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TMI Blog2008 (11) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... into by him. He also claims to have been made a co-owner of the suit plot of land which has been transferred to him upon payment of consideration pursuant to the Agreement /MOU dated 8th May, 2004. He further claims to have acted upon the said agreement to develop the suit plot of land by negotiating and entering into registered agreement with several of the tenants on the suit plot of land. The plaintiff further claims to have obtained ownership rights in respect of certain flats in the building to be constructed on the suit plot of land, also pursuant to the said Agreement/MOU dated 8th May, 2004. 4. The plaintiff, therefore, claims that based upon the said agreement, the plaintiff was allowed to develop the suit plot of land before the defendants sought to terminate it. 5. It is the defendants case that the MOU does not settle the rights of the parties for development of the suit plot of land and that the agreement for development was yet to be entered into between them. It is contended that the plaintiff was merely a construction Contractor. He was to demolish the existing structure on the suit plot of land and construct a new building, which agreement is not specificall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laintiff seeks to specifically enforce. 14. Clauses 6(a) to (h) are as follows: i) Under Clause (a) defendants 1 and 2, who were the Lessees of the plot belonging to defendant No. 3 Society were to obtain permission from defendant No. 3 Society for demolition of the old structure and construction of the new structure as per sanctioned plans. The plaintiff was to pay for the T.D.R. to be obtained on the said plot. ii) Under Clause (b) plaintiff was to demolish the old structure and construct a new building at his cost and as per sanctioned plan of the M.M.C. The plaintiff was to hand over possession of two flats of the specifications mentioned therein to defendants 1 and 2 and one flat each to die tenants, defendants 4 to 8 as per agreements with them. iii) Under Clause (c) the plaintiff was to obtain ownership rights in respect of the rest of the flats in the new construction. This was specifically because, the plaintiff was to develop the suit plot of land by construction of the new structure utilizing the T.D.R. obtained and produced by him. Under the said clause die plaintiff was not to have rights in the suit plot, save and except those limited and related to the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to exclusive access to all the terraces and the access to the terrace above the entire construction. 16. It is an admitted position that the plaintiff has purchased T.D.R. The purchase has been made for Rs. 34 lakhs. The worth of the T.D.R. has since escalated. It is also an admitted position that the plaintiff has entered into a registered agreement with some of the tenants offering them for temporary alternate accommodation. The plaintiff has expended monies on that ground. I have been informed that some of the tenants had vacated upon such agreements between entered into and upon payments being made by the plaintiff in respect of the temporary alternate accommodation, but since further development and construction could not take place as defendants 1 and 2 did not allow the plaintiff to demolish the whole structure and construct the new structure as per sanctioned plan as agreed in the MOU, they have returned to their old premises on the suit plot of land. 17. Defendants 1 and 2 are the only contesting defendants. They are brothers. They are the Lessees of the suit plot of land. The memorandum records not only the essential agreement of development between the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the parties have set out whatever was agreed by and between them. However it is only not a formal, legal document for development of the suit plot of land. Consequently the parties agreed that the Development Agreement would be executed and registered between the plaintiff and defendants 1 and 2 within 7 days of the execution of the MOU. That Development Agreement was to incorporate the terms agreed upon between the parties which were enumerated as Clauses 6(a) to (h). Nothing further was to be done except to give it a formal legal colour. 28. It has to be seen whether the parties did actually act upon the MOU also. Defendants 1 and 2 were to obtain the permission of the Society for the development. The plaintiff was to get part ownership rights. The defendants 1 and 2 performed their part of the reciprocal promises and obligations under Clause 6(a). Accordingly by their letter dated 25th June, 2004 defendant No. 1 wrote to the Society to make the plaintiff (as also defendant No. 8) co-owner in respect of the suit plot of land. They also got the permission of the Society conditionally approving the plans submitted by them in respect of the new construction. Consequently the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention is completely misconceived. If an MOU is entered into by the parties merely agreeing to enter into a Development Agreement for developing the suit plot of land upon terms not agreed by the parties, the MOU, which does not set out a full agreement between the parties, would not be enforceable. If, however, an MOU sets out the entire agreement between the parties for the development of the entire plot of land as per sanctioned plan to the extent of the F.S.I, as also the additionally purchased T.D.R. and sets out the extent of the rights and entitlements of the parties being the owner as well as the Developer in the new construction to be put up by the Developer at his own cost, the agreement between the parties is complete. Such MOU is itself specifically enforceable, whether or not, a formal Development Agreement is to be further entered into by them. 33. The MOU of the kind, as in this case is an agreement for development itself. It is nothing short of that except that it is entered into informally by the parties putting on record the complete agreement arrived at between themselves as also with the tenants. It only lacks legal jargon. Such an agreement is exhaustive and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities of the plaintiff are shown. The aforesaid letters show that the defendants have themselves got the name of the plaintiff as also defendant No. 8 entered into records of the Society as members and accordingly as co-owners of the suit plot of land. The allegation that the plaintiff has no right, title and interest is seen to be erroneous. The consideration that passed under the agreement need not be only monetary consideration. The consideration given to defendants 1 and 2 is in terms of the flats to be constructed and given to them. The parties are seen to have acted upon the said MOU. The defendants are seen to have allowed the plaintiff to further act upon it. The notice of termination is of little effect. 35. The Agreement/ MOU dated 8th May, 2004 would be specifically enforceable as seen from its contents. Mr. Samdani relied upon several judgments with regard to the execution of an Agreement /MOU between the parties which do not lay down explicitly the rights and entitlements of the parties and which require further Development Agreement to be entered into, to show that this agreement is not specifically enforceable. 36. The case of (H.S. Khan Sons v. Homi J. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement to enter into a formal Development Agreement is, therefore, of little or no significance, since such a Development Agreement was specifically agreed to be entered into as per Clause 6(a) to 6(h) enumerated in the MOU itself. 38. Mr. Samdani relied upon the case of (Chheda Housing Development Corporation v. Bibijan Shaikh Farid 2007 (2) Bom CR 587 which sets out which agreements could be specifically enforceable and which not, as enumerated in paragraph 12(A) therein. It may be noted that the prerequisite for any decision about the specific enforceability of the agreement is stated to be the facts of each case in paragraph 12(A) itself. Paragraph 12(A) sets out 3 types of agreements: 39. The suit agreement is not a mere agreement for development. It creates an interest in the land in favour of the plaintiff to the extent of 40% (30+10) as co-owner/member of the Society already in existence. The plaintiffs ownership rights further implies a right to sell, mortgage, lease, assign etc. 40. In fact the plaintiff paid consideration of Rs. 4.92 lakhs for obtaining the transfer to the said extent as reflected in letter dated 1st July, 2004 ExhibitR to the plaint, si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implies that the suit is filed by the owner against the defendant who has obtained possession of the whole or part of the land to develop it. Hence, the owner can sue for specific performance of the contract and have the land developed. 43. Whilst it is observed that the development agreement at the instance of the developer is hit by Section 14(3)(iii) but the suit by the owner is maintainable, it is held in paragraph 5 of the judgment that it is possible for the Court to pass a decree for the performance even when the contract is for development of the property. That depends upon the nature of the agreement. Consequently if the agreement is not otherwise excluded under Section 14(1) all such agreements including contracts for development of properties would be specifically enforceable even at the instance of the developers. 44. Since it would depend upon the nature of the agreement we have to see whether the agreement in this suit can fall outside the purview of Section 14(1). In other words whether the agreement in this suit is not only an agreement at the instance of a developer compensable in money and involving the continuous duty, unsupervisable by the Court. 45. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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