Karnataka High Court
M/S Ranka Raj Properties vs Sri Khimji Keshara Patel on 10 January, 2024
Author: H.P.Sandesh
Bench: H.P.Sandesh
-1-
NC: 2024:KHC:1230
MFA No. 8318 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE H.P.SANDESH
MISCELLANEOUS FIRST APPEAL NO. 8318 OF 2023 (CPC)
BETWEEN:
M/S RANKA RAJ PROPERTIES
A PARTNERSHIP FIRM HAVING ITS OFFICE
AT NO.4, RANKA CHAMBERS
NO.31, CUNNINGHAM ROAD,
BENGALURU-560 001
REPRESENTED BY ITS PARTNER
SRI SHAH RAJESH
...APPELLANT
(BY SRI. NAVEED AHMED, ADVOCATE)
AND:
1. SRI KHIMJI KESHARA PATEL
S/O LATE KESHRA HIRAJI PATEL
Digitally signed
AGED ABOUT 72 YEARS,
by SHARANYA T R/A NO.A-32, SAHJANAND
Location: HIGH APARTMENT, GURUKUL ROAD,
COURT OF NEAR AGRESAR SCHOOL, MEMNAGAR,
KARNATAKA
AHMEDABAD-380 052.
2. M/S SOUTH PACIFIC DEVELOPERS
& INVESTMENT LLP
(FORMERLY KNOWN AS SOUTH PACIFIC
DEVELOPERS AND INVESTMENT PVT LTD)
A LIMITED LIABILITY PARTNERSHIP FIRM
CONSTITUTED UNDER LLP ACT 2008
HAVING ITS OFFICE AT NO.126,
HOTEL SHAMLIMAR BVK IYENGAR ROAD,
BANGALORE-560 053.
REPRESENTED BY ITS PARTNER
-2-
NC: 2024:KHC:1230
MFA No. 8318 of 2023
3. DEEPU DOULATRAM DADLANI
S/O DOULATRAM DADLANI
4. MAHESH KISHANCHAND DADLANI
S/O GOBINDARAM KISHINCHAND
5. LALCHAND BHAGAWANDAS DADLANI
S/O BHAGWANDAS DADLANI
6. GULL GOBINDARAM DADLANI
S/O GOBINDARAM
7. NIRMALA HIRANAND DADLANI
D/O DHEWARAM MAHABOOBANI
8. DURU KISHINCHAND DADLANI
9. HOORBAI DOULATRAM DADLANI
D/O GULIRAM MAHBOOBANI
10. CHIMANALAL RAMJIBHAI SALVA
S/O RAMJ VALJI SAVLA
11. LALJI RAMJI SAVLA
S/O RAMJI VALJI SAVLA
12. DHIRAJLAL RAMJI SAVLA
S/O RAMJI VALJI SAVLA
13. BHARATH ASHOK DADLANI
S/O ASHOK BHAGWANDAS DADLANI
14. GAUTAM LALCHAND DADLANI
S/O LALCHAND BHAGWANDAS
15. HEENA DEEPU DADLANI
D/O LACHMAN GOPALDAS MELWANI
16. SWEETA ASHOK DADLANI
D/O KISHINCHAND MOHANANI
17. ASHOK BHAGWANDAS DADLANI
S/O BHAGWANDAS DETARAM DADLANI
-3-
NC: 2024:KHC:1230
MFA No. 8318 of 2023
18. MANOJ GULL DADLANI
S/O GULL GOBINDARAM
19. RUPA LALCHAND DADLANI
D/O RAMCHAND SADHWANI
20. KHIMJI KESHRA PATEL
S/O KESHRA HIRJI PATEL
21. DEVJI KESHRA PATEL
S/O KESHRA PATEL
22. BHAVESH CHAMPSHI NANDU A/S SHAH
S/O CHAMPSHI RAJ BHAI NANDU A/S SHAH
23. VISHANJI RAJABHAI SHAH
S/O RAJABHAI NANDU
24. NAINESH MULJIBHAI NANDU
S/O MULJIBAI NANDU
25. ROHIT CHAMPSHI NANDU A/S SHAH
S/O CHAMPSHI DEVI SHAH
ALL ARE R/AT NO.126, HORTUR, SHALIMAR, BVK
IYENGAR ROAD, BANGALORE- 560 053.
R3-25 ARE PARTNERS OF R2
...RESPONDENTS
(BY SRI. G.KRISHNA MURTHY, SRNIOR COUNSEL FOR
SRI.RAVISHANKAR R.H, ADVOCATE FOR C/R2)
THIS MFA IS FILED U/O.43 RULE 1(r) OF THE CPC,
AGAINST THE ORDER DT.29.11.2023 PASSED ON IA NO.1 IN
O.S.NO.553/2023 ON THE FILE OF THE ADDITIONAL SENIOR
CIVIL JUDGE AND JMFC, DEVANAHALLI, REJECTING IA NO.1
FILED U/O.39 RULE 1 AND 2 R/W SEC.151 OF CPC.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
-4-
NC: 2024:KHC:1230
MFA No. 8318 of 2023
JUDGMENT
Heard the learned counsel for the appellant and also
learned counsel appearing for the respondents.
2. This appeal is filed against the rejection of the
application filed under Order 39 Rule 1 and 2 r/w Section 151
of C.P.C. refusing to restrain the defendants, their heirs or any
body claiming through them from alienating or encumbering
the suit schedule properties to third parties pending disposal of
suit.
3. The factual matrix of the case of the plaintiff before
the trial Court is that it entered into a Memorandum of
Understanding in order to purchase schedule properties for a
sale consideration of Rs.75 Crores and on the date of execution
of Memorandum of Understanding (MOU), it made a payment
of Rs.5 Crores to the defendants by way of RTGS. As per MOU,
the plaintiff-firm shall intimate within 3 months in writing that
they are not going to proceed with the transaction, then the
defendant shall refund the entire amount of Rs.5 Crores with
interest at the rate of 18% per annum to the plaintiff-firm
within 8 days from the date of receipt of notice in writing.
NC: 2024:KHC:1230
Further, if the plaintiff-firm intents to proceed further, then the
plaintiff-firm shall further pay an amount of Rs.6 Crores to the
defendants. The said 11 Crores shall be treated as advance
amount. The term fixed in MOU is 12 months plus 3 months
grace periods. Further, defendant No.1 is also partner of
defendant No.2 and all the partners of defendant No.2 have
jointly executed a General Power of Attorney dated 19.07.2022
in favour of Mr.Sha Rajesh, the partner of the plaintiff-firm. The
plaintiff would require 3 months for due diligence of total
documents to ascertain whether the plaintiff would be able to
proceed further. Accordingly, the plaintiff addressed a letter
dated 08.09.2022 to the defendants and the same has been
accepted and acknowledged by the defendants. As per the
terms of Memorandum of Understanding, after due diligence of
3 months, the plaintiff confirming to proceed further, the
plaintiff shall pay Rs.6 Crores to the defendants and shall enter
into sale agreement. The plaintiff obtained demand draft for
Rs.6 Crores and intimated the defendants to send agreement of
sale. The defendants failed to send draft sale agreement and
failed to come forward to execute the sale agreement and
ultimately, got issued notice dated 26.12.2022 and filed a suit
for specific performance.
NC: 2024:KHC:1230
4. In pursuance of the suit summons, the defendants
appeared and filed written statement contending that in terms
of MOU dated 09.06.2022 entered into between the plaintiff
and the defendants, the plaintiff did not come forward to
express their desire to complete the transaction and also not
made payment of Rs.6 Crores. It is also contended that without
payment of proper stamp duty and penalty, the plaintiff cannot
seek any relief as prayed in the plaint and hence, the Trial
Court considering the pleadings of the parties and while
considering I.A.No.1 in granting temporary injunction comes to
the conclusion that first of all MOU is not properly stamped and
the documents cannot be looked into unless proper stamp duty
and penalty has been paid on the instrument and on that
ground alone, the various contentions of the plaintiff cannot be
accepted. The Trial Court also taken note of the terms and
conditions of MOU and rejected the application. Hence, the
present Miscellaneous First Appeal is filed before the Court.
5. Learned counsel for the appellant vehemently
contends that before expiry of three months as stated in the
MOU, a letter was sent and same was acknowledged. In spite of
demand draft was ready for an amount of Rs.6 Crores in the
NC: 2024:KHC:1230
month of October itself, the defendants did not come forward to
execute the sale agreement nor sent any draft sale agreement
and ultimately, legal notice was issued and when the
defendants did not come forward to execute the sale deed
without any other alternative, a suit was filed inter alia sought
for the relief of temporary injunction. Learned counsel would
submit that if the plaintiff succeeds in the suit and if any third
party rights have created, it would leads to multiplicity of
proceedings. Learned counsel also vehemently contends that
the Trial Court fails to take note of the terms of the MOU and
committed an error in coming to the conclusion that the
defendants have taken a contention that as per MOU dated
09.06.2022, the plaintiff should have offered to purchase a suit
schedule property on or before 09.09.2022. The said
observation is erroneous and fails to consider the terms of the
MOU. Learned counsel brought to the notice of this Court that
after due diligence within three months, the plaintiff was
decided to proceed further. Learned counsel also vehemently
contends that an amount of Rs.6 Crores is payable while
executing the agreement of sale and even in spite of demand
draft was ready, the same is not accepted.
NC: 2024:KHC:1230
6. Per contra, learned counsel for the respondents
would submit that time is the essence of the contract and
based on the MOU, a relief is sought for the specific
performance and the very suit itself is not maintainable.
Learned counsel submits that unless the stamp duty is paid on
the MOU, the plaintiff cannot seek any relief and based on the
MOU, a direction cannot be given to execute the sale
agreement as prayed in the plaint. He further submits that
when the time is the essence of the contract, the plaintiff-firm
ought to have informed to the defendants that they intents to
go ahead with the transaction on verification of the documents.
Even though three months time is provided to verify and
express its desire to complete the transaction, the same is not
done. He also submits that as per the terms of MOU, an
amount of Rs.6 Crores has to be paid to the defendants. When
the very suit is not maintainable, question of granting the relief
not to alienate only on account of payment of Rs.5 Crores in
terms of MOU does not arise. The same is taken note of by the
Trial Court and rightly rejected the application.
7. Having heard the learned counsel for the appellant
and learned counsel for the respondents, there is no dispute
NC: 2024:KHC:1230
with regard to the MOU came into existence on 09.06.2022.
The defendants also not disputed the MOU entered into
between the plaintiff and the defendants. It is also not disputed
for having paid the amount of Rs.5 Crores on the date of
execution of the MOU. The suit is filed for the relief of specific
performance based on the MOU and seeking the relief of
execution of the agreement of sale in terms of the MOU. When
such relief is sought based on the MOU, the Court has to look
into the terms and conditions of the MOU.
8. Having perused the MOU, no doubt the sale
consideration is fixed at Rs.75 crores and as already pointed
out, Rs.5 crores was paid on the date of execution of MOU. It is
also important to note that from the very clause in the MOU
between the parties, it is clear that three months time is given
to the plaintiff to take a decision for due diligence of title
document and to ascertain whether the plaintiff will be able to
proceed further.
9. It is the contention of the plaintiff that before expiry
of three months, it has expressed its opinion.
- 10 -
NC: 2024:KHC:1230
10. On the other hand, learned counsel for the
respondents would submits that the defendants have not
placed the said document before the Trial Court and the
defendants themselves produced the documents before the
Trial Court wherein it has not expressed any desire to continue
the transaction and expressed its desire to take decision of the
due diligence to be 08.12.2022 and the same is unilateral
decision.
11. Having perused this document which is not disputed
and relied upon by the plaintiff and specific pleading also made
in the plaint that the plaintiff itself has issued this letter and
there is no agreement between the parties with regard to the
unilateral extension of time till 08.12.2022 and hence, the very
contention of the plaintiff that within three months, it was
ready to complete the transaction cannot be accepted in view
of the very document of the plaintiff which is admitted by it.
Hence, it is clear that the plaintiff itself has sought time till
08.12.2022 unilaterally and there was no consensus between
the plaintiff and the defendants with regard to the extension of
time. Apart from that, no doubt the counsel contends that the
plaintiff kept ready an amount of Rs.6 Crores. But on perusal of
- 11 -
NC: 2024:KHC:1230
MOU, it is clear that the plaintiff-firm was agreed to execute an
agreement for sale on payment of further sum of Rs.6 crores.
But when the plaintiff itself has written a letter for extension of
time and even though keeping the demand draft ready with it,
the same will not serve the purpose and merely making
payment of Rs.5 Crores against the amount of Rs.75 Crores
and when there is denial of readiness on the part of the plaintiff
in the written statement filed by the defendants, the same
requires trial whether the plaintiff was ready and willing to
perform its part of contract and also the Trial Court has taken
note of the document i.e., MOU and the same is not a sale
agreement and the same is unstamped. Unless duty and
penalty is paid on the document, the same cannot be enforced.
There is a force in the contention of the learned counsel for the
respondents that the very initiation of the suit is based on the
MOU and granting relief has to be determined by the Trial Court
and based on the MOU, the plaintiff seeking direction against
the defendants to enter into a sale agreement has to be
considered during the course of trial. Hence, I do not find any
error committed by the Trial Court in rejecting the application
filed under Order 39 Rule 1 and 2 and restraining the
defendants in creating and alienating the property. Whether the
- 12 -
NC: 2024:KHC:1230
plaintiff is entitled for relief as sought and to refund of the
amount in terms of the clause in MOU has to be decided by the
Trial Court only on merit. Hence, there is no merit in the appeal
to reverse the findings of the trial Court in allowing the
application.
12. In view of the discussion made above, I pass the
following:
ORDER
i) The appeal is dismissed.
In view of dismissal of the appeal, I.A.No.1/2023 does
not survive for consideration and the same stands disposed.
Sd/-
JUDGE
VM
