Case Note & Summary
The appeal arose from a suit dismissed by the trial court for mandatory injunction seeking execution of an agreement for sale of a flat under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963. The plaintiff, a retired bank manager, had booked a flat from the defendant builder, Richa Construction & Associates, and was issued an allotment letter dated 30th March 2006 for flat No. 402 at an agreed consideration of Rs. 40,66,000. He claimed to have paid an advance of Rs. 51,000 by cheque and later delivered pay orders for part consideration and stamp duty, but the builder failed to execute and register the agreement. The defendant denied receipt of the subsequent payments, contended the advance cheque was never encashed, and argued that the allotment letter was issued only to facilitate loan disbursal. The trial court dismissed the suit, prompting this first appeal before the Bombay High Court. The court heard the appeal finally at admission stage and reserved judgment. The principal question was whether the plaintiff is entitled to a decree of specific performance based on oral agreement and part payments. The parties presented conflicting versions on the existence of a concluded contract and the extent of payments made. The judgment text does not set out the final decision on the appeal.
Issue of Consideration
FIRST APPEAL NO.514 OF 2014
Case Details
2019 LawText (BOM) (01) 103
First Appeal No.514 of 2014 along with Civil Application No.1759 of 2014
Premlal Krishnan, Sankalp Anantwar, Prasad Dani, Suraj Iyer, Debashree Mandpe
1. Richa Construction & Associates, 2. Azad Nagar Anand Sagar Co-operative Housing Society Ltd.
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Nature of Litigation
Suit for mandatory injunction seeking direction to the defendant builder to execute an agreement for sale of a flat under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963.
Remedy Sought
The plaintiff sought a decree of mandatory injunction directing the defendants to comply with statutory obligations to execute an agreement for sale in respect of the flat allotted to the plaintiff.
Filing Reason
The plaintiff alleged that despite paying advance and part consideration and after being issued an allotment letter, the defendant builder failed and neglected to execute and register the agreement for sale, compelling the filing of the suit.
Previous Decisions
The trial court (City Civil Court at Bombay) dismissed Suit No.3559 of 2006 on 2nd April 2014. Earlier, on 3rd March 2008, the trial court had granted an injunction restraining the defendant no.1 from creating third party interests and directed the plaintiff to deposit the entire consideration with interest, which direction was later stayed by the High Court in appeal.
Issues
Whether the plaintiff is entitled to a decree for mandatory injunction directing the defendant to execute an agreement for sale under MOFA based on an oral agreement and part payments, and whether the trial court erred in dismissing the suit.
Submissions/Arguments
Plaintiff contended that he paid advance of Rs.51,000, was issued an allotment letter confirming the sale, and subsequently paid further amounts via pay orders for part consideration and stamp duty, but the defendant failed to execute the agreement for sale despite assurances.
Defendant no.1 denied receipt of subsequent payments, argued that the cheque for Rs.51,000 was never encashed, that the allotment letter was issued only to facilitate loan disbursal, and that the plaintiff failed to pay the required earnest money of Rs.7,00,000 to bind the contract.
Defendant no.1 also contended that the suit was beyond pecuniary jurisdiction and bad for mis-joinder, and that no concluded contract existed.
Judgment Excerpts
the defendant no.1 confirmed the sale of the said flat and issued an allotment letter dated 30 th March 2006 and allotted the said flat No.402 for a total consideration of Rs.40,66,000/-.
By an order dated 3 rd March 2008, the City Civil Court passed an order of injunction against the defendant no.1 in Notice of Motion No.3264 of 2006 restraining the defendant no.1 from creating any third party interest in flat No.402 till further orders and directed the plaintiff to deposit the entire consideration amount with interest thereon @12% p.a.
By an order dated 16 th July 2008 passed by this Court in Civil Application No.499 of 2008 in Appeal from Order No.424 of 2008 filed by the plaintiff herein clarified by an order dated 12 th August 2008, this Court granted stay of the para 2 of order passed by the City Civil Court dated 3 rd March 2008 in so far as the direction was issued against the plaintiff to deposit the entire consideration amount with interest.
Procedural History
The plaintiff filed S.C. Suit No.3559 of 2006 before the City Civil Court at Bombay seeking mandatory injunction for execution of agreement for sale under MOFA. In the suit, Notice of Motion No.3264 of 2006 was taken out; the trial court passed an order on 3rd March 2008 granting injunction in favour of the plaintiff restraining the defendant no.1 from creating third party interests and directing the plaintiff to deposit the entire consideration with interest. The plaintiff filed Appeal from Order No.424 of 2008 in the High Court challenging the deposit direction. The High Court in Civil Application No.499 of 2008, by orders dated 16th July 2008 and 12th August 2008, stayed the deposit direction. The Appeal from Order was ultimately disposed of by the High Court on 17th September 2013, holding that the interim protection was sufficient. Subsequently, the trial court dismissed the suit on 2nd April 2014. Aggrieved, the plaintiff filed this First Appeal No.514 of 2014 along with Civil Application No.1759 of 2014. The appeal was heard finally at the admission stage, judgment reserved on 15th November 2019 and pronounced on 16th January 2020.
Acts & Sections
- Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963:
- Maharashtra Co-operative Societies Act, 1960:
