Delhi High Court
Mohd Arif vs M/S Dnd Buildcon & Ors on 18 May, 2015
Author: Manmohan
21
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 2989/2014 & I.As. 19103/2014, 1364-1365/2015
MOHD ARIF ..... Plaintiff
Through: Mr. Gaurav Mitra, Advocate with
Mr. N. Raja Singh, Advocate.
versus
M/S DND BUILDCON & ORS ..... Defendants
Through: Mr. Himanshu Bohara, Advocate for
Mr. S.P. Aggarwal, Advocate for
defendants No.3 and 4.
Mr. R.M. Sinha, Advocate for
defendants No.5 and 6.
Mr. Yogesh Kumar Rana, Advocate for
defendants No.7 and 8.
Mr. Sarvesh Rai, Advocate for
Mr. Ankit Jain, Advocate for defendant
No.9.
% Date of Decision : 18th 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 26th September, 2014, this Court granted an ex parte ad interim
CS(OS) 2989/2014 Page 1 of 7
injunction order restraining the defendants from selling, alienating,
transferring or parting with possession of suit property i.e. second floor of
the property bearing No.D-225, Anand Vihar, Delhi-110092.
3. Today, Mr. R.M. Sinha, learned counsel for defendants No.5 and 6
presses for vacation of stay. He states that though the defendants No.3, 4, 6,
7 and 8 had entered into a Collaboration Agreement dated 12th July, 2012
with defendants No.1 and 2 with regard to construction of suit property i.e.
second floor of Plot No.D-225, Anand Vihar, 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. Sinha 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. Sinha further states that the Collaboration Agreement executed
between the defendants had been terminated by defendants No.3, 4, 6, 7 and
8 and as a consequence, the plaintiff can only seek reliefs and remedies
against the defendants No.1 and 2 and not against the defendants No.3, 4, 6,
7 and 8.
6. 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 11 and 16 of the
CS(OS) 2989/2014 Page 2 of 7
Collaboration Agreement dated 12th July, 2012 which read as under:-
"11) That after the construction Ground floor up to ceiling
level, First Floor up to ceiling leve, Third floor up to ceiling
level shall go to the parties of the First Part/Owners and the
Second Floor up to the ceiling level shall go the Party of the
Second Party/Builder. The roof right shall go to the present
second floor owner i.e., Mr. Arun Gupta & Mrs. Sujata Gupta.
As the roof right will be with 3rd Floor owner (Mr. Arun Gupta
& Mrs. Sujata Gupta) hence other floor owners will be allowed
to go to roof only to attend/check their water tanks.
xxx xxx xxx
16) That the owner shall be entitled to sell, transfer, convey
and assign their allocation to any prospective buyer and to
receive the sale proceeds in respect thereof in their own names
during or after the completion of construction, without any
objection or hindrance by the builder. The builder shall be
entitled to book and receive/the advance money against his
allocation during the course of construction however the
registry for his allocation shall be done as per first owner
requirement"
7. 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.
8. 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 defendants No.3, 4, 6, 7 and 8 on
the other hand.
CS(OS) 2989/2014 Page 3 of 7
9. 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."
10. Even the last Memorandum of Understanding/Extension dated 03rd
July, 2014 executed between the same parties states as under:-
CS(OS) 2989/2014 Page 4 of 7
"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).
CS(OS) 2989/2014 Page 5 of 7
11. 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.
12. 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.
13. 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."
14. 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.
15. 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
CS(OS) 2989/2014 Page 6 of 7
sum of Rs.1.40 crores within a period of six weeks.
16. 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 order dated 26th September, 2014 stands disposed of.
List the matter on 20th July, 2015.
MANMOHAN, J
MAY 18, 2015
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CS(OS) 2989/2014 Page 7 of 7
