SRI. DESAI UDAYKUMAR v. M/S. NR GREENWOOD CONSTRUCTION PRIVATE LIMITED

plaintiff offered to enter into a Joint Development Agreement with the defendant in respect of the suit properties, which shall empower the plaintiff to develop the said property into a residential layout according to the plan that would be approved by the competent authorities. Pursuant to same, plaintiff and defendant entered into Memorandum of Understanding dated 12th March, 2021, agreeing to execute a Joint Development Agreement in respect of suit schedule properties and it was agreed that the ratio of the scheme shall be 45:55%, of which 45% of the developed area would be allotted to defendant and 55% to the plaintiff. It was agreed that, under the Memorandum of Understanding, the defendant would come forward and execute the Joint Development Agreement within a period of three months from the date of entering into Memorandum of Understanding. However, the defendant failed and neglected to execute the Joint Development Agreement within the stipulated period of three months as per the Memorandum of Understanding. Hence, the plaintiff was forced - 4 - CRP No. 100079/2025 to issue legal notice dated 8th February, 2022, calling upon the defendant to execute the Joint Development Agreement as agreed upon. However, instead of complying the same, defendant got issued a vague and evasive reply dated 25th February, 2022. It is further stated in the plaint that the defendant having agreed to execute the Joint Development Agreement in favour of the plaintiff and thereafter to develop the suit property into a residential layout, now, for the reasons best known to him, is not coming forward to execute the Joint Development Agreement and develop the schedule property. It is stated that the defendant, in order to frustrate/deprive the plaintiff of its legally enforceable rights under the Memorandum of Understanding and in order to gain unjust enrichment at the cost of the plaintiff, clandestinely attempting to create third party rights over the suit schedule properties. It is submitted that the plaintiff has been always ready and willing to perform its part of contract under the memorandum of understanding and that the defendant, without there being any justifiable reasons, is denying to perform his part of contract. Accordingly, the plaintiff has filed the suit. - 5 - CRP No. 100079/2025

The defendant entered appearance through his Counsel and filed written statement. An Application under Order VII Rules 11(a), (b) and (d) of Code of Civil Procedure is also filed. Plaintiff had filed objection to the Application IA.No.5.

Having heard the arguments on both sides, the trial Court has rejected the application. Being aggrieved by the rejection of the Application, the defendant has preferred this Revision Petition.

Sri H. Subramanya Jois, learned Senior Counsel appearing for the Counsel for Revision Petitioner, would submit the order under revision is grossly illegal and unsustainable for the reason that it is totally opposed to the ratio and dictum laid down by the Hon’ble Supreme Court in the case of SPEECH AND SOFTWARE TECHNOLOGIES (INDIA) PRIVATE LTD. v. NEOS INTERACTIVE LIMITED reported in (2009)1 SCC 475 wherein it is held that an agreement to enter into an agreement is not enforceable, nor does it confer any right upon the parties. He would submit that the finding of the trial Court on the aspect of absence of cause of action for the suit, is wholly erroneous and opposed to the ruling of Hon’ble - 6 - CRP No. 100079/2025 Supreme Court in the case of T. ARAVINDANDAM v. T.V. SATYAPAL reported in (1977)4 SCC 467 wherein it is held that, “if clever drafting has created the illusion of cause of action, nip it in the bud at the first hearing by examining the party searching under Order X of Code of Civil Procedure.

As against this Sri Vivek Reddy, learned Senior Counsel appearing for the Counsel for respondent, would submit that the trial Court has properly appreciated the - 8 - CRP No. 100079/2025 material on record in accordance with law and facts. Absolutely, there are no grounds to interfere with the order impugned. The arguments advanced on behalf of the revision petitioner can be considered only after a full-fledged trial and that there are no grounds to reject the plaint under order VII Rule 11(a), (b) and (d) of Code of Civil Procedure. With regard to consideration of the Memorandum of Understanding is concerned, it is stated in the Memorandum of Understanding it is stated that 45% of the developed land falls to the share of land-lord and 55% of the land is to the Developer. On all these grounds, the learned Senior Counsel sought for rejection of the revision petition. To substantiate his arguments, he placed reliance on the following judgments:

MR. RAJ A. MENDA AND OTHERS v. M/S. RASAMANI RAL ESTATE AND OTHERS – ILR 2007 KAR 2627;

MILLENIA REALTORS PRIVATE LIMITED v. SJR INFRATRUCTURE (PRIVATE) LIMITED – 2005(6) KAR.LJ 36;

ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK VIDYARTHI AND OTHERS – 2023 INSC 1043; - 9 - CRP No. 100079/2025

M/S. JAI BEVERAGES PVT. LTD. v. STATE OF JAMMU AND KASHMIR & OTHERS – 2006(5) SCC 722;

5. STATE OF ORISSA v THE TITAGHUR PAPER MILLS - 1985 AIR 1293;

6. GURUDEV SINGH v. HARVINDER SINGH 2022 LIVELAW (SC) 963

I have carefully examined the materials placed before me. Having given my anxious consideration to the contentions advanced by the learned Senior Counsels appearing for the parties, the sole question that would arise for consideration in this revision petition is, “Whether the revision petitioner has made out ground to reject the plaint under Order VII Rules 11(a), (b) and (d) of Code of Civil Procedure?”

The plaintiff has filed a suit seeking relief of specific performance of Memorandum of Understanding dated 12th March, 2021 and to direct the defendant to execute Joint Development Agreement in respect of the suit schedule property. After appearance, defendant filed application under Order VII Rules 11(a), (b) and (d) of Code of Civil Procedure. The trial Court has rejected the said application as per order dated 18th March, 2024. The same was challenged by the - 10 - CRP No. 100079/2025 defendant in CRP No.100044 of 2024. Vide order dated 12th December, 2024, this Court allowed the revision petition in part and set aside the order dated 18th March, 2024 passed by the trial Court and the matter was remanded to the trial Court for fresh consideration. After remand, the trial Court heard the arguments on both sides. Written arguments were filed by both the parties. Having heard the arguments on both sides, the trial Court vide Order dated 19th April, 2025 again rejected the Application IA.No.5 filed by the defendant under Order VII Rule 11(a), (b) and (d) of Code of Civil Procedure. Being aggrieved by the said order, the defendant is before this Court in this revision petition.

The defendant has not disputed the alleged Memorandum of Understanding dated 23rd February, 2021, which is registered before the Sub-Registrar, Banaswadi on 12th March, 2021. Defendant contended that the plaint does not disclose any cause of action and it is barred by law as there is no concluded contract between the plaintiff and the defendant and no consideration is passed. The alleged memorandum of understanding is not enforceable in law and the same is barred - 11 - CRP No. 100079/2025 under Sections 14 and 41(e) of Specific Relief Act and under Section 25 of Indian Contract Act.

Before appreciation of material on record, it is relevant to mention as to the contents of the Memorandum of Understanding dated 12th March, 2021 entered into between the parties. The same is reproduced here under: “MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING is made and executed on this TUESDAY the TWENTY THIRD day of FEBRUARY, TWO THOUSAND TWENTY ONE (23-02-2021) at BANGALORE CITY: BETWEEN: SRI. DESAI UDAYKUMAR S/o Sri Vasanth Rao Desai Residing at: Desai Estate, Radhakrishna colony, Shrinagar, Dharwad-580 003. Karnataka State. HEREINAFTER referred to as the OWNER/FIRST PARTY which expression shall wherever the context so requires or admits mean and include his heirs, executors, administrators and assigns. AND: M/s NR GREENWOOD CONSTRUCTION PRIVATE LIMITED, A company incorporated under the companies Act, 1956, having Its registered office at #396, 3rd Floor, I" Main, KHM Block (Judges Colony) Ganganagar, Bangalore-560 032.

1. DEVELOPER/BUILDER/SECOND PARTY herein explicitly agree that this Memorandum of Understanding is valid the from the OWNER/FIRST PARTY - 14 - CRP No. 100079/2025 date of execution/signing on to this Memorandum of Understanding by PARTY both DEVELOPER/BUILDER/SECOND PARTY up to legal clearance by obtaining all the required certified the OWNER/FIRST and the copies of documents pertaining to the SCHEDULE PROPERTY is obtained/legal verification and original document of the verification is done by the advocate/legal counsel DEVELOPER/BUILDER/SECOND PARTY and plans are cleared by both the parties, wherein the OWNER/FIRST PARTY DEVELOPER/BUILDER/SECOND PARTY shall make arrangements and execute Joint development agreement only after legal clearance by obtaining all the required certified copies of documents pertaining to the SCHEDULE PROPERTY is obtained/legal verification and original document verification is done by the advocate/legal counsel of the DEVELOPER/BUILDER/SECOND PARTY, and layout plan approvals are cleared by both the parties, failing which this Memorandum of Understanding and all its conditions shall automatically stand annulled. PARTY.

2. It has been agreed between the OWNER/FIRST PARTY and the DEVELOPER/BUILDER/SECOND PARTY that the OWNER/FIRST PARTY shall sign all or any documents and shall provide any documents/details whatsoever pertaining to the SCHEDULE PROPERTY in terms/accordance of the MOU to the Advocate or any person/s authorized by the DEVELOPER case DEVELOPER BUILDER/SECOND BUILDER/SECOND PARTY is not satisfied with the title of the SCHEDULE DEVELOPER/ BUILDER/SECOND PARTY shall within the course of this Memorandum of understanding, assign valid reasons for the same to the OWNER/FIRST PARTY and terminate this Memorandum of Understanding and all its conditions and the DEVELOPER/BUILDER/SECOND PARTY shall not execute JDA Memorandum of Understanding. the OWNER/FIRST PARTY as specified PROPERTY, If

3. Whereas the OWNER/FIRST PARTY during the course of this Memorandum of Understanding shall not enter into any sort of Agreements/Agreement to sell with any third party/ies, and the OWNER/FIRST PARTY shall further not contract any other developer to develop the SCHEDULE the DEVELOPER/BUILDER/SECOND PROPERTY. Likewise, PARTY shall not enter into any agreement to sell its 55% DEVELOPER/BUILDER/SECOND PARTY would get its share of 55% only upon execution of Joint Development Agreement (JDA). execution JDA - 15 - CRP No. 100079/2025 It has been agreed by both the OWNER/FIRST PARTY 4. and the DEVELOPER/BUILDER/SECOND PARTY that the DEVELOPER/BUILDER/SECOND arrangements to procure all necessary statutory approvals for development of from the concerned authority/ies residential layout and carry on any other works required for procuring approvals for formation of residential layout over the SCHEDULE PROPERTY. PARTY Whereas

5. the OWNER/FIRST PARTY shall grant permission/allow all or any persons being authorized by the DEVELOPER/BUILDER/SECOND PARTY or from any other government authority to inspect the SCHEDULE PROPERTY and to conduct survey or any other requirements, post execution of this MOU. Whereas it is explicitly understood between the 6. parties to this MOU that the DEVELOPER/BUILDER/SECOND PARTY shall form a residential layout by providing all the amenities there at listed below as ANNEXURE-A and the OWNER/FIRST PARTY acknowledge the same.

7. The OWNER/FIRST PARTY shall produce the original documents of title pertaining to the SCHEDULE PROPERTY to the DEVELOPER/BUILDER/SECOND PARTY or any statutory authority/ies/banks/ to the DEVELOPER/BUILDER/SECOND PARTY whenever/wherever necessary either through their advocate/or on their own on prior intimation of 2 days by the DEVELOPER/BUILDER/SECOND PARTY. Wherein the advocate of OWNER/FIRST PARTY/ the owners themselves personally may produce the original documents of title pertaining to the SCHEDULE PROPERTY without fail/without assigning any reasons/without any sort of delay whatsoever, whenever intimated/demanded by the DEVELOPER/BUILDER/SECOND PARTY or any other statutory authority/ies, during the course of this MOU. required The OWNER/FIRST PARTY shall execute necessary 8. documents/forms to secure sanctioned plan approvals from STATUTORY AUTHORITY/IES for development of the proposed residential layout over the SCHEDULE PROPERTY at the cost of the DEVELOPER/BUILDER/SECOND PARTY. The DEVELOPER/BUILDER/SECOND PARTY shall be entitled to appoint architects and other professionals for securing approvals of plans and other matters connected therewith. And the DEVELOPER/BUILDER/SECOND PARTY - 16 - CRP No. 100079/2025 agrees to show the originals of the approvals being obtained by it to the OWNER/FIRST PARTY and their lawyers.

9. The OWNER/FIRST PARTY hereby expressly grants permission to the DEVELOPER/BUILDER/SECOND PARTY to use the SCHEDULE PROPERTY for formation of residential layout and to bring for the said purpose its men and store materials on the SCHEDULE PROPERTY from the date of execution of completion of formation of layout. Joint Development Agreement,

10. Whereas the OWNER/FIRST PARTY has paid/shall clear payment of property taxes and all other statutory taxes, electricity, water supply, sewerage and other provisions therein, pertaining to the SCHEDULE PROPERTY up to the date of execution of Joint development agreement, wherein further payments with respect to the same shall be decided and mentioned in the Joint development agreement which is to be executed between the OWNER/FIRST PARTY and the DEVELOPER/BUILDER/SECOND PARTY. It is made clear by the OWNER/FIRST PARTY that, all 11. expenses and costs to be incurred with respect to the scheme of development, such as approvals, extensions, re- approvals from any authority, Government Agency, and all related permissions, water connection, power connection etc., the DEVELOPER/ BUILDER/SECOND PARTY. borne/paid

12. Whereas the DEVELOPER/BUILDER/SECOND PARTY shall not under any circumstance relinquish or assign its rights and obligations under this agreement to a third party and its responsibility by handing over the development to a third party.

It is categorically understood and agreed to by the DEVELOPER/BUILDER/SECOND PARTY that no part of the SCHEDULE PROPERTY shall be encumbered by it as offered as collateral security for any loan/Credit facility that it may avail from any banking institution, Non-Banking Finance Corporation (NBFC) or Private Money lender/s.

Whereas it is explicitly agreed by both the parties to this MOU that the name of the residential layout proposed to be formed over the SCHEDULE PROPERTY will be decided and mentioned in the Joint Development Agreement, by the OWNER/FIRST PARTY. - 17 - CRP No. 100079/2025 SCHEDULE PROPERTY ITEM NO 1 All that piece and parcel of the property bearing survey no 48, measuring 22 Acres 13 Guntas, situated at Dharwad taluk, Dharwad Hobli, Manasur & Sanna Somapura Village, Dharwad District, Karnataka. ITEM NO 2 All that piece and parcel of the property bearing survey no 48/1, measuring 2 Acre 20 Guntas, situated at Dharwad taluk, Dharwad Hobli, Manasur & Sanna Somapura Village, Dharwad District, Karnataka ITEM NO 3 All that piece and parcel of the property bearing survey no 49/3, totally measuring 08 Acres 02 Guntas, out of which 08 Guntas is POD Kharab, situated at Dharwad taluk, Dharwad Hobli, Manasur & Sanna Somapura Village, Dharwad District, Karnataka. WHEREAS the boundaries of ITEM NO 1, 2 and 3 of the SCHEDULE PROPERTY along with all requisite details and the title flow of the schedule property and description of the composite schedule property will be mentioned in detail in the JOINT DEVELOPMENT AGREEMENT only after due verification of all the related documents, title deeds etc,.”

13. A plain reading of the contents of Memorandum of Understanding makes it crystal clear that there is no recital as to the consideration. It is an admitted fact that the plaintiff has not paid any consideration to the defendant. The defendant has also not received any consideration from the plaintiff. There is no consideration for Joint Development Agreement - 18 - CRP No. 100079/2025 also. The recitals of the impugned document reveals that the defendant, being the owner of the land, has been given 45% in the developed land, whereas the plaintiff, who is a developer, is given 55% of the developed land. This agreement between the parties cannot be termed as consideration. Section 2(e) of the Indian Contract Act contemplates that every promise and every set of promises, forming the consideration for each other, is an agreement. Sub-section (g) of Section 2 of the Act contemplates that an agreement not enforceable by law is said to be void. Sub-section (h) of Section 2 of the Act contemplates that an agreement enforceable by law is a contract. Section 25 of the Act contemplates that an agreement made without consideration is void. As the maxim goes, ex nudo pacto non oritur action - from a bare promise, no action arises. Unless mutual consideration flows, no legal obligation can arise. The Memorandum of Understanding being only an expression of intent (nudum pactum), incapable of enforcement.

14. It is also relevant to mention here as to the provisions of Section 14 of Specific Relief Act, 1963. The same reads as under: - 19 - CRP No. 100079/2025 “14. Contracts not specifically enforceable.— The following contracts cannot be specifically enforced, namely:— (a) where a party to the contract has obtained substituted performance of contract accordance with the provisions of section 20; (b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and (d) a contract which its nature determinable.”

The maxim id certum est quod certum reddi potest— that is certain which can be made certain-underscores the requirement of certainty in contractual terms. A contract must be concluded with certainty of terms; otherwise unenforceable. In the present case, essential terms have been left open, and therefore the arrangement lacks the requisite certainty to be specifically enforced. It is relevant to mention here, as to the decision of Hon’ble Supreme Court in the case of SPEECH AND SOFTWARE TECHNOLOGIES (supra) wherein it is held that an agreement to enter into an agreement is not - 20 - CRP No. 100079/2025 enforceable, nor does it confer any right upon the parties. In another decision in the case of DAHIBEN (supra), the Hon’ble Supreme Court has held that having regard to the documents filed along with the plaint are required to be taken into consideration for deciding the application under order VII Rule 11(a) of Code of Civil Procedure. When a document referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint.

It is relevant to mention here as to the decision Hon’ble Supreme Court in the case of MUKUND BHAVAN Trust v. SHRIMANT CHHATRAPATI UDAYAN RAJE PRATAPSINH MAHARAJ BHONSALE AND ANOTHER rendered in Civil Appeal No.14807 of 2024 decided on 20th December, 2024. The key aspects of the decision, may be summarised as under: Purpose of Order VII Rule 11(d) of CPC: The Hon’ble Supreme Court re-affirmed that the intent of Order VII Rule 11(d) is to "nip in the bud" and summarily reject a suit if it is clearly barred by law, such as the Limitation Act. Addressing Delay and Abuse: The Hon’ble Supreme Court highlights that courts should not be hesitant to reject a plaint when the - 21 - CRP No. 100079/2025 plaintiff's claims are hopelessly time-barred or constitute an abuse of the legal process. Harm to Defendants: Forcing defendants to undergo the ordeal of a trial when the suit is clearly unsustainable and time- barred is considered harmful and unjust. Judicial Economy: Rejecting stale or frivolous claims at the threshold is crucial to ensure judicial resources are not wasted on litigation that lacks merit and is statutorily barred. In essence, the decision encourages a proactive approach to terminate meritless cases and prevent their unnecessary protraction, upholding principles of legal certainty and efficient judicial administration.

In the case on hand, a plain reading of aforesaid memorandum of understanding, makes it clear that there is no privity of contract between the parties and the contract is not a concluded contract. When there is no concluded contract between the parties, the parties cannot seek enforcement of such agreement as contemplated under Section 14 of Chapter II of Specific Relief Act, 1963. In paragraph 12 of the plaint, the has clearly stated that the suit is filed by the plaintiff - 22 - CRP No. 100079/2025 seeking relief of specific performance of the rights of the plaintiff under the Memorandum of Understanding dated 12th March, 2021 to get the Joint Development Agreement executed as per the terms of memorandum of understanding. The same reads as under:

12) Valuation and Court Fee: That, the suit is filed by the plaintiff seeking relief of specific performance of the rights of the plaintiff under MOU dated 12.03.2021 to get the JDA executed as per the terms of MOU. It is submitted that, the suit schedule properties are agricultural lands bearing Sy.No.48, 48/1 and 49/3 situated at Mansur village, Tq: & Dist: Dharwad, in all measuring 32 Acres and 32 Guntas. It is submitted that, the plaintiff is seeking the relief of specific performance of its right under the MOU and since there is no consideration mentioned for execution of JDA, the relief sought by the plaintiff falls under Clause (e) of Section 40 of the Karnataka Court Fees and Suit Valuations Act, 1958 and since, the value of the suit schedule properties is more than Rs.10,000/-, a Court fee of Rs.200/- is paid U/Sec.47 of KCF and SV Act.

Upon perusal of the memorandum of understanding dated 12th March, 2021 and the aforesaid averment made in the plaint, it would make clear that it is only a expression of intent to enter into Joint Development Agreement, which does not embody consideration or a binding obligation. Under - 23 - CRP No. 100079/2025 Section 25 of the Indian Contract Act, 1872, an agreement without consideration is void (nudum pactum). It is well settled law that Memorandum of Understanding/Letter of Intents is mere “agreements to agree” and unenforceable.

On perusal of materials placed before me and keeping in mind the aforesaid provisions of Section 14 of Specific Relief Act and Section 25 of Indian Contract Act, as also, the decisions of Hon’ble Apex Court, I am of the considered opinion that the suit of the plaintiff is barred. When the suit is barred by law, the trial Court is not at all required to adjudicate the matter in dispute. Under the given set of circumstances, the Court should not be hesitant to reject the plaint when the plaintiff’s claims are hopelessly barred under law. If trial is conducted, it would constitute an abuse of legal process and in view of the decision of the Hon’ble Supreme Court, the Court has to summarily reject the plaint if it is clearly barred by law under the principle of ‘nip in the bud’ and to terminate the meritless cases, and prevent their unnecessary protection, upholding the principles of legal certainty and efficient judicial administration. For the aforesaid reasons and discussions, the revision petitioner has made out a ground to allow this petition. - 24 - CRP No. 100079/2025 I have carefully examined the decisions relied upon by the learned counsel respondent. The facts and circumstances of the case on hand, and the facts and circumstances of the judgments relied upon are not consistent to each other. In view of the recent decision of the Hon’ble Supreme Court and also keeping in mind the provisions of Section 14 of Specific Relief Act and Section 25 of Indian Contract Act, the decisions relied upon by the counsel for the respondent will not come to the aid of respondent. In the result, I proceed to pass the following:

O R D E R i) Civil Revision Petition filed under Section 115 of Code of Civil Procedure is hereby allowed; ii) Order dated 19th April, 2025 passed by the II Additional Civil Judge & JMFC, Dharwad on IA. No.5 in OS No.803 of 2022 under Order VII Rule 11 of Code of Civil Procedure is set aside; iii) Consequently, IA.5 filed under Order VII Rule 11 of Code of Civil Procedure is allowed and the plaint filed under Section 26 read with Order VII Rule 1 of Code of Civil Procedure by the plaintiff, is rejected; - 25 - CRP No. 100079/2025 iv) Considering the facts and circumstances of the case, and the nature of transaction, parties are directed to bear their own costs; v) Registry to send the copy of this Order along with the trial Court Records to the trial Court. Sd/- (G BASAVARAJA) JUDGE CT-CM