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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH
B.P. DHARMADHIKARI & P.N. DESHMUKH, JJ.
Gold Touch Real Estate Private Limited – Appellant
Versus
Suresh & Ors. – Respondents
First Appeal No. 1010 of 2012 and Cross Objection No. 63 of 2013
Decided On : 21-11-2015
The plaintiff, a company, entered into agreements with the defendants, who were members of the same family, to purchase land for the development of a township. The agreements were subject to the condition that the land would be de-reserved from its current status as a park. The plaintiff filed a suit for specific performance of the agreements after the defendants refused to sell the land. The trial court dismissed the suit, holding that the plaintiff had not proved that it was ready and willing to perform its part of the contract, and that the agreements had been frustrated by the decision of the Nagpur Improvement Trust (NIT) to acquire the land. The plaintiff appealed, and the defendants filed a cross-objection, seeking to have the trial court's order to refund the amount received by them from the plaintiff with 10% interest set aside.
Fact of the Case:
The plaintiff, a company, entered into agreements with the defendants, who were members of the same family, to purchase land for the development of a township. The agreements were subject to the condition that the land would be de-reserved from its current status as a park. The plaintiff filed a suit for specific performance of the agreements after the defendants refused to sell the land. The trial court dismissed the suit, holding that the plaintiff had not proved that it was ready and willing to perform its part of the contract, and that the agreements had been frustrated by the decision of the Nagpur Improvement Trust (NIT) to acquire the land. The plaintiff appealed, and the defendants filed a cross-objection, seeking to have the trial court's order to refund the amount received by them from the plaintiff with 10% interest set aside.
Finding of the Court:
The High Court held that the plaintiff had not proved that it was ready and willing to perform its part of the contract, and that the agreements had been frustrated by the decision of the NIT to acquire the land. The court also held that the defendants were liable to refund the amount received by them from the plaintiff, but only after receipt of the compensation for the subject lands from the NIT, and without any interest.
Issues: 1. Whether the plaintiff had proved that it was ready and willing to perform its part of the contract? 2. Whether the agreements had been frustrated by the decision of the NIT to acquire the land? 3. Whether the defendants were liable to refund the amount received by them from the plaintiff?
Ratio Decidendi: 1. The court held that the plaintiff had not proved that it was ready and willing to perform its part of the contract because: a. The plaintiff had not obtained the necessary approvals and permissions for the development of the land. b. The plaintiff had not paid the full purchase price to the defendants. c. The plaintiff had not taken any steps to develop the land after the NIT decided to acquire it. 2. The court held that the agreements had been frustrated by the decision of the NIT to acquire the land because: a. The acquisition of the land by the NIT made it impossible for the plaintiff to develop the land as a township. b. The plaintiff had no control over the decision of the NIT to acquire the land. 3. The court held that the defendants were liable to refund the amount received by them from the plaintiff because: a. The agreements provided that the defendants would refund the purchase price if the land was acquired by the NIT. b. The defendants had received the purchase price from the plaintiff in anticipation of the development of the land as a township, which was no longer possible.
Final Decision: The High Court dismissed the plaintiff's appeal and allowed the defendants' cross-objection. The court modified the trial court's decree to provide that the defendants were to refund the amount received by them from the plaintiff, but only after receipt of the compensation for the subject lands from the NIT, and without any interest.
B.P. DHARMADHIKARI, J.
This First appeal by plaintiff assailing the dismissal of its suit for specific performance came to be admitted on 03.04.2013 and at that stage while passing orders on Civil Application No. 2507 of 2012, the appellant was directed to deposit an amount of Rs.15 crore with the registry of this Court by 31.05.2013. Subject to such deposit interim direction to maintain status quo was continued. The said direction was questioned before the Hon'ble Apex Court and the Hon'ble Apex Court has on 07.07.2014 directed expeditious disposal of appeal. The deposit of Rs.4 crore made by the appellant with the Registry of the Hon'ble Apex Court was directed to the transferred to this Court. The amount of Rs.15 crore was thus substituted by the amount of Rs.4 crore. In the meanwhile, on 13.12.2013, Cross Objection filed by Respondent Nos. 1, 4 & 5 also came to be admitted for final hearing.
2. As per orders of the Hon'ble Apex Court dated 07.07.2014, the Appeal and Cross Objection have been taken up for final hearing. The original plaintiff questions dismissal of his Special Civil Suit No. 82 of 2006. Said suit for specific performance, for possession, declaration and for permanent injunction is dismissed vide judgment dated 17.09.2012 delivered by the 5th Joint Civil Judge, Senior Division, Nagpur. While dismissing that suit, defendant Nos. 1, 4 & 5 were directed to repay sums paid to them by the plaintiff with 10% interest from the date of receipt of that amount till its repayment. This direction is questioned in Cross Objection by defendant Nos. 1, 4 & 5.
3. We have heard Shri Dangre, learned counsel for the appellant/plaintiff, Shri Anilkumar, learned counsel for defendant/ respondent Nos. 1, 4 & 5, Shri Chauhan, Advocate for defendant/ respondent No. 3 and Shri Dhore, learned counsel for defendant/ respondent No. 6 – Co-operative Society, in First Appeal. We prefer to refer to the parties as per their mention in impugned judgment.
4. The description of suit properties is not in dispute. The title of defendant Nos. 1 to 5 to their respective lands is also not in dispute. During the pendency of said suit defendant Nos. 2 & 3 entered into compromise with the plaintiff and have sold their respective portions to it. These sale deeds are also not in dispute. The plaintiff approached Civil Court with a story stating that defendant Nos. 1 to 5, who are members of same family, executed an agreement to sell (Art. A) in favour of defendant No. 6 – Society, on 26.06.2000. On 09.08.2002 they executed six separate agreements at Exs.136 to 141 in favour of plaintiff and defendant No. 6 consented to it. On 04.10.2003, defendant Nos. 1 to 5 executed a supplementary agreement Ex. 156 in favour of the plaintiff and it was confirmed by defendant No. 6.
5. The plaintiff is a company which deals in Real Estate development and construction. Defendant No. 6 is a cooperative housing society duly registered under & governed by the Maharashtra Cooperative Societies Act, It had agreed to pay rate of 10 lakh per acre i.e. total consideration of Rs.6,87,50,000/- to defendant Nos. 1 to 5 and had paid earnest money of Rs. One lakh. It had also agreed to obtain all certificates, no objections and other documents required for execution of sale deed. Defendant Nos. 1 to 5 agreed to entrust the work of development of suit property to a Developer of choice of defendant No. 6 – society and to execute necessary document for said purpose. Defendants pointed out to the plaintiff that their property was brought under town planning reservation in the Development Plan and hence agreement dated 26.06.2000 could not have been implemented. After discussion, on 09.08.2000, six different agreements were entered into by defendant Nos. 1 to 5 while defendant No.6–society consented to it. The sale consideration was agreed at Rs.17,07,000/- per acre. The tot
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