Karnataka High Court
Shankarappa vs C Gopala Raju on 19 December, 2023
Author: H.T. Narendra Prasad
Bench: H.T. Narendra Prasad
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MFA No. 6277 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE H.T. NARENDRA PRASAD
MISCELLANEOUS FIRST APPEAL NO. 6277 OF 2023 (AA)
BETWEEN:
SHANKARAPPA
SON OF LATE MUNIYAPPA
AGED ABOUT 59 YEARS
R/AT NO. 202, SIDDAPURA VILLAGE
RAMAGONDANAHALLI POST
BANGALORE EAST TALUK
BANGALORE - 560 066
...APPELLANT
(BY SRI. DHYAN CHINNAPPA, SENIOR COUNSEL FOR
SRI. SUNDARA RAMAN M V.,ADVOCATE)
AND:
C GOPALA RAJU
S/O LATE MR. C. PEDDA NARASARAJU
Digitally signed AGED ABOUT 77 YEARS
by R/AT VARADARAJAPURAM
DHANALAKSHMI
MURTHY KARLAMABAKKAM POST
Location: High PALLIPAT TALUK
Court of
Karnataka THIRUVALLUVAR DISTRICT
REPRESENTED BY
CHADNRASHKEAR C
S/O C GOPALA RAJU
AGED ABOUT 55 YEARS
RESIDING AT NO. 5, 1ST FLOOR
9TH CROSS, INDIRANAGAR
I STAGE, BANGALORE - 560 038
...RESPONDENT
(BY SRI. UDAY HOLLA, SENIOR COUNSEL FOR
SRI. M.S. RAJENDRA, ADVOCATE)
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MFA No. 6277 of 2023
THIS MFA IS FILED UNDER SECTION 37(1)(c) OF THE
ARBITRATION AND CONCILIATION ACT, AGAINST THE ORDER
DATED: 02.08.2023 PASSED ON I.A. NO.1 AND 2 IN AA.
NO.70/2023 THE FILE OF THE XII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE, CCH-27, BENGALURU, ALLOWING THE
I.A.NO. 1 AND 2 FILED UNDER ORDER 39 RULE 1 AND 2 R/W
SECTION 151 OF CPC.
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
JUDGMENT
1. This appeal is filed by the appellant challenging the
order dated 02.08.2023 passed by the XII Addl. City Civil
Judge, Bengaluru on I.A.Nos.1 and 2 filed under Order 39
Rule 1 and 2 of CPC in A.A.No.70/2023, whereby the Trial
Court has allowed the said applications filed by the
petitioner therein.
2. For the sake of convenience, the parties are referred
to as per their ranking before the Trial Court as petitioner
and respondent.
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3. The petitioner (respondent herein), had filed a
petition under Section 9 of the Arbitration and Conciliation
Act, 1996 (for short 'the Act') in A.A.No.70/2023 seeking
following reliefs :
i. Pass an order of interim injunction restraining the
Respondent, his agents, employees, workman,
assigns, heirs, or anyone claiming under him from
alienating, encumbering or creating any further
and/or other third party rights, claims and/ or
interest over the Schedule Property.
ii. Pass an order of interim injunction restraining the
Respondent, his agents, employees, workman,
assigns, heirs, or anyone claiming under him from
changing the nature of the Schedule Property;
iii. Award costs of the above application in favour of
the Applicant and;
iv. Pass any such order or direction, as it may deem
fit in the interest of justice and equity.
4. Along with the petition, the petitioner had filed
I.A.Nos.1 and 2 under Order 39 Rule 1 and 2 of CPC
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seeking an order of temporary injunction restraining the
respondent from alienating or creating third party rights in
respect of petition schedule property and also restraining
the respondent from changing the nature of the petition
schedule property. On service of summons by the Trial
Court, the respondent appeared before the Trial Court
through his counsel and filed detailed objections to the
petition as well as to the applications. The Trial Court after
hearing the parties, by impugned order dated 02.08.2023
has allowed the said applications and restrained the
respondent, his agents, his men, servants or any one
claiming through or under him from alienating or creating
third party rights over the petition schedule property and
also restrained the respondent, his agents, his men,
servants or anyone claiming through or under him from
changing the nature of the petition schedule property.
Being aggrieved by the same, the present appeal has been
filed.
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5. Mr.Dhyan Chinnappa, learned senior counsel
appearing for the appellant (respondent therein) has
raised the following contentions:
a) The Memorandum of Understanding (for short 'MOU')
dated 12.10.2007 is an agreement and it is not a complete
contract. Hence, no suit can be filed for enforcement of
MOU.
b) Even if it is accepted that the said agreement dated
12.10.2007 is a Joint Development Agreement (for short
'JDA'), since it is not registered, it cannot be enforceable
under the law. Without considering this aspect, the Trial
Court has erred in holding that since the agreement dated
12.10.2007 is a MOU, it is not required to be registered
and the petition filed for enforcement of MOU is
maintainable and granted an order of temporary
injunction. The said order of the Trial Court is
unsustainable.
c) The MOU is entered on 12.10.2007. Pursuant to
MOU, no development has been taken place in the
property by the petitioner. After lapse of 15 years, now
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the petitioner has filed the petition for enforcement of
MOU. Because of the inordinate delay, the parties have
abandoned the MOU dated 12.10.2007. Without
considering this aspect of the matter, the Trial Court has
erred in granting an order of temporary injunction. In
support of his contention, he has relied upon the following
decisions:
• B.K.Muniraju -v- State of Karnataka and Others
[(2008) 4 SCC 451]
• Urvashi Aggarwal & Another -v- Kushagr Ansal
& Others [(2020) 17 SCC 774]
• Davender Kumar Sharma -v- Mohinder Singh &
Others [2012 SCC Online Delhi 4441]
• Commissioner of Income Tax -v- Balbir Singh
Maini [(2018) 12 SCC 354]
With the above contentions, he sought for allowing
the appeal.
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6. Mr.Uday Holla, learned senior counsel appearing for
respondent (petitioner therein) has raised the following
counter-contentions:
a) The MOU dated 12.10.2007 is a complete agreement.
It has all the clauses including the shares of the property,
method of development of property. It is not a MOU, it is a
complete agreement.
b) The stamp duty has been paid on the said agreement
as per the Karnataka Stamp Act. In respect of
enforcement of MOU, the petitioner has approached the
Trial Court for relief of Specific Performance of Agreement
dated 12.10.2007. Enforcement of agreement need not
necessarily be registered. In support of his contention, he
has relied on the following decisions:
• Commissioner of Income Tax -v- Balbir Singh
Maini [(2018) 12 SCC 354]
• S.Kaladevi -v- v.R.Somasundaram and others
(2010) 5 SCC 401
• Julien Educational Trust -v- Sourendra Kumar
Roy and others (2010) 1 SCC 379
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• Maharwal Khewaji Trust (Regd.) Faidkot -v-
Baldev Dass (2004) 8 SCC 488
• Sunil Kumar and Another -v- Ram Prakash and
others (1988) 2 SCC 77
c) In respect of delay in development of the property is
concerned, it is contended that pursuant to the MOU, the
petitioner got the land converted and was in the process of
getting the permission from other statutory authorities for
building plan approval and building licence. The petitioner
had transferred in all a sum of Rs.47,45,000/- to the
respondent and after completion of getting permissions
from the statutory bodies, the petitioner was obligated to
commence the work. At that stage, it was noticed that as
per the Revised Master Plan of 2015, a road was passing
through a portion of the schedule property and in view of
the same, it was not practically possible to proceed with
the development. The Government had issued a
notification dated 3.11.2020 for widening of the road,
which was supposed to pass over the schedule property.
Challenging the said notification, the appellant herein had
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filed W.P.No.155/2021 before this Court. This Court by
order dated 4.2.2021 granted interim order directing the
parties to maintain status-quo in respect of the schedule
property. Therefore, in view of the said status-quo order
which is operating till today, the petitioner is not in a
position to proceed with the development of the property.
Hence, there is delay in development of the property. The
Trial Court after considering that the petitioner has made
out a prima-facie case and balance of convenience lies in
his favour, has rightly granted an order of temporary
injunction. There is no error in the impugned order passed
by the Trial Court.
With the above contentions, he sought for dismissal
of the appeal.
7. Heard the learned senior counsel for the parties.
Perused the impugned order and appeal papers.
8. The petitioner had filed the petition i.e.,
A.A.No.70/2023 under Section 9 of the Arbitration and
Conciliation Act seeking for the reliefs as mentioned
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above. Along with the petition, the petitioner had filed
I.A.Nos.1 and 2 under Order 39 Rule 1 and 2 of CPC
seeking an order of temporary injunction restraining the
respondent from alienating or creating third party rights in
respect of petition schedule property and also restraining
the respondent from changing the nature of the petition
schedule property. On service of summons by the Trial
Court, the respondent appeared before the Trial Court
through his counsel and filed detailed objections to the
petition as well as to the applications.
9. In the applications filed under Order 39 Rules 1 and
2 of CPC before the Trial Court, the petitioner has taken a
contention that the agreement dated 12.10.2007 is a MOU
and it is not a JDA. Even in the arguments advanced
before the Trial Court, the contention of the petitioner was
that the agreement dated 12.10.2007 is a MOU. In fact,
on the other hand, respondent had taken a contention that
the agreement dated 12.10.2007 is a JDA and it requires
to be registered. After hearing the arguments of the
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parties, the Trial Court raised points for consideration. The
second point raised by the Trial Court for consideration is
as follows:
"2. Does the respondent make out the ground that
MOU dated 12.10.2007 is JDA in nature, which is a
compulsorily registerable document and moreover it
is an insufficiently stamped document thus based on
which the court cannot grant any relief sought by the
petitioner infact the said document is requires to be
impounded?"
10. From the above point raised by the Trial Court, it is
clear that the Trial Court has decided the applications only
on the footings that the Agreement dated 12.10.2007 is a
MOU. The entire discussion in the order of the Trial Court
is based on the contention raised by the petitioner that it
is a MOU. Even the Trial Court has given a finding that the
respondent has failed to prove that the Agreement dated
12.10.2007 is a JDA. The Trial Court has further given a
finding that the contention of the respondent that the MOU
itself in the nature of JDA, cannot be accepted and thus,
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registration of MOU in the nature of JDA entered into
between the parties to the proceedings, is not necessary.
11. It is very clear from the above finding of the trial
court that the Trial Court has decided the applications on
the ground that the agreement dated 12.01.2007 is a
MOU.
12. Now, for the first time before this Court, it is argued
by the petitioner that the MOU dated 12.10.2007 is a
complete agreement and only the parties have to enter
into a formal JDA. This argument of the petitioner was not
advanced before the Trial Court. Since, it is argued before
this Court for the first time, this Court is of the opinion
that the matter requires to be remitted back to the Trial
Court for fresh consideration. Hence, the following order is
passed:
ORDER
a) The appeal is allowed.
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b) The impugned order dated 02.08.2023 passed by XII
Addl. City Civil Judge, Bengaluru on I.A.Nos.1 and 2
filed under Order 39 Rule 1 and 2 of CPC in
A.A.No.70/2023, is set aside.
c) The matter is remitted back to the Trial Court with a
direction to the Trial Court to reconsider the
applications i.e., I.A.Nos.1 and 2 filed by the petitioner
under Order 39 Rules 1 and 2 of CPC and also the main
petition i.e., A.A.No.70/2023 filed under Section 9 of
the Act, afresh and in accordance with law, by the end
of January 2024, without being influenced by any
observation made by this Court in this order.
d) Parties are directed to co-operate for early disposal
of the matter.
e) All contentions of the parties are kept open.
Sd/-
JUDGE
DM
