Ranjit Vardichand Jain v. Nirmal Gagubhai Chhadwa & Ors.

15. The investigation office filed report on 24th December, 2018 in the criminal complaint filed by Defendant No.1 stating that since Suit had been filed in the Court, the file is closed.

16. The Plaintiff had also filed complaint against Defendant Nos.[1] and 2 on 15th February, 2019 for criminal breach of trust and cheating on grounds that they failed to disclose that the smaller property had already been mortgaged prior to the execution of the said MoU and subsequent to the said MoU and the City Civil Civil Suit, another mortgage had been created in favour of the Punjab National Bank. In these proceedings, an FIR was registered against Defendant No.1 on 6th April, 2019 and on 10th April, 2019. The notary who notarized the said MoU gave a statement dated 10th April, 2019 confirming execution of the said MoU. Further, on 11th April, 2019, the Defendant No.7 made a statement that he is unaware of the said MoU and produced the JV Agreement and confirmed that Defendant Nos.[1] and 2 have 6.2% development rights in the construction. Further, that Defendant Nos.[1] and 2 sold three units out of their share. Another statement recorded on 30th April, 2019 is on the same lines. It is the case of the Plaintiff that at least from this date the Defendant No.3 (Defendant No.7 being a partner of Defendant No.3) had knowledge of the said MoU. The Defendant No.1 was thereafter arrested on 27th May, 2019. The bail applied for was rejected by the Metropolitan Magistrate Court and by the Sessions Court. This Court granted bail on 3rd July, 2019 in view of Defendant No.1 offering to deposit Rs.1.55 Crores in this Court.

17. It is the case of the Plaintiff that the Defendant No.1 had created encumbrances with respect to the smaller property prior to the said MoU and the City Civil Court Suit. The JV Agreement records that the title deeds of 6 smaller plots which constitutes the smaller property were mortgaged to Kurla Nagrik Bank and Religare Finvest Ltd. This is apart from the mortgage created in favour of Punjab National Bank subsequent to the said MoU and City Civil Court Suit. There were Agreements for Sale executed by the Defendant Nos.[1] and 2 after the sad MoU dated 17th April, 2018 and City Civil Court Suit which included Agreement for sale dated 31st December, 2018 in respect of Office No. 207 and registered Agreement for Sale dated 31st December, 2018 in respect of office No.206. The Defendant No.3 signed as confirming party and Punjab National Bank issued NOC. Further, Defendant Nos. 1 & 2 executed registered Agreement for Sale dated 15th January, 2019 in respect of office 401 and where Defendant No.3 signed as confirming party and Punjab National Bank issued NOC. However, this unit appears to be not part of the Defendant Nos.[1] and 2’s share as per the J V Agreement.

18. The registered Deed of Exchange was entered into on 30th August, 2019 between Defendant Nos.[1] and 2 on the one hand and Defendant No.3 on the other. By the said Deed of Exchange, Defendant Nos.[1] and 2 transferred to Defendant No.3 the smaller property and in exchange thereof Defendant No.3 allotted 7 commercial units in Sabari Park which included Unit NO. 203 admeasuring 1,153 Sq. ft. (Carpet area) along with two car parking spaces; Unit No.204, having carpet area of 1,445 Sq. ft. with two covered car parking spaces; Unit No.404, having carpet area of 1,445 Sq. ft together with two covered car parking spaces; Unit No.606 having carpet area of 507 sq. ft together with one covered car parking space; Unit No.904, having carpet area of 1,445 Sq.ft with two covered car parking space; Unit No.907, having carpet area of 651 Sq.ft with one covered car parking space and Unit No.1003 having carpet area of 1,153 Sq. ft with two covered car parking spaces. It is necessary to note that in the Deed of Exchange, it is mentioned that the Defendant Nos.[1] and 2 have clear and marketable title to the smaller property free from any debts, charges / encumbrances and that Defendant Nos.[1] and 2 have not created any lien, grant or charge or any other encumbrances of whatsoever nature over the smaller property.

19. In the Affidavit in Reply to the present Interim Application, the Defendant Nos.[1] and 2 have denied the said MoU with the Plaintiff in its entirety as being a complete fabrication. Further, that Defendant No.2 was not a party to the said MoU despite some parcels of the smaller property being in her name. The consideration purportedly under the said MoU was paid as early as 1st April, 2016 whereas the MoU is dated 17th April,

2018. It is the case of the Defendant No.1 that the said MoU is completely one sided and no prudent person would enter into such an MoU. The cost of construction as per the JV Agreement is Rs.57.39 Crore with regard to the area coming to the share of Defendant Nos.[1] and 2. Therefore, it is inconceivable that these Defendants would assign half their rights for a paltry amount of Rs.1.55 Crore.

20. The Defendant Nos.[3] to 5 have in their Reply to the Interim Application raised various defences. The primary defence being that under the Deed of Exchange Defendant Nos.[1] and 2 transferred the smaller property to Defendant Nos.3. The Defendant No.3 is not party to the said MoU with the Plaintiff. Therefore, the Plaintiff cannot seek relief against Defendant No.3 or in respect of the smaller property since it is no longer owned by the Defendant Nos.[1] and 2. The defences raised by Defendant No.3 are similar to that raised by Defendant Nos.[1] and 2 and which include lack of stamping and registration of said MoU; delay in filing the Suit as well as the Interim Application; limitation; fraud; the said MoU being an agreement to agree; the Plaintiffs claim of Rs.1.55 Crores being fully secured by the deposit of the said sum by Defendant No.1 as condition for bail; not a commercial dispute; the 7 units coming to the share of Defendant Nos.[1] and 2 under the Deed of Exchange having been sold to third parties. The stand of Defendant No.10 is that he had retired from Defendant No.3 on 30th June, 2018 and therefore cannot be made liable.

21. By an order dated 1st December, 2021 passed by this Court Defendant Nos.[1] and 2 were directed to file Affidavit in Reply making disclosures of (i) all particulars of the sale of the 7 units that came to the share of Defendant Nos.[1] & 2 under the Deed of Exchange dated 30th August, 2019 executed between Defendant Nos.[1] & 2 and Defendant No.3; (ii) Whether Defendant Nos.[1] and 2 have only received 7 units under the Deed of Exchange.

22. Thereafter, the disclosure Affidavit has been filed by the Defendant Nos.[1] and 2 and which provides details of the 7 units which came to the share of the Defendant Nos.[1] and 2 under the Deed of Exchange and particulars of the sale of these units and consideration received. A statement has been made by Defendant Nos.[1] and 2 that the 7 units are the only units received by them under the Deed of Exchange. Further, particulars are given of the three units viz. 206, 207 and 401 allotted to Defendant Nos.[1] and 2 by Defendant No.3 under the J V Agreement i.e. prior to the execution of the Deed of Exchange. These have also been sold by Defendant Nos.[1] and 2 and for which particulars of sale have been given as well as the consideration received.

23. The Plaintiff in his Affidavit in Rejoinder has raised issues with regard to incomplete disclosure made by Defendant Nos.[1] and 2 and that it is not stated that the consideration value set out in the Disclosure Affidavits in respect of the 7 units is the entire or complete consideration received by these Defendants. Further, there are certain discrepancies in consideration received in relation of the certain units as well as Defendant Nos.[1] and 2 not disclosing cash component in the transactions relating to the sale of the 7 units. Further, it is contended that though the units were allotted to the share of Defendant Nos.[1] and 2 under the J V Agreement, the consideration in respect of these units has been received by Defendant No.3.

24. In a further Affidavit of the Plaintiff, certified copy of the opinion of the Additional Chief State Examiner of Documents, Handwriting and Photography Bureau CID, Mumbai requisitioned by the Joint Commissioner of Police, EoW, Mumbai has been relied upon and which states that signatures on the said MoU is shown to be that of Defendant No.1 and the signatures on certain specified documents of Defendant No.1 collected by police are of the some person. Therefore, it is evident that Defendant No.1 had signed on the said MoU. Further, it is contended that the sale transactions in respect of the 7 units received by Defendant Nos. 1 & 2 are not arms length transaction since they are sold for amounts lesser than the Ready Reckoner Rates. This has been disputed in an additional Reply filed by Defendant Nos.[1] and 2 dated 24th August, 2022. It is stated that the consideration mentioned in respect of unit 907 was inadvertently shown and giving the actual consideration / agreement value of the said unit.

25. Mr. Sharan Jagtiani, learned Senior Counsel appearing for the Applicant / Plaintiff has submitted that the Plaintiff is entitled to claim specific performance of the said MoU and that specific performance can also be claimed against Defendant No.3 being a purchaser with notice of the said MoU when the Deed of Exchange had been executed. He has submitted that the Plaintiff had performed his part of the agreement by paying the entire consideration of Rs.1.55 Crores and was entitled to 3.1% share of constructed area i.e. 50% of Defendant No.1 / Defendant No.2’s 6.2% share in the Suit property. He has submitted that clause 11 of the MoU contemplated that the Suit property (reflected to therein as the “Suit land”) would be constructed upon and it would be the sole responsibility of Defendant No.1 to apply and obtain all necessary permissions for construction of new buildings at his own cost and commence, carry on and complete construction in accordance with the sanctioned plan and obtain completion certificate and put the joint developers (defined to mean the Plaintiff) into peaceful and vacant possession of 3.1% share in the said land.

26. Mr. Jagtiani has submitted that the Defendant No.1 by entering into the said MoU with the Plaintiff represented that he had implied / ostensible authority to act on behalf of Defendant No.2 as owner of the smaller property in the sale of 50% of the development rights of Defendant Nos. 1 & 2 to the Plaintiff. This authority has been ratified by Defendant No.2 receiving her share of Rs.1.55 Crores being the entire consideration paid under the said MoU. In the context of agency he has relied upon the decision of the Supreme Court in Chairman, LIC Vs. Rajiv Kumar Bhaskar[1] Paragraphs 22, 23, 28, 36, 37 to 40 and for act of ratification relied upon the decision of the Supreme Court in Jugraj Singh Vs. Jawant Singh[2] paragraph 8. In Chairman, LIC (supra), the Supreme Court has held that an agency can be created expressly or by necessary implication. In the context of ratification, it has been held that a person ratifying the act of another would be deemed to be, though in fact he was not, a party to the contract. Mr. Jagtiani has them referred to the relevant provisions viz. Section 185 - 187 of the Contract Act with regard to implied authority as well as Sections 196 to 197 of the Contract Act with regard to ratification. It is provided under Section 185 of the Contract Act that even passing of consideration is not necessary.

27. Mr. Jagtiani has thereafter made submissions with regard to the Plaintiff’s entitlement to enforce performance against Defendant No.3. He has submitted that in a case where title to which the Plaintiff claims is, subsequent to the Plaintiff’s contract, transferred to a third party, the law allows for performance to be enforced against such third party. This is provided for under Section 19(b) of the Specific Relief Act. In doing so, the Court is not transferring the obligations owed by the Plaintiff’s counter party under the contract to the third party. It is merely divesting the third party of so much of the title that the Plaintiff is entitled to. This subjected to only one exception namely that if the third party has acquired such title in good faith and without notice of the Plaintiffs contract, then specific performance cannot be imposed against such third party. He has relied upon the decision of the Supreme Court in Ram Niwas V. Bano & Ors.[3] and R.K. Mohd Ubaidullah V. Hajee Abdul Wahab.4.

28. Mr. Jagtiani has submitted that the Defendant No.3 had notice of the said MoU by reason of the statement of Defendant No.7, partner of Defendant No.3, made to the Police prior to execution of the Deed of Exchange. Thus, Defendant No.3 cannot be said to be a transferee without notice and this is not a defence available to resist the enforcement of the said MoU. Defendant No.3 by executing the Deed of Exchange with the Defendant Nos.[1] and 2, the Defendant Nos.[1] and 2’s rights to the smaller property of which 50% was otherwise contractual committed to the Plaintiff, has been parted with or given up in favour of Defendant No.3 for an alleged consideration in exchange. Thus, for the purpose of application of Section 19(b), Defendant No.3 is such other person claiming under the party to the original contract / the said MoU i.e. Defendant No.1/Defendant No.2 by a title subsequent i.e. Deed of Exchange to the said MoU. This therefore makes Defendant No.3 ‘a person against whom specific performance of a contract / the said MoU may be enforced’. Further, the Defendant No.3 cannot be considered to be transferee for value as 6.2% share in the Suit property had been estimated by Defendant Nos.[1] or 2 at Rs.35 Crores and that the value of 13 units transferred to them as consideration / exchange for their 6.2% share in land is only Rs.12 Crores. In other words, if Defendant No.3 had paid an upfront consideration of Rs.12 Crores for Defendant No.1 /Defendant No.2’s 6.2% share in the land, it would be much below Defendant No.1/Defendant No.2’s estimated fair value of the land. He has accordingly submitted that in view of Section 19(b) of Specific Relief Act being applicable in the present case, specific performance of the said MoU can be sought by the Plaintiff against Defendant No.3.

29. Mr. Jagtiani has further submitted that delay is not a ground to refuse interim relief and in that context he has relied upon the decision of this Court in Rajiv Sanghvi V. Pradip Kamdar[5]. In the said decision this Court has held that delay by itself is no ground to deny interim relief. It would be necessary for the Defendants to show prejudice caused to them on account of the delay in filing the present Suit and seeking interim relief. The question of delay, if at all, requires to be balanced against the likelihood of the Plaintiff ultimately succeeding in the action and where the Suit is prima facie strong, the Plaintiff’s delay (assuming there is delay) in filing the action would not dis-entitle the Plaintiff

5 Interim Application No.571 of 2022 decided on 30th June, 2022. to the relief. He has further relied upon the decision of the Supreme Court in Madamsetty Satyanarayana Vs. G. Yellogi Rao and Ors.6, wherein the Supreme Court has held that in India mere delay without such conduct on the part of the Plaintiff as would cause prejudice to the Defendant does not empower a Court to refuse such a relief.

30. Mr. Jagtiani has submitted that the issue raised by the Defendants on whether the said MoU was sufficiently stamped and registered and whether the same is admissible in evidence can be gone into at the time of trial. He has relied upon the decisions of this Court in Suhail Abdul Kadar Ishkay – Applicant and Nadeem Majid Oomerbhoy Vs. Riyad Rashid Oomerbhoy Thru LRs and Ors.[7] in support of his submission that the defence of insufficient stamping does not preclude interim relief. He has also placed reliance upon the decision of the Full Bench of this Court in Gautam Landscapes Vs. Shailesh Shah[8] which has held that the Court can grant interim or ad-interim relief in an application under 6 MANU/SC0310/1964: AIR 1965SC 1405: (1965) 2 SCR

Section 9 of the Arbitration Act when a document is unstamped or insufficiently stamped. Further, on the issue of forgery i.e. whether the signature of the party to the agreement is forged or not is a matter of trial. In that context he has relied upon the decision of the Andhra Pradesh High Court in Nalluri Sai Vasavi V. Kolluri at Paragraph 19.

31. Mr. Jagtiani has made submissions with regard to the Courts not inquiring into the adequacy of consideration in the context of the issue raised by the Defendants that there was inadequate consideration under the said MoU for the Plaintiff acquiring 50% of the development rights of the Defendant Nos.[1] and 2. He has in this context relied upon decision of Kolkata High Court Harendra Nath Ghose & Anr. Vs. Union of India & Ors.10 He has also relied upon the decision of this Court in Chintaman Sitaram Bajad Thru L.Rs. Vs. Shankar Sonaji Shingne11 where it has been held that inadequate consideration is not a ground for refusing specific performance. 9 CMA No.120 of 2022 decided on 13th September, 2022. 10 2006 SCC OnLine Cal 567: (2007) 3 CHN 34. 11 2014 (3) Mh.L.J.

32. Mr. Jagtiani has also submitted that said MoU is not an agreement to agree as the rights and obligations are clearly spelt-out from a reading of the said MoU and it constitutes a concluded contract between the parties. The Plaintiff has also paid full consideration under the said MoU which militates against the said MoU being a mere agreement to agree. Mr. Jagtiani has also referred to clauses 12 to 19 of the MoU, which primary contains various powers and rights given to the Plaintiff and corresponding restraints on Defendant Nos.[1] and 2. These include the power of the Plaintiff to supervise construction, operate bank accounts, sharing profits, negotiate with purchasers for sale. There is a restraint on Defendant No.1 from creating third party rights etc. These clauses are from a plain reading clear and not capable or in need of further refinement or agreement between the parties. Merely, because an agreement contemplates further documents to be executed does not mean that it does not constitute a binding contract when the terms are clear and concluded. In this context he has relied upon the decision of this Court in Rajiv Sanghvi (Supra) and Kollipara Sriramulu Vs. T. Aswatha Naryana (dead), (paragraphs 3 and 5). 12 1968 3 SCR 387.

33. Mr. Jagtiani has submitted that the Plaintiff has at all times been ready and willing to perform the said MoU and has infact performed the essential obligation of the Plaintiff which was to bring in consideration of Rs.1.55 Crore, which admittedly has been performed and the receipt of this money has not been denied by Defendant Nos.[1] and 2. The remaining clauses viz. 12 to 18 do not cast obligations on the Plaintiff but on the contrary confer various powers and rights to the Plaintiff and this has no bearing on the question of readiness and willingness of the Plaintiff. He has submitted that mere delay in a case where the Plaintiff has already performed his obligation cannot defeat the Plaintiffs’ case for specific performance. In that context he has relied upon the decision of this Court in Bastion Constructions Vs. Nusli Wadi, (S.C. Gupte, J) dated 4th March, 2016.

34. Mr. Gautam Ankhad, learned Counsel appearing for Defendant Nos.[1] and 2 has submitted that the Plaintiff has propounded a false case and has relied upon a fabricated document. The foundation of the alleged MoU is in serious dispute. There are contradictory statements as to who had drafted the alleged MoU. The notary in a statement dated 10th April, 2019 before the police claims that the alleged MoU was drafted by him. Whereas the Plaintiff in an Affidavit in Rejoinder dated 19th November, 2021 had in paragraph 15 filed before this Court after two years of the notary’s statement pleads that it was Defendant No.1 who had prepared the alleged MoU. Both these statements have been denied by Defendant Nos.[1] and 2. There is no proper explanation given by the Plaintiff in the Rejoinder arguments other than stating that there is inconsistency in these statements and that the Plaintiff is a lay person and the alleged MoU was prepared under the Defendant No.1’s instructions.

35. Mr. Ankhad has referred to the prior Suit filed in the City Civil Court which came to be dismissed on 22nd October,

2018. He has submitted that the prayers sought by the Plaintiff in the City Civil Court Suit and the present Suit are similar and this is nothing but an attempt to re-agitate the same reliefs. He has submitted that the prayers sought in the present Suit are premised on the footing that alleged MoU was valid, subsisting and binding. As the main relief is dismissed by the City Civil Court, there is no question of granting any consequential or interim relief in the matter. He has further submitted that the issues of forgery / fabrication / validity of the MoU will have to be adjudged at the trial and no relief can be granted till the trial is concluded. Mr. Ankhad has submitted that the Plaintiff has propounded a false case and has repeatedly prevaricated on oath in the Plaint on the issue of the dismissal of the City Civil Court and knowledge of the 2010 MoU. This conduct dis-entitles the Plaintiff from claiming Specific Performance.

36. Mr. Ankhad has submitted that Defendant Nos.[1] and / or 2 have no surviving right, title or interest in the Suit property as they have sold and conveyed all their rights to Defendant No.3 under the registered Deed of Exchange executed on 30th August,

2019. The present Suit has been filed only on 28th September,

2021. Assuming without admitting that the Plaintiff has made out a prima facie case, the Plaintiff has only a claim of damages which will be decided after trial. The Defendant Nos.[1] and 2 have sold all 7 units that had come to their share. Thus, third party rights have already been created qua all their interest in the development. The 7 units have been sold by the registered sale deeds and third parties have been put in possession and Occupation Certificate has also been received. The Plaintiff had knowledge of the same and the details have been disclosed in the Plaint, but despite which no steps were taken to prevent the sale or sue the third party purchasers. Thus, the Plaintiff has given up all his rights in the Suit property.

37. Mr. Ankhad has submitted that Defendant No.2 has not signed the alleged MoU. There is no privity of contract between Defendant No.2 and the Plaintiff. The Plaintiff being aware of this has not claimed relief of specific performance against Defendant No.2. Defendant No.2 being the wife of Defendant No.1 has been unnecessarily dragged into litigation on the fanciful oral argument of implied authority. The Plaintiff though being aware that Defendant No.2 was owner of certain parcels of the Suit land did not seek to obtain the consent of Defendant No.2. There is no explanation for this. The Plaintiff being a real estate developer cannot come with a case that no due diligence was conducted by him to verify as to who is the actual owner of the land. There are no pleadings for alleged agency in the Plaint, though submissions are made across the bar. Defendant No.2 has never ratified the alleged MoU. The monies received in the joint account of Defendant No.2 were not towards the sale of Defendant No.2’s land. There is no prayer for specific performance against Defendant No.2. Accordingly, the issue of implied authority when the final relief is not sought against Defendant No.2 does not arise.

38. Mr. Ankhad has submitted that the argument on implied authority and ratification under Section 185, 186, 187,196 and 197 of the Contract Act has no application to the facts of the present case apart from there being no pleading that Defendant No.1 had implied authority to execute the alleged MoU on behalf of Defendant No.2 or Defendant No.2 had consented or ratified the agency of Defendant No[1].

39. Mr. Ankhad has submitted that there is no correspondence addressed by the Plaintiff calling upon Defendant No.1 and / or Defendant No.2 to perform the alleged MoU. There is no readiness and willingness shown by the Plaintiff at any point of time by calling upon Defendant No.1 or Defendant No.2 to perform the alleged MoU.

40. Mr. Ankhad has submitted that the alleged MoU is a fabricated document and its genuineness will be decided at trial. It cannot form the basis of interim relief. He has submitted that Defendant No.1 has not signed the alleged MoU in its present form. He has relied upon Affidavit in Reply dated 10th November, 2021 which has provided the circumstances leading to the signing of papers on which the Plaintiff has typed out the alleged MoU. He has submitted that a reading of the alleged MoU demonstrates that it is a strange document whereby it seeks to assert rights in Defendant No.3’s property. Further, Defendant No.3 had never been called upon by the Plaintiff to perform. There is no explanation as to how the alleged MoU came into existence on 17th April, 2018 whilst part of purported consideration was paid from 1st April, 2016 till 20th February, 2018 to one Karan Enterprises. It is impossible to believe that a real estate developer will advance monies in anticipation of an agreement to be signed two years later.

41. Mr. Ankhad has further submitted that it is impossible to believe that the alleged MoU, it requires Defendant No.1 to refund the entire amount with interest and in addition thereto provide 3.1% rights in the Suit property for free to the Plaintiff. These are some of the factors which shows that the alleged MoU is the fabricated document.

42. Mr. Ankhad has submitted that the Plaintiff being a childhood friend of Defendant No.1 had misused the blank pages provided by Defendant No.1 in context of the separate transaction. Defendant No.1 had learnt about the alleged MoU when the Plaintiff served the City Civil Court papers on 16th October, 2018. The Defendant No.1 took immediate steps to object to the bogus Suit and maintainability of the same on 20th October, 2018, when he appeared before the City Civil Court and filed criminal complaint dated 20th November, 2018 against the Plaintiff and his son Sachin Jain for forgery and cheating.

43. Mr. Ankhad has submitted that there are no ground made out in the Plaint for cancellation of the registered Deed of Exchange. The document is validly executed, stamped, registered and acted upon by the parties. Mr. Ankhad has submitted that there is a presumption in law that a registered agreement is validly executed. The Defendants have acted upon the Deed of Exchange and sold units to third party purchasers, which came to the share of Defendant Nos.[1] and 2 as their consideration. He has submitted that Defendant Nos.[1] and 2 have encashed out of the project instead of the arrangement envisaged under the 2010 MoU and 2018 J V Agreement. This is a matter of commercial bargain between the Defendants and cannot be questioned in Court. It is impossible to believe that Defendant Nos.[1] and 2 will borrow Rs.1.55 Crore where the construction cost is Rs.57.39 Crore and thereafter refund the entire amount with interest and in addition provide 3.1% of the entire land free of cost to the Plaintiff.

44. Mr. Ankhad has submitted that there is gross delay in filing the present Suit and taking out the present Interim Application as the Deed of Exchange is dated 30th August, 2019 and the Suit has been filed only on 20th September, 2021. He has submitted that even after knowledge of the execution of the Deed of Exchange, no steps were taken by the Plaintiff to prevent the Defendants from acting upon the said document. The Plaintiff has slept over alleged rights well over three years and has permitted the third party rights to accrue. This is also because the Plaintiff was interested in recovering Rs.1.55 Crores, which is fully secured. The Defendant No.1 has deposited Rs.1.55 Crores on 3rd July, 2019 and the same is lying in this Court. The Plaintiff cannot be permitted to agitate the right after an inordinate delay. The Plaintiff thus is not entitled to discretionary relief. The gross delay in filing of the Suit dis-entitles the Plaintiff.

45. Mr. Ankhad has submitted that the Plaintiff has never shown readiness and willingness to perform the 2018 MoU. Several clauses of the alleged MoU, such as Clauses 10 to 18 required performance from the Plaintiff. Mr. Ankhad has submitted that readiness and willingness must be continuous and at all times i.e. from the date of contract until the decree in a Suit. He has referred to Section 16(c) of the Specific Relief Act which mandates continuous readiness and willingness as a condition precedent for obtaining relief of specific performance. This must be all throughout i.e. from the date of the contract till the decree in a Suit.

46. Mr. Ankhad has referred to certain facts including that IOD / CC having been obtained in 2014 and 2015 and the construction activities had already started and by 2018, the construction was up to the 10th floor. Neither inquiries were made by the Plaintiff nor did the Plaintiff take any steps to stop the construction. After the alleged MoU, third party rights were created by Defendant Nos.[1] and 2. Yet again, the Plaintiff took no steps. This shows that the Plaintiff was never ready or willing.

47. Mr. Ankhad has submitted that Section 19(b) of the Specific Relief Act has no application whatsoever. The word “contract” in Section 19(b) means a genuine and undisputed document. The alleged MoU is a fabricated document. It cannot be the basis of making a claim against a third party.

48. Mr. Ankhad has submitted that the Plaintiff is not entitled to any relief also in view of Section 17 of the Specific Relief Act. The Defendant No.1 has no title to either Defendant No.2’s land or Defendant No.3’s land and thus specific performance cannot be granted in respect of the alleged MoU, particularly after the Deed of Exchange has been executed between Defendant Nos.[1] and 2 with Defendant No.3. Even on a demurer and assuming this Court holds at the interim stage that the document is a valid and genuine document, the alleged MoU is only a broad arrangement and at best an agreement to agree. This is because the document has never been acted upon by the Plaintiff and nor any formal agreement as envisaged under Clause 21 of the alleged MoU been drawn up. Since, it is only an agreement to agree, the alleged MoU cannot be specifically performed.

49. On the aspect of readiness and willingness, Mr. Ankhad has relied upon the decision of the Supreme Court in Shenbagam Vs. K.K. Rathinavel13 (Paragraphs 13 to 21, 29 to 36 and 41) and Heritage Developers Vs. Cool Bridge CHSL14 (Paragraphs 35 to 38, 49 and 51). He has submitted that in view of the above submissions, the present Interim Application be dismissed with costs.

50. Thereafter, Mr. Ankhad has distinguished the judgments relied upon by the Plaintiffs on implied / ostensible authority and ratification as having no application as Defendant No.2 is neither a party to the MoU nor has ratified the MoU. Further, there is no specific pleading on implied authority and ratification in the Plaint. There is no prayer for specific performance against Defendant No.2. Thus there is no case made

14 (2014) 3 Mh.L.J. out that there was a contract of sale of lands between Defendant No.2 and the Plaintiff. Mr. Ankhad has also distinguished the judgments relied upon by the Plaintiff on delay not being a ground for granting interim relief nor specific performance viz. the case of Rajiv Sanghavi (Supra) and Madamsetty (Supra). He has submitted that unlike in the present case where the alleged MoU is a fabricated document and in any case, its validity can be tested at trial, in Rajiv Sanghavi(Supra) case, the Minutes was a full and final settlement between the parties and the only a formal agreement was to be executed. Further, Defendant No.3 in the present case has been creating third party rights since 2018-19. The present Suit came to be filed only 20th September, 2021. The Plaintiff has not shown what steps he has taken under the alleged MoU to assert his rights. Further, in Rajiv Sanghavi (Supra), the decision was in the context of family arrangement which is governed by special equity principles.

51. Mr. Ankhad has submitted that the decision of of the Supreme Court in Madamsetty (Supra) relied upon by the Plaintiff has no application to the present case as in that case the seven months delay in filing the Suit for specific performance was explained. This is not so in the present case. The alleged MoU is of April, 2018 and the present Suit was filed only on 20th September,

2021. There is no explanation for the delay and infact the Plaintiff’s City Civil Court Suit was also dismissed on the same principle issue.

52. Mr. Ankhad has also distinguished the decision cited by Plaintiffs on defence of forgery to be considered at the time of trial viz. Nalluri Vasavi (Supra). He has submitted that this judgment is not applicable. In the present case forgery is established on the Plaintiff’s own contradictions as to who drafted the alleged MoU. The Plaintiff has not established a prima facie case and there is no question of grant of interim relief.

53. Mr. Ankhad has further distinguished the decision relied upon by the Plaintiff on inadequacy of consideration viz. Harendranath (Supra). He has submitted that this decision is not applicable to the present case as Defendant Nos.[1] and 2 have not asserted inadequacy of consideration but rather the absurdity or unconscionableness of the transaction contemplated in the alleged MoU.

54. Mr. Sanjay Jain, learned Senior Counsel appearing for Defendant Nos.[3] to 5 has submitted that there is no privity of contract between the Plaintiff and Defendant Nos.[2] to 12. The purported MoU under which the Plaintiff is seeking relief is allegedly entered into between the Plaintiff and Defendant No.1 alone. There can be no question of any relief against the remaining Defendants. The Plaintiff has no locus to challenge the Deed of Exchange to which the Plaintiff is not a party as the only parties to Deed of Exchange are the Defendants. The Deed of Exchange was executed and registered for valuable consideration and without any legal impediment. Even otherwise, the Plaintiff cannot seek relief of cancellation of a third party document in a Suit for Specific Performance. Further, on the basis of the Deed of Exchange, third party rights have been created and the same cannot be set aside retrospectively. Therefore, the reliefs sought for in the Interim Application are rendered infructious.

55. Mr. Jain has submitted that the Suit is bad for misjoinder of parties. The purported MoU upon which the Plaintiff has based his entire claim has only been executed between the Plaintiff and Defendant No.1, though as a matter of fact, Defendant No.2 was also owner of two portions of the land. However, Defendant No.2 has not signed the purported MoU. There can be no specific performance against persons who are not signatories to the purported MoU. Further, Defendant Nos.[6] to 12 are no longer partners of Defendant No.3 firm and no longer concerned with the day to day business of the firm.

56. Mr. Jain has submitted that the claim under the purported MoU can only be for 50% share in the profit from the development. This is borne out from the police complaint of the Plaintiff, the City Civil Court Suit and the terms of the purported MoU. The Plaintiff has no right to the flats constructed on the Suit property. The claim in the Suit can only be for money. Hence, the Suit for specific performance is not maintainable.

57. Mr. Jain has further submitted that the claim of the Plaintiff is subservient to the rights of Defendant No.3. The Plaintiff has not sought part performance. The Plaintiff seeks to assert rights contrary to the 2010 MoU and J V Agreement. The Plaintiff cannot do so. If such part of the purported MoU cannot be enforced, then the entire purported MoU cannot be enforced. The Plaintiff has not sought part performance as required under Section 12 of the Specific Relief Act, 1963. Without such assertion and prayer for part performance, no such part performance can be granted. If part performance as a final relief cannot be granted, no interim relief in aid of non-existant final relief can be granted.

58. Mr. Jain has further submitted that the purported MoU is neither registered nor stamped as per the provisions of Indian Registration Act and Maharashtra Stamp Act respectively. The contract does not come into existence till such time as the purported MoU is duly stamped. It is the duty of the Court to impound the purported MoU.

59. Mr. Jain has submitted that the purported MoU is void for want of adequate consideration or in any event unconscionable. The Plaintiff claims entitlement to flats worth Rs.46 Crores. As against this, as per the Plaintiffs case, the Defendant Nos.[1] and 2 have to pay cost of construction of Rs.57 Crore as well as provide their land of about 1100 Sq. mtrs. Therefore, if the Plaintiff’s case is to be believed, the Defendant Nos.[1] and 2 will pay additional amount of Rs.11 Crore (Rs.57 Crore – 46 Crore) also loose their property of 1100 Sq. mtrs., pay to the Plaintiff Rs.1.55 Crore and interest on the amount of Rs.1.55 Crore.

60. Mr. Jain has submitted that the purported MoU is at the highest a pure finance transaction. This can be seen from the alleged amounts paid by M/s. Mangal Jewellers to Karan Enterprises / Nirmal Chhadwa between 1st April, 2016 to 20th February, 2018. Thus substantial amount of money was allegedly paid by M/s Mangal Jewellers to M/s Karan Enterprises / Nirmal Chhadwa before 20th February, 2018. Therefore, if it was the intention of the parties to enter into the purported MoU and if there was any intention to create rights in favour of the Plaintiff in respect of the Chhadwa Land, they would have entered into the purported MoU at the outset.

61. Mr. Jain has further submitted that the Defendant No.1 did not need any financial assistance as entire construction costs and payment of duties, premiums etc were to be borne by Defendant No.3 and reimbursed by Defendant Nos.[1] and 2 from the sale proceeds of the units coming to their share on development of the Suit property. In fact, the construction of the commercial building was completed in the year 2018 and Defendant No.3 had also obtained part OC in respect thereof on 12th March, 2020 and 17th June, 2021. The Plaintiff has purported to file the present Suit after delay of three years from execution of the purported MoU without any explanation and justification for the delay. The entire modus operandi of the Plaintiff is to usurp the property rights of Defendant Nos.[1] and 2.

62. Mr. Jain has further submitted that the Plaintiff has not explained the delay and laches. The Plaintiff was as per Clause 17 of the purported MoU to give 15 days written notice to Defendant No.1 to discharge his alleged obligations. However, no such notice was ever issued. The Plaintiff filed Suit No.331 of 2019 in the City Civil Court in July, 2018 asserting that there had been a breach of the alleged MoU. No interim relief was sought for in the Suit. No explanation was provided by the Plaintiff for not pursing interim relief in the Suit and no explanation for the delay from 2018 till September, 2021 when the present Suit has been filed. The Plaintiff though being aware of the 2010 MoU, J V Agreement and Deed of Exchange had not taken steps to seek appropriate order in the City Civil Court Suit since the last three years.

63. Mr. Jain has further submitted that under Clause 11 of the purported MoU, there was a fixed date of performance of Defendant No.1’s obligations i.e. within one month of execution of the MoU. The cause of action if any arose in favour of the Plaintiff on 16th May, 2018 and thus period of limitation would have ended on 15th May, 2021 and accordingly, the Suit is barred by limitation.

64. Mr. Jain has supported the submissions of Mr. Ankhad on behalf of Defendant Nos.[1] and 2 that the Plaintiff and his son are guilty of committing forgery, fraud, cheating against Defendant No.1. He submitted that no specific relief can be granted when fraud has been alleged by the contesting party and false statement made by the Plaintiff. He has supported the submissions of Mr. Ankhad with regard to the manner in which the purported MoU was executed as well as the one sided nature of the purported MoU. He has further supported the submissions of Mr. Ankhad with regard to the purported MoU not being endorsed by Defendant No.2 despite Defendant Nos.[1] and 2 being joint owners of the smaller property admeasuring 1161.21 Sq. mtrs. forming part of the Suit property. He has also reiterated the submissions made by Mr. Ankhad with regard to the Plaintiff having made several contradictory and false statements in the present Suit as well as not approaching this Court with clean hands and also submissions the purported MoU being an agreement to enter into an agreement.

65. Mr. Jain has also submitted that the Plaintiff’s alleged claim of Rs.1.55 Crores is fully secured as it has been deposited in this Court by Defendant No.1 in July, 2019 as per the directions in the order dated 3rd July, 2019 passed in Bail Application No.1679 of 2019. The deposit of the said amount of Rs.1.55 Crores in the Court dis-entitles the Plaintiff from grant of any interim relief.

66. Mr. Jain has submitted that if the Plaintiff had a right in the flats / premises that came to the share of Defendant Nos.[1] and 2, then the Plaintiff ought to have impugned the transactions relating to the 7 premises as the 7 premises have already been sold and monies received under the registered agreements. The Plaintiff has deliberately not done so. The Plaintiff has no locus to challenge the Deed of Exchange for the project developed by Defendant No.3. Any relief granted against Defendant No.3 would result in multiplicity of proceedings. The Plaintiff’s claim can only be in the nature of damages qua Defendant No.1. In view of Rs.1.55 Crore deposited by Defendant No.1 in this Court, the alleged claim of the Plaintiff is fully secured. Thus, nothing survives in the present Suit.

67. Mr. Jain has submitted that no notice was issued by the Plaintiff to Defendant No.3 with regard to the purported MoU at any point or at all. The statement made by one of the former partners of Defendant No.3 viz. Defendant No.7 recorded before the Chembur Police makes this position clear. It was only put to the Defendant No.3 as to whether the partner was aware of the MoU between the Plaintiff and Defendant Nos.[1] and 2 and nothing more. The purported MoU was not shown to Defendant No.3.

68. Mr. Jain has taken this Court through the various averments in the Plaint. He has submitted that the entire pleading and reliefs sought by the Plaintiff are on the basis of profit sharing. There are no pleadings or reliefs with respect to any rights in the land / Suit property. There are contradictions in the allegations / contentions made by the Plaintiff in the present Suit and in the 2019 City Civil Court Suit which shows that there is no credibility in the allegations made by the Plaintiff.

69. Mr. Jain has submitted that under the Deed of Exchange Defendant No.3 gave 7 units to Defendant Nos.[1] and 2 which were sold by Defendant Nos.[1] and 2 for Rs.12.79 Crores. Defendant No.3 had taken all the obligations of incurring all costs for construction, premium etc. i.e. the cost of Rs.57.30 Crore and waived Rs.[3] Crores. Thus, Defendant No.3 has given to Defendant Nos.[1] and 2, the total amount of Rs.73.90 Crore which includes taking the burden of all construction, premium costs and expenses; no refund of security deposit and 7 units being fully ready for sale with O.C. Thus, this amount is greater than the ready reckoner rate for 6.2% of the Suit property, even if the Plaintiffs case is to be accepted.

70. Mr. Jain has referred to the decision of the Supreme Court in Katta Sujatha Reddy & Anr. Vs. Siddamsetty Infra Projects Pvt. Ltd. & Ors.15, in the context of the amendment of Section 10 of the Specific Relief Act carried out in 2018 being prospective. By the amendment, the specific performance of a contract shall be enforced by the Court subject to provisions contained in Sub- Section (2) of Section 11, Section 14 and Section 16 of the Specific Relief Act. Thus, this provision which remained in the realm of the Court’s discretion pre-amendment was converted into a mandatory provision, prescribing a power the Court had to exercise when the ingredients were fulfilled. Under the preamended Specific Relief Act, one of the major considerations for grant of Specific Performance was the adequacy of damages under Section 14(i) (a). However, this consideration subsequent to the amended has been completely done away with in order to provide better compensation to the agreed party in the form of specific performance. Mr. Jain has submitted that the amendment of 2018 being declared as prospective would not apply in the present case as the purported MoU is dated 17th April, 2018 and thus executed prior to the coming into force of the 2018 amendment i.e. on 1st October, 2018 (the appointed date on which the amended provision has come into effect.) Accordingly, this Court would have to consider the pre-amended position and discretion vests in this Court in granting specific performance by considering the adequacy of damages under Section 14(1) (a) of the Specific Relief Act.

71. Mr. Jain has thereafter relied upon the decision of the Supreme Court in Garware Wall Ropes Ltd. Vs. Coastal Marine Constructions and Engineering Ltd16 to contend that inadequate stamping of the purported MoU renders the contract unenforceable and no injunction can be granted on the strength of an unenforceable contract. Mr. Jain has also referred to N.N. Global Mercantile Private Ltd. Vs. Indo Unique Flame Limited & Ors17, which had referred this issue to a Constitutional Bench of Five Judges of the Supreme Court in view of the Supreme Court having taken a considered view that the finding in Garware Wall (Supra) is not the correct position in law.

72. Mr. Jain has also relied upon the decision of the Supreme Court in Lala Durga Prasad & Anr. Vs. Lala Deep Chand & Ors.18 in support of his submission that the Deed of Exchange entered into between the Plaintiff Nos.[1] and 2 and Defendant No.3 16 (2019) 9 Supreme Court Cases 209. 17 (2021) 4 Supreme Court Cases 379. 18 1954 SCR 360: AIR 1954 SC 75. cannot be cancelled as there are covenants in the Deed between the Defendants which would make it inequitable to disturb by cancellation of their Deed in the event this Court is of the view that the Deed of Exchange could not have entered into given purported MoU. Further, such view can only be arrived at on the premise that the Defendant No.3 had knowledge of the prior purported MoU and was not a bonafide purchaser for value without notice.

73. Mr. Jain has relied upon decision of the Supreme Court in Speech and Software Technologies (India) Private Limited Vs. Neos Interactive Limited19 in support of his submission that, the purported MoU is nothing but an agreement to enter into another agreement. The Supreme Court in that decision held that it is a well settled legal position that an agreement to enter into an agreement is neither enforceable nor does it confer any right upon the parties.

74. Mr. Jain has relied upon the decision of the Supreme Court in Ambalal Sarabhai Enterprises Limited Vs. K.S. Infraspace 19 (2009) 1 Supreme Court Cases 475. LLP Limited & Anr.20 in support of his submission that the issue of whether there is an existing or concluded contract between the parties is itself a matter of trial to be decided on the basis of evidence that may be led.

75. Mr. Jain has further relied upon Best Sellers Retail (India) Private Limited Vs. Aditya Birla Nuvo Limited & Ors.21 and Ambalal Sarabhai (Supra) for the well settled proposition that for an interim injunction the requirements are (i) prima face case, (ii) balance of convenience; and (iii) irreparable injury. He has submitted that in the present case none of these requirements have been met and accordingly, no relief be granted.

76. Having considered the submissions, there have been contrary interpretations given to the various clauses of the said MoU executed between the Plaintiff and Defendant No.1 on 17th April, 2018 and in respect of which specific performance has been sought in the above Suit. There have been submissions on behalf of the Defendants that the said MoU is an absurd commercial arrangement under which Defendant No.1 and / or Defendant 20 (2020) 5 Supreme Court Cases 410. 21 (2012) 6 Supreme Court Cases 792. No.2, though land owners to the extent of 6.2%, would get no benefit from the development, having ceded all their benefits to the Plaintiff under Clause 6 of the said MoU.

77. In the context of the interpretation placed by the Defendants on the clauses of the said MoU, it is necessary to refer to the initial clauses of the said MoU, viz. Clause Nos.[1] to 7 which in my prima facie view merely sets out the recitals to the said MoU and gives a historical background of the agreement between the parties. In clause 6 of the said MoU, it is mentioned that the Defendant No.1 - owner was in need of finance and approached the Plaintiff as joint developer and requested the joint developer to arrange finance for the purpose of jointly developing the Suit property and further agreed to reimburse the amounts with interest and to give 50% share in the profit on the development of the Suit property i.e. 50% of the 6.2% share of the owners in the Suit property.

78. By placing reliance on Clause 6 in order to contend that the said MoU is an absurd commercial arrangement, the Defendant have done a piecemeal and selective reading of the said MoU which is impermissible, particularly when the said MoU is to be read as a whole and the commercial bargain between the Plaintiff and Defendant No.1 / Defendant No. 2 is contained in the later Clauses i.e. Clauses 8 to 15 of the said MoU. It is well settled that in interpretation of clauses of an agreement, it is necessary to harmonize the various clauses in order to give effect to the agreement between the parties.

79. The consideration payable by the Plaintiff to the Defendant No.1 / Defendant No.2 is mentioned in Clause 7 of the said MoU i.e. an aggregate sum of Rs.1.55 Crores. Defendant No.1 confirms having received prior to the execution of the said MoU the sum of 1.05 Crores as per the particulars of payment mentioned in the statement annexed to the said MoU. The balance amount of Rs.50 lakh was payable by the Plaintiff as aggregate consideration and which admittedly has been paid by the Plaintiff to Defendant No.1 / Defendant No.2. Further, in return for the consideration paid by the Plaintiff, the Plaintiff is entitled to 3.1% share in the Suit property. This is made clear from Clause 8 onwards. These clauses contemplate joint development to be carried out by the Plaintiff and Defendant No.1 of their 6.2% ownership in the Suit property of which the share of the Plaintiff is 3.1% thereof. Clause 11 of the said MoU is necessary to reproduce as under: “11. It is agreed that it is the sole responsibility of the Owner to apply and obtain all necessary permissions for construction of new buildings at their own cost and commence, carry on and complete construction in accordance with the sanction plan and to apply and obtain completion certificate and to put the joint developers into peaceful and vacant possession at 3.1% share in the said land thereof. It is agreed that the owner shall within a period of one month from the date hereof, shall take all necessary steps to implement the purpose and intention of this MoU and the obligations of the owner thereof.”

80. Although, in the said Clause 11 reference is made to “put the joint developers into peaceful and vacant possession at 3.1% share in the said land thereof”, this in my prima facie view can only apply to the Plaintiff who is described as joint developer being entitled to and put in possession of 3.1% share of the constructed area of the Suit property. The opening part of Clause 11 makes this clear as it has been agreed between the Plaintiff and Defendant Nos.[1] and 2 that it is the sole responsibility of the owner i.e. Defendant No.1 / Defendant No.2 to apply and obtain all necessary permissions for construction of new buildings at their own costs and commence, carry on and complete construction in accordance with the sanctioned plan and to apply and obtain completion certificate. This is then followed by the aforementioned words in quotation. Thus, in my prima facie view the commercial bargain of the parties is not in the least ambiguous or can be said to be an absurdity.

81. The contention of Defendant No.3 that the Plaintiff has only right to profit and at the highest only has a monetary claim cannot be accepted. Clause 3 of the said MoU describes the word “profit” in terms of area and which reads as under:-

3. The Owner has entered a Memorandum of Understanding (MoU) dated 21st August, 2019 with M/s. Shiv Sabari Developers to develop the properties jointly. The lands of Shiv Sabari are adjacent to the land of the owner. The total land jointly admeasuring is 18486.34 sq. mtrs and on development the right in profit of the owner is 1161.[2] Sq. mtr. i.e. 6.2% of the total land. If the Plaintiff had only a right to the profit and / or monetary claim, there would no necessity in clause 3 of the said MoU to mention that the Suit property would be developed and upon development the right in the profit of the owner is 1161.21 sq.mtrs. i.e. 6.2% of the total land. Out of this area the Plaintiff has by the said MoU purchased 50%. Thus, it would be necessary to read clause 3 with clause 11 and these clauses make it clear that there will be joint development of the Suit property and that the Plaintiff as a joint developer would be put in possession of his share viz.3.1% share in the subject property. Thus, the narrow interpretation placed by the Defendants on the clauses of the said MoU cannot be accepted. It is well settled that Courts must interpret contracts to uphold the bargain of the parties as opposed to nullifying it.

82. It has been contended on behalf of the Defendant No.3 that the Plaintiff has no entitlement to enforce specific performance against Defendant No.3 as the Defendant No.3 is not a party to the said MoU of which specific performance is sought. This contention cannot be accepted in view of Section 19(b) of the Specific Relief Act. Section 19 reads thus:-

83. In the present case, the Plaintiff claims that its 3.2% share in the Suit property has been transferred by Defendant Nos. 1 & 2 to a third party i.e. Defendant No.3. Section 19(b) of the Specific Relief Act provides for specific performance to be enforced against any other person / third party claiming under such person against whom specific performance of the contact may be enforced, by a title subsequent to the contract. The only exception being that if the third party had acquired title in good faith for value and without notice of the Plaintiff’s contract, then specific performance cannot be enforced against such third party.

84. In the present case, Defendant No.3 who is the other party / third party contemplated under Section 19(B) of the said Act has claimed title to the Plaintiff’s 50% of the 6.2% share of the Defendant No.1 / Defendant No.2 in the Suit property by exchanging 7 units with Defendant No.1 and Defendant No.2 under the Deed of Exchange. Prior to the Deed of Exchange, the Plaintiff would have sought specific performance of said MoU only against Defendant No.1 and Defendant No.2. The Plaintiff would have in other words sought enforcement of 50% of the units coming to the share of Defendant No.1 and Defendant No.2. By the Deed of Exchange, Defendant No.1 and Defendant No.2’s share of 6.2% of the Suit property, 50% of which was contractually committed to the Plaintiff has been parted with or given up in favour of Defendant No.3 in exchange of the 7 units. Thus, Defendant No.3 is such other person against whom specific performance of the said MoU may be enforced. Further, the exception in Section 19(b) of the Specific Relief Act will not in my prima facie view apply in present case as Defendant No.3 had notice of the said MoU. This is borne out from the statement made by the then partner Defendant No.7 of the Defendant No.3-Firm to the police i.e. prior to the Deed of Exchange viz. that he was aware of the said MoU. Hence, Defendant No.3 cannot be a transferee without notice to resist the enforcement of the contract. Further, the Defendant No.3 in my prima facie view is not a transferee for value who has paid his money in good faith. This is apparent from the value of the 6.2% share of Defendant No.1 and Defendant No.2 in the Suit property which is estimated at Rs.35 Crores. However, the value of the 7 units which were exchanged by Defendant No.3 with Defendant Nos.[1] and 2 as consideration for their 6.2% share in the Suit property is valued only at Rs.12 Crores.

85. In Lala Durga Prasad (Supra), the Supreme Court has held that specific performance of a contract may be decreed between the vendor and the Plaintiff by directing the subsequent transferee to join in the conveyance, so as to pass on the title which resides in him to the Plaintiff. He does not join in any special covenants made between Plaintiff and his vendor; all he does is to pass on his title to the Plaintiff.

86. The contention on behalf of the Defendants that the purchasers of 7 units should have been joined or relief claimed against them has no merit. The Plaintiff’s relief is for specific performance against Defendant No.3 who claims subsequent title to the Defendant No.1 and Defendant No.2’s share of 6.2% despite 50% of the Suit property having been acquired by the Plaintiff under the said MoU. Thus, it would not be necessary for the Plaintiff to pursue remedies against subsequent purchasers of the 7 units. Further, as aforementioned the Plaintiff is only seeking specific performance of the said MoU and hence there is no requirement to seek specific performance of the 2018 J V Agreement and / or pay construction costs of Rs.57 Crores under the JV Agreement. As the Plaintiff is not a party to the J V Agreement of 2018, the Plaintiff cannot be made liable for any of the obligations under the J V Agreement and / or payment of construction costs contemplated thereunder.

87. The said MoU by itself does not entitle the Plaintiff to claim any property in the hands of Defendant No.3. It is only after the Deed of Exchange that the Plaintiff is entitled to proceed against 3.1% of the Defendant No.1 / Defendant No.2’s share which now vests in Defendant No.3. Thus, Section 17 of the Specific Relief Act which provides that contracts to sell or let any immovable property by one who has no title is not specifically enforceable does not apply in the present case. In my prima facie view the Plaintiff has prior title to 3.1% of the Suit property and that they can claim enforcement against Defendant No.3 of their share under Section 19 (b) of the Specific Relief Act.

88. Further, the contention on behalf of Defendant No.3 that the said MoU is in contravention of the 2010 MoU and JV Agreement and hence cannot be specifically enforced does not deserve acceptance. Clauses 1-11 of the said MoU which give rights to the Plaintiff over 50% of the Defendant No.1 / Defendant No.2’s entitlement in the project is not contrary to the Defendant No.3’s rights under the 2010 MoU or JV Agreement. This is because under these Agreements Defendant No.1 / Defendant No.2’s rights over 6.2% of the constructed area remain with Defendant Nos.[1] & 2. It can be seen from a reading of Clause 12 onwards of the said MoU that, entitlements are given to the Plaintiff by the said MoU. However, the only obligation of the Plaintiff under the said MoU is to make payment of the consideration of Rs.1.55 Crores for acquiring 3.1% of the Defendant No.1 / Defendant No.2’s share in the Suit property. Thus, the Plaintiff’s claim for which consideration has been paid is for 50% of the Defendant No.1 and Defendant No.2’s share in the Suit property. Although the Plaintiff is entitled under the said MoU to take over construction, such entitlement has not been exercised by the Plaintiff.

89. Under Section 12(4) of the Specific Relief Act, it is provided that when part of a contract which, taken by itself can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract, which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part. In my prima facie view, the Plaintiff is seeking performance of that part of the said MoU, which gives the Plaintiff 50% of Defendant No.1 and Defendant No.2’s share in the constructed area of the suit property and which stands on an independent footing as against the entitlement of the Plaintiff under the said MoU, which includes taking over the construction. Thus, in my prima facie view, Section 12(4) expressly permits the final relief sought.

90. Although there have been submissions on behalf of the Defendant No.3 that there can be no cancellation of a Sale Deed / Deed of Exchange in favour of a subsequent purchaser in a Suit for specific performance by the third party, in my view, the law laid down by the Supreme Court in Lala Durga Prasad (Supra) has been misread. The Supreme Court only lays down that, it is not obligatory for the Plaintiff to seek cancellation of the subsequent Deed by the third party. This is also laid down by this Court in Sharada Nanasaheb Patil & Ors. Vs. Appaso Jivappa Chougule & Ors.22

91. Prima facie I do not find any merit in the contention on behalf of Defendants that the said MoU is an agreement to agree and for which the specific performance cannot be granted. In my prima facie view, the rights and obligations have been clearly provided for in the said MoU and constitutes a concluded contract between the parties.

92. In the present case, the Plaintiff has paid full consideration under the said MoU and hence, the said MoU cannot be considered to be a mere agreement to agree. As held above, the subsequent clauses i.e. 12 to 19 of the said MoU contains entitlements / powers or rights given to the Plaintiff and corresponding restraints on Defendant No.1 or Defendant No.2. The powers of the Plaintiff includes the power to supervise construction, operate bank account, sharing profits, negotiate with purchasers for sale. There is a restraint on Defendant No.1 from creating third party rights etc. In my prima facie view, these clauses

22 Second Appeal No.114 of 1991 decided on 20th September, 2019. are clear and not capable or in need of further agreement between the parties. Merely because the said MoU incorporates Clause 20 which requires execution of subsequent documents this does not detract from the fact that the said MoU, in my prima facie view, constitutes a clear and concluded contract. This has been held by this Court in Rajiv Sanghvi (supra) which has been relied upon by the Plaintiff.

93. In so far as the Defendant No.2 not being a signatory to the said MoU is concerned, in my prima facie view, Defendant No.1 by his conduct in executing the said MoU and thereafter Defendant No.1 & 2 receiving the purchase consideration paid by the Plaintiff would make Defendant No.2 bound by the said MoU on the principle of implied authority and ratification. The Defendant No.1 who is the husband of Defendant No.2 has represented to the Plaintiff that he is entitled to deal with the entire property. Further, Defendant No.2 has in receiving her share of the consideration under the said MoU consented to or ratified the agency. It has been laid down in Chairman LIC (Supra) that existence of implied authority is an objective analysis based on the conduct of parties and they will be held to have consented to a relationship of principal and agent if they have agreed to what amounts in law to such a relationship, even if they do not recognize it themselves and even if they have professed to disclaim it. In other words, the existence of state of facts on which the law imposes the consequences of agency are sufficient to hold the parties bound by the relationship of the agency.

94. Defendant No.3 has placed reliance upon the police complaint filed by the Plaintiff to contend that allegations of misrepresentation by Defendant No.1 of his title is contrary to the case of implied authority / agency. This in my view is a misplaced reliance as a perusal of the police complaint would reveal that the allegation of misrepresentation of title was on account of undisclosed prior mortgages on Defendant No.1 / Defendant No.2’s land and not that Defendant No.1 dealt with Defendant No.2’s land without being authorized to do so. A Police Complaint has also been filed against Defendant Nos.[1] and 2 and which is consistent with the Plaintiff’s case that Defendant No.2 was represented by Defendant No.1.

95. Regarding readiness and willingness of the Plaintiff, one has to consider the obligation of the Plaintiff under the said MoU which was to bring in consideration of Rs.1.55 Crore, which has been admittedly done. The receipt of money is not denied by Defendant No.1 and 2. Thus, in my prima facie view, the Plaintiff has performed his part of the said MoU. The remaining clauses i.e Clauses 12 to 18 are only entitlement of the Plaintiff and / or powers or rights given to the Plaintiff which may or may not be exercised and have no bearing on the issue of readiness and willingness of the Plaintiff. The reliance placed by the Defendants on the decision of the Supreme Court in Shenbagam (Supra) is misplaced. The case is clearly distinguishable on facts. In that case, the Plaintiff had not paid the balance consideration and there was complete inaction on its part calling upon the Defendant to complete the transaction and offer the balance consideration. Merely sitting idle with the balance consideration was not considered sufficient to demonstrates readiness and willingness. In the present case, the Plaintiff has paid full consideration under the said MoU, a few months after the said MoU. Though there has been delay in applying for restoration of the City Civil Court’s Suit, such delay in my prima facie view does not amount to waiver or abandonment of the Plaintiff’s rights or for the Defendant No.1 / Defendant No.2 to claim the benefit of the delay. In view of the Plaintiff having performed his obligations, delay cannot defeat the Plaintiff’s case of specific performance. Reliance upon Bastion Constructions (Supra) is apposite.

96. I do not find any merit in the contention on behalf of Defendant No.3 that the delay in restoring the City Civil Court Suit amounts to laches because prior to the restoration i.e. during the period when there was no suit, the Defendant No.3 had entered into Deed of Exchange with Defendant No.1 and Defendant No.2. It is necessary to note that prior to entering into the Deed of Exchange, Defendant No.3 had notice of the said MoU and despite which it entered into said Deed of Exchange within a month of the Plaintiff filing its Notice of Motion for restoration. The Deed of Exchange was entered into by Defendant No.3 with Defendant No.1 / Defendant No.2 prior to even filing its reply to the restoration application. It is further necessary to note that the City Civil Suit was not dismissed on merits but was on account of default. Accordingly, Defendant No.3 cannot be stated to have suffered prejudice on account of the delay in the Plaintiff seeking restoration of the City Civil Suit. Accordingly, Defendant No.3 who had notice of the said MoU whilst entering into the Deed of Exchange, did so with eyes open and thus suffered no prejudice and hence cannot claim any equities.

97. I also do not find any merit in the Defendants contention that in view of the contract being inadequately stamped, no injunction can be granted. The Defendant has placed reliance upon Garware Wall Ropes (Supra). It is necessary to note that the Supreme Court in Garware Wall Ropes (Supra), at paragraph 30, upon making reference to the decision of the Full Bench of this Court in Gautam Landscapes (P.) Ltd. (Supra), has not interfered with the conclusion therein viz. that the Court can entertain and grant interim or ad-interim relief in an Application under Section 9, despite the document containing an arbitration clause which is un-stamped or insufficiently stamped. The decision of the Supreme Court in Garware Wall Ropes (Supra) has been recently upheld by the Constitution Bench of the Supreme Court in M/s N.N. Global Mercantile Private Limited Vs. M/s Indo Unique Flame Ltd. - Civil Appeal No.(S) 3802-3803 of 2020 – dated 25th April, 2023. It is noted that in the majority decision of the Supreme Court, there was no pronouncement on the matter with reference to Section 9 of the Arbitration Act. Thus, the non-inference with the conclusion of the Full Bench of this Court in Gautam Landscapes (Supra) by the Supreme Court in Garware Wall Ropes (supra) remains. Accordingly, the principle of inadequacy of stamping, assuming there is improper stamping as contended, will not preclude this Court from granting interim relief.

98. Prima facie, I do not find any merit in the stand taken on behalf of the Defendant No.1 / Defendant No.2 that the said MoU is a fabrication. This undisputed position in view of the fact that the Defendant No.1 has signed the said MoU. Further, the said MoU is notarized and there is a detailed statement given by the Notary Officer of execution with a copy of the Notarial Register. It is necessary to note that the Plaintiff had offered to produce the Notary Officer and the Register before this Court. Defendant No.1 in their Affidavit has in my prima facie view given a far fetched explanation of Defendant No.1’s signature on the said MoU. The explanation given in the said Affidavit of Defendant No.1 is that the said MoU was meant to be a loan agreement which Defendant No.1 asked the Plaintiff to unilaterally draw up blank papers signed by Defendant No.1 because Defendant No.1 was travelling to Turkey. There is no reason given by Defendant No.1 as to why the drawing up of the document was so urgent that could not wait his return. Further, Defendant No.1 has not given any justification as to why he did not see the document drawn up by the Plaintiff and only saw it when served with the City Civil Court Suit. If the said MoU was unilaterally drawn up by Plaintiff, there is no explanation as to how the 2010 MoU has been quoted in the said MoU of 2018. This fact would have only be known to the Defendant No.1. There is no mention that the Plaintiff had been told of the 2010 MoU for a purported loan agreement which was unconnected to the development. Further, an important fact is that Defendant No.1 / Defendant No.2 never offered to pay back the money which is alleged to be a loan. The consideration was admittedly received by Defendant No.1 and Defendant No.2.

99. The Defendants have relied upon Best Seller and Ambalal Sarabhai (Supra) for the well settled proposition that for an interim injunction these are three requirements to be satisfied viz.

(i) prima facie case (ii) balance of convenience and (iii) irreparable injury. In my prima facie view these requirements have been satisfied in the present case.

100. Accordingly, in my view, a strong prima facie case has been made out for grant of injunctive relief at the interlocutory stage with respect to the Plaintiff’s entitlement of 1655.07 Sq mtrs built up area of residential units and 1122.73 sq. mtrs. built up area of commercial units.

101. In view thereof, the Interim Application is made absolute in terms of prayer Clause a(i) to a(iv) as under: a) The Court Receiver, High Court, Bombay is appointed as Receiver of the land situated at CTS 619/21B and CTS 667A/2A of the village Borla, Taluka Kurla and District Mumbai Suburban, as well as the project “Sabhari Park” being constructed on the land and the unsold units in the commercial building known as “Sabhari Park” and in the residential buildings known as “Shiv Garden – Tower I and II” more particularly described in Exhibit “KK” to the Plaint with all powers under Order XL Rule 1 of the Code of Civil Procedure, 1908 including the power to sell the said units by public auction or private treaty and / or as this Hon’ble Court may think fit. b) The Defendants, by themselves / themselves, their servants and agents are restrained by an order and injunction of this Hon’ble Court from disposing off, alienating, encumbering, parting with possession or creating any third party right over or in respect of the unsold units more particularly described in Exhibit “KK” to the Plaint. c) The Defendants jointly or severally as directed to disclose on oath all steps taken by them jointly or severally in furtherance of development of the Suit land including however not limited to all plans submitted, sanctions granted up to date, all construction and proposed construction up to date, premises residential or commercial sold and those that are yet to be old along with amounts recovered and amounts yet to be recovered; d) The Defendants, by themselves / themselves, their servant and agent are restrained by an order and injunction of this Hon’ble Court from disposing off, alienating, encumbering, parting with possession or creating any third party rights or carrying out any further construction in furtherance of development and / or doing any act causing prejudice to the rights of the Plaintiff under MoU dated 17th April, 2018.” e) The Interim Application is accordingly disposed of. ( R. I. CHAGLA J. )