A formal development agreement is essential for a binding contract; ongoing negotiations do not constitute a concluded contract.

JUDGMENT :

M.S. KARNIK, J.

1. The challenge in this Commercial Appeal under Section 13 of the Commercial Courts Act is to the judgment and order dated 1^st February 2024 passed by the learned Single Judge of this Court in the Interim Application seeking reliefs in terms of prayer clauses (a) and (b) during the pendency of the Commercial Suit filed by the Respondent/original plaintiff – Pittie Antariksh GRL Pvt. Ltd. (‘the developer’ for short). By the impugned order, the learned Single Judge made the Interim Application absolute in terms of prayer clauses (a)and (b) which read thus:-

“(a) This Hon'ble Court be pleased to pass an interim and temporary injunction against the defendant restraining the defendant, its members, representatives, nominees, and assigns/or from entering into any agreement, appointing another developer for redevelopment of the defendant's building and/or creating any third party rights in respect of the Suit property.

(b) This Hon'ble Court be pleased to stay effect and implementation of the defendant's letter dated 24^th May 2023 and restrain the defendant and its members from acting in furtherance of the said letter dated 24^th May 2023.”

2. In the Suit, the Respondent prayed for a declaration that there is a valid, binding and subsisting contract between the Respondent/original plaintiff - developer and the Appellant/original defendant – Kher Nagar Sai Prasad Co-operative Housing Society Ltd. (‘society’ for short) as recorded in letters dated 30^th August 2021 and 23^rd October 2021. The relief for a decree of specific performance of agreement as recorded in letters dated 30^th August 2021 and 23^rd October 2021 was prayed for. A relief for declaration that letter dated 24^th May 2023 is illegal, contrary to law and non-est is prayed for. Then a relief for a mandatory injunction against the society and its representatives from creating third party rights in the suit property; in the alternative for compensation. The Interim Application was filed for reliefs during the pendency of the Suit.

3. Facts relevant to the decision in the Appeal are thus :-

Maharashtra Housing and Area Development Authority ('MHADA' for short) was the owner of a land admeasuring 1066.94 sq.mtrs. situated at Survey No.341(pt) and CS No.604 (pt) at Khernagar, Bandra (East) ('suit land' for short) alongwith a building (G + 2 storey) ('suit building' for short), the property referred to as ‘suit property’ for short hereafter. MHADA executed a Lease Deed in favour of the society for suit land on 4^th January 2016. On this date i.e. 4^th January 2016 MHADA also executed Sale Deed in favour of the society for the suit building. The society floated a tender on 29^th March 2021 for redevelopment of the suit property and bids were invited from the interested developers. The bid submitted by the said developer was accepted. A Special General Body Meeting of the society was held on 31^st July 2021 where the Respondent/plaintiff was provisionally selected as the developer by the society. An offer letter was issued by the developer to the society on 4^th August 2021. A comfort letter dated 7^th August 2021 was issued to the developer by the society inter alia stating that the final selection and appointment of the plaintiff as a developer shall be done after complying with the procedure laid down under Section 79A of the Maharashtra Co-operative Societies Act, 1960 ('Societies Act' for short).

4. A revised offer letter dated 30^th August 2021 was issued by the developer to the society. By the said offer letter, the developer inter alia offered (i) additional area of 510 sq.ft. MOFA carpet area to each existing member free of cost and (ii) Rs.20,00,000/- as lumpsum hardship allowance to each member. An email was addressed by the developer to the society inter alia revising its offer on 20^th October 2021. By the said revised offer letter, the developer inter alia offered (i) additional area of 528 sq.ft. MOFA carpet area to each existing member free of cost and (ii