Case Note & Summary
The present Appeal from Order arose from an order dated 14 February 2025 passed by the 5th Joint Civil Judge, Senior Division, Pune in Special Civil Suit No.387 of 2024, temporarily restraining the Appellant (Original Defendant) from transferring, alienating or creating third party interest in Transferable Development Rights (TDR) admeasuring 5200 sq. mtrs., which was the subject matter of a Memorandum of Understanding dated 13 July 2022. The dispute concerned a project under the Slum Rehabilitation Scheme on final plot no.57, Mangalwar Peth, Pune. The Appellant had represented that it was entitled to obtain Floor Space Index credit and Development Rights Certificate. On 6 July 2022, the Respondent paid Rs.2,47,50,000, and on 13 July 2022 an MOU was executed for total consideration of Rs.8,23,05,600 for purchase of TDR of 5200 sq. mtrs. Further payments of Rs.1,48,50,000 and Rs.40,000 towards TDS were made on 25 August 2022, resulting in total payment of Rs.4,00,00,000. The Appellant was required to obtain DRC by 13 October 2022 but failed due to technical difficulties. On 18 October 2023, the Appellant issued notice cancelling the MOU; replies and rejoinders were exchanged on 12 and 28 November 2023. On 16 February 2024, the Respondent filed a suit seeking declaration that the termination notice was illegal and for specific performance of the MOU, along with an application for temporary injunction. The Trial Court allowed the injunction on 14 February 2025. In the appeal, the Appellant contended that the MOU was a determinable document and therefore unenforceable under Section 14(d) of the Specific Relief Act, 1963, and that the Trial Court had not considered this vital issue. The Appellant relied on clauses 4A and 4B of the MOU, which provided for refund by cheques, and claimed it had given irrevocable consent to deposit security cheques but the Respondent did not encash them. The Appellant relied on Narender Hira and Company v. Sholay Media Entertainment Pvt. Ltd. and another. The Respondent argued that the MOU was terminable only by the Respondent under clauses 4A and 4B, and that clause 4B gave the Respondent right to terminate and claim interest; since Rs.4,00,00,000 had been paid, there was a high chance of third party interest being created. The extracted portion of the judgment does not contain the final decision or operative directions.
Headnote
A) Civil Procedure - Appeal from Order - Order XLIII Rule 1(r) read with Section 104 Code of Civil Procedure, 1908 - Appeal filed against temporary injunction order dated 14.02.2025 passed by 5th Joint Civil Judge, Senior Division, Pune in Special Civil Suit No.387 of 2024, restraining Appellant/Original Defendant from transferring, alienating or creating third party interest in TDR of 5200 sq. mtrs. subject matter of MOU dated 13.07.2022 till disposal of suit. The High Court considered submissions on maintainability and merits of appeal. Final decision not available in extracted text. (Paras 1-3)
B) Specific Relief Act - Specific Performance - Section 14(d) Specific Relief Act, 1963 - A determinable contract cannot be specifically enforced - Appellant contended that MOU dated 13.07.2022 was determinable under clauses 4A and 4B, hence unenforceable and suit for specific performance was not maintainable; reliance placed on Narender Hira and Company v. Sholay Media Entertainment Pvt. Ltd. and another, 2020(5) Mh.L.J. 173. The Trial Court allegedly did not render any finding on this issue. Final decision not available. (Paras 4-6)
C) Interim Injunction - Prima facie case, balance of convenience, irreparable injury - Code of Civil Procedure, 1908, Order XXXIX Rules 1 and 2 - Trial Court granted temporary injunction based on payment of Rs.4,00,00,000 by Respondent/Original Plaintiff and possibility of Appellant creating third party rights; Appellant argued it offered refund cheques and no irreparable loss would ensue; Respondent contended there was high chance of third party interest being created. Court's final analysis not available in extracted text. (Paras 4-7)
Issue of Consideration
Whether the Trial Court erred in granting temporary injunction restraining the Appellant/Original Defendant from transferring or creating third party interest in TDR pending disposal of Special Civil Suit No.387 of 2024; Whether the MOU dated 13 July 2022 is determinable in nature and therefore unenforceable under Section 14(d) of Specific Relief Act, 1963; Whether the suit for specific performance is maintainable; Whether the Appellant/Original Defendant made out grounds for vacating injunction.
Law Points
- Appeal from Order under Order XLIII Rule 1(r) read with Section 104 Code of Civil Procedure
- 1908
- Specific performance of determinable contract barred under Section 14(d) of Specific Relief Act
- 1963
- Temporary injunction requires prima facie case
- balance of convenience
- irreparable injury
- MOU clauses providing refund mechanism may render agreement determinable
Case Details
2026 LawText (BOM) (08) 88
Appeal from Order No.627 of 2026 with Interim Application No.4389 of 2026
Mr.Sanjeev Kadam, Senior Advocate, i/by Mr.Swapnil R.Chopade for Appellant; Mr.Jaydeep Deo for Respondent
M/s.Sada Anand Developers, through its Partner Mr.Sadanand K.Shetty
Shree Balaji Realty, through Partner Meenamni Ganga Builders LLP, through partner Anju Umesh Goel
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Nature of Litigation
Appeal from Order against temporary injunction passed in Special Civil Suit No.387 of 2024 restraining the Appellant/Original Defendant from transferring, alienating or creating third party interest in TDR of 5200 sq. mtrs. subject matter of MOU dated 13 July 2022.
Remedy Sought
Appellant/Original Defendant sought setting aside of impugned order dated 14 February 2025 passed by 5th Joint Civil Judge, Senior Division, Pune allowing Exhibit-5 temporary injunction.
Filing Reason
Aggrieved by Trial Court's temporary injunction which allegedly failed to consider that MOU was determinable and unenforceable under Section 14(d) of Specific Relief Act, 1963, and ignored clauses 4A and 4B providing refund mechanism.
Previous Decisions
Trial Court allowed Exhibit-5 application on 14 February 2025, temporarily restraining Appellant/Original Defendant from transferring/alienating/creating third party interest in TDR till disposal of suit. No other previous decisions mentioned.
Issues
Whether the Trial Court erred in granting temporary injunction in favour of the Respondent/Original Plaintiff?
Whether the MOU dated 13 July 2022 is a determinable document and hence not enforceable by specific performance under Section 14(d) of Specific Relief Act, 1963?
Whether the suit for specific performance is maintainable when the agreement is determinable in nature?
Whether the Appellant/Original Defendant made out a case for vacating injunction based on offer of refund and absence of irreparable loss?
Submissions/Arguments
Appellant: impugned order suffers from non-consideration of relevant facts and legal provisions; MOU not enforceable under Specific Relief Act, 1963; clauses 4A and 4B provide repayment of amount by cheques; respondent voluntarily extended time by six months; appellant gave irrevocable consent to deposit security cheques but respondent did not encash them; MOU is determinable and unenforceable under Section 14(d) of amended Act; relied on Narender Hira and Company v. Sholay Media Entertainment Pvt. Ltd. and another.
Respondent: impugned order rightly passed; MOU was a contract terminable only by respondent under clauses 4A and 4B; clause 4B gave respondent right to terminate and claim compound interest @ 12% p.a.; since Rs.4,00,00,000 had been paid, there was high chance that appellant would create third-party interests in the TDR.
Judgment Excerpts
This Appeal from Order under Order XLIII, Rule 1(r) read with Section 104 of the Code of Civil Procedure, 1908 takes an exception to the order dated 14th February 2025 passed by the 5th Joint Civil Judge, Senior Division, Pune (`the Trial Court’) passed below Exhibit-5 (`impugned order’) in Special Civil Suit No.387 of 2024 (`the suit’), inter-alia , temporarily restraining the Appellant (Original Defendant) either by itself or through agents, servants, power of attorney holders, representatives and anybody claiming for and on behalf of the Appellant (Original Defendant) from transferring, alienating, or any way creating third party interest in any part of the Transferable Development Rights (TDR) i.e. admeasuring 5200 sq. mtrs. which is subject matter of agreement dated 13th July 2022 till disposal of the suit.
the MOU by its very nature is a determinable document and once that being the position, the same becomes an unenforceable document, as contemplated under Section 14(d) of the amended Act.
the Trial Court in the impugned order has not rendered any finding in respect of this vital provision regarding unenforceability of the MOU under the provisions of Section 14(d) of the Act, which strikes at the very root of the matter thereby vitiating the impugned order.
Clause 4B of the MOU specifically gave a right to the Respondent (Original Plaintiff) to terminate the MOU.
Procedural History
6 July 2022: Respondent/Original Plaintiff made initial payment of Rs.2,47,50,000 to Appellant/Original Defendant. 13 July 2022: MOU executed for total consideration Rs.8,23,05,600 for purchase of TDR 5,200 sq. mtrs. 25 August 2022: further payment of Rs.1,48,50,000 and Rs.40,000 towards TDS made. 13 October 2022: deadline for Appellant to obtain DRC as per clauses 4A and 4B; not obtained due to technical difficulties. 18 October 2023: Appellant issued notice cancelling MOU. 12 November 2023 and 28 November 2023: replies and rejoinders exchanged. 16 February 2024: Respondent filed Special Civil Suit No.387 of 2024 for declaration and specific performance. 25 June 2024: Respondent filed another application for temporary injunction. 9 July 2024: Appellant filed reply opposing temporary injunction. 12 July 2024: Appellant filed written statement and application for list of documents. 25 July 2024: Respondent filed counter affidavit. 14 February 2025: Trial Court allowed Exhibit-5, temporary injunction. 18 August 2026: Bombay High Court heard Appeal from Order.
Acts & Sections
- Code of Civil Procedure, 1908: Order XLIII Rule 1(r), Section 104
- Specific Relief Act, 1963: Section 14(d)
- Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971:
- Income Tax Act, 1961: Section 194Q
