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2024 Supreme(Online)(KER) 4355
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN
WEDNESDAY, THE 6TH DAY OF MARCH 2024/16TH PHALGUNA, 1945
OP(C) NO.340 OF 2021
AS AGAINST THE COMMON JUDGMENT DATED 01.01.2021 IN C.M.A
NOS.25/2020 AND 37/2020 ON THE FILE OF THE ADDITIONAL
DISTRICT COURT-IV, KOZHIKODE; I.A.NO.3397/2019 IN O.S.
NO.401/2019 ON THE FILE OF PRINCIPAL MUNSIFF COURT-I,
KOZHIKODE
PETITIONER/APPELLANT/PLAINTIFF:
SAHEER VACHAL, AGED 35 YEARS,
S/O.ABOOBACKER, VACHAL HOUSE, UMMATHOOR,
PARAKKADAV DESOM, P.O.PARAKKADAV,
CHEKKYAD VILLAGE, VATAKARA TALUK,
KOZHIKODE DISTRICT-673509.
BY ADVS.
SRI.T.SETHUMADHAVAN (SR.)
SMT.PREETHI. P.V.
SRI.M.V.BALAGOPAL
SMT.DEEPA NARAYANAN
RESPONDENTS/RESPONDENTS/PLAINTIFFS:
COCHIN SMART CITY PROPERTIES PVT.LTD.,
PEEVEES TRITON, MARINE DRIVE, COCHIN-682031,
REPRESENTED BY ITS MANAGING DIRECTOR P.O.JOSE.
M/S.TRADERS TOWERS CONSTRUCTION AND PROPERTY
DEVELOPERS PVT.LTD.,
REGISTERED OFFICE AT BUILDING NO.5/3410-T15,
FIRST FLOOR, RP MALL, MAVOOR ROAD, KOZHIKODE,
REPRESENTED BY ITS MANAGING DIRECTOR
B.RAVEENDRAN PILLAI, BY P.A.HOLDER
SRI.A.C.RAVINDRAN, S/O.GOPALA MENON,
KALLATH MADATHIL, RAJI CHEMBALASSERY PARAMBA,
NEAR COTTON MILL, P.O.THIRUVANNUR NADA,
KOZHIKODE-673029.
BY ADVS.
SRI.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SRI.PAULOSE C.ABRAHAM
SRI.RAJA KANNAN
HARINDRANATH B.G
AMITH KRISHNAN H.(K/000666/2015)
SAIRA PUTHIYAPARAMPATH(K/1557-B/2019)
GOWRI DEV(K/003380/2023)
THIS OP (CIVIL) HAVING BEEN HEARD ON 05.01.2024, THE
COURT ON 06.03.2024, DELIVERED THE FOLLOWING:
The Letter of Intent (LOI) did not reflect a completed contract and only indicated an intention to enter into a contract upon the commencement of the Mall.
Headnote:
Letter of Intent - Leave and License Agreement - The court held that the Letter of Intent (LOI) between the parties did not reflect a completed contract and only indicated an intention to enter into a contract upon the commencement of the Mall. The petitioner was not in possession of the scheduled shop room, and the LOI was not intended to bind either party to enter into a contract ultimately. The court found no reason to interfere with the judgment of the learned District Judge, which refused injunction, and dismissed the Original Petition.
Fact of the Case:
The plaintiff in the suit O.S.No.401/2019 claimed to have been offered a shop room in a Mall under a Letter of Intent (LOI) executed with the 1st respondent private limited company. The plaintiff alleged prevention from entering the building complex by the 2nd respondent, claiming that the Mall was sold to it by the 1st respondent.
Finding of the Court:
The court found that the LOI did not reflect a completed contract and only indicated an intention to enter into a contract upon the commencement of the Mall. The petitioner was not in possession of the scheduled shop room, and the LOI was not intended to bind either party to enter into a contract ultimately. The court found no reason to interfere with the judgment of the learned District Judge, which refused injunction, and dismissed the Original Petition.
Issues: The main issue was whether the LOI between the parties constituted a completed contract and whether the petitioner was entitled to an injunction preventing the demolition of fit-outs made by the petitioner in the scheduled shop room.
Ratio Decidendi: The court held that the LOI did not reflect a completed contract and only indicated an intention to enter into a contract upon the commencement of the Mall. The petitioner was not in possession of the scheduled shop room, and the LOI was not intended to bind either party to enter into a contract ultimately.
Final Decision: The court found no reason to interfere with the judgment of the learned District Judge, which refused injunction, and dismissed the Original Petition.
JUDGMENT
Dated, this the 6th day of March, 2024 The common order in C.M.A.Nos.25 & 37 of 2020 of the Addition District Court-VI, Kozhikode is under challenge in this Original Petition. The plaintiff in the suit O.S.No.401/2019 of the Principal Munsiff Court, Kozhikode, who is the appellant in the C.M.A. second above referred, is the petitioner herein. Ext.P5 order of interim injunction granted by the Principal Munsiff - restraining the respondents from demolishing/ removing the fit-outs, interiors and other belongings of the petitioner in the petition scheduled room - was vacated by the learned District Judge by the impugned Ext.P6 common order.
2. Heard Sri.T.Sethumadhavan, learned Senior Counsel, instructed by Adv.Deepa Narayanan, on behalf of the petitioner and Sri.B.G.Harindranath, learned counsel for the respondents.
3. The bare minimum facts required for adjudication of the instant Original Petition are as follows:
Ext.P1 Letter of Intent (LOI) was executed by and between the 1st respondent private limited company and the petitioner herein, whereunder, the petitioner was offered a shop room having an area of 1337 sq. ft. in the first floor of a Mall at Calicut, under the name and style “Mall of Joy”. Ext.P1 Letter of Intent specifies the type of agreement as that of a leave and license. The expected date of commencement of the Mall, as per Ext.P1, was 01.04.2012; and the expected date for giving possession for fit-outs was 15.01.2012. The period of leave and license was prescribed as nine years, with a lock-in period of three years. License fee, security deposit etc, are prescribed in Ext.P1. Two months license fee, equivalent to Rs.2,94,140/-, has to be paid at the time of signing Ext.P1 letter of intent, which the petitioner/plaintiff claims to have performed. It is the further claim of the petitioner/plaintiff that he had spend Rupees Forty lakhs approximately, to carry out the interior works and fit-outs in the scheduled shop room. The suit was filed in the year 2019, on the allegation that the petitioner/plaintiff was prevented by the 2nd respondent herein, from entering into the building complex, on the claim that the Mall was sold to it by the 1st respondent. It is not in dispute that, the Mall could not be developed in view of several litigation, which respondents 1 and 2 faced from various quarters. The disputes were ultimately referred to arbitration and based on the award, the complete rights of the building was given to the 2nd respondent herein.
4. The 2nd respondent would maintain that, there is no privity of contract between the petitioner/plaintiff and the 2nd respondent. Even as per the case of the petitioner/plaintiff, Ext.P1 was only an offer and the petitioner has not become a licensee. Nor was the shop room taken possession of, by him. Based on Ext.P1, the petitioner/plaintiff was only permitted to do the fit-outs in the scheduled shop room. The petitioner never started any business in the shop room. It was contended that the remedy, if any, of the petitioner, is to seek compensation from the 1st respondent; and the injunction sought for cannot be sustained.
5. Learned Senior counsel appearing for the petitioner/plaintiff would contend that, the effect of a Letter of Intent like Ext.P1 has been explained by the Hon'ble Supreme Court in Rishi Kiran Logistics Private Limited vs. Board of Trustees of Kandla Port Trust and Others[2015 (13) SCC 233] and Dresser Rand S.A. v. M/s. Bindal Agro Chem Ltd. & Another [(2006) 1 SCC 751]. On the strength of the said dicta, learned Senior would contend that the Letter of Intent is enforceable, particularly when the petitioner/plaintiff had acted upon it. According to the Senior Counsel, the injunction granted by the learned Munsiff, ought not have been interfered with by the 1st appellate court, inasmuch as, it only seeks to prevent demolition of the fit-outs made by the petitioner/plaintiff. Such interference was all the more illegal, in view of the law laid down a Divi
