1st NLS SAM FinTech Moot Court Competition, 2024 PINK FLOYD (D)

TC – PINK FLOYD (D)

ompetition

1st NLS SAM FinTech Moot Court Competition, 2024

BEFORE THE HON’BLE

HIGH COURT OF REIDERIA

IN THE CASE OF
SUIT NO._/2024
(UNDER Rule 26 of THE REIDERIA HIGH COURT (ORIGINAL SIDE) RULES, 1980)

3AS & ORS.………...……………………………………...………………..……...…PLAINTIFF(S)

Versus

SREENATH & ORS....……………………………………………..……..………....DEFENDANT(S)

CLUBBED WITH

3BS & ORS.………………………………………………………………………..…PLAINTIFF(S)

Versus

TURBO & ORS…….…………………………………………………..……………DEFENDANT(S)

RESPECTFULLY SUBMITTED TO THE HON’BLE JUDGES IN JUDICATURE OF

THE HIGH COURT OF REIDERIA

MEMORIAL ON THE BEHALF OF DEFENDANT

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TABLE OF CONTENTS

List of Abbreviations………………………………………………………………...2-3

Index of Authorities………………………………………………………………….4-6

Statement of Jurisdiction…………………………………………………………....7

Statement of Facts……………………………………………………………………8-12

Issues Raised………………………………………………………………………….13

Summary of Arguments……………………………………………………………...14-16

Arguments Advanced………………………………………………………………...17-39

1. Whether Turbo carried out illegal activities and enabled fraudulent transactions
favouring developers like Nirguna?
2. Whether the sale of land allocated to Project A-Hash, to Sreenath is not legally
valid and interim injunction should be granted?
3. Whether State failed to timely regulate Real Estate Tokenizing Platforms like Turbo
and hereby violated Article 21A and Article 300A of the retail investors?

Prayer………………………………………………………………………………….40

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LIST OF ABBREVIATIONS

ABBREVATION FULL FORM

& And
3As Abhinaya, Akanksha, Arjun
3Bs Bhaskar, Basha, Brandon
AIR All India Report
Art. Article
BFP Bonafide Purchaser
Bw Between
CM Chief Minister
Const. Constitution
F&Os Futures and Options
FRs Fundamental Rights
Govt. Government
GO Government Order
HC High Court
Hon’ble Honourable
i.e. That is
LDA Land Development Authority
LDR Land Revenue Department
Mhk. P Maharakshak Portal
OLOT One Land One Title
Ors. Others
Para Paragraph
Pg. no. Page No.
R.Invst. Retail Investors
RERA Real Estate (Regulation and Development) Act
ROFR Right of First Refusal
SC Supreme Court
SCC Supreme Court Cases
SEBI Stock Exchange Board of India

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Sec. Section
T.Tk TurboTokens
USD United States Dollars
v. Versus
Vol. Volume

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INDEX OF AUTHORITIES

CONSTITUTION

• The Constitution of India, 1950.

• The Constitution of Danubia, 1952.

NATIONAL CASES

• Bachhaj Nahar v. Nilima Mandal, (2008) 17 SCC 491.

• Central Inland Water Transport Corporation Limited and Anr. v. Brojo Nath Ganguly
and Anr., 2015 7 SCR 1025.
• Gopalakrishnan v. Gomathi Ammal, AIR 1954 SC 176.
• Gulf Goans Hotels Company Limited & anr. v. Union of India & Ors., 2014 10 SCC
673.
• Harla v. State of Rajasthan, 1951, AIR 1951 SC 467.
• Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd.,
2021, AIRONLINE 2021 SC 224.
• Jaipur Development Authority & Ors. v. Vijay Kumar Data & anr, 2011 12 SCC 9.
• Justice K. S. Puttaswamy (Retd.) & Anr. v. Union of India & Ors., 2017 10 SCC 1.
• K.B. Saha and Sons Pvt. Ltd. v. Development Consultant Ltd., (2008) 8 SCC 564.
• K.T. Plantation Pvt. Ltd. v. State of Karnataka, 2011 9 SCC 1.
• Laxmi Kumari v. Ramesh Chandra Gupta, 2017.
• Lingappa Pochanna Appelwar v. State of Maharashtra, 1985, AIR 1985 SC 389.
• M. P. Sharma & Ors. v. Satish Chandra, District Magistrate, Delhi & Ors., AIR 1954
SC 300.
• Modern Dental College & Research Centre v. State of Madhya Pradesh, 2016 7 SCC
353.
• Nathulal v. Phoolchand, 1970, AIR 1970 SC 546.
• Navjyoti Coop. Group Housing Society v. Union of India, 1992 4 SCC 477.
• S.P. Chengalvaraya Naidu v. Jagannath, 1994 1 SCC 1, Lazarus Estates Ltd. v. Beasley,
1956 1 QB 702.
• SEBI v. Sahara India Real Estate Corporation Ltd., 2012 10 SCC 603.
• Shailesh Haribhakti v. Indiabulls Real Estate Ltd., 2017 137 SCL 259 (Bom).
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• Shah Babulal Khimji v. Jayaben D. Kania, 1981 4 SCC 8.

• Sodan Singh v. New Delhi Municipal Committee, 1989 4 SCC 155.
• State Bank of India v. S.N. Goyal, (2008) 8 SCC 92.
• State of Maharashtra v. Kanchanmala Vijaysing Shirke, 1995 5 SCC 659.
• State of Uttaranchal v. S.K. Vaish, 2011 8 SCC 670.
• Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, 2012 1 SCC 656.
• Union of India v. Chaturbhai M. Patel, 1976 3 SCC 600.
• Union of India v. Tata Sons Ltd, (2019) 11 SCC 181.

INTERNATIONAL CASES

• Bishopsgate Motor Finance Corporation Ltd. v. Transport Brakes Ltd., 1949 1 KB 322
(CA).
• Dann v. Hamilton, 1939 1 KB 509 (CA), ICI Ltd. v. Shatwell, 1965 AC 656 (HL).
• Derry v. Peek, 1889 14 App. Cas. 337.
• Lazarus Estates Ltd. v. Beasley, 1956 1 QB 702.
• Lloyd v. Grace, Smith & Co., 1912 AC 716.
• Morris v. Ashbee, 1868, C 16/514/M81.

STATUTES

• Consumer Protection Act, 2019.

• Indian Contract Act, 1872.
• Indian Stamp Act, 1899.
• Insolvency and Bankruptcy Code.
• Real Estate (Regulation and Development Act, 2016.
• The Information Technology Act, 2000.
• The Registration Act, 1908.
• The Transfer of Property Act, 1882.

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BOOKS

• The Logic of Securities Lae, Nicholas L. Georgakopoulos, Cambridge University Press,

2017.
• Engineering International, Volume 4, No 2 (2016) ISSN 2409-3629 Asian Business
Consortium.

OTHER AUTHORITIES

• INDUSTRYTODAY.COM, The Role and Importance of Technology in Business -

Industry Today - Leader in Manufacturing & Industry News, (last visited Aug 10,
2024).
• LEGALSERVICESINDIA.COM, Actus Non Facit Reum, Nisi Mens Sit Rea: A Deep
Dive into the Nexus of Actus Reus and Mens Rea (legalserviceindia.com), (last visited
Aug 6, 2024).
• LEGALSERVICESINDIA.COM, The Doctrine of Impossibility: Lex Non Cogit Ad
Impossibila (legalserviceindia.com), (last visited Aug 7, 2024).
• LEGALSERVICESINDIA.COM, The Realm of Caveat Emptor: Unveiling its
Significance in Consumer Transactions (legalserviceindia.com), (last visited Aug 7,
2024).
• Research Article Date: March 1, 2023, Introduction to UI/UX Design: Key Concepts
and Principles Nasrullah Hamidli Baku Engineering University, Information
Technologies (SABAH groups), Baku, Azerbaijan.

DATABASES

• LexisNexis (Advance).
• Manupatra.
• SCC Online.

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STATEMENT OF JURISDICTION

The Plaintiffs have approached the Original Side of the Hon'ble High Court of Reideria under
Rule 26 of THE RIDERA HIGH COURT (ORIGINAL SIDE) RULES, 1980 read with Section
16, 79, Order 1 Rule 9, Order 27 Rule 1 of Civil Procedure Code, 1908 under which Plaintiff
can directly file a civil suit in High Court. Also, Hon’ble High Court upon its discretion can
club two suits together arising out of some facts and issues being of similar nature. Additionally,
Hon’ble High Court can allow to implead relevant parties to administer complete justice. And
Government can also be made party to the suit, if necessary, under the above-mentioned rule
read with sections.

The Defendants submit to this jurisdiction of this Hon’ble Court.

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STATEMENT OF FACTS

• The Republic of Danubia, Neighbour to Democratic Republic of India share a same

colonial past. Constitution of Danubia is Mutatis Mutandis to Constitution of India with
modifications in Art 19 and 21. Danubian economy was also opened up three decades
ago as similar to 1991 situation of India.
• TK (Management Head) TL (Tech Expert) developers of Turbo initiated with e
commerce business later on which was sold to Amazon. Then the Turbo became an
platform for Tenants and Renters and real estate broker in an online mode (using UI/UX
experience). Turbo wanted to revolutionize real estate sale which was slow and heavily
regulated making it hard and less marketable for the Turbo.
• Turbo invested money to analyse real estate market and observed that young retail
investors in Danubia, faced significant challenges. Rising property prices, poor title
deed record-keeping and the threat of land mafia deter them. The judicial system was
slow and costly, low rental incomes, regulatory processes were cumbersome, no title
insurance for protection, housing loan rates were high and heavy taxes on resale gains
dissuaded potential buyers, making real estate an unattractive investment despite its
premium value.
• TK and TL wanted to expand to retail investors, who preferred stocks and
cryptocurrencies by gamifying real estate like other asset classes.
• The Danubian land records were unreliable, with 30% fabricated titles in key cities.
Turbo, with government approval, launched a pilot in Reide in state of Rideria, using
government records, proprietary maps, drone imagery, and the CORS network. They
invited public feedback for 90 days, removing 3,187 disputed tracts. On August 1, 2021,
Turbo unveiled the Maharakshak database,. Turbo adopted a permissioned blockchain
for transparency and immutability, with public view access but required users to agree
to a disclaimer. TurboSquare, launched the same day, featured property influencers
promoting the platform.
• “With a clear text disclaimer in light green on a beige background and Times New
Roman (font size 11) made available through the web and app user interfaces (branded
TurboSquare) that Danubian law makes a distinction between title and evidence of title
and that the records made available through Maharakshak cannot substitute for the
requirement of taking an independent legal opinion.”

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• Turbo began selling futures and options (F&Os) on Reide property prices and
encouraged users to share their information for F&O transactions. The Danubian
securities regulator issued an advisory against Turbo's legal limits in dealing with
property F&Os on January 15, 2022. Turbo without disputing then revised its
monetization plan, leveraging its consortium blockchain and data from TurboX and
F&O transactions. This led to the introduction of TurboTokens, connecting real estate
owners, developers, and retail investors.
• TurboSquare enabled real estate developers to raise funds for projects by issuing
TurboTokens. Developers having conducted due diligence, integrated project details
into the consortium blockchain after paying a technology facilitation fee to Turbo.
TurboTokens represented fractional shares in the purchased land and upcoming
developments, with no segregation of assets. Retail investors bought these tokens,
which funded the developer. Token holders could exit by redeeming tokens at a higher
price or retain them to sell to homebuyers. Turbo provided valuation data for
redemption, and token holders had the right of first refusal for apartments based on their
holdings.
Some conditions were stipulated to instil confidence in retail investors to take part in
fractional ownership powered through TurboTokens:
o Developers on TurboSquare must raise funds solely through the fractional
ownership model and can only sell completed apartments to home buyers after
fractional owners have exercised their right of first refusal.
o If fractional owners opt for redemption, developers must fulfil these requests,
with sale proceeds placed in an escrow managed by Turbo, prioritizing
payments to owners before disbursing any remaining funds to the developer.
o Developer agreements with Turbo include key milestones, integrated into
TurboToken terms. Failure to meet these milestones triggers the encashment of
bank guarantees to settle claims.
o If 75% of project funds are raised via TurboTokens, Turbo may offer a bridge
loan; otherwise, funds are refunded to investors, and the project is delisted.
o All agreements and transactions are recorded on the blockchain, ensuring
transparency and automatic execution of investor protections like bank
guarantee encashments, accessible by both State authorities and investors.

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• By April 1, 2022, Turbo began issuing TurboTokens for a Tarneja group project.
Adoption was slow, so Turbo invested heavily in educating investors on token
mechanics, safeguards, immutable blockchain ownership, and potential returns over
50%. At this crucial time, Ms. Suguna, the Chief Minister of Reideria, stepped in to
support Turbo.
• C.M. Suguna got issued an Order from the Reideria Land Revenue Department dated
May 1, 2022 in which The Land Revenue Department commended Turbo for its efforts
for use of a consortium blockchain architecture, which allowed staff to validate and
update the blockchain registry. Sub-registrars in Reide have been instructed to not only
maintain records in official property registries but also update them on Maharakshak,
Turbo’s blockchain solution. This protocol, initially for Reide, will be extended to other
areas as Turbo expands its Maharakshak database.
• The issuance of this Order Turbo witnessed high growth volume of investors willing to
take fractional shares in these projects through TurboTokens.
• Nirguna, Suguna’s corrupt brother, exploited his connections to dominate real estate in
Reideria, using intimidation and political influence. Facing legal troubles for
defrauding homebuyers, he turned to defrauding retail investors through fractional
ownership with Turbo Tokens.
• Nirguna, a notorious real estate developer, listed two projects—A-Hash in a prime
Reide locality and B-Hash in a rundown area—on Turbo using a benami friend, Harish,
as the primary developer. Retail investors (3As and 3Bs) invested in these projects,
which fell short of full capitalization, requiring bridge loans from Turbo. In February
2023, Nirguna disappeared amid allegations of involvement in farmer deaths, causing
political turmoil and his sister Suguna’s resignation. It was revealed that Nirguna had
sold the land for A-Hash (which Nirguna obtained by coercion from an old man earlier)
to industrialist Sreenath and that B-Hash's land lacked proper records (belonged to slum
dwellers in actual). The Real Estate Regulatory Authority (RERA) of Reideria (similar
to Maharashtra RERA) declared a ban on all fractional share transactions in real estate,
except where the transactions are recorded in the State-owned public register, and
declaring platforms like Turbo (4 more startups had started this activity in the meantime
though all of them were permitted to use Maharakshak upon payment of a fee), violators
of the provisions of RERA, both directly and as enablers. The latter accusation was
perhaps motivated by the fact that developers like Nirguna, who otherwise registered

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their projects under RERA, used the fractional share model where retail investors and
not homebuyers were financing the project, to sneak out of the ambit of RERA. The
securities regulator of Danubia, in the meantime, issued a circular declaring
TurboTokens to be illegally issued securities.
• In April 2023, the 3As and 3Bs approached the original side of the Reideria High Court,
filing a civil suit which has been clubbed together and required parties have been
impleaded to the suit. The 3As have impleaded Turbo, all other A-Hash TurboToken
owners, Nirguna (ex parte), Harish, and the Land Revenue Department of the State of
Reideria in their suit. The 3Bs have impleaded all the B-Hash TurboToken owners,
Nirguna (ex parte), Harish, and the Land Revenue Department of the State of Reideria
in their suit. Turbo has impleaded the Republic of Danubia in both the suits. The case
is now up for final hearing.

LIST OF EVENTS

SR. DATE PARTICULARS

NO
1. 2001 Turbo came into Existence as an B2C E-Commerce Company
2. 2011 Turbo became a Public Listed Company (Market Capitalisation 2
billion USD)

3. 2012 Sale of E-Commerce Business to Amazon

4. 2012 TurboX came to existence. Online House Hunting platform as an agent
bw Renters & Tenants.

5. 2020 Budget for Real Estate Market analysis.

6. May Turbo put up online for public inspection, all the land records
2021 alongside proprietary cadastral maps

7. Aug Release of Maharakshak Portal on Turbosquare Homepage after

2021 hiding the disputed lands

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8. Jan 15, Stopped dealing in F&O transactions and decided to reexamine

2022 monetisation plan.

9. Jan-Mar Formulation of Blockchain backed TurboTokens.

2022
10. Apr 1, Started issuing Turbo Tokens.
2022
11. May 1, CM order supporting and promoting Maharakshak Portal.
2022
12. July 3As buy TurboTokens for project A-hash for 500,000 USD.
2022
13. Nov. 3Bs invest in project B-hash for 180,000 USD
2022
14. Oct 2022 Sale of land tract of A- Hash to Sreenath by Nirguna. (secretly)

15. Feb One block of A hash complete, foundation work of B-hash started,
2023 Nirguna Vanished, CM Suguna Resigned

16. Feb- Turbo finds out sale of land of A hash made on Oct 2022 and Harish
March have no asset to indemnify. Ban on Fractional Shares and Turbo
2023 Tokens by RERA and security regulator.

17. April Filing of Suit in High Court

2023

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ISSUES RAISED

ISSUE 1
WHETHER TURBO CARRIED OUT ILLEGAL ACTIVITIES AND ENABLED
FRAUDULENT TRANSACTIONS FAVOURING DEVELOPERS LIKE
NIRGUNA?

ISSUE 2
WHETHER THE SALE OF LAND ALLOCATED TO PROJECT A-HASH, TO
SREENATH IS NOT LEGALLY VALID AND INTERIM INJUNCTION SHOULD
BE GRANTED?

ISSUE 3
WHETHER STATE FAILED TO TIMELY REGULATE REAL ESTATE
TOKENIZING PLATFORMS LIKE TURBO AND HEREBY VIOLATED
ARTICLE 21A AND ARTICLE 300A OF THE RETAIL INVESTORS?

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SUMMARY OF ARGUMENTS

I. Turbo did not carry out illegal activities and did not enable fraudulent
transactions favouring developers like Nirguna.

Turbo argues that it has not engaged in illegal activities nor supported fraudulent
transactions favoring developers like Nirguna or Harish. It asserts that its initiatives,
including the Maharakshak Portal, fractional ownership model and issuance of turbo
tokens, were legally valid, and were designed to improve transparency in the real estate
market, and had government support through former Chief Minister Suguna. Turbo
emphasizes that it acted in good faith, providing users with opportunities to raise
grievances and ensuring transparency through the use of blockchain technology. The
company denies any misuse of personal data and asserts that it is merely a platform
provider, not directly involved in real estate transactions. Turbo also argues that the
government's ban on fractional ownership and the declaration of TurboTokens as illegal
is unconstitutional, and infringes on the right to property and the freedom to conduct
business of turbo and the retail investors. Furthermore, Turbo claims that it has been
defrauded by Nirguna and Harish, who should be held primarily liable for any harm
caused to retail investors. The company proposes a solution to mitigate investors' losses
by offering alternative tokenized assets backed by government-approved projects.

II. The sale of land allocated to Project A-Hash, to Sreenath is legally valid and
interim injunction should not be granted.

In addressing the legal validity of the sale of land to Sreenath, the Defendants assert
that the transaction was conducted in full compliance with all relevant legislations.
Sreenath purchased the land as a bona fide purchaser, meaning that he purchased the
property without prior knowledge of any underlying fraudulent activity linked to
Nirguna, the previous owner. The Defendants emphasize that the sale deed was properly
registered under Sec 17 of the Registration Act, 1908, which provides presumptive

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validity to the transaction, making it conclusive evidence of ownership unless proven

otherwise by the petitioners. Additionally, Sec 41 of the Transfer of Property Act, 1882
safeguards Sreenath’s rights as a purchaser in good faith. The Defendants argue that
granting an interim injunction would halt the ongoing construction on the land, which
in turn will halt the project all together leading to substantial financial losses for
Sreenath and retail investors. Moreover, with Nirguna having fled the country, Sreenath
has no financial means to mitigate these losses. The economic impact could extend
beyond the project, potentially destabilizing financial markets. Furthermore, the
principle of promissory estoppel prevents the petitioners from challenging Shreenath’s
title after the state’s prior assurances regarding the validity of the land. Consequently,
the Defendants urge that the interim injunction should not be granted due to the severe
economic consequences and the unjust treatment it would impose on Sreenath.
However, we duly propose a solution to mitigate losses provided the state cooperates
in its due legal obligations.

III. State did not fail to regulate real estate tokenizing platforms like Turbo and
didn’t violate Article 21-A and 300-A of retail investors in any manner.

State government of Rideria was aligned with the Union Government of Danubia's
mission to improve land title data through the "One Land One Title" (OLOT) mission.
The state's support for Turbo was limited to validating property deeds using blockchain
technology, which was aimed at ensuring transparency and data integrity. It is
contended that Turbo had only a minor impact on the real estate market in Ridera,
controlling just 5% of the market. Therefore, claims that the state supported illegal
activities through Turbo are considered baseless. Turbo had provided "view" access to
all transactions on the blockchain, allowing investors to scrutinize the validation
process. The responsibility for meticulousness was placed on the investors, who were
informed of the state’s role in the validation process. The Securities Regulator had
issued advisories and later banned Turbo Tokens when the situation escalated,
demonstrating the state's efforts to protect investors. The Land Revenue Department
(LRD) also played a role in ensuring that Turbo’s platform followed legal processes,
but any support provided was not legally binding. The Defendants asserts that any

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government orders or circulars related to Turbo were merely suggestive and lacked
legal authority. The state did not mandate the use of the Turbo platform, and any
investor participation was voluntary.

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ARGUMENTS ADVANCED

I. Turbo didn’t carry out illegal activities and did not enable fraudulent
transactions favouring developers like Nirguna.

It is humbly submitted before the Hon’ble Court that Turbo is not engaged in any illegal
activities, and it did not support and aided the Fraudulent activities of Nirguna. Turbo’s
initiatives have been always under its legal capacities, it never violated any legal provisions.

1.1 Maharakshak Portal of TurboSquare was a legally valid initiative and Turbo didn’t
utilize any deceptive practices to defraud its users.

It is humbly submitted that TurboSquare designed Maharakshak Portal to revolutionize the

record keeping system of Title Deeds in Republic of Danubia to facilitate growth and
development of Real Estate Market despite severe infrastructural challenges prevalent in
state. Innovation and technological advancement are an indispensable part of any business
1
thus, Turbo by using technological innovation created a mechanism for the ease-of-
business and exercised its right to freedom of business.2 Turbo’s initiative was duly
reviewed and permitted by the Government. Turbo utilized Permissioned blockchain
architecture using distributed ledger technology to create this Platform and Government
was given a stake in this platform by giving it access to validate every transaction being
update on it and access to view was given to General public ensuring transparency.

Blockchains serve four important functions regardless of their form. Encryption,

immutability, distributed data storage (transaction records), and consensus methods are
crucial aspects. Blockchains store encrypted data across a peer-to-peer network by joining
contiguous "blocks" of information to form "chains." All network members can see
blockchain information transactions. The consensus procedure keeps information
unchangeable across the distributed network and stops people from adding new data
without web permission. The blockchain's design prevents changing or removing data.3
Such nature of Blockchain makes it transparent and safe i.e. free from fabrication and

1
INDUSTRYTODAY.COM, The Role and Importance of Technology in Business - Industry Today - Leader in
Manufacturing & Industry News, (last visited Aug 10, 2024).
2
DANUBIA CONST. art. 19 (1) (g).
3
Engineering International, Volume 4, No 2(2016) ISSN 2409-3629 Asian Business Consortium | EI Page 89
Commercial Applications of Blockchain and Distributed Ledger Technology Sai Srujan Gutlapalli* Interior
Architect/ Designer, RI Group, NY, USA *Corresponding Contact: sgutlapalli07@gmail.com.

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manipulation singlehandedly of any recoded transaction which is major challenge with

current Government Infrastructure.

Turbo in Good Faith gave 90 days of opportunity i.e. May-July 2021 to general public to
raise grievances about title accuracy before launch as Government records no doubt were
highly unreliable. And kept the view of such disputed properties blocked for general public
after the launch of Portal on August 1, 2021, to ensure the accuracy and reliability of data
presented.

Turbo utilizes UI/UX design which plays a crucial role in the development of digital
products as it directly impacts how users interact and engage with them. A well-designed
UI can make a digital product visually appealing, intuitive, and easy to navigate, while a
well-designed UX can ensure that users have a positive experience throughout their entire
journey, from discovering the product to using it and seeking support.4 Turbo made a clear
and catchy presentation of Disclaimer (an essential term) and ensured that it is not ignored
by users by making it compulsory to agree to it. The colour choice was kept unique and
catchy and different from colour scheme of whole web page to catch the attention and the
language of term was made in clear words which suit for the understanding of man of
ordinary prudence. Thus, there was a clear communication which is necessary for contract
to be valid.

The condition presented was made compulsory but there is no unconscionable or

unreasonable term in such an agreement to make it legally invalid. It was to the benefit of
the clarity of the users about the nature of transactions uploaded upon Maharakshak Portal
due to its limited application of city of Reide only. And here parties are not at any kind of
disadvantage due to accepting the term raised by TurboSquare.

The advertisements which are allegedly called “Misleading Advertisements” have been
grossly misinterpreted by the Plaintiffs. The advertisements persuade people to invest in
the Real Estate Sector in general and not in any Turbo specific project and along with it
they are commending Maharakshak portals safe and transparent nature which is an

4
Research Article Date: March 1, 2023, Introduction to UI/UX Design: Key Concepts and Principles Nasrullah
Hamidli Baku Engineering University, Information Technologies (SABAH groups), Baku, Azerbaijan.

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undeniable fact. There are no false or misleading claims in the advertisements, or any other
such shortcoming presented to make it liable under Sec 2 of Consumer Protection Act.5
Thus, it is again reiterated that Maharakshak Portal of turbo is completely legally valid
initiative and Turbo didn’t utilize any deceptive practices to defraud its users.

1.2 Turbo is just an enabler platform between Developers and Investors ensuring a
safe and secure exchange between them.

It is humbly submitted before this Hon’ble Court that Turbo’s primary business is in
technology and financial innovation. The company is merely a platform provider and a
technology service provider ensuring a safe and secure exchange between real estate project
developers and retail investors.

Turbo is charging its users for the Technical and Analytical utilization of its service. Turbo
itself doesn’t engage directly in buying, selling, or leasing real estate properties but instead
facilitates safe and secure exchange through its platform.

The phenomenon of investing in Real Estate which Turbo introduced is new, unique and
completely innovative and the regulatory framework of the state hasn’t kept pace with this
technological innovation, and Turbo has never tried to hide any of its activities either from
Government or general public everything was completely transparent owing to the
Maharakshak Portal and always acted in a completely goof faith. And failing to register as
a ‘real estate agent’6 is a single oversight that should not overshadow the company's history
of lawful operations. Turbo has always cooperated with regulatory authorities once the
issue was identified as in the case of F&O transactions. Turbo's willingness to comply and
correct the oversight should be viewed favourably.

The principle of "actus non facit reum nisi mens sit rea"7 (an act does not make one
guilty unless there is a guilty mind) applies here. There is no evidence to suggest that Turbo
acted with fraudulent intent or mens rea. Turbo issued the Turbo Tokens as a means to
ensure liquidity and facilitate legitimate transactions between developers and retail
investors of fractional ownership through TurboTokens.

5
Consumer Protection Act, 2019, § 2, No. 35, Acts of Parliament, 2019 (India).
6
Real Estate (Regulation and Development Act, 2016 § 2 (zm), No. 16, Acts of Parliament, 2016 (India).
7
LEGALSERVICESINDIA.COM, Actus Non Facit Reum, Nisi Mens Sit Rea: A Deep Dive into the Nexus of
Actus Reus and Mens Rea (legalserviceindia.com), (last visited Aug 6,2024).

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In lieu of Sec 9 of the RERA Act,8 the sale of real estate in fractional shares may be
regulated; however, such transactions are not inherently illegal. Turbo facilitated the
issuance of Turbo Tokens with full transparency and regulatory compliance. Furthermore,
the doctrine of "Caveat Emptor9" (buyer beware) places the onus on investors to conduct
due diligence in their investment decisions.

Caveat Emptor has been commonly used in commercial dealings, especially in real estate.
In Indian law, this idea is recognised as part of the basic legal framework that governs
contracts and investments. For example, Sec 16 of the Sale of items Act of 1930
incorporates the notion by requiring a buyer to examine the items and make purchases at
their own risk, unless the seller is guilty of fraud or misrepresentation.
Relevant case law supporting this doctrine includes:

The English case Morris v. Ashbee 10(1868) established that consumers should exercise
caution when purchasing unless the seller intentionally conceals major faults.
Laxmi Kumari v. Ramesh Chandra Gupta 11 (2017) In this case the Court reaffirmed
that a buyer must conduct due diligence before purchasing a property and cannot later
allege flaws if all information was available at the time of sale.
The Caveat Emptor law is especially relevant in the real estate sector, as Turbo Tokens are
used to facilitate fractional ownership sales. Turbo ensured transparency by letting
customers evaluate all disclosures about their assets. As a result, the buyers cannot later
claim that they were uninformed of the risks associated with these transactions.
Further Turbo has put in place a system to protect retail investors' interests in the event that
the developer defaults. However, the state's delay and incompetence have undermined its
efficacy. Turbo's system, which is governed by smart contracts based on blockchain
technology, protects investors through automatic execution. The state's refusal to regulate
or provide infrastructure impedes effective transaction registration, using the notion of "Lex
non cogit ad impossibilia12" (the law does not compel a person to do something impossible).

8
Real Estate (Regulation and Development Act, 2016 § 9, No. 16, Acts of Parliament, 2016 (India).
9
LEGALSERVICESINDIA.COM, The Realm of Caveat Emptor: Unveiling its Significance in Consumer
Transactions (legalserviceindia.com), (last visited Aug 7,2024).
10
Morris v. Ashbee, 1868, C 16/514/M81.
11
Laxmi Kumari v. Ramesh Chandra Gupta, 2017.
12
LEGALSERVICESINDIA.COM, The Doctrine of Impossibility: Lex Non Cogit Ad Impossibila
(legalserviceindia.com), (last visited Aug 7,2024).

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Turbo cannot be held responsible for the state's failure to enable the system's full
functionality.

And the state's prohibition on fractional shares, as enforced by RERA, inhibits Turbo's
authorized efforts to redeem fractional shares. The legal framework reinforces Turbo's
inability to carry out such redemptions, absolving it of any breach of contractual or
fiduciary obligations under Sec 10 of the RERA Act13 and Sec 56 of the Indian Contract
Act14, as a contract is void if it becomes impossible to perform or illegal after its formation
due to an event that the parties could not have anticipated or controlled. The regulatory
climate fails to recognise the changing nature of digital assets and tokens, unfairly
penalising Turbo for conforming to current, although antiquated, legislation.

Given the state's poor infrastructure and pervasive corruption, it is practically impossible
for Turbo to ensure that every transaction is accurately recorded in the government’s
property registry. This incapacity directly stems from the state's failure to provide an
adequate system, which constitutes a "hindrance by third parties" under the doctrine of
"Force Majeure". Turbo's reliance on blockchain was intended to bypass these deficiencies,
ensuring transparency and efficiency in recording transactions.

It is submitted to this honourable court that in the case of Union of India v. Tata Sons
Ltd15, the court emphasised the importance of administrative diligence and accuracy in
maintaining public records, emphasising that negligence can result in legal challenges and
the nullification of unauthorised actions. As in our current case, the land revenue
department's failure to notify the transaction of sale to Sreenath on the Maharakshak portal
in compliance with CM Suguna's directive resulted in fraud and misrepresentation.

Further turbo also claims that the loan made to Nirguna qualifies as a financial debt under
Sec 5(8) of the IBC16. The retail investors' investments in Turbo constituted financial debts
with enforceable rights, making them financial creditors in the event of Nirguna's default.

Further cases, such as "Shailesh Haribhakti v. Indiabulls Real Estate Ltd." (2017)17,

13
Real Estate (Regulation and Development Act, 2016 § 10, No. 15, Acts of Parliament, 2016 (India).
14
Indian Contract Act, 1872, § 56, No. 09, Acts of Parliament, 1872 (India).
15
Union of India v. Tata Sons Ltd, (2019) 11 SCC 181.
16
Insolvency and Bankruptcy Code, 2016, § 5(8), No. 31, Acts of Parliament, 2016 (India).
17
Shailesh Haribhakti v. Indiabulls Real Estate Ltd ,2017 137 SCL 259 (Bom).

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show the limitations of liability for intermediaries who enable transactions without
personally engaging in fraudulent behaviour.
Bachhaj Nahar v. Nilima Mandal18: This case emphasises the principle that no one can be
held accountable for crimes or wrongs they did not commit or were aware of.

1.3 There is no misuse of data by Turbo.

It is respectfully submitted to this Hon’ble Court that Turbo's alleged misuse of personal
data is unjustified, baseless, and without merit! The reply respectfully maintains that
Turbo's activities were entirely consistent with all applicable legal frameworks and duties.
The replies categorically deny any misuse, unauthorised disclosure, or illegal handling of
the personal data of retail investors or other project stakeholders.

The applicable provisions of the Information Technology Act of 2000, specifically Sec
43A19, and the Information Technology (Reasonable Security Practices and Procedures and
Sensitive Personal Data or Information) Rules of 2011, were strictly followed. The council
asserts that Turbo collected and processed personal data with the express and informed
consent of retail investors. The idea of volenti non fit injuria20 applies in this case since
retail investors freely volunteered their personal information to engage in the fractional
ownership scheme. The principle of bona fide (good faith) supports Turbo's actions,
assuring that the personal data processing was performed with the legitimate purpose of
satisfying contractual commitments and delivering services to retail investors who in turn
were potential allottees.

It is further submitted that there has been no breach of data security, or any harm caused to
the retail investors due to the actions of Turbo. The principle of damnum sine injuria
(damage without legal injury) is relevant, as no such legal injury has been inflicted upon
the retail investors in context of data breach. The council draws the court’s attention to the
legendary case of M. P. Sharma & Ors. v. Satish Chandra, District Magistrate, Delhi
& Ors21, where the Hon’ble SC emphasized that a mere breach of privacy without
demonstrable harm or injury does not give rise to a cause of action.

18
Bachhaj Nahar v. Nilima Mandal, (2008) 17 SCC 491.
19
The Information Technology Act, 2000, § 43A, No. 21, Acts of Parliament, 2000 (India).
20
Dann v. Hamilton, 1939 1 KB 509 (CA), ICI Ltd. v. Shatwell, 1965 AC 656 (HL).
21
M. P. Sharma & Ors. v. Satish Chandra, District Magistrate, Delhi & Ors., (AIR 1954 SC 300).

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The Defendants’s actions are further fortified by the ruling in Justice K. S. Puttaswamy
(Retd.) & Anr. v. Union of India & Ors.22 (the Aadhaar case), wherein the Supreme Court
held that the right to privacy is not absolute and is subject to reasonable restrictions. Turbo's
data processing practices align with the principles of necessity and proportionality
established in this case, ensuring that personal data is processed only to the extent necessary
for the legitimate business purpose and in a manner proportionate to that purpose only.
They only used that data to call upon or send project information to potential retail investors
based on their portfolios which in turn were generated with data mining and profiling based
on that user’s consensual private data.

1.4 Turbo itself was defrauded by Nirguna and harish making them primarily liable to
indemnify Retail Investors.

The Defendants respectfully submit that Turbo is itself a victim of a scheme of fraud and
deception planned and acted upon by Nirguna and Harish. The Defendants contend that the
primary liability to indemnify the retail investors lies squarely with the perpetrators of the
fraud, Nirguna and Harish, and not with Turbo.

It is a settled principle of law that fraud nullifies all transactions, as expressed in the maxim
“fraus omnia vitiat”23 In the instant case, Nirguna and Harish engaged in fraudulent
activities, misrepresenting many important facts to the development and concealing their
illicit intentions, thereby causing substantial harm to Turbo and its investors. The landmark
case of Derry v. Peek (1889)24 established that fraud involves a false representation made
knowingly, or without belief in its truth, or recklessly. This principle is perfectly applicable
here, as Nirguna and Harish acted with fraudulent intent, misleading both Turbo and the
retail investors into financial loss. Nirguna ran away with Turbo’s loan money too which
hasn’t been realized as of yet as he did with the retail investors money.

Further under the doctrine of indemnity, as entailed in Sec 12425 of the Indian Contract Act,
1872, the wrongdoers who caused the loss are primarily liable to indemnify the party
suffering the loss. Turbo, having been defrauded by Nirguna and Harish, is entitled to be
indemnified by them for any claims arising out of their fraudulent actions. The Hon’ble SC

22
Justice K. S. Puttaswamy (Retd.) & Anr. v. Union of India & Ors., 2017 10 SCC 1.
23
S.P. Chengalvaraya Naidu v. Jagannath, 1994 1 SCC 1, Lazarus Estates Ltd. v. Beasley, 1956 1 QB 702.
24
Derry v. Peek, 1889 14 App. Cas. 337.
25
Indian Contract Act, 1872, § 56, No. 124, Acts of Parliament, 1872 (India).

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in Gopalakrishnan v. Gomathi Ammal26 emphasized that the indemnifier’s liability is co-

extensive with that of the indemnified, and the indemnified party (Turbo, in this case) can
seek full compensation from the indemnifier (Nirguna and Harish).

It is respectfully submitted that Turbo cannot be held vicariously liable for the fraudulent
acts of Nirguna and Harish, as these acts were committed outside the scope of their
legitimate authority and were in clear contravention of Turbo's established policies,
conditions and working ethics. The principle of qui facit per alium facit per se27 (he who
acts through another acts himself) does not apply here, as the actions of Nirguna and
Harish were not in furtherance of Turbo’s interests but were instead aimed at deceiving
Turbo and enriching themselves at its expense as also was mentioned in the proposition
regarding their malafide intentions.
Page 9 of the proposition--
“Instead of mending his ways, Nirguna felt that it would be easier to defraud people with
less stake in the matter (read retail investors) who would not take upon themselves the
hassle of going to court. So, the fractional ownership model gained his attention and he
wanted to try out a few projects where he could get people to invest in his development (pun
intended) using TurboTokens.”

The Hon’ble SC in State Bank of India v. S.N. Goyal28 held that an employer is not
vicariously liable for the unauthorized acts of an employee or agent that are committed for
personal gain and in violation of the employer's instructions or orders of an aforesaid work.

The Defendants further contend that there was no contributory negligence on the part of
Turbo that would mitigate the liability of Nirguna and Harish. Turbo acted in good faith,
exercising due diligence in its business operations. The maxim ex turpi causa non oritur
actio (no action arises from a wrongful cause) is relevant here; the retail investors’ claims
for indemnity cannot arise from the wrongful acts of Nirguna and Harish, for which Turbo
bears no monetary nor legal responsibility. The precedent set in Lloyd v. Grace, Smith &

26
Gopalakrishnan v. Gomathi Ammal, AIR 1954 SC 176.
27
Lloyd v. Grace, Smith & Co., 1912 AC 716 (HL), State of Maharashtra v. Kanchanmala Vijaysing Shirke, 1995
5 SCC 659.
28
State Bank of India v. S.N. Goyal28 (2008) 8 SCC 92.

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Co.29, where the House of Lords ruled that a principal is not liable for an agent’s fraudulent
acts committed solely for the agent's benefit, further supports this position.

1.5 Government’s ban on fractional ownership and declaration of TurboTokens as

illegal is unjustified and constitutionally invalid

The government's outright ban on fractional ownership and the declaration of TurboTokens
as illegal infringes upon the right to property of many, can be further said the infringement
of land and property rights of general public at large, a legal right protected under Art 300-
A of the Constitution of Danubia30. Art 300-A stipulates that no person shall be deprived of
their property save by the authority of law. The Defendants submit that the government's
actions amount to an arbitrary deprivation of property for our retail investors of project A-
Hash and B-Hash without following due process of law, thereby violating Art 300-A. The
landmark judgment of K.T. Plantation Pvt. Ltd. v. State of Karnataka 31 reaffirmed that
any deprivation of property must be for a public purpose and must be accompanied by
compensation, neither of which has been followed or given to in the present case.

The Defendants contend that the government's broad ban on fractional ownership and the
declaration of TurboTokens as illegal infringe Art 19(1)(g) 32
of the Constitution, which
ensures the right to practise any profession or engage in any occupation, trade, or business.
It is generally established that any restriction on fundamental rights, such as the right to
property and the freedom to engage in any employment, trade, or business, must meet the
rationality and proportionality tests. In Sodan Singh v. New Delhi Municipal Committee
(1989)33, the Hon’ble SC of India emphasised that any restriction on this freedom must be
reasonable and in the public interest.

Furthermore, in Modern Dental College & Research Centre v. State of Madhya

Pradesh34, the Court determined that constraints should not be excessive and should be the
least restrictive means of achieving the stated purpose, which does not apply to our current
issue. Defendants argue that the government's activities are excessive, disproportionate,

29
Lloyd v. Grace, Smith & Co., 1912 AC 716.
30
DANUBIA CONST. art. 300-A.
31
K.T. Plantation Pvt. Ltd. v. State of Karnataka, 2011 9 SCC 1.
32
DANUBIA CONST. art. 19 (1) (g).
33
Sodan Singh v. New Delhi Municipal Committee, 1989 4 SCC 155.
34
Modern Dental College & Research Centre v. State of Madhya Pradesh, 2016 7 SCC 353.

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and serve no legitimate public purpose. Instead, they are an arbitrary use of authority that
stifles free trade and innovation, completely ignoring novel financial instruments and
individual property rights without considering less restrictive alternatives.

In the case of Navjyoti Coop. Group Housing Society v. Union of India35, the Supreme
Court declared that the government cannot act in a way that undermines individuals'
legitimate expectations based on previous behaviour or patterns. Furthermore, the blanket
ban contradicts the principles of laissez faire economics, which advocate for little
government engagement in economic activities.
The Defendants direct this Honourable Court's attention to jurisprudence that encourages
financial innovation and the creation of new financial instruments. The case of SEBI v.
Sahara India Real Estate Corporation Ltd.36, which dealt with financial instrument
regulation, recognised the need of striking a balance between regulatory control and the
encouragement of new financial activities. The Defendants submit that the government's
actions, by outright banning an innovative financial instrument like TurboTokens, stifle
innovation and progress, contrary to the spirit of judicial precedents that advocate for the
development of new financial avenues under appropriate regulatory frameworks.

Further highlighting how the onus being on the states inability to curb the fraud and the its
no efforts to right the infrastructure of Reideria, we as a company willing to do right by our
investors in deep peril are willing to offer a structured redeployment of Turbo tokens where
affected retail investors could be given alternative tokenized assets backed by government-
approved projects, mitigating their losses without direct financial restitution. Turbo could
work with state authorities to allocate land or government bonds as backing for these new
tokens. But, state’s compliance with this good deed needs to be confirmed first, for the
betterment of the stakeholders and the retail investors are at stake.

In conclusion, Turbo humbly submits to this Hon'ble Court that it has not engaged in any
criminal activity or sponsored fraudulent transactions by developers such as Nirguna.
Turbo's initiatives, like the Maharakshak Portal, were developed and implemented legally,
with the goal of modernizing property record-keeping and making real estate transactions
more transparent. The platform was created using modern technology, such as blockchain,

35
Navjyoti Coop. Group Housing Society v. Union of India, 1992 4 SCC 477.
36
SEBI v. Sahara India Real Estate Corporation Ltd., 2012 10 SCC 603.

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to assure transaction security and immutability, thereby providing users with a safe
environment. Turbo's operations have always been in good faith, and any lapse, such as
failing to register as a real estate agent, should not overshadow the company's dedication
to ethical and open business practices. Furthermore, the limitation on fractional ownership
and the statement that TurboTokens which in turn are evidence of fractional ownership
which now is prohibited by the state (RERA) has impacted Turbo, retail investors and the
finance market at large, which needs to be curbed and addressed though collective resolve.

Furthermore, the prohibition on fractional ownership and the declaration of TurboTokens

as illegal by the state is unjustified and constitutionally invalid, infringing upon the rights
of investors and stifling innovation. Turbo cannot be held responsible for the state's failures,
and the company is still dedicated to preserving its investors' interests while adhering to the
legal framework.

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II. The sale of land allotted to Project A-Hash, to Sreenath is legally valid and
interim injunction should not be granted.

It is to be respectfully contended before this Hon’ble HC that the sale of land subject to the
suit to Sreenath is legally valid, and the transaction was executed in full compliance with
the relevant statutory provisions, including the Registration Act, 190837, the RERA Act,
201638, and other applicable laws. Sreenath, as a bona fide purchaser, acquired the title to
the property lawfully, and the transaction was conducted without any defect or irregularity
with the due procedure being followed. The Defendants contend that the sale is protected
under the principles of property law and is not vitiated by the allegations of fraud against
the previous owner, Nirguna.

It is to be humbly submitted before this Hon’ble Court that the sale of land subject to the
suit was conducted in full compliance with the Registration Act, 1908 39. The transaction
was duly registered with proper papers in the sub registry and a mutual real estate
agreement and contract with proper consideration took place between Mr. Sreenath and
Nirguna, ensuring the transfer of ownership was legally recognized. The registration of the
sale deed confers conclusive evidence of ownership, as stipulated under Sec 17 40 of the
Registration Act.

“The following documents shall be registered... namely: (b) other non-testamentary

instruments which purport or operate to create, declare, assign, limit or extinguish,
whether in present or in future, any right, title or interest, whether vested or contingent, of
the value of one hundred rupees and upwards, to or in immovable property”

Consequently, the said transaction is prima facie valid, and the presumption of validity
under Sec 60 of the Registration Act, 1908, attaches to the registered sale deed.

Sreenath's acquisition of Property A-Hash adhered to all legal formalities, with no

knowledge of any irregularities, and was conducted in good faith. As a bona fide purchaser
for value, Sreenath's rights must be protected under Danubian law, particularly under Sec
4141 of the Transfer of Property Act, 1882, which safeguards purchasers without notice of

37
The Registration Act, 1908, No. 16, Acts of Parliament, 1908 (India).
38
Real Estate (Regulation and Development Act, 2016, No. 15, Acts of Parliament, 2016 (India).
39
The Registration Act, 1908, No. 16, Acts of Parliament, 1908 (India).
40
The Registration Act, 1908, § 17, No. 16, Acts of Parliament, 1908 (India).
41
The Transfer of Property Act, 1882, § 41, No. 04, Acts of Parliament, 1882 (India).

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any defects in the title. The sale was executed through a legally registered deed, in
compliance with the Indian Registration Act, 190842, and recorded in the sub-registrar's
office, affirming the legitimacy of Nirguna's ownership at the time. Sreenath relied on these
public records and had no knowledge of any fraudulent activities. With Nirguna having
absconded with funds from retail investors, Turbo's loan, and the consideration paid by
Sreenath, an injunction would unfairly penalize Sreenath, who has fulfilled his obligations
and now faces financial harm. Furthermore, under the doctrine of promissory estoppel,
Sreenath’s reliance on the state's representation that the title was clear should prevent the
petitioners from challenging his rights. Therefore, the injunction should not be granted, as
it would unjustly prejudice Sreenath and undermine the principles of fairness and good
faith.

Further it is submitted that in the case of Suraj Lamp & Industries Pvt. Ltd. v. State of
Haryana43, the Hon’ble SC of India emphasized the necessity of proper registration for the
validity of property transactions, reinforcing that the duly registered sale to Sreenath is
legally binding and granting an interim injunction would be in violation of his legal right
to property under Sec 300A44. “Persons not to be deprived of property save by authority of
law.— No person shall be deprived of his property save by authority of law.”

The Defendants assert that all legal and procedural formalities were adhered to accordingly
as per stipulated procedures and necessities, which included obtaining requisite approvals,
payment of applicable stamp duties under the Indian Stamp Act, 189945, and execution of
a valid sale deed as per the Transfer of Property Act, 188246.

It was observed in the case of K. B. Saha and Sons Pvt. Ltd. v. Development Consultant
Ltd47 that Compliance with procedural formalities is essential for the validity of a property
transaction, which was duly satisfied by our client Mr. Sreenath in his real estate deal with
Nirguna.

The council further submits that once a document is registered as per the statutory
requirements, it is presumed to be genuine and legally binding as we contend is the case in
our clients defence. The burden of proving otherwise rests on the party challenging the

42
The Registration Act, 1908, No. 16, Acts of Parliament, 1908 (India).
43
Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, 2012 1 SCC 656.
44
DANUBIA CONST. art. 300-A.
45
Indian Stamp Act, 1899, No. 02, Acts of Parliament, 1899 (India).
46
The Transfer of Property Act, 1882, No. 04, Acts of Parliament, 1882 (India).
47
K. B. Saha and Sons Pvt. Ltd. v. Development Consultant Ltd, 2008) 8 SCC 564.

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document's validity. The Defendants respectfully submit that no substantial evidence has
been presented to rebut the presumption of validity attached to the registered sale deed
in favor of our client Mr. Sreenath.

Further Granting an interim injunction would effectively halt all ongoing construction and
development work on Project A-Hash. This stoppage would prevent the completion and
sale of residential apartments, leading to significant financial losses for both Sreenath and
the retail investors (Potential home buyers). The injunction would freeze capital, leaving
funds stuck without generating any income, thereby destabilizing the financial markets and
potentially causing a stock market crash. The economic repercussions would extend beyond
the immediate parties, affecting the broader economy and causing harm to all stakeholders
involved.

In the event of an interim injunction, Sreenath would be left with no financial security to
fall back on, as Nirguna, the previous owner, has run off with the funds. With Nirguna
having fled the country, there is no available recourse for Sreenath to recover his investment
or secure alternative financial support. The absence of any financial safety net will
drastically increase the potential harm that an interim injunction would cause, making it
unjust and detrimental to Sreenath's financial interests. If by some merit of compensation
or guilt, turbo agrees to restore the monetary values of the retail investors share in that
property and registers them in the sub registrars office validating their fractional ownership,
in case of that, apartments need to be built as fast as possible under Sreenath as the primary
developer for the retail investors to exercise their right of first refusal.

We as Defendants are proposing a solution to this problem upon arrest and conviction of
Nirguna, we believe an equitable distribution of future asset needs to be presumed and
confirmed with further clarifications from turbo’s end. Turbo lent a loan to Nirguna as his
both projects were falling short of 100% capitalization through turbo tokens. The loan lent
was about 20%- 25% as the investment vent slightly above the 75% floor. That can further
be clarified by turbo itself.

Meaning that this data shows how much was the total value of both the projects:

A-Hash:

If Turbo’s Loan is 25%: Total Project Value = 3,800,000 USD; TurboTokens Value =
2,850,000 USD

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If Turbo’s Loan is 20%: Total Project Value = 4,750,000 USD; TurboTokens Value =
3,800,000 USD 1 TurboToken = 83.33 USD

B-Hash:

If Turbo’s Loan is 25%: Total Project Value = 440,000 USD; TurboTokens Value =
330,000 USD

If Turbo’s Loan is 20%: Total Project Value = 550,000 USD; TurboTokens Value =
440,000 USD 1 TurboToken = 3 USD

Now Nirguna being the primary liability holder and acting as the promoter to both the retail
investors and Sreenath himself will be liable to pay an interest on the damages incurred by
both Shreenath and the retail investors which will be calculated under section (Rule) 18 of
Maha-RERA.

That being the rate of interest payable by the promoters to the allottees or by the allottees
to the promoters as the case may be the State Bank of India highest marginal cost of lending
rate plus 2%.

Provided that in the case the State Bank of India marginal cost of lending rate is not in use
it would be replaced by such benchmark lending rates which the State Bank of India may
fix from time to time for lending to the general public.

Furthermore, it is to be submitted before this Hon’ble Court that our client Mr. Sreenath is
a bona fide purchaser under doctrine (of bona fide purchaser for value without notice) for
value without notice of any defects in the title or prior encumbrances in that property of
project A-Hash, thereby entitling him to full ownership rights over the property. As per the
principles of property law, the rights of a bona fide purchaser are protected against claims
arising from previous undisclosed interests or encumbrances as are the claims of. BFP
status provides a set of protections under property law. For example, if a BFP buys from a
seller with a defect of title (as was the case in our current scenario), they may still be able
to keep the property if a third party (retail investors in our present case) files a claim of
ownership. As long as the BFP properly records the transaction and the transaction took
place in good faith, they take good title to the property despite competing claims. In this
case, parties with competing claims can only take action against the party who fraudulently
transferred the property to the BFP which will be Nirguna the seller and the one with the
benami claims to the property.

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The council further submits that in the case of Nathulal v. Phoolchand48 the Hon’ble SC
affirmed that a bona fide purchaser acquires full ownership rights, free from any claims
unknown at the time of purchase. This further shines a persuasive light on our client Mr.
Sreenath who purchased the property of project A-Hash from Nirguna without knowing
about the Right of First Refusal (ROFR) clause, which makes him the innocent party and
hence a Bona Fide Purchaser (BFP).

Further there are no legal impediments preventing Sreenath from utilizing the land as
intended. Any allegations of fraud or misrepresentation upon Nirguna by the retail investors
are extraneous to the transaction between Sreenath and Nirguna and do not affect Sreenath's
legal rights as the owner of the land. He purchased the land lawfully and as the maxim goes
Nemo Dat Quod Non Habet49- No one can give what they do not have. As Nirguna held
legal title at the time of sale, the transfer to Sreenath is valid, and Sreenath’s ownership
rights are unassailable.

The Defendants assert that the sale adhered to the provisions of the Maharashtra Real Estate
Regulatory Authority (MahaRERA), which governs real estate transactions within the state,
ensuring transparency and protection of rights for all parties involved. As stipulated in Sec
450 of Redieria RERA (similar to MahaRera) mandates registration of real estate projects,
which was duly complied with, further affirming the transaction’s legality. Even Sec 1551
of the RERA Act, 2016 was not breached, as Sreenath was not a third-party assignee but a
bona fide purchaser for value. There was no transfer of majority rights or liabilities
requiring approval from two-thirds of the allottees. As highlighted in the case of Jaypee
Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd.
(2021)52, the SC held that third-party transfers require allottee approval, which is
inapplicable here as the transaction was not an assignment of rights but a sale of property.

The counsel further submits that the Defendants contend that the doctrine of Lis Pendens
is inapplicable in the present case as no litigation was pending at the time of the transaction
of the land subject to litigation in our present case between Nirguna and Sreenath, thereby

48
Nathulal v. Phoolchand, 1970, AIR 1970 SC 546.
49
Bishopsgate Motor Finance Corporation Ltd. v. Transport Brakes Ltd., 1949 1 KB 322 (CA), Saleh Ali Khan v.
State of Maharashtra, 2005 1 SCC 146.
50
Real Estate (Regulation and Development Act, 2016, § 4, No. 15, Acts of Parliament, 2016 (India).
51
Real Estate (Regulation and Development Act, 2016, § 15, No. 15, Acts of Parliament, 2016 (India).
52
Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd., 2021, AIRONLINE
2021 SC 224.

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affirming the legality of the sale. Further Sec 5253 of the Transfer of Property Act, 1882
outlines that Lis pendens applies only when litigation is pending, which was not the case
during the sale to Sreenath. Even if any litigation were pending (which weren’t), the rights
of bona fide purchasers are safeguarded, provided the purchase was made in good faith and
without knowledge of any dispute. Further even the Legal Maxim Caveat Emptor54 - Let
the buyer beware does not negate the protections offered to bona fide purchasers who have
conducted due diligence. It is and was the sellers (Nirguna’s) duty to make Sreenath aware
about the present issues at hand which are being contested in this Hon’ble Court.

Further Sreenath's right to utilize the land is further supported by Sec 855 of the Transfer of
Property Act, 1882, which stipulates that unless a different intention is expressed or
implied, a transfer of property passes forthwith to the transferee all the interests that the
transferor is capable of passing in the property. Sec 856, Transfer of Property Act, 1882:
"Operation of transfer: Unless a different intention is expressed or necessarily implied, a
transfer of property passes forthwith to the transferee all the interest which the transferor is
then capable of passing in the property and in the legal incidents thereof." More so it was
held in the case of The Hon’ble Supreme Court in Narandas Karsondas v. S.A.
Kamtam57 affirmed that the transferee, upon the completion of a lawful transaction,
obtains the full right to enjoy and develop the property as an absolute owner.

It is to be humbly submitted before this Hon’ble Court that Sreenath purchased the land
without any notice of fraud or prior claims against it. As Sec 1958 of the Indian Contract
Act, 1872 stipulates that a contract is not voidable merely because it was caused by fraud
if the party had the means of discovering the truth with ordinary diligence. More so in Sec
1959, Indian Contract Act, 1872: "A contract is voidable at the option of the party whose
consent was caused by fraud or misrepresentation; provided that, in the case of fraud, if the
party whose consent was so caused had the means of discovering the truth with ordinary
diligence, the contract is not voidable." It was even held in the case of The Hon’ble SC in

53
The Transfer of Property Act, 1882, § 52, No. 04, Acts of Parliament, 1882 (India).
54
Shah Babulal Khimji v. Jayaben D. Kania, 1981 4 SCC 8.
55
The Transfer of Property Act, 1882, § 08, No. 04, Acts of Parliament, 1882 (India).
56
The Transfer of Property Act, 1882, § 08, No. 04, Acts of Parliament, 1882 (India).
57
The Hon’ble Supreme Court in Narandas Karsondas v. S.A. Kamtam, 1977 3 SCC 247.
58
Indian Contract Act, 1872, § 18, No. 19, Acts of Parliament, 1872 (India).
59
Indian Contract Act, 1872, § 18, No. 19, Acts of Parliament, 1872 (India).

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Union of India v. Chaturbhai M. Patel60 held that where a purchaser acts in good faith
and without notice of any fraud or defect in the seller’s title, the transaction is valid.

Due diligence was done on the part of Sreenath, as a potential buyer one is meant to check
the government registry for any confirmation or authority regarding the property in
question or as an object of a real estate contract. And the last transaction in place was that
of between the old man and Nirguna. Meaning the transaction between Shreenath and
Nirguna are that of a legal and valid nature for even after due diligence was followed it was
not a void agreement but a voidable one, and under no circumstance is Mr. Shreenath
revoking his property rights to the land by deeming the contract as voidable and revoking
the transaction, for Nirguna has run off from the country, meaning there is none to
reimburse him of the consideration he had paid in that property transaction to Nirguna.

Furthermore, Shreenath was not aware of the retail investors' fractional ownership rights or
turbo tokens because they were not registered in the sub registry but only in the
Maharakshak portal, which, according to the disclaimer on Turbo's homepage and website,
is neither title nor evidence of title, nor a legally recognised proof of title or evidence of
title. Furthermore, we claim that Shreenath was unaware of the Nirguna or turbo agreement,
or anything else related to fractional ownership or turbo tokens. He just exercised his legal
right to property under Danubia's constitution, Sec 300-A61, and purchased it after
conducting necessary due diligence as a bona fide purchaser.

The council concludes by stating that the sale of the land designated to Project A-Hash to
Sreenath is legally lawful and was carried out in complete accordance with the Registration
Act of 1908, the RERA Act of 2016, and other relevant legislation. Sreenath, as a BFP,
acquired the property lawfully and in good faith, with all procedural and legal formalities
completed, including proper registration. The transaction is free of fraud and irregularities,
and the Lis Pendens concept does not apply because there was no litigation pending at the
time of sale. As a result, Sreenath's ownership rights are legally safeguarded and
impenetrable, rendering the sale legally lawful and binding.

60
Union of India v. Chaturbhai M. Patel, 1976 3 SCC 600.
61
DANUBIA CONST. art. 300-A.

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III. State did not fail to regulate real estate tokenizing platforms like Turbo and
didn’t violate Article 21-A and 300-A of retail investors in any manner.

It is humbly the State Govt. of Rideria under the following the footsteps of the Union
Government of Danubia wanted to play its part in contributing to the One Land, One Title
(OLOT) mission to fix data quality issues and have a standard operating procedure going
forward for the ascertainment of title (Prop, Pg 5, Para 2).

The contention of the Petitioners that the State supported Turbo’s illegal activities is
baseless and accusatory. Turbo as a company did not have a huge impact on the real estate
scenario in Reide, it had a meagre 5% market when it came to the sales transactions of real
estate properties as is mentioned on the Prop, Pg.3 Para 4. Furthermore, the state did not
violate any FRs enshrined under the Danubian Constitution as the state did not extort any
sort of private information from its citizens. Even when the plaintiff content that Turbo and
the State were jointly liable, it is to be noted that the State and the LRD supported
consortium blockchain architecture using distributed ledger technology. In this
permissioned blockchain model, designated since the State authorities were also given the
optional authority to record and validate additional transactions (blocks) with respect to
any land tract.

The original records and cadastral maps as well as subsequent transactions as and when
validated by the State could be seen by the public as they were provided “view” access to
each block, i.e. The investors in this case were not defrauded nor were material facts
concealed by the State, till the extent of the state the Turbo Square platform was very clear
as to whether the investors could see the State validating the transactions. It is the
responsibility of the investor to scrutinize the object of investment before investing in it, as
the platform was clear as to whether the state had validated the transaction or not. As all
the agreements, transactions and relationships were coded into the blockchain (Prop Pg 7,
Point 5) which was accessible both to the public/investors and the State, the petitioners
cannot claim that the State defrauded them.

3.1 There was an prompt action from The Securities Regulator.

Further the Securities board had already on 15th January, 2022 (Prop Pg 6, Para 3) issued
an advisory for the benefit of third parties that Turbo, a listed company, was potentially not
within its legal limits when dealing in such property F&Os. This in itself was a positive

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step ahead from the State’s side to regulate the actions of Turbo. Further when matter grew
out of hand on in October 2022 the Securities Regulator put a ban on Turbo Tokens deeming
them illegal. This was done with a view to protect the interests of investors and to prevent
Turbo from collecting further funds from the public, SEBI issued a circular restraining the
company from mobilizing funds under the name of Turbo Tokens. So that Turbo could not
to offer its Tokens or any other securities to the public or invite subscription in any manner
whatsoever till further directions.

3.2 There was an prompt action from the side of Land Revenue Department.

The Land Revenue Department knowing the shortcoming of its system only prompted
Turbo till the extend of validation of property deeds via its Maharakshak portal which used
consortium blockchain architecture using distributed ledger technology as it created a
permanent record of titles. Till this extent the state believed it played its part in trying to
legalized its numerous title deeds via a harmless platform. Turbo entailed that the developer
do the due diligence of the property, which is in line with the provisions of RERA as was
covered in ISSUE 2. The state having the social responsibility of changing the real estate
scenario of Danubia, in its view it followed a theory of distributive justice.

Their Lordships of the Hon'ble Supreme Court of India in Central Inland Water
Transport Corporation Limited and Anr. v. Brojo Nath Ganguly and Anr.62 have held
as under:

“Another jurisprudential concept of comparatively modern origin which has affected the
law of contracts is the theory of distributive justice". According to this doctrine, distributive
fairness and justice" in the possession of wealth and property can be achieved not only by
taxation but also by regulatory control of private and contractual transactions. even though
this might involve some sacrifice of individual liberty. In Lingappa Pochanna Appelwar
v. State of Maharashtra63 this Court, while upholding the constitutionality of the
Maharashtra Restoration of Lands to Scheduled Tribes Act 1974, said (at page 493) (of
SCC): (at p. 398 of AIR)

Our Constitution permits and even directs the State to administer what may be termed
distributive justice'. The concept of distributive justice in the sphere of law-making

62
Central Inland Water Transport Corporation Limited and Anr. v. Brojo Nath Ganguly and Anr, 2015 7 SCR
1025.
63
Lingappa Pochanna Appelwar v. State of Maharashtra, 1985, AIR 1985 SC 389.

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connotes, inter alia, the removal of economic inequalities and rectifying the injustice
resulting from dealings or transactions between unequals in society. Law should be used as
an instrument of distributive justice to achieve a fair division of wealth among the members
of society based upon the principle: 'From each according to his capacity, to each according
to his needs'. Distributive justice comprehends more than achieving lessening of
inequalities by differential taxation, giving debt relief or distribution of property owned by
one to many who have none by imposing ceiling on holdings, both agricultural and urban,
or by direct regulation of contractual transactions by forbidding certain transactions and,
perhaps, by requiring others. It also means that those who have been deprived of their
properties by unconscionable bargains should be restored their property. All such laws may
take the form of forced redistribution of wealth as a means of achieving a fair division of
material resources among the members of society or there may be legislative control of
unfair agreements.”

Regardless of the noble intention of the LRD, the GO (Prop, Pg 8-9) issued by the Revenue
Department has no legal sanctity since the same is not the law, enacted by the legislature.
The circular is not in line with the statutory provisions and any circulars issued by the
Government or its department without the authority of the government, cannot supersede
the statutory provisions. A number of Apex Court of India’s decisions including Gulf
Goans Hotels Company Limited & anr. v. Union of India & Ors.64 and Jaipur
Development Authority & Ors. v. Vijay Kumar Data & anr65 substantiate this
contention.

The Apex Court after considering the facts and circumstances of the case and the
contentions raised observed that in the absence of due authentication and promulgation of
the guidelines, its contents cannot be treated as an order of the Government and would only
represent an expression of opinion. The Court further added that unless an order is
expressed in the name of the President or the Governor and is authenticated in the manner
prescribed by the rules, the same cannot be treated as an order made on behalf of the
Government.

Clause (2) of Art 7766 also provides for the authentication of orders and instruments in a
manner as may be prescribed by the Rules. In this regard, the President or Governor has

64
Gulf Goans Hotels Company Limited & anr. v. Union of India & Ors., 2014 10 SCC 673.
65
Jaipur Development Authority & Ors. v. Vijay Kumar Data & anr, 2011 12 SCC 94.
66
INDIA CONST. art. 77(2).

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issued an order following the Authentication (Orders and Other Instruments) Rules, 1958
(amended 2002). Admittedly, the provisions of the said Rules of 1958 had not been
followed in the present case insofar as the promulgation of the Government Order is
concerned.

In the absence of due authentication and promulgation of the guidelines, the contents of the
G.O thereof cannot be treated as law of the Government and would really represent an
expression of opinion. In law, the said guidelines and its binding effect would be no more
than what was expressed by the Supreme Court in State of Uttaranchal v. S.K. Vaish67 in
the following paragraph of the report:

It is settled law that all executive actions of the Government of India and the Government
of a State are required to be taken in the name of the President or the Governor of the State
concerned, as the case may be [Art 77(1) and 166(1)]. Orders and other instruments made
and executed in the name of the President or the Governor of a State, as the case may be,
are required to be authenticated in the manner specified in the rules made by the President
or the Governor, as the case may be [Art 77(2) and 166(2)]. In other words, unless an order
is expressed in the name of the President or the Governor and is authenticated in the manner
prescribed by the rules, the same cannot be treated as an order on behalf of the Government.
[Para 23]

It is also essential that what is claimed to be a law must be notified or made public in order
to bind the citizen. In Harla v. State of Rajasthan 68
while dealing with the vires of the
Jaipur Opium Act, which was enacted by a resolution passed by the Council of Ministers,
though never published in the Gazette, in the following case the Supreme Court had
observed:

Natural justice requires that before a law can become operative it must be promulgated or
published. It must be broadcast in some recognizable way so that all men may know what
it is, or, at the very least, there must be some special rule or regulation or customary channel
by or through which such knowledge can be acquired with the exercise of due and
reasonable diligence. The thought that a decision reached in the secret recesses of a
chamber to which the public have no access and to which even their accredited
representatives have no access and of which they can normally know nothing, can

67
State of Uttaranchal v. S.K. Vaish, 2011 8 SCC 670.
68
Harla v. State of Rajasthan, 1951, AIR 1951 SC 467.

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nevertheless affect their lives, liberty and property by the mere passing of a Resolution
without anything more is abhorrent to civilized man.

Hence it can be concluded that the G.O issued by the LRD was merely an expression of
interest and by no means was it a directive to the investors or developers to make use of the
Turbo Platform. The LRD was merely being suggestive to the investors, it was not a law
nor was there a sanction to be followed. The investors by their own accord based on the
mere suggestion by the LRD chose to invest in Turbo Tokens on Turbo Square, now it is a
matter of common parlance that a suggestion cannot determine the liability of a person, in
this case the state.

Further the other wing of state, that is, the Real Estate Regulator of Ridera (RERA),
immediately issued a notification declaring a ban on all fractional share transactions in
real estate, except where the transactions are recorded in the State-owned public register,
and declaring platforms like Turbo (4 more startups had started this activity in the meantime
though all of them were permitted to use Maharakshak upon payment of a fee), violators
of the provisions of RERA, both directly and as enablers. Being a statutory body, RERA is
also considered state under Art 12 of the Indian Constitution, the state has to protect the
investors from schemes such as that of Turbo have already done their part in declaring a
ban on F&O transactions and has even declared Turbo Tokens as illegal.

Hence it is the contention of the state that merely being suggestive and expressing an
opinion about a platform does not make it liable for the platform’s wrongdoings,
furthermore the fact that the Securities board and RERA had taken prompt action to curb
Turbo’s activities is a clear indication of the State doing its part in upholding Art 21 A of
the Constitution of Danubia and not violating it.

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PRAYER

THEREFORE, IN THE LIGHT OF THE FACTS STATED, ISSUED RAISED,

AUTHORITIES CITED, AND ARGUMENTS ADVANCED, IT IS MOST HUMBLY
IMPLORED BEFORE THE HON’BLE COURT THAT IT MAY BE PLEASED TO:

I. Hold that Turbo is absolved of any liability related to the fraudulent activities of
developers like Nirguna.

II. Recognize Turbo’s willingness to mitigate the losses of affected retail investors by
offering a structured redeployment of TurboTokens, wherein investors could be
provided alternative tokenized assets backed by government-approved projects. This
solution is proposed contingent upon the uplifting of the ban on Turbo, TurboTokens,
and fractional ownership, ensuring that this Hon’ble Court may enable the operational
conditions necessary for this redemptive action, thereby protecting investors' interests
while promoting financial innovation.

III. It is most humbly submitted that the sale of land in Project A-Hash to Sreenath is valid
and should be upheld under the provisions of the Registration Act, 1908, the Transfer
of Property Act, 1882, and the RERA Act, 2016.

IV. The Defendants respectfully request that this Hon'ble Court protect Sreenath's rights as
a bona fide purchaser and reject the petitioners' demand for an interim injunction, which
would cause undue prejudice and financial harm to Sreenath.

V. The liability of Land Revenue Department of State of Rideria is absolved.

And/or pass any other order or direction that the Hon’ble Court deems fit in the furtherance of
Justice, Equity, and Good Conscience, all of which is respectfully submitted. For this act of
kindness, the Defendants shall duty-bound forever pray.

Respectfully Submitted,

Counsel on behalf of the Defendants

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