Sushil Javher Shivdasani vs Air Inn Pvt. Ltd.

Roshan Dalvi, J.—The Plaintiff has sued for specific performance of an agreement / contract of sale /purcha se of the suit premises being Unit No. C02 on the ground floor of the building known as Hiranandani Corporate Plaza, Near Sahar Airport, at Village Sahar, Taluka: Andheri (E), Bombay and incidental reliefs.

The Plaintiff''s Notice of Motion is for an injunction against the Defendant s restraining them from disposing, alienating, selling or transfer or creating 3rd party rights in the suit premises or in the entire building to be constructed in the premises described in Exhibit- A to the plaint and other incidental reliefs. Mr. Mody on behalf of the Plaintiff fairly stated that he would press for an injunction only in respect of a premises of 945 sq. ft., on the ground floor of the building known as Hiranandi Corporate Plaza.

The Defendant s allotted a premises of 900 sq. ft. on the ground floor of the aforesaid building upon acknowledging receipt of Rs. 45,000 / - by two Pay Orders from the Plaintiff under their letter dated 27th April 1989, Exhibit- B to the plaint. The letter of allotment Exhibit- B shows the area of the premises to be allotted on the ground floor of the suit building. The allotment letter was issued upon the consideration received which would be part of consideration for the suit premises.

It is the case of the Plaintiff that the parties had agreed to transact in respect of 945 sq. ft and not 900 sq. ft of premises for the said price. Hence, soon after the Letter of Allotment was issued, the Defendant s issued another letter to the Plaintiff, Exhibit- C to the plaint. That is an undated letter in respect of offer of units for office premises at Hirananda ni Corporate Plaza, Near Sahar Airport, at Village Sahar, Taluka: Andheri (E), Bombay. The said letter specifies the description of the premises shown as premises No. CO2 on the ground floor of an area of 945 sq. ft. at the rate of Rs. 900 / - per sq.ft. It is an offer on a computer print out much like a cyclostyled letter. It is a letter sought to be addressed to various persons similarly. A space for the name and address of the addressee is left blank. The particulars of the premises are also left blank. These are filled up in ink later. The letter Exhibit- C, which is an offer of the units shows the unit offered to the Plaintiff. The letter further shows that the offer would remain valid for a period of ____ days. The number of days have remained blank even after the other blanks are filled in. The letter further shows that the addressee is requested to let the Defendant s know, if they require any details and total requirement s of the premises, so that the Defendant s may reserve those requirement s for the addressee. The letter is signed by the Director of the Defendant s.

Since the Defendant s are Builders and Developers, they would make similar offers to all prospective purchaser s of their units for office premises. The details of the premises offered would be entered in the blank spaces in the letter. The letter shows that it is one amongst many, issued to various addressees. The letter Exhibit- C is addressed to the Plaintiff.

At the foot of the letter is a note making a reference to the Allotment Letter dated 27 th April 1989, Exhibit- B to the plaint. It further notes that as per the second para of that letter the Defendant s acknowledge receipt of the sum of Rs. 45,000 / - (Rupees Forty- five thousand only) and hence requested the Plaintiff to treat the letter dated 27th April 1989 as cancelled. This note must be read alongside para 3 of the letter, Exhibit- C to the plaint. It shows blank number of days for which the offer was to remain valid. Since the consideration for the premises which was offered in the letter Exhibit- C and allotted in the letter Exhibit- B was already paid, (which would be by way of earnest) that note is made at the foot of the said letter and re- signed by the Defendant''s Director and the space is left blank.

It must be appreciated that particulars of the premises to be offered are mentioned in the letter, Exhibit- C to the plaint. The offer has to be accepted to constitute an agreement between the parties. The acceptance has to be by payment of token consideration(earnest). If the consideration is not paid within the specified time, the offer would naturally lapse. The space left for the days during which the offer would remain valid is not filled- in in Exhibit- C. That is because the part of the consideration has been received and acknowledged. Since that is in respect of the premises for which full particulars have been given being premises No. CO2, no other premises could have been allotted or offered to them. Nevertheless, since consideration was received for the premises and since that consideration was to be the consideration for the premises specified in Exhibit- C, a specific note in that behalf has been made.

The acceptance by the Plaintiff of the offer of the Defendant s could be in no way other than by deposit of some amount to book the premises. Since that amount was paid, has been acknowledged in the letter of offer itself. The acceptance by the Plaintiff by performance viz. by payment of the deposit amount of Rs. 45,000 / - is acknowledged by the Defendant s. Hence, whilst the Defendant s offer is in writing, the Plaintiff''s acceptance is by performance followed by the Defendant s'' acknowledgment . Since that is in respect of one premises, the allotment letter for an unspecified premises of 900 sq. ft on the ground floor is requested to be treated as cancelled. This is the agreement for which the Plaintiff has sued for specific performance.

It is the case of the Defendant s that the letter Exhibit- C does not constitute an agreement between the parties- oral, written, implied or otherwise. Mr. Seervai argued that it is an offer simplicitor and that it has not been accepted by the Defendant s later or at that time and hence does not constitute an agreement between the parties. He argued that since the Defendant s'' Director alone has signed the agreement, it would not constitute an agreement enforceable at law, since no man can agree with himself. It is seen that the letter Exhibit- C is not an agreement of the Defendant s with themselves. It is an agreement of the Defendant s with the Plaintiff. The offer of the Defendant s of the specified unit of office premises in their specified building is accepted by the Plaintiff by payment of the agreed amount by way of part consideration by the Pay orders got issued by him, which is acknowledged by the Defendant.

It is also argued by Mr. Seervai that the consideration is prior to the offer and hence cannot constitute an acceptance which cannot precede the offer. It may be mentioned that no allotment of the premises would be made by the Developer until he receives a token amount agreed by the parties for payment against agreement. The Plaintiff''s Pay Orders are dated 24 th April 1989. They are received by the Defendant s initially on 27 th April 1989. Their receipt is acknowledged initially in the letter dated 27th April 1989, Exhibit- B to the plaint. Consideration for a contract may be past, present or future. The consideration for booking one premises on the ground floor of the Defendant s'' aforesaid building has been received. Hence, the letter of allotment was issued. Thereafter a letter of offer acknowledging the amount was again issued.

It is the Plaintiff''s case that that was because there was an error in the area of the premises. The letter Exhibit- B shows premises of 900 sq. ft. allotted to the Plaintiff. The letter Exhibit- C shows a premises of 945 sq. ft. offered to the Plaintiff. Whatever that be, the offer is followed by the payment of consideration. The payment of consideration constitutes acceptance. The acknowledgment of the receipt of the amount shows acknowledgment of the acceptance and consequently, the contract is complete between the parties when the acceptance is communicated to the Plaintiff.

Mr. Seervai drew my attention to Section 2 of the Indian Contract Act. It has to be seen whether the suit contract falls within the purview of the said Section to constitute an enforceable contract. Section 2 runs thus:

Interpretation- clause - In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context:

(a) When one person signifies to another his willingness s to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal;

(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted becomes a promise;

(c) ...

(d) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise;

(e) ...

(f) ...

(g) ...

(h) An agreement enforceable by law is a contract;

In this contract the Defendant s signified to the Plaintiff their willingness to offer a unit specified in the letter Exhibit- C, to the plaint with a view to obtain the assent of the Plaintiff to that Act. The Defendant s, therefore, made the offer or proposal. The Plaintiff, to whom the offer was made, signified his assent by way of the Pay Orders for Rs. 45,000 / - paid for booking the premises as mentioned in the letter of offer. The Defendant s'' proposal, therefore, got accepted by the Plaintiff. It become a promise. Since it is enforceable at law, it is a contract. Prima facie, therefore, an agreement between the parties was arrived at. That agreement becomes specifically enforceable.

In fact there is intrinsic circumstantial evidence of such contract. The balance- sheet of the Defendant s of much later years relied upon by the Plaintiff in one of the affidavits filed in the Notice of Motion shows the receipt of the amount against the Plaintiff''s name. It shows yet another such amount against the name of another person. It is admitted by the Defendant s that the receipt of Rs. 45,000 / - is for no transaction, other than the suit transaction.

It is the Plaintiff''s case that the Defendant s did not start construction and development of the aforesaid building. The Defendant s had litigation with the owners of the land. The Defendant s'' title was not clear. The Plaintiff inquired with the Defendant s'' Director about the construction. The Plaintiff was assured on numerous occasions that the building would be constructed and the unit will be allotted to the Plaintiff. The Plaintiff had 69 such meetings between September 1989 and April 2000 with the Defendant s'' Director one Surendra. The Plaintiff has averred in paragraph 3(o) of the plaint that the Plaintiff was informed at each of those meetings upon inquiries made by the Plaintiff that everything would be alright and the Plaintiff need not worry about the suit premises. However, the meetings were not being fruitful as the assurances given. This was though the contract was kept alive.

The Plaintiff issued his Advocate''s notice on 18th October 2001 to the Defendant s followed by a reminder on 5th November 2001. The Defendant s by their Advocate''s letter dated 22 nd November 2001 denied the allotment made to the Plaintiff of the suit premises or the receipt of any amount in respect of the suit premises. Despite further correspondence, since nothing was achieved, the Plaintiff sued within 3 years after that date. The entire correspondence is admitted. The respective Counsel of the parties have relied upon the said correspondence and interpreted the same.

Since the agreement has been entered in 1989 and the Plaintiff has sued in 2004, the Plaintiff''s suit certainly suffers from latches. However, the suit is not barred by the Law of Limitation since under Article 54(II) of the Schedule to the Limitation Act, 1963 a suit for specific performance is required to be filed within three years of the performance being refused when the date for the performance is not fixed.

Mr. Seervai argued that the suit is barred by limitation. Mr. Mody showed me a number of judgment s to contend that it is not ( Mst. Rukhmabai Vs. Lala Laxminarayan and Others, ; Miss Pinky N. Hotchandani Vs. M/s. Daya Builders and others, ; Lata Construction v. Rameshchandra Ramniklal Shah (2000) NCJ (SC) 34 ; Gunwantbhai Mulchand Shah and Others Vs. Anton Elis Farel and Others, ; Panchanan Dhara and Others Vs. Monmatha Nath Maity (Dead) thr. L.Rs. and Another, ).

The specific performance is a discretionary remedy. The relief of injunction is an equitable relief. If a specific contract between the parties is made out, the property contracted for deserves to be protected pending the suit. However, in a very belated action for specific performance of a contract, the Plaintiff would be entitled to damages upon proving the contract in the place of specific performance if the action is belated, or if he can be adequately compensated in money''s worth.

The plaintiff is one of the flat purchasers as contemplated under The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management And Transfer) Act, 1963 (MOFA). The Defendant s are bound and liable to execute a formal agreement with the Plaintiff u/s 4 of the said Act. The Plaintiff''s rights would continue and be enforceable at law despite the fact that the Defendant s default in their statutory obligations. In fact the Defendant s are liable to be prosecuted for breaches and defaults of the statutory provisions under MOFA.

Mr. Seervai drew my attention to the affidavit in rejoinder of the Plaintiff in reply to paragraph 2 of the written statement of the Defendant s in which the Plaintiff has stated that the Defendant s did not adhere to the strict norms or format of a Letter of Allotment or an Agreement for Sale though it was assured by the Defendant s'' Director that the letter, Exhibit- C to the plaint was in fact a Letter of Allotment, which would stand substituted with a formal Agreement. That is not compliance of the statutory provisions of MOFA itself, which the Defendant s have defaulted in and which the Plaintiff seeks enforcement of. The strict norms or format is not a mandatory requirement for a writing to constitute a contract between the parties, though a formal agreement incorporating the entitlement of the flat purchasers (which includes a shop purchaser s) under MOFA is a statutory requirement. The reading nonetheless constitutes a contract which is specifically enforceable.

It must be appreciated that the execution of letters Exhibit- B and C are admitted. The receipt of Rs. 45,000 / - is also admitted. However, the Plaintiff has not sought specific performance of the agreement expediently. He claims to have waited patiently upon a numerous assurances of the Defendant s'' Director. That may not be an act in derogation of the Plaintiff''s legal rights and entitlement in the suit itself. However, the fact that the Plaintiff has sued 16 years after the agreement may not entitle the Plaintiff to the discretionary relief at the final hearing. The Plaintiff''s Advocate''s letter / notice dated 5th November 2001, Exhibit- E to the plaint itself shows an offer of accepting another premises similar to the suit premises and the monetary valuation of the suit premises and the monetary loss that the Plaintiff suffered upon his return on investment in the suit premises.

The Plaintiff has valued the suit premises as per the particulars of claim, Exhibit- P to the plaint. The cost of acquiring alternate premises in the vicinity of the suit premises is shown to be Rs. 1,13,40,000 / - . The suit has been filed in 2004. The Plaintiff has taken out an earlier Notice of Motion which came to be withdrawn. It is stated to Court that that was upon the further assurances of the Defendant s. The Plaintiff failed to obtain ad- interim relief in this Notice of Motion from which he filed an Appeal. That Appeal also came to be withdrawn. It is stated that that was also upon similar assurances. Nevertheless a period of four years has transpired since the filing of the suit and before the Plaintiff''s prima facie case on merits can be considered. The amount at which the premises was valued at the time of the filing of the suit would bear further reasonable interest at the rate then governing.

One premises on the ground floor of the suit building sought to be constructed by the Defendant s is required to be protected pending the suit. In the alternative and in view of the belated action of the Plaintiff, the monetary worth of such premises as computed by the Plaintiff himself would be required to be secured, if the Defendant s failed to, or does not desire to secure a premises for the Plaintiff in the suit building. The reasonable amount of monetary security would be Rs. 1.5 Crores. Hence, the following order.

ORDER

The Defendant shall deposit in Court Rs. 1.5 Crores. The Defendant has tendered a Pay Order dated 15th Janua ry 2009 made out in the name of the Prothonotary and Senior Master, High Court, Bombay for Rs. 1.5 Crores.

The Prothonotary and Sr. Master shall invest the said amount in FDR of any Nationalised Bank until the hearing of the Suit.

Written statement is filed. The admissions between the parties are required to be recorded under Order X Rule 1 of C.P.C. The issues are required to be framed under Order XIV Rule 1 of the C.P.C.

ADMISSIONS

The Defendant s issued the letter of allotment dated 27 th April 1989 to the Plaintiff.

The Defendant s issued the undated letter of offer 15 Exhibit- C to the plaint, to the Plaintiff.

The letter of allotment dated 27th April 1989 stood cancelled upon execution of the letter Exhibit- C to the plaintiff.

The Defendant s received and acknowledged receipt of Rs. 45,000 / - by two Pay Orders on 24th April 1989 drawn on Syndicate Bank in the letter, Exhibit- C.

Correspondence ensued between the parties and their Attorneys commencing with the Plaintiffs legal notice dated 18 th October 2001.

The Defendant s have begun construction of the suit building Hirananda ni Corporate Plaza.

The Defendant s had litigation in the Bombay City Civil Court with the owners of the suit property, which is pending in this Court, in appeal.

I S S U E S

Whether the suit is barred by the law of 16 limitation.

Whether there was a concluded, valid and subsisting agreement between the parties as reflected in the Defendant s'' undated letter Exhibit- C to the plaint in respect of the suit premises.

Whether the suit agreement, if any, stood frustrated in view of the litigation that the Defendant s had with the owners of the suit land.

What relief, if any, is the Plaintiff entitled to ?

The Plaintiff has relied upon certain digital recordings of which transcript s are produced. These have not been required to be considered at the interim hearing. These are admissible in evidence ( S. Pratap Singh Vs. The State of Punjab, ; Yusufalli Esmail Nagree Vs. The State of Maharashtra, ; N. Sri Rama Reddy, etc. Vs. V.V. Giri, ; R.M. Malkani Vs. State of Maharashtra, ) as documents ( Ziyauddin Burhanuddin Bukhari Vs. Brijmohan Ramdass Mehra and Others, ) and shall be considered at the stage of appreciation of evidence upon seeing the Plaintiff''s compliance of the mandate given in Ziyauddin Burhanuddin Bukhari Vs. Brijmohan Ramdass Mehra and Others, ; and showing proper custody and preservation of the taped records as laid down in Ram Singh v. State of Maharashtra 1993 Cr.L.J . 2863. If the Plaintiff desires to rely upon those recordings in the trial, the Plaintiff shall offer inspection of the original recording to the Defendant s and /or their Attorneys within 8 weeks from today. In that case, the Plaintiff shall make 2 electronic copies of those recordings at the time the inspection of the original digital recording is given. The Plaintiff shall seal one of them at the said inspection meeting itself and deposit such sealed copy in the Court immediately thereafter. The Plaintiff shall handover the other copy to the Defendant s and /or their Attorneys at the said meeting itself without sealing the same.

The Plaintiff shall file his affidavit of Examination- inchief, if any, and produce the original document s, if any, for considering their admissibility within 12 weeks from today.

The execution of the letters dated 27th April 1989 and the undated letter Exhibit- C to the plaint including the truth of their content s are admitted. Hence these document s need not be proved by direct oral evidence. The letter dated 27 th April 1989 is, therefore, marked Exhibit- A. The undated letter Exhibit- C to the plaint is marked Exhibit- B. The correspondence that ensued between the Advocates of the parties annexed to the plaint is similarly admitted. The copy letters annexed to the plaint forming a chain of correspondence is marked as Exhibit- C (colly) in the plaint itself.

The admissibility of any other document s to be relied upon by the Plaintiff shall be considered when the affidavit of Examination- in- chief of the Plaintiff is received in evidence under the provisions of Order XVIII Rule 4 of the C.P.C.

The Plaintiff shall be returned the original document s Exhibits A and B upon production of Xerox copies thereof.

The Suit is adjourned to 16 th April 2009 for considering the Plaintiff''s oral and further documentary evidence, if any.