Specific enforceability of a redevelopment MOU upheld where essential terms were settled and the arrangement was acted upon.

The memorandum of understanding was treated as a concluded and specifically enforceable development arrangement because it recorded the full bargain for demolition, redevelopment, tenant accommodation, flat allocation, parking and terrace rights, with the plaintiff to use available FSI and purchased TDR. The contemplated later formal development agreement did not make the arrangement incomplete, since the essential terms had already been settled and the document had been acted upon through purchase of TDR, accommodation arrangements and recognition as co-owner. It was not merely a construction contract and was not excluded from specific enforcement under the Specific Relief Act. Injunction protection against creation of third-party rights over the TDR was therefore justified.

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Issues: Whether the Memorandum of Understanding dated 8 May 2004 constituted a complete and specifically enforceable development agreement, and whether the plaintiff had made out a prima facie case for injunction restraining creation of third-party rights.

Analysis: The agreement recorded the full arrangement between the parties for demolition of the existing structure and development of the entire plot through a new construction at the plaintiff's cost, using both available FSI and purchased TDR. It set out the reciprocal obligations of the lessees and the plaintiff, including permissions, demolition, construction, temporary and permanent accommodation for tenants, allocation of flats, ownership of the remaining flats, parking and terrace rights. The fact that a formal development agreement was contemplated did not render the MOU incomplete, because the essential terms had already been settled and the later formal document was only to give legal form to the concluded arrangement. The plaintiff's conduct in purchasing TDR, arranging accommodation, and being recorded as co-owner showed that the agreement had been acted upon. The agreement was not a mere construction contract and, on its terms, was not excluded from specific enforcement by Section 14 of the Specific Relief Act, 1963.

Conclusion: The MOU was held to be specifically enforceable, and the plaintiff was held entitled to an injunction against the defendants creating third-party rights or otherwise dealing with the TDR.

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