NUSLI NEVILLE WADIA Vs. FERANI HOTELS PRIVATE LIMITED

JUDGEMENT

(1.) THESE Appeals arise from a judgment dated 19 July 2010 of a Learned Single Judge on a Motion for interim relief in a suit. When an application for ad interim relief came up for hearing before the Learned Single Judge, an objection to the maintainability of the suit was raised on behalf of the First Defendant on the ground that the claim was barred by limitation. The Learned Single Judge was requested to raise a preliminary issue under Section 9A of the Code of Civil Procedure, 1908. The Learned Judge accepted the contention that an issue under Section 9A would have to be raised. The Court held that no case for the grant of ad interim relief, within the meaning of Section 9A(2) was made out on the ground of delay. However, the Learned Single Judge proceeded to dispose of the Motion for interim relief on the ground that since affidavits have been filed and parties were heard at length, it would not be appropriate or proper to have a hearing confined only to the disposal of the application for ad interim relief. Two appeals have been filed in these proceedings. The first appeal is by Mr. Nusli Neville Wadia, the Plaintiff; while the second appeal is by Ferani Hotels Private Limited, the First Defendant. The suit has been instituted by the Plaintiff in his capacity as the administrator of the estate of Late E.F. Dinshaw. For convenience of reference and since there are two appeals, it would be appropriate to refer to the parties as the administrator and Ferani. Reference to the other Defendants would be made appropriately, as and when necessary.

(2.) THE suit has been instituted, inter alia, to seek a declaration that an agreement entered into between the administrator and Ferani on 2 January 1995 stands vitiated by fraud and has been duly determined with effect from 12 May 2008. Consequential reliefs have also been claimed to the effect that the powers of attorney executed by the Plaintiff stand validly revoked and that certain agreements entered into between Ferani and the other Defendants, including among them agreements which date back to 2001, 2002, 2003, 2004 and 2005, have been validly revoked. An injunction has been sought, restraining Ferani from carrying out any further construction on the lands which form the subject matter of the suit and to demolish the constructions which have been put up. There is a claim for damages in the amount of Rs.1,370.06 Crores. The lands which form the subject matter of the dispute aggregate to about 350 acres and are situated principally in Malad.

(3.) UNDER the agreement the administrator was to be paid 12% of "all gross realizations from the disposal/ transfer (by any and all formats) as aforesaid". The minimum share of the administrator was to be Rs.75 Crores, payable within a period of ten years from the date of the agreement. The development of the immovable property was to be in the control of the members of the Raheja family including a corporate body under its control. The agreement envisaged that the administrator would continue to be in juridical possession of the land. The administrator was to transfer title and handover formal and juridical possession of the land to the purchasers of the building constructed by Ferani. Clause 15 of the agreement stipulated that Ferani would be dealing with "outsiders/third parties on principal to principal basis" and the relationship between the parties would not be in the nature of a partnership and/or an association of persons. Clause 16(a) of the agreement provided that neither party shall be entitled to terminate or resile from the agreement or their obligations thereunder, the intention of the parties being that the agreement would be operative till the time that the entire development project was complete and a sale / transfer as contemplated had taken place. Ferani was required to furnish to the administrator a statement of accounts at monthly intervals in order to establish that his 12% share was paid into a designated bank account simultaneously with the receipt by Ferani of its 88% share. An annual audit was to be carried out by C.C. Chokhsi & Co. Chartered Accountants, with a view to ensure that the administrator had received his 12% share in the designated bank account. Under clause 17(a) of the agreement the administrator was required to execute powers of attorney in favour of the Third and Fourth Defendants, who are representatives of Ferani, inter alia, authorizing them to get plans sanctioned, enter into agreements with flat purchasers and to arrange for the receipt and payment of the share of the administrator in the gross consideration.