Quick Summary: The Bombay High Court decided that the Term Sheet between Everhome Properties and Aditya Developers isn't a binding contract. The court pointed out the importance of the "Long Stop Date," which wasn't extended, causing the end of the agreement.
Everhome Properties Pvt. Ltd. and Aditya Developers made a Term Sheet on April 12, 2023, to work together on a property in Vasai, Maharashtra. Everhome paid Rs. 11 crores as a refundable security deposit. The Term Sheet had a "Long Stop Date" of April 11, 2024, by which certain conditions had to be met.
Arguments by Everhome: They argued that the Term Sheet was a binding contract and that Aditya didn't do what they were supposed to, stopping the JDA from being finalized.
Arguments by Aditya: They argued that the Term Sheet wasn't a final contract and that the "Long Stop Date" was very important. Since the conditions weren't met by this date, the agreement automatically ended.
Judge Milind N. Jadhav's Ruling: The court decided that the Term Sheet wasn't a binding contract because the "Long Stop Date" wasn't met. The Term Sheet had a clause that made it end on its own if conditions weren't met.
Outcome: The court rejected Everhome's request to stop Aditya from doing anything, allowing Aditya to deposit Rs. 11 crores with the court.
Importance of "Long Stop Date": The court stressed that the "Long Stop Date" is an important part of contracts, giving a clear deadline for meeting conditions.
Refund of Deposit: Aditya Developers deposited the Rs. 11 crores in court, ensuring Everhome's request for a refund.
The court's decision emphasizes the importance of sticking to deadlines in contracts and what happens if conditions aren't met. The ruling shows the need for clear agreements and mutual extensions if conditions can't be met in time.
Everhome's request for a temporary pause was granted, giving them time to go to the Supreme Court for further appeal.
