Order 1

Order Details: Other
Pdf Text: Adinterim order in Draft NM .. 1 .. Suit No. 844/19
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
ADINTERIM ORDER
IN
DRAFT NOTICE OF MOTION
IN
SUIT NO. 844OF 2019
M/s. F.A. Reactor. ...Plaintiff.
V/s.
Anuvidnyan Nagar CoOperative Housing
Society Ltd. ...Defendant.
Appearances:
Learned Adv. Mr. B.P. Shukla for plaintiff.
Learned Adv. Ms. Sonal Awasthi I/b. M/s. Vinod Mistry & Co. for
defendant.
CORAM : HIS HONOUR JUDGE
SHRI SADRUDDIN A. QUAZI
(C.R.No.04)
DATED : 3rd April, 2019.
: ORAL ORDER :
1. The plaintiff has requested to grant adinterim relief of temporary
injunction, restraining the defendant from acting on the letter dated
08.02.2019 and/or creating any third party right and/or executing any
Development Agreement and/or any Agreement in favour of any person
for the purpose of redevelopment of the suit property. The learned
Advocate of the plaintiff has relied on the contentions raised in the
plaint and the documents filed therewith. He has also referred to the
affidavit in support of the Notice of Motion. It is submitted that
admittedly, the defendant is cooperative housing society and it has
executed MOU dated 05.01.2008 in favour of the plaintiff and has also
executed Power of Attorney dated 25.11.2007, which was registered on
12.02.2008. By the MOU, the defendant has given development rights
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Adinterim order in Draft NM .. 2 .. Suit No. 844/19
in respect of suit property to the plaintiff. The suit property is described
as CTS No.178(part). By these documents, the defendant has
authorized the plaintiff to take steps for redevelopment of the property.
As per the terms of MOU, the plaintiff has to provide 660 sq. ft. flat to
each member of the society/defendant and has also to pay corpus fund
of Rs.55,50,000/ to the defendant. The plaintiff has paid
Rs.5,00,000/, out of the said corpus fund to the defendant. The
plaintiff has taken various steps including submission of proposal for
redevelopment to the Municipal Corporation on 12.12.2007 and making
applications for no objection certificates from various authorities
including MMRDA, Airport Authority, Fire Department, Traffic
Department and Mehsul Department. The plaintiff has also obtained
NOC from some of them. The proposal for NOC sanctioned from Mehsul
Department is pending. It is submitted by the learned Advocate of the
plaintiff that the defendant had misrepresented about the area of the
suit property being 3631.7 Sq. Mtrs., whereas, the Municipal
Corporation pointed out that its area is only 2394.9 Sq. Mtrs. The
plaintiff has made application for rectification of the area in the office of
the City Survey and, accordingly, the same is rectified in the property
card from 3631.7 Sq. Mtrs. to 2394.9 Sq. Mtrs. The plaintiff has also
submitted that the defendant has executed development agreement by
signing each page of the agreement, but failed to appear before the
Registrar of Assurances and, therefore, the development agreement has
remained to be registered. Despite the plaintiff taking all steps from
time to time to complete the project, the defendant suddenly issued
letter dated 24.09.2018 through their Advocate alleging therein falsely
that the plaintiff has committed several wrongs and therefore, the
defendant has revoked/cancelled and terminated the MOU dated
05.01.2008 and Power of Attorney registered on 12.02.2008. The
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Adinterim order in Draft NM .. 3 .. Suit No. 844/19
plaintiff issued reply to the said letter of termination on 22.10.2018
denying the said allegations of the defendant in their termination letter
dated 24.09.2018. Thereafter, on 21.11.2018 also, the plaintiff issued
similar reply to the defendant. On 08.02.2019, the defendant sent letter
denying the contentions of the plaintiff on false allegations. Thereafter,
on 08.02.2019, the defendant issued the impugned letter of termination
dated 08.02.2019. The plaintiff apprehends that the defendant may act
upon the said letter dated 08.02.2019, in respect of the alleged
termination of MOU dated 05.01.2008 and Power of Attorney registered
on 12.02.2008 and, therefore, the plaintiff has got cause of action to file
the instant suit for declaration that defendants letter dated 08.02.2019
is illegal, bad in law, malafide, null and void and also for declaration
that the said MOU and Power of Attorney subsist and they binding on
the defendant. The plaintiff has also requested in the plaint to grant
injunction restraining the defendant from acting upon the said letter
dated 08.02.2019. The learned Advocate of the plaintiff has submitted
that in the aforesaid circumstances, the plaintiff may be granted
aforesaid adinterim relief as requested in the draft Notice of Motion.
2. The defendant has filed preliminary affidavit in reply to oppose
the adinterim relief. According to the defendant, the suit itself is not
tenable before this Court for the reason that the plaintiff has not sought
consequential relief of specific performance of the MOU. According to
the defendant, the plaintiff has suppressed material facts particularly,
the letter dated 04.05.2017, whereby the defendant had terminated the
subject MOU, because of nonperformance of the plaintiff's contractual
obligation. In defendant's letter dated 24.09.2018, produced by the
plaintiff with the plaint, in paragraph No.14, the said letter dated
04.05.2017 is referred and it is stated that in fact, in the society's letter
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dated 04.05.2017, that the society also terminated plaintiff/appellant as
developer, after having the resolution passed and the plaintiff was
called upon to submit the particulars about the expenses, which the
plaintiff might have incurred in the process of redevelopment. The
defendant has also submitted in the reply that the MOU was even
though terminated on 04.05.2017, however, the defendant by its letter
dated 24.09.2018 terminated said MOU. The said fact is clearly
admitted by the plaintiff in paragraph No.17 of the plaint. The letter
dated 24.09.2018 is produced by the plaintiff with the plaint. The
plaintiff has not challenged the said letters of termination dated
04.05.2017 and 24.09.2018. According to the defendant, the plaintiff
has attempted to mislead the Court by incorrectly pointing out that
there were some issues regarding the area of the plot of the defendant.
From the day one of the negotiation with plaintiff, plaintiff was very
much aware that certain area of defendant was illegally encroached
upon by some Slum Dwellers. The defendant is Lessee of the subject
plot of land. In fact, the Collector of Mumbai, by letter dated
19.11.1982 has confirmed that the defendant was holding the area of
3631.20 Sq. Mtrs. That letter was given to the plaintiff at the time of
negotiations of the contract and it is also produced with the reply of the
defendant. According to the defendant, the plaintiff has made false
statement with regard to execution of the purported development
agreement. According to the defendant, no development agreement was
executed by the office bearers of the defendant's society. It seems that
certain signatures of some members of the defendant society are used
by the plaintiff to contend that development agreement was signed by
the office bearers of the society. Thus, there is no registered
development agreement in favour of the plaintiff. It is submitted that
the defendant has lost trust in the plaintiff and it is clearly informed to
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Adinterim order in Draft NM .. 5 .. Suit No. 844/19
the plaintiff by defendant's letter dated 27.09.2017, since the plaintiff
having funds and their credentials are not viable. According to the
defendant, on one pretext or another, the plaintiff prolonged the project
by giving various false and lame excuses. The defendant has produced
copy of said letter dated 27.09.2017. According to the defendant, the
MOU was executed in the year 2008 and in clause (k) therein, it is
clearly mentioned that the plaintiff has agreed to commence the
redevelopment for the subject property within one months from
procuring sanctioned plan and complete the said redevelopment within
30 months. However, even after 11 years, the plaintiff has done nothing
except obtaining few NOCs that too without knowledge and consent of
the defendant. In such circumstances, the defendant submits that
granting any adinterim relief in favour of the plaintiff would amount to
stopping the redevelopment of the defendant's building, which is in
dilapidated condition. If such relief is granted, grave irreparable loss,
harm and injury shall be caused to the defendant, since the members of
the defendant society are residing in dilapidated building and majority
of the members of the defendant society are senior citizens. The
defendant submits that balance of convenience lies in favour of the
defendant and not in favour of the plaintiff. The learned Advocate of
the defendant has submitted that there is arbitration cause in the MOU
and, therefore, the suit itself is not tenable and in this respect, the
defendant has filed application under section 8 read with 5 of
Arbitration and Conciliation Act, for holding that this Court has no
jurisdiction.
3. The learned Advocate of the plaintiff has submitted that even if,
the MOU has arbitration clause, the suit cannot be said to be untenable,
because the plaintiff is also seeking relief regarding cancellation and
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termination of Power of Attorney executed by the defendant in favour
of the plaintiff, in respect of the redevelopment of the suit property. The
arbitration clause has nothing to do with the Power of Attorney
document. According to the learned Advocate of the plaintiff, the Power
of Attorney is irrevocable, as per the contents of the said document. The
defendant cannot revoke it and, therefore, the plaintiff has prima facie
case for grant of adinterim relief.
4. On the other hand, the learned Advocate of the defendant has
submitted that document of Power of Attorney is not independent of the
MOU and, therefore, the arbitration clause in the MOU would be
applicable to the Power of Attorney also, as the MOU is the mother
document and Power of Attorney is ancillary to the MOU and, therefore,
the aforesaid contention of the plaintiff's Advocate cannot be accepted.
The learned Advocate of the defendant has relied on the following
decisions.
(1) In the case of Chloro Controls India Private Limited V/s. Severn
Trent Water Purification Inc. & Ors. [2013 (1) SCC 641], it was held
that where origin and end of all is with the mother or the principal
agreement, the fact that a party was nonsignatory to one or other
agreement may not be of much significance. In cases involving
execution of such multiple agreements, two essential features exist;
firstly, all ancillary agreements are relatable to the mother agreement
and secondly, performance of one is so intrinsically interlinked with the
other agreements that they are incapable of being beneficially
performed without performance of the others or severed from the rest.
The intention of the parties to refer all the disputes between all the
parties to the Arbitral Tribunal is one of the determinative factors. In
the case of Hindustan Petroleum Corpn. Ltd. V/s. Pinkcity Midway
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Petroleums.[2003(6) SCC 503], it was held that where there is
arbitration clause in the agreement, the concerned party is entitled to
seek reference of dispute to arbitration in terms thereof. In the case of
Muni Lal V/s. Oriental Fire & General Insurance Co. Ltd. & Anr.
[1996(1) SCC 90], it was held that section 34 of the Specific Relief Act
provides that any person entitled to a legal character, or to any right as
to any property may, institute a suit against any person denying or
interested to deny, his title to such character or right, and the court may
in its discretion make such declaration and the plaintiff need not ask for
such relief. However, proviso to the said section puts the controversy
beyond pale of doubt that “no court shall make any such declaration
where the plaintiff, being able to ask for other relief than a mere
declaration of title, omits to do so”. In other words, mere declaration
without consequential relief does not provide the needed relief in the
suit. It would be for the plaintiff to seek both the reliefs. The omission
thereof mandates the court to refuse to grant the declaratory relief. In
the case of Gopi Gorwani V/s. Ideal Cooperative Housing Society
Ltd. & Ors. [AIR 2013 Bom 133], it was held that the conduct of the
plaintiff showed that the plaintiff was at all times not ready and willing
to abide by the agreement. In such, a scenario, the question of granting
specific performance of the purported contract does not arise and
therefore, the question of granting any interim relief to the plaintiff also
does not arise. In that case, it was also observed that the defendant had
been waiting for the last about four years for redevelopment of its
property. The balance of convenience was also in favour of the first
defendant and against the plaintiff. The work of redevelopment of a
housing society was such that a society must have confidence in its
developers. Once, the members of the society had expressed loss of
trust, faith and confidence in the developer on account of various
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deviations and violations done by the developer, the society could not
be forced to get the redevelopment work done through the plaintiff. In
the case of Mahesh Govindji Trivedi V/s. Legal Heirs of Bhagwanji
Govindji Trivedi & Ors. [2014 (55) (2) GLR 1482], the Hon'ble
Gujarat High Court has observed that although the deed of Power of
Attorney had been is referred to as irrevocable Power of Attorney, mere
referring and elaborating it as “irrevocable”, would not make the deed
irrevocable.
5. On examination of the submissions of the parties and perusal of
the record, I find that the MOU relied upon by the plaintiff to contend
that the defendant has given rights in respect of redevelopment in
favour of the plaintiff, shows that the plaintiff had agreed to commence
the redevelopment of the said property within one month from getting
the plan sanctioned from the concerned authority and complete the said
redevelopment within 30 months from procuring occupation certificate
from the concerned authorities. Admittedly, the development has not
been commenced so far. The plaintiff has submitted that there were
some difficulties, which were to be sorted out including the exact area
of the property. The said agreement/MOU was entered into year 2008.
Already 11 years have expired and, therefore, according to the
defendant, the defendant has taken the steps for cancellation and
revocation of the MOU and Power of Attorney given by the defendant to
the plaintiff. As far as, development agreement is concerned, it is
contention of the plaintiff that defendant has executed the same by
signing on each of the paper, but they have failed to appear before the
Registrar and, therefore, this document is not registered. Therefore,
prima facie, it cannot be said that registered development agreement is
executed. The learned Advocate of the defendant has submitted that
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fact remains that this document is not executed because it is not
attested by the witnesses. As far as MOU is concerned, no doubt in
clause32 thereof, it is provided that in case of dispute or difference by
and between the parties the same shall be referred to arbitration in
terms of provisions of Indian Arbitration and Conciliation Act. In view
of such arbitration clause in the MOU, on the basis of which the plaintiff
is claiming rights in respect of the development of the property, I find
prima facie merits in the submissions of learned Advocate of the
defendant that section 5 of the Arbitration and Conciliation Act, 1996
would be applicable to the facts of the instant case. Section 5 provides
that notwithstanding anything contained in any other law for the time
being in force, in matters governed by this Act, no judicial authority
shall intervene except where so provided in this Act. Then in section 8
of Arbitration and Conciliation Act, 1996, it is provided that a judicial
authority before, which an action is brought in a matter which is the
subject of an arbitration agreement, shall, if a party to the arbitration
agreement or any person claiming through or under him, so applies not
later than the date of submitting his first statement on the substance of
the dispute, then, notwithstanding any judgment, decree or order of the
Supreme Court or any Court, refer the parties to arbitration, unless it
finds that prima facie no valid arbitration agreement exists. In the
instant case, the defendant has already made an application to this
Court raising objection about maintainability of the suit in view of the
arbitration clause in the MOU. Therefore, before deciding that
application, I do not think that it can be said that the plaintiff is entitled
for adinterim relief from this Court, in view of aforesaid section 8 of
the Arbitration and Conciliation Act, 1996. As far as, submissions of
learned Advocate of the plaintiff that the Power of Attorney does not
provide any arbitration clause and, therefore, the suit can be
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entertained about it, is concerned, I find merits in the submissions of
learned Advocate of the defendant that prima facie the Power of
Attorney cannot be separated from the MOU. The MOU can be said to
be principal document between the parties in respect of the dispute and
the Power of Attorney is ancillary to the MOU. Therefore, in view of
decision of Hon'ble Supreme Court in the case of Chloro Controls India
Private Limited V/s. Severn Trent Water Purification Inc. & Ors.
(supra), the document of Power of Attorney can also be subject matter
of the arbitration as per the arbitration clause contained in the MOU.
Considering all these circumstances, I think the plaintiff is not entitled
for adinterim relief. Hence, the request for adinterim relief will have to
be rejected. Hence, I pass the following order.
: ORDER :
The request to grant adinterim relief is hereby rejected.
(SADRUDDIN A. QUAZI)
Judge, (C.R.No.4)
Date : 03.04.2019. City Civil Court, Gr. Mumbai
Dictated on : 03.04.2019.
Transcribed on : 04.04.2019.
Signed on : 05.04.2019.
“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
11.04.2018, at 1.33 p.m.
UPLOAD DATE AND TIME
Tushar P. Kuwar
[NAME OF STENOGRAPER]
Name of the Judge
(With Court room no.)
HHJ Shri S. A. Quazi
Court Room No.4
Date of Pronouncement of Judgment/order 03.04.2019.
Judgment/order signed by P.O. on 05.04.2019.
Judgment/order uploaded on 11.04.2019.
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