IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Riyaz I. Chagla, J.
Jayesh Mathurbhai Patel – Appellant
Versus
Bhakti Enterprises & Ors. – Respondents
Interim Application (L) No. 18626 of 2021 in Suit (L) No. 18622 of 2021
Decided On : 13-01-2022
Specific Performance - Agreement for Sale - Vaidehi Akash Housing Pvt. Ltd. Vs. New D.N. Nagar Co-Op. Housing Society Union Ltd. & Ors. - Paragraph 16.6, 16.11, 17 - The court held that there is no privity of contract between the Society and the third party purchasers claiming under Vaidehi, the third party purchasers cannot claim specific performance of their respective agreements for sale except through Vaidehi. The third party purchasers cannot claim specific performance against the Society or Rustomjee, the new Developer of the Suit property. The remedy of the purchaser would be to claim damages from the Vaidehi, the erstwhile developer under their agreement.
Fact of the Case:
The Applicant/Plaintiff seeks an injunction restraining Defendant Nos. 3 to 8 from selling or encumbering the Suit fat and appointment of Court Receiver. The Plaintiff claims to have purchased the Suit fat and seeks specific performance of the Agreement for Sale against Defendant No. 1.
Finding of the Court:
The court found that the Applicant/Plaintiff has no privity with the new developer and cannot claim possession from them. The court also noted that the Plaintiff's family member had approached MahaRERA with a similar complaint, which was dismissed. The court held that no ad-interim relief can be granted due to delay and lack of case for relief.
Issues: Claim for specific performance, privity of contract, delay in seeking relief.
Ratio Decidendi: The court relied on the decision in Vaidehi Akash Housing Pvt. Ltd. and subsequent case law to establish the lack of privity of contract between the Plaintiff and the new developer, leading to the denial of ad-interim relief.
Final Decision: Ad-interim relief sought for is not granted. The Defendant Nos. 3 to 6 and Defendant No. 8 are directed to file their Affidavits in Reply to the Interim Application.
JUDGMENT
Riyaz I. Chagla, J. - Heard learned Counsel appearing for the Applicant/Plaintiff, learned Counsel appearing for Defendant Nos. 3 to 6 as also learned Counsel appearing for the Defendant No. 8.
2. By the present Interim Application, the Applicant/Plaintiff is seeking an injunction restraining Defendant Nos. 3 to 8, their agents, servants and/or person or persons claiming through them from selling, encumbering any third party right, title and interest in respect of the Suit fat being Flat No. 1304 admeasuring 800 Sq.ft. Carpet area on the 13th floor without car park level in the building known as Samaj Darshan, Parekh Lane, Kandivali (West), Mumbai 400 067 (for short 'Suit fat). The Interim Application also seeks appointment of Court Receiver as a receiver in respect of the Suit fat. Further direction is sought against Defendant Nos. 3 to 8 to reserve area equivalent to the suit fat admeasuring 800 sq.ft. (carpet area) to protect the legitimate right of the Applicant/Plaintiff in respect of the Suit fat. Certain other consequential relief is also sought for.
3. The Applicant/Plaintiff claims to have purchased the Suit fat for consideration under the Agreement for Sale dated 25th July, 2017 executed between Defendant No. 1 as Developer and the Applicant as purchaser. The Applicant/ Plaintiff has stated that he has paid the entire total agreed consideration price in respect of Suit fat of Rs. 1,03,00,000/-on or before execution and registration of the Agreement for Sale. As per the annexure to the Plaint at Exhibit 'M' the full consideration of the Suit fat is shown to have been paid in cash. The Receipt for which is stated to be annexed to the Agreement for Sale.
4. The Applicant/Plaintiff being aggrieved by not having been put in possession of the Suit fat No. 1304 has fled the present Suit for Specific Performance of the Agreement for Sale against the Defendant No. 1 and has sought a direction against Defendant Nos. 1, 3 to 8 to handover the Suit fat No. 1304 to the Plaintiff. In the Suit the present Interim Application has been taken out.
5. The learned Counsel appearing for the Applicant/Plaintiff states that at this stage the Applicant presses for ad-interim relief by way of injunction restraining the Defendant Nos. 3 to 8 from creating any third party rights in respect of the Suit fat No. 1304 as well as directing Defendant No. 3 to 8 to reserve area equivalent to the Suit fat admeasuring 800 Sq.ft. (Carpet area) to protect the legitimate rights of the Applicant/Plaintiff in the Suit fat.
6. The ad-interim relief sought by the Applicant is vehemently opposed by learned Counsel appearing for Defendant No. 8 - New developer as well as learned Counsel for Defendant Nos. 3 to 6, the owners of the Suit property which is defined in paragraph 3 of the Plaint. It is submitted by the learned Counsel for Defendant No. 8 that the Applicant/Plaintiff being a purchaser of the Suit fat from Defendant No. 1, the erstwhile developer has no privy with the new developer and/or owner and cannot claim possession from them. His claim can be only against Defendant No. 1. The learned Counsel for Defendant No. 8 has relied upon the decision of this Court (Coram :- S.C. Gupte, J.) in Vaidehi Akash Housing Pvt. Ltd. Vs. New D.N. Nagar Co-Op. Housing Society Union Ltd. & Ors., Notice of Motion No. 961 of 2013 in Suit No. 262 of 2012 dated 1st December, 2014. He has in particular relied upon paragraphs 16.6 and 16.11 as well as 17 of the said decision. He has submitted that this Court had held in that case that there is no privity of contract between the Society and third party purchasers claiming under, VaidehiAkash Housing Pvt. Ltd. ('Vaidehi') the erstwhile Developer. The third party purchasers cannot claim specific performance of their respective agreements for sale except through Vaidehi. The third party purchasers were held to have no case against the Society or Rustomjee, the new Developer, for Specific Performance of their individual agree
AI
The lack of privity of contract between the Plaintiff and the new developer led to the denial of ad-interim relief.
Third-party purchasers cannot enforce rights against a society after the termination of the developer's agreement; their remedies lie solely with the developer.
Third parties affected by Section 17 interim orders refusing possession have Section 37 locus; tribunal's blanket lien over sold flats perverse ignoring allocation confirmations and developer's knowl....
(1) Interlocutory injunction—Appellate Court can interfere with order of trial court when it is found that discretion has been exercised by trial Court arbitrarily or capriciously or perversely or wh....
The main legal point established in the judgment is that readiness and willingness to perform an Agreement to Sell, as well as the obligations of the parties under the Agreement, are crucial factors ....
An agreement to sell does not confer ownership rights; lawful possession is required for injunction, and plaintiffs must seek title declaration against third parties.
The Court emphasized the importance of truthfulness and transparency in legal proceedings, and upheld the principle that an amendment to the plaint relates back to the date of the suit, allowing the ....
The main legal point established in the judgment is the conditions for granting specific performance of a development agreement, including the need for a substantial interest in the performance of th....
The court emphasized the importance of establishing a strong prima facie case and considering the balance of convenience in granting interim injunctions.
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