Nircon Developers Pvt. Ltd. . and others vs Zohrabai Fakhruddin and others

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1997 Supreme(Bom) 599

IN THE HIGH COURT OF BOMBAY
S.S. Nijjar, J.
Nircon Developers Pvt. Ltd. and others .....Plaintiffs.
Versus
Zohrabai Fakhruddin and others ......Defendants.
Notice of Motion No. 2149 of 1994 in Suit No. 3308 of 1994, decided on 11-11-1997.
Advocates appeared :
Humranwala i/b Humranwala Co., for the plaintiffs.
Milind Vasudeo with Shiralkar i/b Shiralkar Co., for the defendant Nos. 1 to 14.
D.D. Madan with Rahul Narichania i/b Gagrat Co., for defendant Nos. 15 to 19 and 21.
R.M. Kadam with A. Gadkari, for defendant No. 20.
Ms. Anita Castelina i/b Pandya Co., for defendant No. 22.
Janak Dwarkadas with Ms. Rajdan i/b Malvi Ranchoddas, for defendant No. 23.

Headnote:Order XXXIX, Rules 1 and 2 See-Specific Relief Act, 1964, Sections 15 and 20.
       Order XXXIX, Rules 1 and 2-See-Specific Relief Act, 1963, Sections 15 and 20.
       Section 10-See Specific Relief Act, 1963, Sections 15 and 20.
       Section 296-UC-See Specific Relief Act, 1963, Sections 15 and 30.
       Sections 15 and 20-Code of Civil Procedure, 1908, Order XXXIX, Rules 1 and 2-Contract Act, 1872, Section to-Income Tax Act,1961, Sections 296-UC and 277-0ral sale agreement-Without permission of Income Tax authorities-Formal agreement duly concluded along with sanction from IT authorities-Sought relief for appointment of recover-Held-In absence of vital informations no agreement is complete--All agreements along with drafts have to be sanctioned by the IT authorities-Court cannot be made a party to any agreement in violation of law.- The very purpose of the provisions of Chapter XX-C is to prevent the properties ostensibly being sold at a value which is far less than the market value, thus, depriving the State of valuable revenue. These provisions have been brought in to protect the public interest. In view of the above, even if, there was an oral agreement, dated 25th December, 1993, it could not be ordered by the this Court to be specifically performed. The plaintiff himself has stated that there was no written agreement as executing such an agreement would have entailed complying with provisions of Chapter XX-C of the Income Tax Act. It is stated that the document, dated 18.1.1994, wherein the terms of the oral agreement dated 25th December, 1993 were reduced to writing was deliberately not signed in order to avoid any legal complications that may have arisen with regard to the provisions of Chapter XX- C of the income Tax Act. In Court opinion, this averment by itself is sufficient to deny any discretionary relief to the plaintiff. This Court or indeed, any other Court cannot be a party to deliberate infringement of the law. This kind of an agreement even if, it existed would be void as it is contrary to public interest being contrary to the statute. On this ground alone Court is of the opinion that the Notice of Motion deserves to he dismissed.
       Sections 15 and 30-Code of Civil Procedure, 1908, Order XXXIX, Rules 1 and 2-Income Tax Act, 1961, Sec. 1961 Sec 396 UC-Appointment of receives Interim relief-Justification for-Distribution purchase of property according to oral and draft agreement with IT authorities is not enforceable Land already acquired by Government for development-Interim relief not is public interest.-It may also be noticed that the suit property has been demarcated by the Government of Maharashtra as Oshiwara District Centre. Under the provisions of the Maharashtra Regional Town Planning Act, 1966 defendant No. 20 has been declared as the Special Planning Authority for planning and developing the said Centre by its notification, dated 16.1.1992. According to the counsel for defendant No. 20, the scheme is already partly implemented. In view of the above, granting any interim relief to the plaintiffs would be clearly against the public interest. It would unnecessarily delay and jeopardise the development of the aforesaid Centre. Furthermore, Court is of the opinion that any damage which may have been caused to the plaintiff can well be compensated by award of damages in the event they succeed in the suit ultimately.

JUDGMENT - S.S. NIJJAR, J.:---This suit has been filed by the plaintiffs making a number of prayers. A declaration is sought to the effect that there is a valid and subsisting agreement for sale and development between the plaintiffs and the defendant Nos. 1 to 19 and 21 in terms of the document at Exhibit-Q and that the same is binding on the said defendants. A declaration is also sought to the effect that the agreement to lease dated 31-1-96 alleged to have been executed by the MMRDA in favour of defendant No. 22 and the agreement dated 17-2-1997 alleged to have been executed by defendant No. 22 in favour of defendant No. 23 are null and void and have no legal effect. It is further prayed that this Court be pleased to cancel the aforesaid agreement to lease dated 31-1-97 and the agreement dated 17-2-1997. A further declaration is sought to the effect that the 140 documents as per particulars set out in Exhibit-88 executed by defendant Nos. 1 to 14 in favour of defendant No. 22 are null and void. A further declaration is sought that it is defendant Nos. 1 to 19 and 21 who are under an obligation to apply for permission and/or sanction to the Appropriate Authority under Chapter XX-C of the Income-tax Act by filing the necessary Form 37-I. It is also prayed that defendant Nos. 1 to 19 and 21 be ordered to specifically perform the obligation in prayer clause (b) and to execute the confirmation letter confirming the agreement contained in prayer clause (a) and to execute and submit Form 37-I under the provisions of Chapter XX-C of the Income -Tax Act within 15 days of the execution of such confirmation letter for obtaining sanction or permission under the provisions of Income-tax Act.

2.This Notice of Motion has been taken out with a prayer for appointment of Receiver and injunction restraining defendant Nos. 1 to 19 and 21 from dealing with, disposing of, alienating, encumbering, parting with possession or creating any third party rights in the suit property which is said to be described in Exhibit-A to the plaint. An injunction is also sought against defendant No. 20 restraining the said defendant from granting or executing any lease in favour of the defendants or any of them. It is further prayed that pending the hearing and final disposal of the suit defendant No. 22 be restrained from completing any transaction in favour of defendant No. 23 pursuant to the agreement dated 17-2-1997 and also that the defendant No. 23 be restrained from making any further payment to defendant No. 22 and from taking possession of the suit property. An affidavit in support of the Notice of Motion has been filed.

3.It is the case of the plaintiffs that there was a valid and concluded contract for sale of the suit property by the defendant Nos. 1 to 14 to the plaintiffs. Plaintiffs No. 1 is a Company incorporated under the provisions of the Companies Act. Plaintiff No. 2 is a Director of plaintiff No. 1. Plaintiff Nos. 3 and 4 are the brother and uncle respectively of plaintiff No. 2, who are stated to be builders and developers. In paragraph 2 of the plaint it is stated that defendant Nos. 1 to 14 are the co-owners of the property described therein bearing Survey Nos. 110/2, 113/1 and 2, 115/2 (Pt.) and CTS No. 139 to 144, 153, 153/11011, 151/27, 153/28, 153/34, 153/35, 153/36,153/371038, 153/39, 153/40, 153/421043, 153/49, 153/45, 153/46, 153/477048, 153/49, 153/50 situate at Village Goregaon in Greater Bombay in the registration sub-district of Bandra Taluka South Salsette and Dist. Bombay containing by ad-measurement 56011.68 sq. yds. equivalent to 46830 sq.mts. or thereabout being the property more particularly described in the Schedule at Exhibit-A to the plaint, thereinafter referred to as "the suit property". According to the plaintiffs the suit property falls within the area of 102 hectares of land at Goregaon/Jogeshwari demarcated by the Government of Maharashtra as "Oshiwara District Centre" to be developed as a business district as

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