws this Court's attention to the Memorandum of Understanding dated 22nd November, 2012 executed between the plaintiff and defendants No.1 and 2.

5. Mr. Gupta further states that the Collaboration Agreement executed between the defendants had been terminated by defendant No. 3 on 28th July, 2014 and as a consequence, the plaintiff can only seek reliefs and remedies against the defendants No.1 and 2 and not against the defendant No.3.

6. Mr. Gupta lastly submits that the Collaboration document has no legal sanctity inasmuch as the defendant No.4 was a joint owner of the suit property and she had not executed the Collaboration Agreement in favour of defendants No.1 and 2.

7. Mr. Gaurav Mitra, learned counsel for plaintiff submits that under the Collaboration Agreement, defendants No.1 and 2 had the right to negotiate for sale of the second floor of the suit property and to execute an Agreement

to Sell. In support of his contention, he relies upon clauses 9 and 10 of the Collaboration Agreement dated 06th May, 2012 which read as under:-

"9. That according to this Collaboration Agreement and against the proposed construction the second party shall be at liberty to get transfer documents in respect of the second floor portion i.e. ABOVE STILT PARKING, GROUND FLOOR, FIRST FLOOR & BELOW TOP FLOOR up-to ceiling level only with 25% share in stilt car parking in 17, Shyam Enclave, Delhi-110092 along with its proportionate, undivided, indivisible ownership rights land underneath, either in his/her/their name(s) or in the name of any person from the First Party. And the first party shall not create any obstruction. And rest portion i.e. REMAINING STILT PARKING AREA, GROUND FLOOR, FIRST FLOOR AND THIRD FLOOR of the said property shall be occupied/remained by the First Party along with all common facilities provided in building.

10. That during the proposed construction the second party may negotiate for the sale of his/her/their respective portions i.e. second floor of the proposed construction at his/her/their own terms and conditions with any intending buyer and The second party may also take earnest money from the intending buyer towards the sale of his/her/their respective portions and the first party shall have nothing to do at all with the transaction/bargain. And the Second Party will be fully entitled and empowered to enter into an Agreement to Sell on behalf of this COLLABORATION AGREEMENT with the intending buyer without any objection/claim of the First Party."

8. Mr. Mitra also states that in pursuance to the said Collaboration Agreement, a Memorandum of Understanding and an Agreement to Sell both dated 22nd November, 2012 had been executed between the plaintiff and defendants No.1 and 2.

9. Mr. Mitra also points out that defendant No.4 is none else, but the wife of defendant No.3 and she had acknowledged receipts of certain payment under the Collaboration Agreement. He contends that if defendant

No.4 wanted to dispute the Collaboration Agreement, she should have done the same at the initial stage and not now.

10. Mr. Piuyush Prabhakar, learned counsel for defendants No.1 and 2 states that plaintiff by way of the present suit proceedings cannot seek specific performance of the Collaboration Agreement executed between the defendants No.1 and 2 on the one hand and defendant No.3 on the other hand.

11. Having heard the learned counsel for parties, this Court finds that in the Memorandum of Understanding which had been executed between the defendants No.1 and 2 and the plaintiff, it had been specifically stipulated that in the event of the defendants No.1 and 2 not executing the sale documents in favour of the plaintiff, the plaintiff would be entitled to only a profit of Rs.80 lacs over and above their investment of Rs.2 crores in two properties meaning thereby that in the present instance the plaintiff would be entitled to damages/compensation of Rs.1,40,00,000/-. The relevant portion of Memorandum of Understanding dated 22nd November, 2012 executed between the plaintiff and defendants No. 1 and 2 is reproduced hereinbelow:-

"Whereas Sh. Praveen Nagpal has taken an amount of Rs.2,00,00,000/- (Rupees Two Crores Only) against the Collateral Security of Collaboration Agreement of Second Floor of Property No.17, Shyam Enclave, Delhi-110092 and Second Floor of Property No.D-225, Anand Vihar, Delhi- 110092.

The said amount of Rs.2,00,00,000/- (Rupees Two Crores Only) will be returned to Mr. Mohd. Arif along with Profit 8000000/- (Eighty Lac) on or before 21.11.2013. Total 2.8000000/- (Two Crore Eighty Lac only).

It is hereby mutually agreed that the Collateral Security of Collaboration Agreement in respect of Second Floor of Property No.17, Shyam Enclave, Delhi-110092 and Second Floor of Property No.D-225 Anand Vihar, Delhi-110092 will be returned by Mr. Mohd. Arif to Mr. Praveen Nagpal at the time of full and final payment."

12. Even the last Memorandum of Understanding/Extension dated 03rd July, 2014 executed between the same parties states as under:-

"1. That now the first party has agreed to execute the sale documents of the said both properties upto 29.06.2014 positively in favour of the second party and now if the first party fails to execute the same till 31.07.2014, then for the repayment of the said earnest money/bayana, the first party has already issued and handed over to the second party total eleven post dated cheques all dated 30.06.2014 in favour of the second party on 10.03.2014, however, the date of cheques in question inadvertently could not be mentioned in the Deed of MOU/Extension Deed dated 10.03.2014 executed between the parties, against the principle amount as well as the profit of Rs.80 Lacs (Rs.Eighty Lacs) on the amount of earnest money of Rs.2 Crores. (Rs.Two Crore), total 11 cheques amount Rs.2,80,00,000/- (Rs.Two Crore Eighty Lacs). The details of the said cheques are as follows :-

        S.No. CHEQUE NO.     AMOUNT IN      DATED         DRAWN ON
                             Rs.
        1.         406401    25,00,000/-    30.06.2014    YES BANK,
                                                          Branch at
                                                          Ram Vihar,
                                                          Delhi
        2.         406402    25,00,000/-    30.06.2014    -----do-----
        3.         406403    25,00,000/-    30.06.2014    -----do-----
        4.         406404    25,00,000/-    30.06.2014    -----do-----
        5.         406405    25,00,000/-    30.06.2014    -----do-----
        6.         406406    25,00,000/-    30.06.2014    -----do-----
        7.         406407    25,00,000/-    30.06.2014    -----do-----
        8.         406408    25,00,000/-    30.06.2014    -----do-----





         9.         406409      25,00,000/-    30.06.2014     -----do-----
        10.        406410      25,00,000/-    30.06.2014     -----do-----
        11.        406411      30,00,000/-    30.06.2014     -----do-----

2. That if the first party fails to execute the sale documents of the said both the properties in favour of the second party on or before 31.07.2014, then the second party shall present the said all cheques for its encashment in the bank, for which the first party is legally liable and bound to pay the said cheques amount i.e. total Rs.2,80,00,000/- (Rupees Two Crore, Eighty Lacs only).

13. It is pertinent to mention that the cheques of Rs.2,80,00,000/- under the two Agreements had been handed over in advance by the defendants No.1 and 2 to the plaintiff.

14. Consequently, this Court is of the view that monetary damages is an adequate relief to the plaintiff on account of alleged failure on the part of defendants No.1 and 2 to execute the sale deed.

15. At this stage, learned counsel for plaintiff tries to rely on Clause 3 to Memorandum of Understanding/Extension dated 03rd July, 2014 which reads as under:-

"3. That no further extention will be granted to the first party by the second party and if first fails then the first will peacefully provide the possession of both the properties to the second party."

16. In the opinion of this Court, the aforesaid Clause cannot be read to mean that monetary compensation will not be an adequate relief in the present case on account of breach by defendants No.1 and 2 to execute the sale agreement. If the intent of the parties was as contended by counsel for plaintiff, the Clause 3 would have stated that the monetary compensation provided in Clauses 1 and 2 is not an adequate relief and the plaintiff shall

be entitled to seek specific performance of Agreement to Sell. Since the Clause 3 does not state so, this Court is of the view that monetary compensation is an adequate relief for alleged breach of the contract by the defendants No.1 and 2.

17. However, as even the cheques which had been handed over by the defendants No.1 and 2 to the plaintiff under Memorandum of Understanding/Extension have been dishonoured, this Court to protect the interest of the plaintiff, directs defendants No.1 and 2 to deposit in Court a sum of Rs.1.40 crores within a period of eight weeks.

18. It is made clear that this order is without prejudice to the rights and contentions or the remedies which the defendants No.1 and 2 may have against defendant No.3. With the aforesaid observations and directions, the interim orders dated 29th August, 2014 and 30th January, 2015 stand vacated and the I.As. 16548/2014 and 19992/2014 stand disposed of.

List the matter on 20th July, 2015.

MANMOHAN, J MAY 07, 2015 js