Final Order 1

Order Details: Notice of Motion
Pdf Text: 1 Ord. in NM no 1655-12020 in Suit no. 1093 of 2021
MHCC010049762020
IN THE BOMBAY CITY CIVIL COURT, AT BOMBAY
ORDER IN NOTICE OF MOTION NO.1655 OF 2020
IN
SUIT NO.1093 of 2021
1. Vagish Tribhuvannath Dwivedi and Anr. ... Plaintiffs
V/s
1. M/s. Aperam Properties Pvt. Ltd. and Ors. …. Defendants.
CORAM: HIS HONOUR JUDGE
SHRI VIRENDRA D. KEDAR
(COURT ROOM NO.01)
DATE : 16th DAY OF SEPTEMBER, 2023
-: Appearances: -
The learned Adv. M.A. Dudhane for plaintiffs.
The learned Adv. P. D. Gandhy for defendants No. 1 to 3.
ORAL ORDER
The plaintiff has taken out present notice of motion for
claiming reliefs inter alia: -
(a) By an order of temporary injunction, defendants no. 1 to 3
themselves, their agents, servants and/or any persons acting through
and/or under them from parting with the possession and/or creating
third party rights and/or dealing with the suit premises;
(b) By an order of temporary injunction, the defendant no.4 be
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restrained from recording/ effecting the records in favour of any third
person in respect of suit premises;
(c) Defendants no.1 to 3 be directed to pay the compensation to the
plaintiffs or in alternative directed to deposit the said amount in the
Court; and
(d) Defendants no. 1 to 3 be directed to deposit an amount of the
part consideration of Rs.50 lacs in the Court;
2. Briefly stated, facts of the case of plaintiffs are as under: -
Plaintiffs have inclined to purchase the commercial
premises for conducting their business activities/ company operations.
Plaintiffs have located the premises viz., office no.401, 4th floor and 4
car parking spaces on first floor in the building known as ‘Palai plaza
premises, Co. Operative Society Ltd.’, situated at Plot no. 9, C.S. No.
30/10, Dadar Matunga Division, Kohinoor Road, Dadar (E), Mumbai
(hereinafter referred to as ‘Suit premises’).
3. The suit premises belongs to the defendants. Therefore,
plaintiffs had several meetings and discussions with defendants no.2
and 3, who are directors of defendant no.1 company. Thereafter, in the
month of March, 2020 defendants no.2 and 3 have quoted a price of
Rs.13,50,00,000/- for the suit premises, to which plaintiffs have become
agree. Plaintiffs have paid Rs.50 lacs before execution of MOU/sale
deed as earnest amount to defendants. Defendants also acknowledged
of receiving said amount of Rs.50 lacs.
4. It is contended that, on 24/03/2020 Nationwide lock down
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was imposed in the country. Therefore, the business of the plaintiffs was
shut down and they have suffered losses. Thus, plaintiffs sent email to
defendants no.2 and 3 on 29/03/2020 about their inability to purchase
the suit premises and requested to refund the token amount. However,
there was no response from defendants no. 2 and 3. Defendants no. 2
and 3 showed their inability to refund part consideration of money to
plaintiffs until they got another buyer for the suit premises.
Alternatively, defendants offered to reduce the consideration amount to
Rs.12 crores as they were in desperate need of money to close some
other deal. Thereafter, multiple rounds of negotiations had happened
and the total consideration for the suit premises arrived at
Rs.8,50,00,000/-. Accordingly, it came to be reduced in writing through
draft MOU/sale deed.
5. In the MOU dated 02/07/2020, as per clause 22, it was
agreed that, if the plaintiffs failed to pay the total payment/
consideration within the period specified herein above, then the deal
shall stand cancelled. Any documents signed by the seller in such a case
shall stand null and void, and seller shall at his/her own discretion, can
sell the suit premises to any other purchaser or purchasers. The amount
paid by the purchasers, shall be refunded by the seller to the purchasers
from the amount received by the seller from other purchasers. Thus,
defendants agreed to refund part consideration amount received by
them, if the said deal could not be materialized.
6. It is further contended that, plaintiffs gave public notice on
25/06/2020 in furtherance to their intention to purchase the suit
premises. However, due to pandemic Covid-19 and financial condition
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of plaintiffs, it is impossible for them to continue with transaction of
purchase. Thus, they have conveyed messages pertaining to their
intention to defendants. Due to ensuing circumstances, it was decided
mutually to cancel the agreement pertaining to suit premises. They have
decided to get executed deed of cancellation. Hence, on 15/08/2020
plaintiffs mail draft deed of cancellation for approval to defendants.
Upon perusal of same, defendants suggested certain revision /
correction in it. Thereafter, revised draft of deed of cancellation was
again email on 28/08/2020 to defendants. In furtherance of same, they
sought time to execute deed of cancellation. However, defendants no.2
and 3 orally informed the plaintiffs about their unwillingness to sign the
deed of cancellation. Defendants were avoided to refund the part
consideration. Therefore, plaintiffs have issued legal notice dated
14/09/2020 thereby called upon defendants to refund the amount of
part consideration of Rs.50 lacs along with interest 21 % p.a., and
damages. Defendants no.1 to 3 sent reply on 29/09/2020 and falsely
denied the claim contentions of plaintiffs. Hence, plaintiffs have
constrained to file the suit and the notice of motion for the reliefs as
stated supra.
7. Defendants no. 1 to 3 strongly opposed the notice of
motion by filing reply on affidavit. Defendants denied all the adverse
contention in the suit and notice of motion. It is contended that, the
notice of motion as taken out by plaintiffs is false and frivolous and filed
with dishonest intention to harass the defendants and to extort monies
from them. Defendants were ready and willing to perform their part of
contract, however, plaintiffs failed to perform their part of contract,
hence plaintiffs are not entitled for the relief claimed. It is further
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submitted that plaintiffs have committed breach of contract therefore
defendants are entitled to forfeit part consideration amount paid by the
plaintiffs. Due to fault on part of plaintiffs, defendants have suffered
loss of monthly income of Rs.6 lacs from 01/07/2020. Therefore,
defendants have filed counter claim against the plaintiffs. As plaintiffs
have filed suit for refund of earnest money and for damages, hence
question of causing irreparable loss to plaintiffs does not arises. Thus,
on that count also plaintiffs are not entitled for the relief of temporary
injunction as claimed. Hence notice of motion may kindly be dismissed.
8. Plaintiffs filed rejoinder to the reply filed by defendants
no. 1 to 3 and denied all the adverse contention. It is contended that,
in view of draft MOU dated 02/07/2020, it was agreed in between the
parties that in case the sale deed was not materialized then the
defendants shall refund the entire amount of earnest money to
plaintiffs. Accordingly, plaintiffs are entitled to receive earnest money
from defendants. However, defendants avoided to pay the same and
intending to create third party interest in the suit property. Therefore,
notice of motion may kindly be allowed.
9. Heard the learned advocate for the plaintiffs, and the
learned advocate for the defendants at length. Perused the record.
The learned advocate for the plaintiffs relied on the
authorities reported in the case of:
1. Indrawati Devi Vs. Balu Ghosh and Others AIR 1990 Patna 1;
2. Mangalam Group a Partnership firm and Ors. Vs. Nandkumar
Bhalchandra Bhondve and Ors. 2013 (1) ABR 331;
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The learned advocate for the defendants relied on the
authorities reported in the case of
1. Satish Batra Vs. Sudhir Rawal (2013) 1 SCC 345;
2. Shree Hanuma Cotton Mills & Ors. Vs. Tata Air Craft Ltd. 1969
(3) SCC 522;
3. Smt. Papree Das & Anr. Vs. Rizwan Ali 2016 SCC OnLine Calcutta
249;
4. Sri Subramanya Sri Devara Vs. Srinivasa Rao, ILR 1996 Karnataka
1485;
5. State of Assam Director of State Lotteries Vs. M/s. M.S. Associates
New Delhi-1;
10. Following points arise for my determination to which I have
recorded my findings with reasons as follows: -
Sr. No. Points Determination
1. Whether plaintiffs are entitled for the
reliefs claimed in the notice of
motion?
No
2. What order? As per final order.
REASONS
As to Points no.1: -
11. It is well settled that for claiming the relief of temporary
injunction, plaintiffs have to show three essential ingredients in their
favour i.e., plaintiffs have prima facie case in their favour; balance of
convenience lies in favour of the plaintiffs and if the temporary
injunction is refused, then plaintiffs are going to suffer irreparable loss
which cannot be compensated in terms of money.
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Herein, it is to be noted that plaintiffs have filed the suit
for declaration and injunction. Plaintiffs asked to declare MOU/ Sale
deed executed in between the plaintiffs and defendants be treated as
cancelled and not binding upon the plaintiffs. Further plaintiffs prayed
to refund of part consideration amount of Rs.50 lacs with interest at the
rate of 21% p.a. As well as, plaintiffs also prayed for compensation to
the tunes of Rs.25 lacs.
12. Plaintiffs have come with the case that, in the month of
March, 2020 they entered into an agreement to purchase suit premises
with defendants no. 1 to 3 for total consideration of Rs.13,50,00,000/-.
At that time, they have paid Rs.50 lacs in two installments i.e., Rs.10
lacs on 02/03/2020 and Rs.40 lacs on 21/03/2020 to defendants as an
earnest money. However, due to imposing of National Lock-down on
23/03/2020, plaintiffs have suffered loss in their business. Therefore,
due to financial crunch they are unable to perform their part of contract
and thus requested defendants to refund their money. After lot of
meetings and talks, it was agreed in between the plaintiffs and
defendants no. 1 to 3 that the total amount of consideration is to be
reduced up to Rs.8,50,00,000/-. However, plaintiffs were even unable
to manage the said amount due to loss in the business. By draft MOU,
email dated 02/07/2020 it was agreed in between plaintiffs and
defendants that if plaintiffs failed to purchase the suit premises, then in
that eventuality, if defendants have sold suit premises to third party,
then defendants shall refund to plaintiffs the amount of earnest money.
Accordingly, plaintiffs are entitled to receive an amount of earnest
money from defendants. Thereafter, in view of talks took place in
between plaintiffs and defendants, it was further agreed to cancelled
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the MOU/ sale deed by executing the deed of cancellation. However,
defendants neither performed their part of contract to execute deed of
cancellation nor refunded earnest money. In fact, defendants are
intended to create third party interest in suit premises. Therefore, it is
necessary to restrain defendants from doing so. Hence, notice of motion
may kindly be allowed.
13. Per contra, it is contention of defendants that, plaintiffs
failed to perform their part of contract, hence are not entitled for any
reliefs claimed. Infact, defendants are entitled to forfeit the amount.
Due to non-performance of their part of contract by plaintiffs,
defendants have suffered loss to the tune of Rs.6 lacs per month. Hence,
defendants have constrained to file counter claim against the plaintiffs
for recovery of said amount. As no irreparable loss caused to plaintiffs
therefore question of granting relief of temporary injunction to plaintiffs
does not arises. Hence, notice of motion may kindly be dismissed.
14. I have gone through the authorities relied by the learned
advocate for plaintiffs. In the case of Smt. Indrawati (supra), the
Hon’ble Patna High Court held that,
“In the exercise of its inherent
powers, the court can in exceptional circumstances not covered by the
situations envisaged under O. 39 Rr.1 and 2 grant temporary injunction,
which includes not only a prohibitory but also a mandatory injunction.”
Herein it is to be seen that, the facts of the cited authority
are pertinent to eviction litigation. Thus, it is totally different from the
facts of the case in hand. Thus, this authority is of no help to the
plaintiffs.
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15. In the case of Mangalam Group (supra), the Hon’ble
Bombay High Court held that,
“Temporary injunction is a discretionary
relief granted to preserve subject matter till end of civil suit.”
16. I have also gone through the authorities relied by the
learned advocate for defendants. In case of Satish Batra (supra), the
Hon’ble Supreme Court held that,
“To justify the forfeiture of advance
money being part of “earnest money” the terms of the contract should
be clear and explicit. Earnest money is paid or given at the time when
the contract is entered into and, as a pledge for its due performance by
the depositor to be forfeited in case of non-performance by the
depositor.”
17. In the case of Shree Hanuma Cotton Mills (supra), the
Hon’ble Supreme Court held that,
“earnest money is part of the
purchase price when the transaction goes forward. It is forfeited when
the transaction falls through by reason of the default or failure of the
vendee/ purchaser.”
18. In the case of Papree Das (supra), the Hon’ble Calcutta
High Court held that,
“in a suit for recovery of the money claim, no
injunction even in the ad-interim form can be granted.”
19. In the case of Sri Subramanya Sri Devara Bhandram
(supra), the Hon’ble Karnataka High Court held that,
“it is well settled
principle of law that in the matter of grant of temporary injunction, the
applicant himself will have to show that if temporary injunction is not
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granted, the applicant will be subjected to irreparable loss or injury
which cannot be compensated in terms of money. The court had to
consider whether the hardship or injury was of such a nature which
cannot be remedied or for which compensation do not provide
adequate remedy.”
20. In the case of State of Assam Director (supra), the Hon’ble
Gauhati High Court held that,
“where damage assessable in terms of
money and or the same can be compensated, then no injunction can be
granted.”
21. Herein, it is to be noted that, plaintiffs have filed the case
for cancellation of MOU and for recovery of earnest money of Rs.50 lacs
and for damages of Rs.25 lacs. Plaintiffs themselves came with the case
that due to lock down, financial condition of the plaintiffs have
weakened and therefore plaintiffs were not able to perform their part of
contract to get execute registered sale deed in their favour. Even, it is
contention of plaintiffs that defendants have reduced the amount of
total consideration from Rs.13,50,00,000/- to Rs.8,50,00,000/-. In spite
of it, plaintiffs could not be able to perform their part of contract.
Though it is contention of the plaintiffs that, defendants have agreed to
refund earnest money but, it was denied by defendants. Infact,
defendants have filed counter claim for recovery of money against
plaintiffs as they suffered losses due to non-performance of contract by
the plaintiffs. Plaintiffs are seeking damages. Herein it is to be noted
that, plaintiffs have quantified their irreparable loss by demanding
recovery of earnest amount to the tune of Rs.50 lacs with interest @
21% and damage to the tune of Rs.25 lacs. Thus, when the irreparable
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loss is quantified in terms of money, then question of granting
temporary injunction does not arise, as held in the case of State of
Assam Director and Papree Das (supra). Herein, it is to be seen that
plaintiffs have not filed suit for seeking specific performance of contract
but for the reliefs as stated supra. Be that as it may, in view of my
above discussion, plaintiffs failed to made out case for grant of
temporary injunction. Hence, my answer to point no.1 is in the
negative.
As to point no.2:
22. In view of my above discussion, I pass the following order:
ORDER
Notice of motion No.1655 of 2020 stands rejected.
Notice of motion stands disposed of accordingly.
(Virendra D. Kedar)
Judge, City Civil & Sessions
Court, Gr. Mumbai
Date:.16.09.2023 (C.R. No.1)
Dictated on : 16.09.2023
Transcribed on : 18 & 25.09.2023
Checked & Signed on: 26.09.2023
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
UPLOAD DATE 27.09.2023 NAME OF STENOGRAPHER(G-I)
Mrs. V. V. Mhatre
TIME:
Name of the Judge (With Court
room no.)
HHJ Shri Virendra D. Kedar
(Court Room No.1)
Date of Pronouncement of
JUDGEMENT/ORDER
16.09.2023
JUDGMENT/ORDER signed by
P.O. on
26.09.2023
JUDGEMENT/ORDER uploaded
on
27.09.2023
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