An agreement between two commercial interests to acquire a property and develop a hotel on it is an arms length commercial transaction and not a fiduciary relationship.

( 1 ) THIS appeal arises out of an order passed by a Learned single Judge on 14th March 2005 while disposing of a Motion for interim relief in the suit. The Plaintiffs are in appeal.

( 2 ) THE reliefs claimed:- The suit out of which these proceedings arise, came to be instituted in order to seek the following reliefs :

(i) A declaration that Defendant Nos. 1, 2 and/or 6 to 9 hold 50% of the shares and 50% of the Directorships of the Fifth defendant-Company through which the First and the Second defendants have acquired the property which forms the subject matter of the suit, in trust for and for the benefit of the Plaintiffs;

(ii) A decree against the Defendants to transfer 50% of the issued share capital of the Fifth Defendant to the Plaintiffs and to appoint half the Directors of the Company from amongst the plaintiffs and their nominees against payment of a half of the price of the property;

(iii) An injunction restraining the Defendants from alienating or developing the property without first transferring to the plaintiffs 50% of the shares of the Company and appointing half the Directors from amongst the Plaintiffs and their nominees;

(iv) An injunction restraining the Defendants from alienating or encumbering shares of the Fifth Defendant and from exercising any right or receiving any benefit in regard thereto. The dispute:

( 3 ) A tract of land admeasuring 3 acres, situated on the junction of Kasturba Road and Vittal Mallya Road in Bangalore, is described in Exhibit 'a' to the Plaint as forming the matter in dispute. The case of the Plaintiffs revolves around a brief communication dated 27th September 2003 addressed by the First and Second Defendants to the Plaintiffs and confirmed by the plaintiffs with an endorsement at the foot of the document. The communication is to the following effect :

"sub : UB City Property of 3 acres bearing Khatta No. 24 situate at the corner of Kasturba Gandhi Marg and Vithal Mallya Road, Bangalore. We confirm that we are buying the above property in a company called Mont Blanc Hotels Pvt. Ltd. and to make you a partner, we are giving you equal shares on the same terms and conditions and equal directorship in mont Blanc Hotels Pvt. Ltd. as our group holds. Both our groups confirm that Marriott shall have equity stake in the company. We shall carry out the amendments to the memorandum of Article, in 30 days and shall then give the equity to you. "

The case of the Plaintiffs is that they were interested in commencing a hotel at Bangalore and were negotiating with United breweries (Holdings) Ltd. ("ub") for the acquisition of the land in question. The Plaintiffs seek to establish a case to the effect that (i) The agreement that was arrived at between them on the one hand and the First and Second Defendants on the other, was that the land would be acquired by the First and Second Defendants through a nominee Company on behalf of the Plaintiffs and themselves; (ii) On the acquisition of the land, the Plaintiffs would be allotted equal shares and Directorships in the acquiring company; and (iii) A Deluxe Five Star Hotel would be constructed and operated by both the parties together as partners in collaboration with Marriott International. The transaction between the parties, in other words, is according to the Plaintiffs, one in which upon the land being purchased the Plaintiffs on the one hand and the First and Second Defendants on the other, would be equal partners in regard to the property acquired, the development of the land and the conduct of the Hotel. The material averments in that regard are contained in sub-paras (b) and (g) of para 4 and in subpara (i) of para 6 of the Plaint which read thus:"the Defendants had agreed that on the said property being acquired they would give the Plaintiffs equal shares and directorships in the acquiring company and that a five star deluxe hotel would be constructed and operated on the said property by both the parties together as partners