As per case facts, Plaintiffs filed for specific performance of a 2017 development agreement for a CIDCO-allotted plot, claiming substantial payment and that time was not essential. The original owner, ...
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AO-548-2024.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO. 548 OF 2024
WITH
INTERIM APPLICATION NO. 15064 OF 2024
IN
APPEAL FROM ORDER NO. 548 OF 2024
1) Rahul Ganesh Mehta
Age: 33 yrs, Occ: Business,
]
]
2) Kirankumar Kanubhai Kotdiya,
Age: 35 yrs, Occ: Business,
]
]
3) Bhavesh Jeram Babriya,
Age: 40 yrs, Occ: Business,
Nos. 1 to 3 having o�ce at: 1500 In�nity,
Plot No. 396 to 400 &
Plot No. 406 to 408, Sector-36,
Seawood, Nerul, Navi Mumbai
Tal & Dist. Thane
]
]
]
]
]
]
]...Appellants
Versus
1) Narayan Ganpat Gaikwad,
Age: 73 years, Occ: Not Known,
]
]
2) Nandkumar Narayan Gaikwad,
Age: 51 years, Occ: Not Known,
Nos. 1 & 2 R/at: Plot No. 158,
Sector-1, Karanjade,
Near APASC Collage, Tal. Panvel,
District: Raigad 410 206.
]
]
]
]
]
]
3) M/s. Shripati Buildcon,
Through it's Partners
]
]
3/1. Amol Maruti Rajage,
Age: 34 years, Occ: Business,
]
]
3/2. Maruti Baburav Rajage,
Age: 60 years, Occ: Business,
Both R/at: Flat No. 401, Kasturi
Heights, Sector-20, Plot No. 39,
Khargar, Tal. Panvel, Dist.: Raigad 410 210.
And having o�ce at: Shop No. 3,
]
]
]
]
]
]
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Plot No. 48, Sector -5, Karanjade,
Tal. Panvel, District: Raigad 410 206.
]
]
4) City & Industrial Development Corporation
(CIDCO)
Through its Managing Director,
Having O�ce at: 2
nd
Floor, CIDCO
Bhavan, CBD Belapur,
Navi Mumbai - 400 614
]
]
]
]
]
]
5) Chief Land and City Survey O�cer,
NMAV 22.5% & Re-establishment &
Resettlement Department,
Having o�ce at Ground Floor,
CIDCO Bhavan, CBD Belapur,
Navi Mumbai 400614.
]
]
]
]
]
]
6) The Estate O�cer, 22.5% Department,
Having o�ce at: Ground/First Floor,
CIDCO Bhavan, CBD Belapur,
Navi Mumbai 400614.
]
]
]
]
7) The Town Planning O�cer,
Construction Department,
Having o�ce at: 4
th
Floor,
Raigad Bhavan, CBD Belapur,
Navi Mumbai 400614.
]
]
]
]
]
...Respondents
Mr. Surel Shah senior Advocate a/w Mr. Prashant Patil, for the Appellant.
Mr. Drupad Patil a/w Mr. Suyash Sule i/b Mr. Drupad Patil, for the
Respondent No. 3.
Mr. Onkar Gawade i/b Mr. Jaydeep Deo, for the Respondent Nos. 4 to
7(CIDCO).
--------------
CORAM : SHARMILA U. DESHMUKH
RESERVED ON : JULY 17, 2026
PRONOUNCED ON : AUGUST 7, 2026
JUDGMENT:
1. The present Appeal is at the instance of the original Plainti�s,
aggrieved by the impugned order dated 19
th
June, 2024, passed by the
2
nd
Assistant Civil Judge, Senior Division, Panvel, below Exhibit 5, in
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Special Civil Suit No. 181 of 2024, rejecting the Exhibit 5 application.
2. Special Civil Suit No. 181 of 2024 was �led by the Plainti�s
seeking inter alia speci�c performance of the agreement for sale dated
31
st
July, 2017, executed by Defendant No. 1 in favour of the Plainti�s.
The suit property is described as Plot No. 345, admeasuring 940 square
meters, situated at Sector 3, Taluka Panvel, District Raigad. It was
pleaded that the suit property was allotted to Defendant No. 1 by
CIDCO, in view of the acquisition of Defendant No. 1's original property,
under the 22.5% scheme. It was pleaded that as Defendant No. 1 did not
have the �nancial capability and the expertise to develop the suit plot, it
was agreed between Defendant Nos. 1 and 2 and the Plainti�s in July
2017 that the said plot would be developed by the Plainti�s, and 50% of
the constructed built-up area would be handed over to the Plainti�s
along with monetary consideration of Rs. 1 crore 88 lakhs.
3. The consideration of Rs. 1 crores 88 lakhs was to be paid by the
Plainti�s to Defendant Nos. 1 and 2 as per the timelines mentioned in
the agreement and was paid by the Plainti�s.
4. On 12
th
August, 2017, the Plainti�s published a public notice
about the sale transaction, to which there was no objection, and
accordingly, the Plainti�s have paid a sum of Rs. 70,80,000/- to the
Defendant Nos. 1 and 2. It was pleaded that as per the agreement dated
31
st
July, 2017, 50% of the constructed built-up area was to be handed
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over to Defendant No. 1 after CIDCO executes a lease deed in favor of
Defendant No. 1 and hands over possession of the said property. On
12
th
February, 2018, lease agreement was executed between CIDCO and
Defendant No. 1, which was registered on 15
th
February, 2018.
Defendant No. 1 approached the Plainti�s and, citing advanced age,
requested the Plainti�'s help to obtain the necessary permissions from
CIDCO for transferring the suit plot in favour of Defendant No. 2 with
the assurance that Defendant No. 2 would comply with all obligations
under the development agreement. The Plainti�s, relying on the
assurance, accepted the request of Defendant No. 1 and after CIDCO's
permission was obtained on 8
th
August, 2019, Defendant No. 1 executed
a gift deed on 9
th
August, 2019 for the suit plot in favor of Defendant
No. 2, in respect of which public notice was issued by the Plainti�'s
Advocate on 3
rd
May, 2019. It was pleaded that the Plainti�s paid a sum
of Rs. 22 lakhs to Defendant No. 2 on the assurance of Defendant No. 2
that, after the plot is handed over by CIDCO, there will be a tripartite
agreement executed in favour of Plainti�s in respect of 50% of the plot.
5. It was further pleaded that on 1
st
March, 2024, when the Plainti�s
visited the o�ce of CIDCO, it learned of the application �led by
Defendant No. 2 with CIDCO for the transfer of the suit plot in favor of
Defendant No. 3. Consequently, a legal notice was issued on 1
st
March,
2024 and 4
th
March, 2024. Similarly, criminal complaint was �led by the
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Plainti�s against Defendant Nos. 1 and 2, and the suit came to be �led
seeking speci�c performance of the agreement for sale dated 31
st
July,
2017.
6. In response to the Exhibit 5 application seeking temporar y
injunction against the Defendants from creating any third-party rights,
the Defendant No. 1 contended that, as per the agreement for sale,
50% of the suit plot was to be transferred to the Plainti�s via a
tripartite agreement after execution of the lease agreement with
CIDCO. It was further contended that on 12
th
February, 2018, the lease
deed was executed by CIDCO in favor of Defendant No. 1, and
possession of the suit plot was handed over on that date, and therefore,
it was necessary for the Plainti�s to seek compliance with the
obligations on 12
th
February, 2018, and the suit was required to be �led
by 11
th
February, 2021, and is therefore barred by limitation.
7. It was further pleaded that, as per the terms of the agreement for
the purpose of executing a tripartite agreement in respect of the
Plainti�'s 50% share after the execution of the lease deed, the cost and
charges were required to be borne by the Plainti�s, which has not been
done, and therefore, there is non-compliance of the obligations of the
Plainti�s. It was further claimed that though approached by the
Plainti�s, Defendant No. 1 did not agree to sell the suit plot, and
therefore, a development agreement was reached between the parties.
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It was pleaded that after execution of the development agreement in
March 2019, Defendant No. 1 inquired with the Plainti�s regarding the
development of the plot, and was informed in April 2019 that the
Plainti�s are not developers but involved in real estate, and that the
Plainti�s are unable to carry out the development of the said plot, and
permitted the Defendant No. 1 to develop the said plot with third party.
Insofar as the amount received is concerned, it was orally agreed that
the amount can be returned with 15% interest, and till that time, the
original lease agreement of the Defendant No. 1 with CIDCO be kept as
security with the Plainti�s. Accordingly, as the Plainti�s was unable to
comply with their obligations and pay the balance consideration, the
development agreement came to an end in April 2019, and therefore,
the Plainti�s are disentitled to seek the relief for speci�c performance.
8. It was further pleaded that the suit property has been gifted to
Defendant No. 2 with the permission of CIDCO, to which there was no
objection by the Plainti�s, and that there was no readiness and
willingness on the part of the Plainti�s.
9. The case of Defendant No. 2 was of absence of privity of contract.
The execution of the agreement dated 31
st
July, 2017 was denied. The
Plainti�s had not carried out any development project. The amount of
Rs. 22 lakhs received by Defendant No. 2 from Plainti�s was �nancial
loan repayable with interest.
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10. The case of Defendant No. 3 was of non-compliance of obligations
by the Plainti�s. As the title documents of the suit plot was in favour of
Defendant No. 2 the Defendant No. 3 entered into sale transaction with
Defendant No. 2 and paid the sale consideration and is bona �de
purchaser for value.
11. The Trial Court noted the rival contentions to observe that prima
facie there was execution of development agreement on 31
st
July, 2017,
and during the existence of the agreement, Defendant No. 2 has
entered into a development agreement with Defendant No. 3. It further
noted that Defendant No. 3 is not a bona �de purchaser for value, as
there were no details regarding when the development agreement
between Defendant Nos. 2 and 3 was entered into, the agreed sale
consideration, or the amount paid.
12. The Trial Court further noted that Defendant No. 2 was witness to
the agreement for sale dated 31
st
July, 2017 executed between the
Plainti�s and Defendant No. 1 and had full knowledge of the
agreement and that the Plainti�s are entitled to seek speci�c
performance against Defendant No. 2 under Section 19(b) of the
Speci�c Relief Act, 1963 (for short 'Speci�c Relief Act').
13. It further noted that Defendant No. 1 claimed that the agreement
dated 31
st
July, 2017 was terminated and the money was to be returned
with 15% interest, however, there is no written agreement to that
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e�ect. It further noted that there is no written contract to support the
case of Defendant No. 2 that for �nancial assistance, Defendant No. 2
accepted the sum of Rs. 22 lakhs from the Plainti�s, and as security,
deposited the original gift deed with the Plainti�s.
14. On the basis of the material on record, the Trial Court opined that
out of the total sale consideration of Rs. 1 crore 88 lakh, a sum of Rs.
70,80,000/- has been paid by the Plainti�s between 31
st
March, 2017
and 29
th
December, 2022. It noted that on 15
th
February, 2018, the
possession of the suit property was handed over to Defendant No. 1 by
CIDCO, and as per the Plainti�s, it happened on 30
th
December, 2021.
The suit has been �led on 1
st
April 2024. It noted that the Plainti�s have
not produced any documents to show that it has carried out any
development project, and from the possession date of 30
th
December,
2021 till March 2024, no steps have been taken by the Plainti�s for
obtaining necessary permissions.
15. The Trial Court noted the provisions of Section 14(3)(c) of the
Speci�c Relief Act and noted that the development agreement does not
mention any proposed residential or commercial plans, as required by
Section 14(3)(c)(i). It noted that the Plainti�s can be compensated in
terms of money, and there is no planning permission obtained and
neither third-party rights have been created. It noted that the Plainti�s
have failed to make out a prima facie case under Section 14(3)(c)(i) and
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(ii) and dismissed the Interim Application.
16. Mr. Shah, learned Senior Advocate for the Appellant would submit
that as per the agreement between the parties, the entire suit property
was to be developed by the Plainti�s, and 50% of the constructed built-
up area alongwith Rs. 1.88 crores as consideration was agreed to be
paid to Defendant No. 1. He submits that around Rs. 70,80,000/- of the
consideration amount has been paid to Defendant Nos. 1 and 2. He
would further point out that the contract was executed between the
parties in 2017, and the �nding of the Trial Court is that as the suit has
been �led in the year 2024, the Plainti�s has not taken any steps in
furtherance of the contract. He would point out Clause 9 of the
development agreement to submit that the obligation was upon
Defendant No. 1 to take all steps for the purpose of obtaining the
possession of the plot and for transferring the same in favor of the
Plainti�s. He would further point out that as per Clause 23 of the
agreement for sale, time was not of essence, and therefore, there is no
question of any inaction by the Plainti�s. He would further point out
that the Trial Court has accepted that the Plainti�s has paid a sum of
almost Rs. 70,80,000, and has rejected the contention of Defendant No.
2 that the sum of Rs. 22 lakhs was taken to tide over �nancial
di�culties. He submits that the possession of the plot was received on
30
th
December, 2021. He submits that the development agreement was
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signed by Defendant No. 2 as witness and despite thereof, Defendant
No. 2 is attempting to create third party rights in favor of Defendant No.
3.
17. He has taken this Court in detail through the �ndings of the Trial
Court and would submit that the Trial Court has accepted the execution
of the development agreement between the Plainti�s and Defendant
No. 1 on 31
st
July, 2017, and has observed that Defendant No. 3 is not
bona �de purchaser for value. He submits that the Defendants have not
challenged this �nding. He submits that the clauses in the development
agreement clearly provides that the plot was required to be developed
only after the surrounding areas have been developed, and therefore,
time was not of essence. He submits that the Defendants did not inform
the Plainti�s about the actual possession of plot in the year 2021, and
there is no termination and no refund of the amount paid.
18.Per contra, Mr. Patil, learned counsel for Defendant No. 3 would
submit that the development agreement was executed on 31
st
July,
2017, prior to the lease deed, which came to be executed on 15
th
February, 2018. He submits that on the date of the agreeme nt,
Defendant Nos. 1 and 2 were not the lessees of the plot. He submits
that as per the terms of the agreement, a tripartite agreement was to
be executed in favor of the Plainti�s for only 50% of the plot. He
submits that in view thereof, speci�c performance can be permitted
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solely for this 50%, and Defendant No. 3 has purchased 50% of the suit
plot. He submits that since the suit was �led in respect of the entire suit
land, any injunction granted would cover the whole property, which is
contrary to the agreement terms. He would further submit that the Trial
Court speci�cally noted that the Plainti�s are not in development
business, and therefore, can be compensated. He submits that the sum
of about Rs. 70 lakhs paid by the Plainti�s can be secured by reserving
the �ats to be constructed on the land by Defendant No. 3.
19. In rejoinder, Mr. Shah would point out that under Clause 2 of the
development agreement, the entire suit property was to be developed,
as the development will take place by taking into consideration the
Floor Space Index of the entire plot of land.
20. Rival contentions now fall for determination.
21. There is no dispute about the fact of execution of th e
development agreement between the Plainti�s and Defendant No. 1 on
31
st
July, 2017. The suit plot was to be allotted by CIDCO to the
Defendant No. 1 in view of acquisition of the original plot of Defendant
No. 1 under 22.5% scheme �oated by CIDCO. The recital in the
agreement for sale is that due to �nancial di�culties and inability to
develop the plot, the Defendant No. 1 has entered into development
agreement with the Plainti�s. The recital in the agreement for sale is
that there has been an allotment of plot by allotment letter dated 3
rd
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June, 2015, which is the suit plot. Clause 2 of the agreement for sale
records that Defendant No. 1 has agreed for the development of the
suit plot to be carried out by the Plainti�s and 50% of the constructed
built-up area was to be handed over by the Plainti�s to Defendant No.
1. Clause 3 provides for consideration of Rs. 1 crore 88 lakhs to be paid
by the Plainti�s to Defendant No. 1. Clause 7 provides that upon the
actual possession of the plot being handed over by CIDCO to Defendant
No. 1, the Defendant No. 1 will cause to be executed a tripartite
agreement in respect of 50% of the plot in favor of Plainti�s or its
nominees. Clause 8 provides that by the tripartite agreement, 50% of
the plot will be transferred in favor of the Plainti�s under the tripartite
agreement and 50% will remain in name of Defendant No. 1. Clause 9
provides that the Defendant No. 1 will at its own cost take all steps for
the purpose of execution of the lease deed in favor of the Defendant
No. ,1 and for the purpose of entering into a tripartite agreement in
favor of the Plainti�s, will execute all necessary documents.
22. Clause 22 provides that in event, the development does not take
place within a period of 42 months, damages to the sum of Rs. 50,000/-
per month will be paid by the Plainti�s to Defendant No. 1. Clause 23
provides that even if the previous clause provides for the construction
to be carried out within a period of 42 months as the suit plot is in an
undeveloped area, and the entire area will take some time for
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development, for the purpose of receiving bene�cial consideration for
sale of the constructed area, the development will take some time in
respect of which no objection will be taken by Defendant No. 1.
23. The terms of the agreement make it clear that time was not the
essence of the contract, and though 50% of the plot was required to be
transferred in favor of the Plainti�s by virtue of tripartite agreement,
the contract entered into between the parties was for the development
of the entire suit plot with 50% of the constructed area to be handed
over by the Plainti�s to Defendant No. 1 along with consideration of Rs.
1 crore 88 lakhs. There is no dispute about the fact that Rs. 70,80,000/-
has already been paid by the Plainti�s to Defendant No. 1. It is also an
admitted position that after the agreement for sale was entered into
between the Plainti�s and Defendant No. 1, gift deed with consent of
the Plainti�s was entered into between the Defendant Nos. 1 and 2 and
the sum of Rs. 22 lakhs was paid by Plainti�s to Defendant No. 2.
24. The stand taken by Defendant No. 2 that the sum of Rs. 22 lakhs
was received as �nancial assistance has not been accepted by the Trial
Court. The Trial Court has also not accepted the contention of
Defendant No. 1 that in April 2019, the development agreement has
been terminated by Defendant No. 1. The Trial Court has further not
accepted that the Defendant No. 3 is a bona �de purchaser for value
without notice. The Trial Court has accepted that the actual possession
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of the plot was handed over by CIDCO to the Plainti�s on 30
th
December, 2021.
25. The reason why the Trial Court declined to exercise its discretion
in favor of the Plainti�s is that the Plainti�s had not produced any
document to show that the Plainti�s are developers and had carried out
any development work. It has further noted that the agreement for sale
was executed on 31
st
July, 2017, and the lease deed was executed in
favor of the Defendant No. 1 on 12
th
February, 2018, the gift deed was
executed on 9
th
August, 2019, and actual possession was handed over on
30
th
December, 2021, and the Plainti�s till March 2024 have not taken
any steps towards carrying out the construction.
26. The Trial Court failed to notice Clause 7 of the development
agreement which provides that after the physical possession of the plot
is handed over by CIDCO, the Defendant No. 1 will execute the tripartite
agreement either in favor of the Plainti�s or in respect of the nominees
of the Plainti�s. It is not necessary for the developer to prove his
credentials and it would have been perfectly possible for the Plainti�s
to engage a contractor for the purpose of carrying out construction.
There was no clause in the agreement which required the satisfaction of
such credentials of the Plainti�s. The Trial Court also failed to notice
Clause 23 of the agreement for sale which makes it clear that time was
not of essence, and it was agreed between the parties that as the suit
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plot allotted is an undeveloped zone, it would be in bene�cial interest
of both the parties to await development of the surrounding areas in
order to receive better consideration for the constructed area. The Trial
Court therefore committed an error in holding that the Plainti�s had
been inactive from the year 2021 to March 2024.
27. The other reason which went against the Plainti�s was that no
planning permissions were obtained by the Plainti�s and that as per the
agreement for sale, all the expenses in respect of obtaining the
permissions from CIDCO was to be borne by the Plainti�s. The said
�nding is factually erroneous as Clause 9 of the agreement for sale
imposes an obligation on Defendant No. 1 to take all steps necessary
with CIDCO for the purpose of execution of the lease deed and for the
purpose of transferring the plot in favor of the Plainti�s.
28. The next ground on which the Trial Court declined inte rim
injunction was in view of Section 14(3)(c) of the Speci�c Relief Act. The
development agreement was executed on 31
st
July, 2017 prior to the
amendment to the Speci�c Relief Act in 2018. The unamended Section
14(3) reads as under :
"(3) Notwithstanding anything contained in clause (a) or clause (c) or
clause (d) of sub-section (1), the Court may enforce speci�c performance
in the following cases:-
(a) where the suit is for the enforcement of a contract,-
(i) to execute a mortgage or furnish any other security for securing the
repayment of any loan which the borrower is not willing to repay at once:
Provided that where only a part of the loan has been advanced the lender
is willing to advance the remaining part of the loan in terms of the
contract; or (ii) to take up and pay for any debentures of a company;
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(b) where the suit is for, -
(i) the execution of a formal deed of partnership, the parties having
commenced to carry on the business of the partnership; or
(ii) the purchase of a share of a partner in a �rm;
(c) where the suit is for the enforcement of a contract for the
construction of any building or the execution of any other work on land:
Provided that the following conditions are ful�lled, namely:-
(i) the building or other work is described in the contract in terms
su�ciently precise to enable the Court to determine the exact nature of
the building or work;
(ii) the plainti� has a substantial interest in the performance of the
contract and the interest is of such a nature that compensation in money
for non-performance of the contract is not an adequate relief; and
(iii) the defendant has, in pursuance of the contract, obtained possession
of the whole or any part of the land on which the building is to be
constructed or other work is to be executed.".
29. In the case of Sushil Kumar Agarwal vs Meenakshi Sadhu And
Others
1
, the Honorable Apex Court noted that the expression
development agreement is not statutorily de�ned and can be used to
describe a wide range of agreements which an owner of a property may
enter into for development of immovable property. Broadl y
summarizing the character of development agreements, it held in
paragraph 17.1 to 17.5 as under :
"17.1. An agreement may envisage that the owner of the immovable
property engages someone to carry out the work of construction on the
property for monetary consideration. This is a pure construction contract;
17.2. An agreement by which the owner or a person holding other rights
in an immovable property grants rights to a third party to carry on
development for a monetary consideration payable by the developer to
the other. In such a situation, the owner or right holder may in e�ect
create an interest in the property in favour of the developer for a
monetary consideration;
17.3. An agreement where the owner or a person holding any other rights
in an immovable property grants rights to another person to carry out
development. In consideration, the developer has to hand over a part of
the constructed area to the owner. The developer is entitled to deal with
the balance of the constructed area. In some situations, a society or
similar other association is formed and the land is conveyed or leased to
1 (2019) 2 SCC 241
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the society or association;
17.4. A development agreement may be entered into in a situation where
the immovable property is occupied by tenants or other right holders. In
some cases, the property may be encroached upon. The developer may
take on the entire responsibility to settle with the occupants and to
thereafter carry out construction; and
17.5. An owner may negotiate with a developer to develop a plot of land
which is occupied by slum dwellers and which has been declared as a slum.
Alternately, there may be old and dilapidated buildings which are
occupied by a number of occupants or tenants. The developer may
undertake to rehabilitate the occupants or, as the case may be, the slum
dwellers and thereafter share the saleable constructed area with the
owner."
30. It held that when a pure construction contract is entered into, the
contractor has no interest in either the land or the construction which is
carried out. But in various other categories of development agreement,
the developer may have acquired a valuable right either in the property
or in the constructed area, and it is the terms of the agreement which
are crucial in determining whether any interest has been created in the
land or in respect of rights in the land in favor of the developer. It held
that in development agreements, where an interest is created in the
land or in the development in favor of the developer, it may be di�cult
to hold that the agreement is not capable of being speci�cally
performed.
31. The Honorable Apex Court further noted the decision of the Full
Bench of the Calcutta High Court in case of Ashok Kumar Jaiswal vs
Ashim Kumar Kar
2
which has held that a right to seek speci�c
performance of a development agreement is not barred expressly or by
2 2014 SCC Online Cal 3497
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necessary implications while deciding whether the suit at the instance
of the developer is maintainable in view of Section 14(3)(c).
32. Applying the law laid down by the Hon'ble Apex Court to the facts
of the present case, the terms in the development agreement would
make it evident, that the Plainti�s are not merely contractors engaged
to undertake the construction and had agreed to develop the entire suit
plot and hand over 50% of the constructed built-up are a and
consideration to Defendant No. 1, while retaining the balance 50%.
Considering the nature of the agreement, the Trial Court erred in
construing the agreement as pure construction contract by applying
Section 14(3)(c). By construing the agreement as construction contract,
the Trial Court has applied the consideration of absence of any
construction carried out by Plainti�s prior to present contract.
33. For the purpose of being entitled to grant of injunctive relief in a
suit seeking speci�c performance of an agreement, it is necessary for
the Plainti�s to show prima facie compliance of its obligations under the
agreement and the breach or the attempted breach on part of the
Defendant No. 1 which raises triable issues.
34. In the present case, the obligation upon the Plainti�s was to
develop the entire suit plot and hand over 50% of the constructed built-
up area and consideration of Rs. 1 crores 88 lakhs to Defendant No. 1.
The obligation was upon Defendant No. 1 to take all necessary steps
Arya Chavan 18/21
AO-548-2024.doc
and ensure the tripartite agreement is executed in favor of Plainti�s by
CIDCO. Despite the physical possession of the plot being handed over
by CIDCO to Defendant No. 1 on 30
th
December, 2021, Defendant No. 1
did not inform the Plainti�s about the said fact, which fact came to the
notice of the Plainti�s only when they visited the o�ce of CIDCO. The
allotment of the plot was in the year 2015, development agreement was
executed in the year 2017 and the actual possession has been handed
over in the year 2021. The Plainti�s have paid substantial consideration
and the obligation to carry out the construction would arise only after
the possession of the physical plot is handed over or atleast informed to
have been received from CIDCO. The payment terms set out in Clause 3
of the development agreement would indicate that substantial amounts
were required to be paid only after tripartite agreement was executed
in favor of the Plainti�s, and despite thereof, the Plainti�s have paid
almost Rs. 70,80,000/-, though not required to pay at this stage. There is
no obligation of the Plainti�s which has not been complied with in order
to disentitle the Plainti�s to the injunctive relief in a suit for speci�c
performance. The breach, if any, is on the part of Defendant Nos. 1 and
2 for failing to inform the fact of actual possession of the land being
handed over to Defendant No. 1 and executing the purp orted
agreement in favor of Defendant No. 3. The Trial Court has itself noted
that Defendant No. 3 is not a bona �de purchaser for value without
Arya Chavan 19/21
AO-548-2024.doc
notice. The Defendant No. 3 has not produced the contract entered into
with the Defendant No. 2 or the consideration agreed upon or paid. No
rights could therefore be claimed at this stage atleast by Defendant No.
3.The right claimed by Defendant No. 3 would, however, support the
Plainti�’s claim for injunctive relief as there is likelihood of alienation of
suit property.
35. In light of the discussion above, the Plainti�s have made out a
prima facie case for grant of injunctive reliefs. Though, it is sought to be
contended that the Plainti�s are only entitled to 50% of the suit plot
and Defendant No. 3 has purchased the balance 50%, the Defendant No.
3 has not produced its purported agreement to demonstrate the sale
transaction. The development agreement of 2017 provides for the
development of the entire plot and 50% of the constructed area to be
handed over to the owner and 50% of the land to be conveyed by a
tripartite agreement in favor of the Plainti�s. Prima facie, the Plainti�s
are therefore entitled to the bene�t of the FSI arising out of the entire
plot area and their rights to develop the entire plot could not be
curtailed on the basis of the covenant that 50% of the land be
thereafter be conveyed in favor of the Plainti�s.
36. The Plainti�s having complied with their obligations and having
acquired an interest in the property, which is one of the incident of
ownership, irreparable loss and injury will be caused to the Plainti�s in
Arya Chavan 20/21
AO-548-2024.doc
the event the injunction is not granted. The balance of convenience is in
favor of Plainti�s and not in favor of Defendant No. 3, particularly
considering the �nding of the Trial Court that Defendant No. 3 is not a
bona �de purchaser.
37. Resultantly, the Appeal From Order succeeds. The impugn ed
order dated 19
th
June, 2024 is hereby quashed and set aside. The
application dated 1
st
April, 2024 below Exhibit 5 is allowed.
(SHARMILA U. DESHMUKH, J.)
Arya Chavan 21/21
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