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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Sandeep K. Shinde, J.
M/s. Suraj Estate Developers Through Its Partner – Appellant
Versus
Dilip Ashok Desai – Respondent
Appeal From Order No. 381 / 2021 Alongwith Interim Application No. 3164 / 2021 in Appeal From Order No. 381 / 2021
Decided On : 28-02-2022

Advocates Appeared:
Mr. Surel S. Shah, Advocate, for the Appellant; Mr. Suryajeet P. Chavan I/By One Legal Bay Llp, Advocate, for the Respondent.

The specific relief of cancellation of an agreement is governed by Section 31 of the Specific Relief Act, and seeking relief that would prevent the defendant from prosecuting under the Negotiable Instruments Act may not be granted.

Headnote:

Specific Relief Act - Development Agreement - The court dismissed the appeal seeking to declare a development contract void and to restrain the defendant from negotiating post-dated cheques, citing that the relief sought would prevent the defendant from prosecuting the plaintiffs under the Negotiable Instruments Act and that the specific relief of cancellation of the agreement was sought under Section 31 of the Specific Relief Act.

Fact of the Case:

The plaintiff entered into a development agreement with the defendant to develop the defendant's property. However, due to a change in the property's classification, the performance of the agreement was rendered impossible. The plaintiff sought to declare the agreement void and to restrain the defendant from negotiating post-dated cheques.

Finding of the Court:

The court found that the relief sought would prevent the defendant from prosecuting the plaintiffs under the Negotiable Instruments Act and that the specific relief of cancellation of the agreement was sought under Section 31 of the Specific Relief Act. As a result, the appeal was dismissed.

Issues: The issues involved the validity of the development agreement, the classification change of the property, and the relief sought by the plaintiff to restrain the defendant from negotiating post-dated cheques.

Ratio Decidendi: The court held that the relief sought would prevent the defendant from prosecuting the plaintiffs under the Negotiable Instruments Act and that the specific relief of cancellation of the agreement was sought under Section 31 of the Specific Relief Act.

Final Decision: The appeal was dismissed, and the ad-interim relief was allowed to continue for a period of four weeks.

JUDGMENT

Sandeep K. Shinde, J. - In the Special Suit Appellant/ Plaintiff prayed for ;

(i) declaration that development contract dated 24th April, 2018 executed between the Plaintiff firm and the Defendant be declared void, reason being it is 'impossible to perform'.

(ii) perpetual injunction to restrain the Defendant from negotiating 38 Post Dated Cheques (PDC) and two security cheques bearing no. 599551 and 062772.

(iii) to recover Rs. 1,49,08,749/- with interest @ 12% from the Defendant.

2. Pending suit, the application moved by the Appellant-Plaintiff below Exhibit-5 seeking, relief to restrain the Defendant from negotiating the 36 post dated cheques, was rejected by the learned trial Judge vide order dated 24th September, 2021. That order is challenged this appeal under Order-43, Rule-1 read with Section 104 of the Code of Civil Procedure.

3. Heard. Learned Counsel for the parties.

4. Factual Matrix:

Plaintiffs' case in brief is that vide Development Agreement dated 24th April, 2018, Plaintiffs had agreed to develop the Defendants' property, upon certain terms and conditions. In consideration whereof, Plaintiffs had agreed to pay Rs. 3,30,000,00/- to the Defendant and two flats. Accordingly, Plaintiffs paid Rs. 85,20,000/- to the Defendant up to 10th February, 2019. Assuring performance of agreement, Plaintiff No.1 drew 53 post dated cheques of Rs. 5,10,000/- each in favour of Defendant of dates between April, 2019 to March, 2023 towards the balance consideration of Rs. 2,44,80,000/-. In addition thereto, also drew two cheques of Rs. 50,000/- each, in the name of Defendant as a 'security' for allotting the flats in the suit property. Plaintiffs' case is, when Development Agreement was executed i.e. in April, 2018, the 'property' in question was falling in residential zone; however, the State of Maharashtra in its' Irrigation Department vide communication dated 10th July, 2019 classified the said property within the 'blue line' (flood line). As a result, the property in question classified in the preventive/ prohibited zone, of development. In consequence, the performance of the Development Agreement was rendered, 'impossible'. In the said circumstances, the Plaintiffs requested the Defendant, not to deposit remaining 36 Post Dated Cheques. Yet the Defendant presented some cheques for negotiation on due dates. Thus, Plaintiffs instructed Bank to stop the payment. Cheques were dishonoured. Whereafter, Defendant filed complaints under Section 138 of the Negotiable Instruments Act, 1881. In these circumstances, Plaintiffs brought the suit for the reliefs stated herein above and pending suit, moved an application to injunct the Defendant from negotiating 36 post dated cheques + two security deposit cheques.

5. The learned trial Judge declined the said relief on two grounds;

(i) Cheque being not a 'movable' or 'immovable property', provision of Order 39 Rule 1 and 2 of the CPC, has no application thereto and thus, temporary injunction cannot be granted; and

(ii) the temporary relief sought in effect would restrain the Defendant from prosecuting the Plaintiffs under Section 138 of Negotiable Instruments Act, which, cannot be granted in view of provision of Section 41 (d) of the Specific Relief Act, 1963.

6. Question is whether impugned order calls for interference ? Answer is 'No'. Following are the reasons.

7. Correct to say that upon reading a plaint in whole, although the plaint does not specifically pray for an injunction against the Defendant from prosecuting the remedy under Section 138 of N.I. Act, yet the fact remains, that the Defendant has already prosecuted the Plaintiffs under Section 138 of N.I. Act for dishonor of few posted cheques and further, order preventing to present the cheques for negotiation, would amount to preventing the Defendant from prosecuting remedy available under the law. It would counter, the express prohibition contained in provision of Section 41 (d) of the Act of 1963.

8. Insofar as the reason that chequ

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