2008 (11) TMI 743 - HC - Indian Laws

Summary

Issues Involved:
1. Specific performance of the Agreement/MOU dated 8th May, 2004.
2. Termination of the Agreement/MOU by the defendants.
3. Rights and obligations of the plaintiff and defendants under the Agreement/MOU.
4. Enforceability of the Agreement/MOU.
5. Injunction restraining defendants from creating third-party rights.

Detailed Analysis:

1. Specific Performance of the Agreement/MOU:
The plaintiff sued for the specific performance of an Agreement/MOU executed on 8th May, 2004, claiming rights as a Developer of the suit plot of land. The plaintiff asserted that he had purchased T.D.R. and acted upon the agreement by negotiating with tenants and obtaining ownership rights in certain flats to be constructed. The plaintiff argued that the agreement allowed him to develop the property before the defendants sought to terminate it.

2. Termination of the Agreement/MOU by the Defendants:
The defendants claimed to have terminated the agreement through a notice dated 10th August, 2005, arguing that the plaintiff was merely a construction contractor and that the agreement for development was yet to be formalized. They contended that the MOU did not settle the rights of the parties for development and was not specifically enforceable.

3. Rights and Obligations of the Plaintiff and Defendants under the Agreement/MOU:
The MOU detailed the roles and responsibilities of the parties:
- The plaintiff was to develop the property by demolishing the existing structure and constructing a new building.
- Defendants 1 and 2 were to obtain permission from the Society for the demolition and construction.
- The plaintiff was to incur the cost of demolition and construction and provide flats to defendants 1, 2, and 4 to 8.
- The plaintiff was entitled to ownership rights in the remainder of the new construction and exclusive access to certain areas.

4. Enforceability of the Agreement/MOU:
The court found that the MOU, though informal, set out the complete agreement between the parties, including reciprocal promises and obligations. The MOU was deemed specifically enforceable because it detailed the development plan, the rights and entitlements of the parties, and the plaintiff's interest in the property. The court rejected the defendants' argument that the MOU was not enforceable due to the lack of a formal Development Agreement.

5. Injunction Restraining Defendants from Creating Third-Party Rights:
The court granted an injunction restraining the defendants from creating any third-party rights in the suit property. The court noted that the plaintiff had made out a clear prima facie case for such relief, considering the plaintiff's actions and investments based on the MOU.

Conclusion:
The court held that the Agreement/MOU dated 8th May, 2004, was specifically enforceable and granted the plaintiff's request for an injunction to prevent the defendants from creating third-party rights in the suit property. The court emphasized that the MOU constituted a comprehensive agreement for development, detailing the rights and obligations of all parties involved.