Sunday, 13 December 2015

How to ascertain probative value of documents which are admissible in documents?


 The trial court decreed the suit observing that as the
parties had deposed that the original power of attorney was
not in their possession, question of laying any further factual
foundation could not arise. Further, the trial court took note
of the fact that the respondent herein has specifically denied
execution of power of attorney authorising his brother, R.
Viswanathan to alienate the suit property, but brushed aside
the same observing that it was not necessary for the
appellant-plaintiff to call upon the defendant to produce the
original power of attorney on the ground that the photocopy
of the power of attorney was shown to the respondent herein
in his cross-examination and he had admitted his signature.
Thus, it could be inferred that it is the copy of the power of
attorney executed by the respondent in favour of his brother
(R. Viswanathan, the second defendant in the suit) and
therefore, there was a specific admission by the respondent
having executed such document. So it was evident that the
respondent had authorised the second defendant to alienate
the suit property.
In our humble opinion, the trial court could not proceed
in such an unwarranted manner for the reason that the
respondent had merely admitted his signature on the
photocopy of the power of attorney and did not admit the
contents thereof. More so, the court should have borne in
mind that admissibility of a document or contents thereof
may not necessarily lead to drawing any inference unless the
contents thereof have some probative value.

In State of Bihar v. Radha Krishna Singh this Court
considered the issue in respect of admissibility of documents
or contents thereof and held as under:
“40. … Admissibility of a document is one thing and its
probative value quite another—these two aspects cannot
be combined. A document may be admissible and yet may
not carry any conviction and weight or its probative value
may be nil.”

16. In Madan Mohan Singh v. Rajni Kant this Court
examined a case as a court of fifth instance. The statutory
authorities and the High Court had determined the issues
taking into consideration a large number of documents
including electoral rolls and school leaving certificates and
held that such documents were admissible in evidence. This
Court examined the documents and contents thereof and
reached the conclusion that if the contents of the said
documents are examined making mere arithmetical exercise
it would lead not only to improbabilities and impossibilities
but also to absurdity. This Court examined the probative
value of the contents of the said documents and came to the
conclusion that Smt Shakuntala, second wife of the father of
the contesting parties therein had given birth to the first
child two years prior to her own birth. The second child was
born when she was 6 years of age; the third child was born
at the age of 8 years; the fourth child was born at the age of
10 years; and she gave birth to the fifth child when she was
12 years of age.
17. Therefore, it is the duty of the court to examine whether
the documents produced in the court or contents thereof have
any probative value”.

 REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO. 1148 OF 2010
Nandkishore Lalbhai Mehta .... Appellant(s)
Versus
New Era Fabrics Pvt. Ltd. & Ors. .... Respondent(s)
 WITH
CIVIL APPEAL NOs. 1131-1132 OF 2010
Citation;(2015) 9 SCC 755


1) This appeal has been filed against the judgment and
order dated 06.05.2008 passed by the Division Bench of the
High Court of Judicature at Bombay in Appeal No. 245 of
2006 in Suit No. 1414 of 1979 whereby the High Court allowed
the appeal filed by respondents herein while setting aside the
decree dated 12.12.2005 passed by the learned single Judge of
the High Court in favour of the appellant herein in Suit No.
1414 of 1979 for specific performance of the agreement dated
19.10.1977.
Brief facts:
2) (a) In October, 1977, Respondent Nos. 1 and 2 agreed to
sell their respective right, title and interest in the property
admeasuring approximately 13011 sq. yards or thereabouts of
Mahim T.P.S. III, Plot No. 264 opposite Matunga Western
Railway in favour of Shri Nandkishore Lalbhai Mehta – the
appellant herein which was resolved under an Agreement for
Sale dated 19.10.1977 on certain terms and conditions.
(b) The relevant terms of the agreement are as under:-
1. Area of the Property : 13011 Square Yards.
2. Price : Lumpsum price of Rs. 78,06,600/-
(Rupees Seventy-eight lacs six thousand
and six hundred only); It is agreed that
the price shall not be revised or amended
for any reason whatsoever including any
legislation or otherwise;
5. Payment : Rs. 11,50,000/- (Rupees Eleven lacs fifty
thousand only) to be paid as earnest to
your Solicitor Mr. D.H. Nanavati as
follows:-
(a) Rs. 7,50,000/- (Rupees Seven lacs fifty
thousand only) on confirmation of this
letter by you and balance of Rs.
4,00,000/- (Rupees four lacs only) on or
before 24th October 1997 time being of the
essence. Provide further that the sums of
Rs.7,50,000/- (Rupees Seven lacs fifty
thousand only) be utilized by you New Era
Fabrics Pvt. Ltd. for the purpose of
carrying out the Consent Terms in the
High Court and small Causes Court suit
mentioned above.
The time for the payment thereof has
expired and you will therefore offer the
same to the other side and on their
accepting to extend the time till the
payment thereof under the said two
Consent Terms the said amount will be
paid by you to them; in the event of their
declining and insisting on going on with
the suit or your settlement of the suit as
per the Consent Terms not materializing
you will return the said amount to me on
such refusal or settlement falling through
and I will not be entitled to any interest
thereon or costs. In the event of my failing
to pay to your Solicitor the sum of Rs.
7,50,000/- on the execution thereof and
Rs. 4,00,000/- (Rupees four lacs only) on
or before 24th October 1977 you will be
entitled to forfeit the amount of
Rs. 7,50,000/- paid by me till such default
and the Agreement herein will stand
automatically cancelled. I enclose herewith
my Solicitors’ cheque of Rs. 7,50,000/-
(Rupees Seven lacs fifty thousand only) in
your Solicitor’s favour which may be
cashed after confirmation by you of the
terms contained herein, if the terms are
not confirmed you will return the said
cheque to me;
(b) : Half of the balance of the consideration
money mentioned in the paragraph 2
above will be paid by me on receipt of the
permissions under Sections 22 and 27 of
the Urban Land (Ceiling & Regulation) Act
being obtained as also the permission for
conversion into residential user being
obtained as well as your settling with your
labour and getting their permission as
herein provided and vacant possession of
the said land being handed over to me and
the balance of the consideration by equal
quarterly installments to be paid within
one year from the date of possession of the
plot being handed over to me as herein
provided;
6. Sale : The sale shall be subject to permission
being obtained under Sections 22 and 27
of the Urban Land (Ceiling & Regulation)
Act, 1976. The sale shall also be subject to
the property being converted from
Industrial Zone to residential use. The sale
shall also be subject to your being able to
settle with your labour and your labour
agreeing to the sale contemplated herein.
If N.O.C and change of users and the
permission provided herein are not
obtained within a period of 9 months from
the date hereof and if you are not able to
settle with your labour and to get them to
agree to the sale herein contemplated you
will not be bound to complete the sale
herein contemplated and the Agreement
will survive only to the extent of the
return of my money which will be paid
within 6 months of the expiration of the
aforesaid nine months with interest at 18
% per annum from the date of refusal of
any of the permission or consent or
agreement set out above, till the
repayment of money with interest and till
then you will not be entitled to do any act,
deed, matter or thing whereby or by
reason whereof the security created as
herein provided in my favour will be
affected or jeopardize in any manner
whatsoever…... (emphasis supplied)
: You will sign such application forms, etc.
for the aforesaid permissions as may be
necessary, as well as forms for
permissions of building Department from
B.M.C. and sanction of plans etc. for new
construction on the said property and any
other permission from Town Planning or
any other Department;
8. Vacant possession : Vacant possession shall be handed over
to me within 3 months of all the above
mentioned permissions being obtained
and your settling with your labour
agreeing to the sale herein
contemplated…..
(c) Pursuant to the said agreement, the appellant herein
paid a sum of Rs. 11,50,000/- as part of earnest money in two
installments of Rs. 7,50,000/- and Rs. 4,00,000/- each on
20.10.1977 and 24.10.1977 respectively.
(d) Pursuant to Point No. 6 of the agreement dated
19.10.1977, the sale was subject to the permission being
obtained under Sections 22 and 27 of the Urban Land (Ceiling
and Regulation) Act, 1976 (hereinafter referred to as ‘the ULC
Act’); the property being converted from industrial zone to
residential use and to give vacant possession of the land after
settling with the labour.
(e) In order to materialize the agreement, further steps were
taken. Respondent No. 1, vide letter dated 08.11.1977,
5Page 6
intimated the Labour Union about the Agreement and
requested to give their consent to the same. Vide letter dated
09.11.1977, Respondent No. 2 approached the Arbitrator,
Town Planning Scheme to have the said property converted
into residential zone from industrial zone.
(f) Vide letter dated 05.12.1977, Mill Mazdoor Sabha-Labour
Union informed the respondents that they were not agreeable
to the sale of the said property.
(g) Respondent Nos. 1 & 2 informed this fact to the appellant
herein vide letter dated 15.12.1977 stating that the agreement
stood cancelled and they would return the amount of Rs.
11,50,000/- with interest and also withdrew the application
made to the Arbitrator, Town Planning Scheme for conversion
of the property from industrial to residential zone.
(h) The appellant herein waived the stipulation/condition of
obtaining the consent of the labour but inspite of the efforts,
the agreement did not materialize.
(i) Being aggrieved, the appellant herein filed Suit No. 1414
of 1979 before the High Court of Bombay for specific
performance of the agreement dated 19.10.1977. Learned
6Page 7
single Judge of the High Court, vide order dated 12.12.2005,
decreed the suit in favour of the appellant herein.
(j) Being aggrieved by the order dated 12.12.2005,
Respondent Nos. 1 and 2 filed Appeal No. 245 of 2006 in Suit
No. 1414 of 1979 before the High Court. The Division Bench
of the High Court, by order dated 06.05.2008, allowed the
appeal of the respondents herein setting aside the decree of
specific performance granted by learned single Judge of the
High Court.
(k) Against the said order, the appellant has preferred this
appeal by way of special leave before this Court.
Civil Appeal Nos. 1131-1132 of 2010
(l) The aforesaid appeals have been filed against the order
dated 12.12.2008 passed by the Division Bench of the Bombay
High Court wherein the cross-objections filed by the appellant
herein were dismissed. These appeals were tagged with the
main appeal at the SLP stage vide order dated 02.04.2009,
hence will be disposed of by this common judgment.
3) Heard Mr. P.H. Parikh, learned senior counsel assisted
by Mr. P.V. Yogeswaran, learned counsel for the appellant and
Mr. Vinod A. Bobde, learned senior counsel and Mr. Shivaji M.
Jadhav, learned counsel for the respondents.
Rival Submissions:
4) Learned senior counsel for the appellant submitted that
the Agreement for Sale dated 19.10.1977 executed by the
parties is not in dispute. The appellant had always been ready
and willing to discharge his obligations and the plea of the
respondents that there was no concluded agreement relying
upon Clause 10 of the agreement was neither raised in the
written statement nor any issue was framed by learned single
Judge. Thus, it was not open to the defendants-respondents
herein to plead that there was no concluded agreement. It was
correctly negated by the learned single Judge. In fact, the
respondents were acting dishonestly as the agreement was
terminated by them within two months of its execution. In
fact, the agreement itself contemplated a period of nine (9)
months and the plea taken by the respondents herein that the
Mill Mazdoor Sabha refused to agree to the sale vide letter
dated 05.12.1977 was within a very short time and the
respondents did not take sufficient steps to get the consent of
8Page 9
the Mill Mazdoor Sabha/labour/workmen. It appears that the
respondents were in dire financial position and required
money to perfect their title by making balance payment to the
Zaveris under the consent terms. The defendants-respondents
herein paid a sum of Rs. 7.5 lakhs received from the appellant
to the Zaveris to perfect their title and after getting the same
done, they dishonestly terminated the agreement. Learned
senior counsel further submitted that the Division Bench had
erred in reversing the judgment of the learned single Judge on
the basis that was not even pleaded by the respondents. In
fact, the Division Bench had wrongly reversed the judgment on
the ground that the important facts including documentary
evidence that were relied upon by the appellant were not
pleaded in the plaint and the plaint was not even amended.
Even though, an objection was raised by the respondents
before the court that certain evidence were outside the scope
of the plaint but no such objections were raised at the stage of
final hearing. He further submitted that as the parties had
contested the matter before the learned single Judge on the
basis of the concluded agreement, the Division Bench was not
at all justified in holding the agreement in question to be
contingent in nature. In support of his contention, learned
senior counsel relied upon a decision of this Court in
Chandnee Widya Vati Maden vs. Dr. C.L. Katial and
Others (1964) 2 SCR 495 wherein it was held that where all
the terms are crystallized between the parties, the execution of
a formal agreement is not a pre-requisite for the grant of
specific relief. He further submitted that in view of the
documents having been filed before the court and exhibited as
P-27 to P-42, the Division Bench had wrongly held that they
were outside the scope of evidence as these documents were
not pleaded in the plaint nor was any amendment preferred.
According to learned senior counsel, the only requirement
under the Code of Civil Procedure, 1908 is that the plaint
must contain essential pleas or contentions and it is not
necessary to plead evidence. In paragraph Nos. 33 and 35 of
the plaint, a specific plea was taken by the appellant that the
respondents were on a false pretext seeking to wriggle out
their contractual obligations and in support of the plea of false
pretext, the appellant was entitled to adduce evidence to show
that the refusal on the part of the Mill Mazdoor Sabha/labour
to permit the sale of the suit property was nothing but an eye
wash by the respondents. To establish this fact, the appellant
had produced documents and also led oral testimony through
one of the trade union office bearers, viz., Mr. Vasant Gupte,
President and this evidence could not be shut out as the
respondents were aware about it.
5) He further submitted that the Division Bench has
wrongly held the agreement dated 19.10.1977 to be a
contingent contract. No specific plea was raised by the
defendants-respondents herein regarding it to be a contingent
contract and further no specific issue was framed. According
to him, on a correct construction and interpretation of the
agreement, it cannot be termed as a contingent contract and it
is always open to the party in whose favour a specific term is
inserted to waive the term and seek specific performance of
the remainder of the obligations. According to him, learned
single Judge had categorically recorded, on appreciation of
evidence on record that the labour union had actually
consented to the sale of the property on certain terms being
fulfilled, as is clear from Exhibit Nos. 43 and 44. Further, the
grant of relief of specific performance is a matter of discretion
and if it has been granted by the learned single Judge, the
Division Bench ought not to have substituted its assessment
where the court had perceived dishonest conduct on the part
of the defendants-respondents herein. Elaborating it further,
learned senior counsel submitted that the appellant had
waived the express term relating to the consent of the labour
vide letter dated 19.04.1978 nearly six (6) months prior to the
institution of the suit and, therefore, the respondents cannot
take advantage of a stipulation which the party for whose
benefit it was made has expressly waived the same for
performance of his other obligations. This aspect has not been
considered or dealt with by the Division Bench. Further, the
Division Bench wrongly held that the appellant did not really
mean to purchase the suit property and that the agreement of
purchase of the suit property was a financial transaction.
This plea was not even raised by the respondents herein in
their written statement. As far as permission under the ULC
Act is concerned, learned senior counsel relied upon a decision
of this Court in The Maharao Sahib Shri Bhim Singhji vs.
Union of India and Ors. (1981) 1 SCC 166 and submitted
that sub-Section (1) of Section 27 of the Act is invalid insofar
as it imposes a restriction on transfer of any urban or
urbanisable land with a building or a portion only of such
building, which is within the ceiling area. Such property will
therefore be transferable without the constraints mentioned in
sub-section (1) of Section 27 of the ULC Act.
6) Learned senior counsel further submitted that the
Annual Reports of Respondent No. 1 categorically demonstrate
that the workers were retrenched and as per Form-6,
Respondent No. 1 had only 69 employees and if the workers
were provided their legal dues they were willing to consent to
the sale of the suit property. The Annual Reports/Balance
Sheets of the Respondent No. 1 have been specifically
appreciated by learned single Judge whereas the Division
Bench had not at all considered the same. According to
learned senior counsel, the appellant was justified in relying
upon the letters Exhibited at P-27 to P-42 and filing the same
before the Court which had material bearing on the issue and
it could not have been excluded. In support of his
submission, he relied upon a decision of this Court in
Pasupuleti Venkateswarlu vs. Motor & General Traders
(1975) 1 SCC 770 wherein it was held as under:-
“4 …..If a fact, arising after the lis has come to court and has
a fundamental impact on the right to relief or the manner of
moulding it, is brought diligently to the notice of the
tribunal, it cannot blink at it or be blind to events which
stultify or render inept the decretal remedy…..”
7) Learned senior counsel for the appellant further
submitted that during the pendency of the present
proceedings, the respondents have earned by way of rental
charges from the suit premises a sum of Rs. 64,57,46,800/-
for the period 23.10.1978 till September 2012 as principal
amount and if interest is computed thereupon it comes to Rs.
160,87,15,887/- as on September 2012. However, as on June
2014, the respondents have earned by way of rental charges
upon the said premises a sum of Rs. 87,42,65,200/- as
principal amount and if interest is computed thereupon @
18% per annum, it comes to Rs. 226,89,85,346/-. It is further
submitted that the appellant at the time of entering the
agreement was 54 years and now he is 91 years. The suit was
14Page 15
filed in the year 1979 and he had suffered all these years for
no fault of his. He believed in the agreement and complied
with all the terms and conditions. Learned senior counsel
further submitted that the judgment and order passed by the
Division Bench of the High Court dated 06.05.2008 should be
set aside and that of the learned single Judge dated
12.12.2005 be restored. Finally, in the alternative, he
submitted that in case the suit for specific performance is not
decreed and the appellant is given damages, it should be just,
fair and equitable and not only Rs. 78 lakhs as given by the
learned single Judge.
8) In reply, learned senior counsel for the respondents
submitted that in the plaint filed by the appellant, a specific
case of the labour union colluded with the present respondent
was pleaded. However, at the time of leading of evidence, a
completely new case vis., of two letters dated 05.12.1977 and
10.01.1978 has been made out which are the documents
handed over to the appellant by one Mr. M.P. Agarwal. A
specific objection was raised that such evidence could not be
allowed to be led, or documents have been produced in the

absence of pleadings in the plaint whereupon learned single
Judge while noting the aforesaid objection held that this issue
would be decided while hearing the matter finally. Instead of
checking as to whether those documents can be relied upon or
not, learned single Judge erroneously accepted the version
contained in the letters dated 05.12.1977 and 10.01.1978 as
produced by the appellant. According to him, no evidence can
be led in the absence of any pleading and if there is any new
ground, new plea or allegation of fact inconsistent with the
previous pleadings of the parties, steps ought to have been
taken to amend the plaint which has not been done for
reasons best known.
9) Learned senior counsel further submitted that unless
and until there is an amendment of the pleadings, no evidence
with regard to the facts not pleaded can be looked into, for
which he relied upon a decision of this Court in Bachhaj
Nahar vs. Nilima Mandal & Anr. (2008) 17 SCC 491 wherein
it was held as under:-

“7. Feeling aggrieved, the plaintiffs filed a second appeal
before the High Court. The High Court by judgment dated
14-5-2004 allowed the second appeal. The High Court held
that the plaintiffs had failed to make out title to the suit
property. It however held that the plaintiffs had made out a
case for grant of relief based on easementary right of
passage, in respect of the suit property, as they had claimed
in the plaint that they and their vendor had been using the
suit property and the first defendant and DW 6 had admitted
such user. The High Court was of the view that the case
based on an easementary right could be considered even in
the absence of any pleading or issue relating to an
easementary right, as the evidence available was sufficient to
make out easementary right over the suit property. The High
Court therefore granted a permanent injunction restraining
the first defendant from interfering with the plaintiffs’ use
and enjoyment of the “right of passage” over the suit
property (as also of the persons living on the northern side of
the suit property).
10. The High Court, in this case, in its obvious zeal to cut
delay and hardship that may ensue by relegating the
plaintiffs to one more round of litigation, has rendered a
judgment which violates several fundamental rules of civil
procedure. The rules breached are:
(i) No amount of evidence can be looked into, upon a plea
which was never put forward in the pleadings. A question
which did arise from the pleadings and which was not the
subject-matter of an issue, cannot be decided by the
court.
(ii) A court cannot make out a case not pleaded. The court
should confine its decision to the question raised in
pleadings. Nor can it grant a relief which is not claimed
and which does not flow from the facts and the cause of
action alleged in the plaint.
(iii) A factual issue cannot be raised or considered for the
first time in a second appeal.
11. The Civil Procedure Code is an elaborate codification of
the principles of natural justice to be applied to civil
litigation. The provisions are so elaborate that many a time,
fulfilment of the procedural requirements of the Code may
itself contribute to delay. But any anxiety to cut the delay or
further litigation should not be a ground to flout the settled
fundamental rules of civil procedure. Be that as it may. We
will briefly set out the reasons for the aforesaid conclusions.
12. The object and purpose of pleadings and issues is to
ensure that the litigants come to trial with all issues clearly
defined and to prevent cases being expanded or grounds
being shifted during trial. Its object is also to ensure that
each side is fully alive to the questions that are likely to be
raised or considered so that they may have an opportunity of
placing the relevant evidence appropriate to the issues before
the court for its consideration. This Court has repeatedly
held that the pleadings are meant to give to each side
intimation of the case of the other so that it may be met, to
enable courts to determine what is really at issue between
the parties, and to prevent any deviation from the course
which litigation on particular causes must take.
13. The object of issues is to identify from the pleadings the
questions or points required to be decided by the courts so
as to enable parties to let in evidence thereon. When the
facts necessary to make out a particular claim, or to seek a
particular relief, are not found in the plaint, the court cannot
focus the attention of the parties, or its own attention on
that claim or relief, by framing an appropriate issue. As a
result the defendant does not get an opportunity to place the
facts and contentions necessary to repudiate or challenge
such a claim or relief. Therefore, the court cannot, on finding
that the plaintiff has not made out the case put forth by him,
grant some other relief. The question before a court is not
whether there is some material on the basis of which some
relief can be granted. The question is whether any relief can
be granted, when the defendant had no opportunity to show
that the relief proposed by the court could not be granted.
When there is no prayer for a particular relief and no
pleadings to support such a relief, and when the defendant
has no opportunity to resist or oppose such a relief, if the
court considers and grants such a relief, it will lead to
miscarriage of justice. Thus it is said that no amount of
evidence, on a plea that is not put forward in the pleadings,
can be looked into to grant any relief.
14. The High Court has ignored the aforesaid principles
relating to the object and necessity of pleadings. Even
though right of easement was not pleaded or claimed by the
plaintiffs, and even though parties were at issue only in
regard to title and possession, it made out for the first time
in second appeal, a case of easement and granted relief
based on an easementary right. For this purpose, it relied
upon the following observations of this Court in Nedunuri
Kameswaramma v. Sampati Subba Rao:
“6. … No doubt, no issue was framed, and the one, which
was framed, could have been more elaborate; but since
the parties went to trial fully knowing the rival case and
led all the evidence not only in support of their
contentions but in refutation of those of the other side, it
cannot be said that the absence of an issue was fatal to
the case, or that there was that mistrial which vitiates
proceedings. We are, therefore, of opinion that the suit
could not be dismissed on this narrow ground, and also
that there is no need for a remit, as the evidence which
has been led in the case is sufficient to reach the right
conclusion.”
But the said observations were made in the context of
absence of an issue, and not absence of pleadings.
15. The relevant principle relating to circumstances in which
the deficiency in, or absence of, pleadings could be ignored,
was stated by a Constitution Bench of this Court in
Bhagwati Prasad v. Chandramaul:
“10. … If a plea is not specifically made and yet it is
covered by an issue by implication, and the parties knew
that the said plea was involved in the trial, then the mere
fact that the plea was not expressly taken in the
pleadings would not necessarily disentitle a party from
relying upon it if it is satisfactorily proved by evidence.
The general rule no doubt is that the relief should be
founded on pleadings made by the parties. But where the
substantial matters relating to the title of both parties to
the suit are touched, though indirectly or even obscurely,
in the issues, and evidence has been led about them,
then the argument that a particular matter was not
expressly taken in the pleadings would be purely formal
and technical and cannot succeed in every case. What the
Court has to consider in dealing with such an objection
is: did the parties know that the matter in question was
involved in the trial, and did they lead evidence about it? If
it appears that the parties did not know that the matter
was in issue at the trial and one of them has had no
opportunity to lead evidence in respect of it, that
undoubtedly would be a different matter. To allow one
party to rely upon a matter in respect of which the other
party did not lead evidence and has had no opportunity to
lead evidence, would introduce considerations of prejudice,
and in doing justice to one party, the Court cannot do
injustice to another.”
 (emphasis supplied)
19Page 20
16. The principle was reiterated by this Court in Ram Sarup
Gupta v. Bishun Narain Inter College:
“6. … It is well settled that in the absence of pleading,
evidence, if any, produced by the parties cannot be
considered. It is also equally settled that no party should
be permitted to travel beyond its pleading and that all
necessary and material facts should be pleaded by the
party in support of the case set up by it. The object and
purpose of pleading is to enable the adversary party to
know the case it has to meet. In order to have a fair trial it
is imperative that the party should settle the essential
material facts so that other party may not be taken by
surprise. The pleadings however should receive a liberal
construction; no pedantic approach should be adopted to
defeat justice on hair-splitting technicalities. Sometimes,
pleadings are expressed in words which may not
expressly make out a case in accordance with strict
interpretation of law. In such a case it is the duty of the
court to ascertain the substance of the pleadings to
determine the question. It is not desirable to place undue
emphasis on form, instead the substance of the pleadings
should be considered. Whenever the question about lack
of pleading is raised the enquiry should not be so much
about the form of the pleadings; instead the court must
find out whether in substance the parties knew the case
and the issues upon which they went to trial. Once it is
found that in spite of deficiency in the pleadings parties
knew the case and they proceeded to trial on those issues
by producing evidence, in that event it would not be open
to a party to raise the question of absence of pleadings in
appeal.”
 (emphasis supplied)
17. It is thus clear that a case not specifically pleaded can be
considered by the court only where the pleadings in
substance, though not in specific terms, contain the
necessary averments to make out a particular case and the
issues framed also generally cover the question involved and
the parties proceed on the basis that such case was at issue
and had led evidence thereon. As the very requirements
indicate, this should be only in exceptional cases where the
court is fully satisfied that the pleadings and issues
generally cover the case subsequently put forward and that
the parties being conscious of the issue, had led evidence on
such issue. But where the court is not satisfied that such
case was at issue, the question of resorting to the exception
to the general rule does not arise. The principles laid down
in Bhagwati Prasad and Ram Sarup Gupta referred to above
and several other decisions of this Court following the same
cannot be construed as diluting the well-settled principle
that without pleadings and issues, evidence cannot be
considered to make out a new case which is not pleaded.
Another aspect to be noticed, is that the court can consider
such a case not specifically pleaded, only when one of the
parties raises the same at the stage of arguments by
contending that the pleadings and issues are sufficient to
make out a particular case and that the parties proceeded on
that basis and had led evidence on that case. Where neither
party puts forth such a contention, the court cannot
obviously make out such a case not pleaded, suo motu”.
10) Learned senior counsel further submitted that merely
because the documents have been exhibited and also because
in some of the documents one of the witnesses had identified
the signature of the person who is alleged to have signed the
document, does not establish that the contents of the
documents have been proved. In support of this contention,
learned senior counsel placed reliance on the decision of this
Court in Shalimar Chemical Works Limited vs. Surendra
Oil and Dal Mills (Refineries) and Others (2010) 8 SCC 423
wherein it was held as under:-
“3. In course of the trial, the appellant produced before the
court photocopies of registration certificates under the Trade
and Merchandise Marks Act, 1958 along with the related
documents attached to the certificates. The photocopies
submitted by the appellant were “marked” by the trial court
as Exts. A-1 to A-5, “subject to objection of proof and
admissibility”. At the conclusion of the trial, the court
dismissed the suit of the appellant by the judgment and
order dated 28-9-1998 inter alia holding that the available
evidence on record did not establish the case of the plaintiff
and there was no prima facie case in favour of the plaintiff
nor was the balance of convenience in favour of the plaintiff.
4. The trial court arrived at its findings mainly because the
appellant did not file the trade mark registration certificates
in their original. In that connection, the trial court made the
following observations:
“All the above documents i.e. Exts. A-1 to A-5 are marked
subject to objection of proof and admissible (sic
admissibility) and also mention so in the deposition of PW 1.
PW 1 in his cross-examination has admitted that all the
above documents are xerox copies. He has also admittedly
not filed legal certificate for the same.
Section 31 of the Trade and Merchandise Marks Act,
1958 specifically reads as follows:
‘31. Registration to be “prima facie” evidence of validity.
—(1) In all legal proceedings relating to a trade mark
registered under this Act (including applications under
Section 56), the original registration of the trade mark
and of all subsequent assignments and transmissions of
the trade mark shall be “prima facie” evidence of the
validity thereof.’
Therefore, the plaintiff has to file the originals of the
registration (sic certificates) or the certified copies thereof.
Exts. A-1 to A-4 are xerox copies. It is well-settled law that
xerox copies are not admissible in evidence. Once those
documents are not held admissible, the plaintiff cannot be
permitted to rely on it. These documents Exts. A-1 to A-4 are
basic documents of the Trade and Merchandise Marks Act.”
9. Mr P.P. Rao, learned Senior Advocate, appearing for the
appellant assailed both, the procedure adopted by the trial
court and the view taken by the Division Bench of the High
Court, on the basis of the provisions of Order 41 Rule 27. Mr
Rao submitted that if the trial court was of the view that the
xerox copies of the documents in question were not
admissible in evidence, it ought to have returned the copies
at the time of their submission. In that event, the appellant
would have substituted them by the original registration
certificates and that would have been the end of the matter.
But once the xerox copies submitted by the appellant were
marked as exhibits, it had no means to know that while
pronouncing the judgment, the court would keep those
documents out of consideration, thus, causing great
prejudice to the appellant.
10. Mr Rao submitted that the provision of Order 13 Rule 4
CPC provides for every document admitted in evidence in the
suit being endorsed by or on behalf of the court, and the
endorsement signed or initialled by the Judge amounts to
admission of the document in evidence. An objection to the
admissibility of the document can be raised before such
endorsement is made and the court is obliged to form its
opinion on the question of admissibility and express the
same on which opinion would depend, the document being
endorsed, admitted or not admitted in evidence. In support
of the submission he relied upon a decision of this Court in
R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami &
V.P. Temple where it was observed as follows:
“20. … The objections as to admissibility of documents in
evidence may be classified into two classes: (i) an
objection that the document which is sought to be proved
is itself inadmissible in evidence; and (ii) where the
objection does not dispute the admissibility of the
document in evidence but is directed towards the mode of
proof alleging the same to be irregular or insufficient. In
the first case, merely because a document has been
marked as ‘an exhibit’, an objection as to its admissibility
is not excluded and is available to be raised even at a
later stage or even in appeal or revision. In the latter case,
the objection should be taken when the evidence is
tendered and once the document has been admitted in
evidence and marked as an exhibit, the objection that it
should not have been admitted in evidence or that the
mode adopted for proving the document is irregular
cannot be allowed to be raised at any stage subsequent to
the marking of the document as an exhibit. The latter
proposition is a rule of fair play. The crucial test is
whether an objection, if taken at the appropriate point of
time, would have enabled the party tendering the
evidence to cure the defect and resort to such mode of
proof as would be regular. The omission to object
becomes fatal because by his failure the party entitled to
object allows the party tendering the evidence to act on
an assumption that the opposite party is not serious
about the mode of proof. On the other hand, a prompt
objection does not prejudice the party tendering the
evidence, for two reasons: firstly, it enables the court to
apply its mind and pronounce its decision on the
question of admissibility then and there; and secondly, in
the event of finding of the court on the mode of proof
sought to be adopted going against the party tendering
the evidence, the opportunity of seeking indulgence of the
court for permitting a regular mode or method of proof
and thereby removing the objection raised by the opposite
party, is available to the party leading the evidence. Such
practice and procedure is fair to both the parties. Out of
the two types of objections, referred to hereinabove, in the
latter case, failure to raise a prompt and timely objection
amounts to waiver of the necessity for insisting on formal
proof of a document, the document itself which is sought
to be proved being admissible in evidence. In the first
case, acquiescence would be no bar to raising the
objection in a superior court.”
(emphasis in original)
15. On a careful consideration of the whole matter, we feel
that serious mistakes were committed in the case at all
stages. The trial court should not have “marked” as exhibits
the xerox copies of the certificates of registration of trade
mark in face of the objection raised by the defendants. It
should have declined to take them on record as evidence and
left the plaintiff to support its case by whatever means it
proposed rather than leaving the issue of admissibility of
those copies open and hanging, by marking them as exhibits
subject to objection of proof and admissibility. The appellant,
therefore, had a legitimate grievance in appeal about the way
the trial proceeded.
16. The learned Single Judge rightly allowed the appellant’s
plea for production of the original certificates of registration
of trade mark as additional evidence because that was
simply in the interest of justice and there was sufficient
statutory basis for that under clause (b) of Order 41 Rule 27.
But then the Single Judge seriously erred in proceeding
simultaneously to allow the appeal and not giving the
respondent-defendants an opportunity to lead evidence in
rebuttal of the documents taken in as additional evidence.
18. The judgment and order dated 25-4-2003 passed by the
Division Bench is set aside and the matter is remitted to the
learned Single Judge to proceed in the appeal from the stage
the originals of the registration certificates were taken on
record as additional evidence. The learned Single Judge may
allow the respondent-defendants to lead any rebuttal
evidence or make a limited remand as provided under Order
41 Rule 28.
19. In the result, the appeal is allowed, as indicated above
but with no order as to costs”.
11) Further, learned senior counsel relied on H. Siddiqui
(Dead) By Lrs. vs. A. Ramalingam (2011) 4 SCC 240 which
held as under:-
“12. The provisions of Section 65 of the 1872 Act provide for
permitting the parties to adduce secondary evidence.
However, such a course is subject to a large number of
limitations. In a case where the original documents are not
produced at any time, nor has any factual foundation been
laid for giving secondary evidence, it is not permissible for
the court to allow a party to adduce secondary evidence.
Thus, secondary evidence relating to the contents of a
document is inadmissible, until the non-production of the
original is accounted for, so as to bring it within one or other
of the cases provided for in the section. The secondary
evidence must be authenticated by foundational evidence
that the alleged copy is in fact a true copy of the original.
Mere admission of a document in evidence does not amount
to its proof. Therefore, the documentary evidence is required
to be proved in accordance with law. The court has an
obligation to decide the question of admissibility of a
document in secondary evidence before making endorsement
thereon. (Vide Roman Catholic Mission v. State of Madras,
State of Rajasthan v. Khemraj, LIC v. Ram Pal Singh Bisen
and M. Chandra v. M. Thangamuthu.)
13. The trial court decreed the suit observing that as the
parties had deposed that the original power of attorney was
not in their possession, question of laying any further factual
foundation could not arise. Further, the trial court took note
of the fact that the respondent herein has specifically denied
execution of power of attorney authorising his brother, R.
Viswanathan to alienate the suit property, but brushed aside
the same observing that it was not necessary for the
appellant-plaintiff to call upon the defendant to produce the
original power of attorney on the ground that the photocopy
of the power of attorney was shown to the respondent herein
in his cross-examination and he had admitted his signature.
Thus, it could be inferred that it is the copy of the power of
attorney executed by the respondent in favour of his brother
(R. Viswanathan, the second defendant in the suit) and
therefore, there was a specific admission by the respondent
having executed such document. So it was evident that the
respondent had authorised the second defendant to alienate
the suit property.
14. In our humble opinion, the trial court could not proceed
in such an unwarranted manner for the reason that the
respondent had merely admitted his signature on the
photocopy of the power of attorney and did not admit the
contents thereof. More so, the court should have borne in
mind that admissibility of a document or contents thereof
may not necessarily lead to drawing any inference unless the
contents thereof have some probative value.
15. In State of Bihar v. Radha Krishna Singh this Court
considered the issue in respect of admissibility of documents
or contents thereof and held as under:
“40. … Admissibility of a document is one thing and its
probative value quite another—these two aspects cannot
be combined. A document may be admissible and yet may
not carry any conviction and weight or its probative value
may be nil.”
16. In Madan Mohan Singh v. Rajni Kant this Court
examined a case as a court of fifth instance. The statutory
authorities and the High Court had determined the issues
taking into consideration a large number of documents
including electoral rolls and school leaving certificates and
held that such documents were admissible in evidence. This
Court examined the documents and contents thereof and
reached the conclusion that if the contents of the said
documents are examined making mere arithmetical exercise
it would lead not only to improbabilities and impossibilities
but also to absurdity. This Court examined the probative
value of the contents of the said documents and came to the
conclusion that Smt Shakuntala, second wife of the father of
the contesting parties therein had given birth to the first
child two years prior to her own birth. The second child was
born when she was 6 years of age; the third child was born
at the age of 8 years; the fourth child was born at the age of
10 years; and she gave birth to the fifth child when she was
12 years of age.
17. Therefore, it is the duty of the court to examine whether
the documents produced in the court or contents thereof have
any probative value”.
12) Further, in R.V.E. Venkatachala Gounder vs.
Arulmigu Viswesaraswami & V.P. Temple and Another
(2003) 8 SCC 752 it was held as under:-
“19. Order 13 Rule 4 CPC provides for every document
admitted in evidence in the suit being endorsed by or on
behalf of the court, which endorsement signed or initialled
by the Judge amounts to admission of the document in
evidence. An objection to the admissibility of the document
should be raised before such endorsement is made and the
court is obliged to form its opinion on the question of
admissibility and express the same on which opinion would
depend the document being endorsed as admitted or not
admitted in evidence. In the latter case, the document may
be returned by the court to the person from whose custody it
was produced.
20. The learned counsel for the defendant-respondent has
relied on Roman Catholic Mission v. State of Madras in
support of his submission that a document not admissible in
evidence, though brought on record, has to be excluded from
consideration. We do not have any dispute with the
proposition of law so laid down in the abovesaid case.
However, the present one is a case which calls for the correct
position of law being made precise. Ordinarily, an objection
to the admissibility of evidence should be taken when it is
tendered and not subsequently. The objections as to
admissibility of documents in evidence may be classified into
two classes: (i) an objection that the document which is
sought to be proved is itself inadmissible in evidence; and (ii)
where the objection does not dispute the admissibility of the
document in evidence but is directed towards the mode of
proof alleging the same to be irregular or insufficient. In the
first case, merely because a document has been marked as
“an exhibit”, an objection as to its admissibility is not
excluded and is available to be raised even at a later stage or
even in appeal or revision. In the latter case, the objection
should be taken when the evidence is tendered and once the
document has been admitted in evidence and marked as an
exhibit, the objection that it should not have been admitted
in evidence or that the mode adopted for proving the
document is irregular cannot be allowed to be raised at any
stage subsequent to the marking of the document as an

exhibit. The latter proposition is a rule of fair play. The
crucial test is whether an objection, if taken at the
appropriate point of time, would have enabled the party
tendering the evidence to cure the defect and resort to such
mode of proof as would be regular. The omission to object
becomes fatal because by his failure the party entitled to
object allows the party tendering the evidence to act on an
assumption that the opposite party is not serious about the
mode of proof. On the other hand, a prompt objection does
not prejudice the party tendering the evidence, for two
reasons: firstly, it enables the court to apply its mind and
pronounce its decision on the question of admissibility then
and there; and secondly, in the event of finding of the court
on the mode of proof sought to be adopted going against the
party tendering the evidence, the opportunity of seeking
indulgence of the court for permitting a regular mode or
method of proof and thereby removing the objection raised
by the opposite party, is available to the party leading the
evidence. Such practice and procedure is fair to both the
parties. Out of the two types of objections, referred to
hereinabove, in the latter case, failure to raise a prompt and
timely objection amounts to waiver of the necessity for
insisting on formal proof of a document, the document itself
which is sought to be proved being admissible in evidence. In
the first case, acquiescence would be no bar to raising the
objection in a superior court”.
13) Learned senior counsel further submitted that the
appellant has taken a case of collusion between the
defendants-respondents herein with the labour union and in
the cross examination of Shri N.L. Mehta (PW-1), it has been
conceded by him that he had no material to show that the
refusal of permission by the workmen was instigated by the
defendants-respondents herein. In view of this admission
alone, the appellant is not entitled to any relief as he has failed
28Page 29
to prove his own case. He further submitted that if a
condition of a contract is for mutual benefit of both the parties
then such a condition cannot be waived by a party
unilaterally. According to him, Clause 6 of the agreement
provides that the vendor will not be bound to complete the
sale, if the labour does not consent to it. This clause was
included as the subject matter of sale was not a running
business as a going concern but a sale of land per se, meaning
thereby, that the business which was being conducted would
have to be shut down. In such a situation, permission of the
Labour Commissioner was required under Section 25-O of the
Industrial Disputes Act, 1947 before closing down the unit.
Further, Regulation 56(3)(c)(1) of the Development Control
Regulations, 1991 also required permission of the Labour
Commissioner in case of conversion from industrial to
residential use of the land is purported. Therefore, these two
conditions were not only for the benefit of one party and in
fact, it was for the benefit of both the parties. Such a
condition cannot be waived unilaterally.
29Page 30
14) In support of this claim, reliance was placed on HPA
International vs. Bhagwandas Fatehchand Daswani and
Others (2004) 6 SCC 537 wherein it was held that:-
“99. The decision in Jiwan Lal (Dr.) v. Brij Mohan Mehra is
also distinguishable on the facts of that case. There clauses
5 and 6 of the agreement provided for execution of sale deed
within three months from the date the premises agreed to be
sold were vacated by the Income Tax Authorities. It was
further provided that if the Income Tax Authorities did not
vacate the premises or they stood requisitioned by the
Government before registration of sale deed — the vendor
shall refund the consideration to the purchaser. As the
premises were requisitioned by the Government, the stand
taken by the vendor was that it was contingent contract and
on requisition of the premises, the contract failed. On the
evidence of the parties, the finding reached was that the
vendor had manipulated requisition of the premises. This
Court, therefore, in appeal held that the contract did not
provide that the sale would be effected only if the premises
remain non-requisitioned or that on requisition of the
premises, the contract would come to an end. The clause
providing for refund of consideration if the premises were not
vacated by the Income Tax Authorities or subsequently
requisitioned by the Government was held to be solely for the
benefit of the vendee. It was held that if the vendor
manipulated the requisition, the vendee could waive that
condition and insist on sale of premises in the condition of it
having been requisitioned.
100. In the case before us, we have not found that the
vendor was guilty of rendering the suit for sanction
infructuous. It did terminate the contract pending the suit
for sanction but never withdrew that suit. The vendee
himself prosecuted it and rendered it infructuous by his own
filing of an affidavit giving up his claim for the interest of
reversioners. In such a situation where the vendor was not
in any manner guilty of not obtaining the sanction and the
clause of the contract requiring the Court’s sanction for
conveyance of full interest, being for the benefit of both the
parties, the contract had been rendered unenforceable with
the dismissal of the sanction suit.
30Page 31
101. Where the clause requiring obtaining of sanction
was to protect interest of both the parties and when the
sanction could not be obtained for reasons beyond the
control of the parties, the contract cannot be directed to be
specifically enforced. The House of Lords in the case of New
Zealand Shipping Co. Ltd. v. Societe Des Ateliers Et Chantiers
De France in similar circumstances, negatived the claim of
specific performance. It was held in that case that where two
parties are equally blameless and none of them could be said
to have brought about a situation by their act or omission to
frustrate the contract, the contract cannot be directed to be
specifically enforced.
102. On behalf of the vendee, support for his claim was
sought from the following observations of Lord Atkinson:
“The application to contracts such as these of the
principle that a man shall not be permitted to take
advantage of his own wrong thus necessarily leaves to
the blameless party an option whether he will or will
not insist on the stipulation that the contract shall be
void on the happening of the named event. To deprive
him of that option would be but to effectuate the
purpose of the blameable party. When this option is
left to the blameless party it is said that the contract is
voidable, but that is only another way of saying that
the blameable party cannot have the contract made
void himself, cannot force the other party to do so, and
cannot deprive the latter of his right to do so. Of
course the parties may expressly or impliedly stipulate
that the contract shall be voidable at the option of any
party to it. I am not dealing with such a case as that.
It may well be that the question whether the particular
event upon the happening of which the contract is to be
void was brought about by the act or omission of either
party to it may involve a determination of a question of
fact.” (emphasis supplied)
103. As has been observed by Lord Atkinson, it is always
a question of fact to be determined in each case as to who is
guilty of the act or omission to render the contract void or
unenforceable. In the case of New Zealand Shipping Co. Ltd
on facts the ultimate conclusion reached unanimously by
Their Lordships was that the clause of the contract in that
case was a stipulation in favour of both the parties and the
situation was not brought about by any of the parties to give
rise to avoidance. It was found that the failure to fulfil the
31Page 32
contract was not due to any fault on the part of the
respondents but was due to a cause beyond their control.
104. In the present case also, we have come to the
conclusion that the vendor waited for a reasonable period for
grant of sanction to the sale by the Court. There was a
pressing need for sale as the public dues and taxes could
have been recovered from the property by coercive process at
any time. The vendor, therefore, advisedly withdrew from the
contract, negotiated sale on different terms with the
subsequent vendee and ultimately entered into the contract
with the latter. The vendor did not actually withdraw the suit
for sanction. The vendee himself became co-plaintiff to the
suit and unsuccessfully tried to prosecute it. The sanction
suit was rendered infructuous by the vendee’s own conduct
of filing an affidavit restricting his claim to life interest. He
suffered the dismissal of sanction suit as infructuous and
did not question the correctness of the Court’s order in
appeal before the Division Bench, although the subsequent
vendee, against grant of decree of specific performance of life
interest, had preferred an appeal.
105. In this situation, even if we come to a conclusion
that the vendee had rightly tried his utmost to obtain the
Court’s sanction and cannot be blamed for transposing
himself as a co-plaintiff and prosecuting the sanction suit,
the sanction sought could not be obtained for reasons
beyond the control of the parties. The vendor cannot be held
guilty of the breach as to entitle the vendee to seek specific
performance of life interest of the vendor. The contract
entered into between the parties was for conveying full
interest in the property, namely, life interest of the vendor
and chance of succession of reversioners. The contract was
one and indivisible for full interest. There is no stipulation in
the contract that if sanction was not obtained, the vendor
would transfer only his life interest for the same or lesser
consideration. On the contrary, the contract stipulated that
if the sanction was not granted, the contract shall stand
cancelled and the advance money would be refunded to the
purchaser”.
15) Further, in Irwin v Wilson [2011] EWHC 326 (Ch), it was
held thus:-
32Page 33
“22. Beguilingly straightforward as the matter appeared to
Judge Madge, I consider that the issues raised are far from
simple. They break down into four separate points. (a)
Benefit of condition
23. The test for determining whether a contract term is for
the exclusive benefit of one party, failing which and in the
absence of any express power of waiver the term is not
capable of unilateral waiver by the party to the contract who
claims to have the benefit of it, is that stated by Brightman J
(as he then was) in Heron Garage at 426e - h;
“Without seeking to define the precise limits within
which a contracting party seeking specific performance
may waive a condition on the ground that it is
intended only for his benefit, it seems to me that in
general the proposition only applies where the
stipulation is in terms for the exclusive benefit of the
plaintiff because it is a power or right vested by the
contract in him alone… , or where the stipulation is by
inevitable implication for the benefit of him alone … If
it is not obvious on the face of the contract that the
stipulation is for the exclusive benefit of the party
seeking to eliminate it, then in my opinion it cannot be
struck out unilaterally. I do not think that the court
should conduct an enquiry outside the terms of the
contract to ascertain where in all the circumstances
the benefit lies if the parties have not concluded the
matter on the face of the agreement they have signed.”
24. In a decision of the New Zealand Court of Appeal, to
which Mr Carlisle referred me, namely Globe Holdings Ltd v
Floratos [1998] 3 NZLR 331 (and to which I shall return
later) there is (at page 334) a citation from an earlier decision
of the same court (Hawker v Vickers [1991] 1 NZLR 399 at
402-3) setting out the following statement of the approach in
law:
“A party may waive a condition or provision in a
contract which is solely for that party’s own benefit
and is severable. In such a case the other party is
denied the right to treat the condition as unsatisfied
and is obliged to complete notwithstanding the loss of
that advantage. The question is one of construction of
the contract. It turns on whether the stipulation is in
terms or by necessary implication for the exclusive
benefit of the party, and the answer is derived from
consideration of the contract as a whole in the light of
the surrounding circumstances…”
33Page 34
That seems to me, with respect, to be an entirely accurate
summary of the relevant approach..
33. What then of the presence in clause 25.2 of the right,
conferred separately on both the buyer and the seller, to
terminate the contract in the event that, despite having used
all reasonable endeavours, the seller has not secured
performance of the documents service term by 1 February
2010? It was the presence of this right that persuaded Judge
Madge to conclude that clause 25.1 was not capable of
waiver by the defendants.
34. In my judgment, the presence of that right is irrelevant
to whether the documents service term is for the exclusive
benefit of the seller. The principle is that a party may waive a
contract term if that term, if performed, is of benefit to him
but not to the other party (or parties) to the contract. By
contrast, the right to terminate the contract conferred by
clause 25.2 is exercisable if and only if the term cannot be or
is not performed.
35. This very point was discussed in Globe Holdings, the
New Zealand decision referred to earlier. In that case a
condition of the contract for the sale of an apartment block
stipulated that, within 60 days of acceptance, the purchaser
would obtain planning consent from the local council for the
sub-division of the block. The contract contained a general
condition that in relation to any financial or other conditions
either party could, at any time before the condition was
fulfilled or waived, avoid the contract by giving notice. Within
the 60 days the purchaser’s solicitors gave notice that the
special condition was waived and that, accordingly, the
contract could be regarded as unconditional. The question
was whether the notice was legally effective. In the course of
a judgment dealing with a number of points, the New
Zealand Court of Appeal (at 339) cited a passage from the
earlier decision of Hawker v Vickers which stated that
“…there is nothing inconsistent in providing expressly
or by necessary implication for unilateral waiver of a
condition up to a certain date and thereafter for
allowing either party to avoid the contract for non
fulfilment of the condition. Such a provision simply
recognises the commercial reality that the nature and
significance to the parties of a condition in a contract
may change over time or at a point in time. If the
contract [sic] is fulfilled or waived, the parties then
have the certainty of an unconditional contract. If not
34Page 35
fulfilled or waived by the nominated date, each is free
to end the contract by appropriate notice to the other.”
The court then pointed out that: “The argument
against waiver rests upon the desirability of certainty
for a vendor from being able immediately to bring the
contract to an end, or see it immediately collapse, once
the given time has elapsed. But certainty is achieved
by a different rule, namely that any waiver must occur
on or before the condition date, or at least before the
contract is actually brought to an end (if it is not
automatically void). It has to be remembered that we
are at this point concerned with a situation in which it
is to be accepted that there is no substantive benefit to
[the vendors]. Therefore, their only legitimate interest
is in knowing whether the transaction is to proceed or
not. Once the time allowed for the fulfilment of the
condition expires they can forthwith give notice of
cancellation if they have not already been informed
that the sale will go ahead. It matters not to them
whether it does so because of fulfilment or because the
purchaser elects to proceed anyway. The achieving of
certainty is in the vendors’ own hands if there has
been no action by the purchaser. If there has been a
waiver the transaction proceeds as it would have done
if the condition had been satisfied on the date of the
waiver… We conclude therefore that a distinction is to
be drawn between the benefit of the substance of the
condition and the benefit of the time limit …”
36. The reasoning in that passage thus distinguishes
between the benefit of the condition - here the documents
service term contained in clause 25.1 - and the benefit of the
right to terminate the contract if the condition has not been
fulfilled by the due date - here the right to terminate the
contract after 1 February if the information in question has
not been provided. These are two distinct terms of the
contract. The existence of the right in either party to
terminate the contract if a particular condition is not
performed by the due date is not inconsistent with the
condition in question being for the exclusive benefit of the
other party to the contract and with that other party having
the right, if necessary by implication of law, to waive the
condition.
37. Heron Garage is not authority for a contrary view. The
condition in that case was that the purchaser would obtain a
particular planning consent. Obtaining that consent was a
35Page 36
condition precedent to the contract. Brightman J put the
matter thus (at 426b):
“The town planning consent is expressed in cl.7 of the
sale agreement as a condition fundamental to the
enforceability of the sale agreement as a whole. It is
not expressed as a condition which is precedent only
to the liability of Heron as purchaser. Clause 7 is not a
clause which is expressed only to confer rights on
Heron. It is expressed to confer a right also on the
vendors.”
It is perhaps the presence of the last sentence in that
passage which needs some elaboration. The right there
referred to was a right in either party, if the stipulated
planning consent should not have been obtained within 6
months or within such extended period as the parties might
agree, to terminate the agreement by notice in writing to the
other. It was part and parcel of the very clause stating that
the contract was conditional upon the particular planning
consent being obtained. The purchaser, Heron, had shortly
before the expiry of the 6 month period given notice in
writing to the vendor’s solicitor purporting to waive what it
described as the benefit of clause 7 of the contract. It is not
surprising therefore that Brightman J concluded that the
condition was not capable of waiver by the purchaser: it was
a condition precedent to the very existence of the contract
and, what is more, it contained a provision expressed to be
for the benefit of both parties.
49. In my judgment, the notice given under clause 25.2
enables the parties to bring an end to their relationship if
one of them chooses to do so and the relevant information
has not been provided by 1 February. The more natural
contruction of the clause is to read it as having that effect
when it is given. It is inconsistent with that purpose to allow
an obligation to complete to arise (either because the
documents service term is performed or the term is waived)
after the notice has been given. The whole point of the notice
is that the time for completion has passed”.
16) Learned senior counsel for the respondents further
submitted that as in the present case, the workmen had
refused to grant their consent for the sale, the contract stood
36Page 37
frustrated being contingent upon the said condition and,
therefore, discretionary remedy of specific performance cannot
be granted. To substantiate this claim, he relied on a decision
of this Court in M. Meenakshi and Others vs. Metadin
Agarwal and Others (2006) 7 SCC 470 wherein it was held
as under:-
“9. It is not disputed that the parties to the agreement
were aware of the proceedings pending before the ceiling
authorities. It is also not in dispute that the Central
Government was the appropriate authority to deal with the
matter as the lands pertained to a cantonment area. The
agreement envisaged that the defendant would obtain
necessary sanction from the competent authority. It was
made clear that he had not submitted any layout nor had he
got any sanction therefor.
23. It was, therefore, not a case where the trial court
found that the defendant had committed a fraud on the
statutory authorities or on the court. The expression “fraud”
in our opinion was improperly used. It must be noticed that
admittedly when the agreement was entered into, the
proceedings under the 1976 Act were pending. The parties
might have proceeded under a misconception. It is also
possible that the defendant had made misrepresentation to
the plaintiff; but the question which was relevant for the
purpose of determination of the dispute was as to whether
having regard to the proceedings pending before the
competent authority under the 1976 Act, the defendants
could perform their part of the contract. The answer thereto,
having regard to the order of the competent authority dated
8-8-1980, must be rendered in the negative.
25. It was, therefore, not a case where a notice under
Section 26 of the 1976 Act could have served the purpose
and in the event, the competent authority did not exercise its
statutory right of perception (sic purchase) within the period
stipulated thereunder, the defendant was free to execute a
deed of sale in favour of any person he liked.
37Page 38
26. Strong reliance has been placed by Mr Nageswara
Rao on a decision of this Court in HPA International v.
Bhagwandas Fateh Chand Daswani1. Our attention in
particular has been drawn to the following observations:
“100. In the case before us, we have not found that the
vendor was guilty of rendering the suit for sanction
infructuous. It did terminate the contract pending the
suit for sanction but never withdrew that suit. The vendee
himself prosecuted it and rendered it infructuous by his
own filing of an affidavit giving up his claim for the
interest of reversioners. In such a situation where the
vendor was not in any manner guilty of not obtaining the
sanction and the clause of the contract requiring the
Court’s sanction for conveyance of full interest, being for
the benefit of both the parties, the contract had been
rendered unenforceable with the dismissal of the sanction
suit.”
27. The said observations were made in the fact situation
obtaining therein.
28. In this case, we are concerned with a situation where
the sanction, it will bear repetition to state, has expressly
been refused.
29. Dharmadhikari, J. in that case itself has noticed a
judgment of the House of Lords in New Zealand Shipping
Co., Ltd. v. Scoiete des Ateliers et Chantiers de France
wherein it was held that a man shall not be allowed to take
advantage of his own wrong, which he himself brought
about.
30. The parties were aware of the proceedings under the
1976 Act. The plaintiff-respondents were also aware that
sanction under the said Act is necessary. The consequence
for non-grant of such sanction was expressly stipulated.
Even the parties were clear in their mind as regards the
consequences of wilful non-execution of a deed of sale or
wilful refusal on their part to perform their part of contract.
31. We may notice that Lord Atkinson in New Zealand
Shipping took into consideration the inability or impossibility
on the part of a party to perform his part of contract and
opined the principle that man shall not be permitted to take
advantage of his own wrong, which he himself brought
about.
32. Our attention has rightly been drawn by Mr Gupta to
the deed of sale executed by the defendant in favour of
others. By the said deeds of sale all the six co-sharers have
38Page 39
sold portions of their house properties and lands
appurtenant thereto. The total land sold to the purchasers
by all the six co-sharers was below 900 sq. m.
33. The comment made by the Division Bench that the
competent authority under the 1976 Act failed to take into
consideration the Muslim law of inheritance and succession
is again besides the point. Each of the claim petitions by the
appellants and their co-sharers was determined having
regard to the 1976 Act. The Muslim law of inheritance and
succession may not have any role to play. In any event, the
same could not have been the subject-matter of a decision at
the hands of the Division Bench.
34. We have noticed the reports of the Commissioner
appointed both by the trial court and the learned Single
Judge of the High Court. The Commissioner appointed by
the trial Judge in his report stated:
“… I also found some numbers were painted in black
on the compound wall inside the western compound wall
as 3-42-67 and I also found one small brick mound near
the middle unfinished room touching the western
compound wall. I also found some numbers on the gate
painted in black as 65-66-67-68-69. While I was
proceeding with the execution of warrant, some persons
brought a board and tied it to the gate which contained
some letters painted as ‘This land and construction area
Cantonment H. Nos. 3-42-65 to 3-42-69 belong to Murthy
Cooperative Housing Society — Trespassers will be
prosecuted’.”
35. It was, therefore, accepted that the plots mentioned
therein had already been sold to Murthy Cooperative
Housing Society. The said Cooperative Society, it is beyond
any cavil of doubt, purchased the land from the original
owners pursuant to or in furtherance of the exemption
accorded in that behalf by the competent authority in
exercise of its power under Section 20 of the 1976 Act. The
land sold to the Cooperative Society which might have
included the vacant land and which was the subject-matter
of the agreement but was not the subject-matter of the suit.
They were not parties thereto. The sanction accorded in their
favour by the competent authority had never been put in
question.
36. The Advocate-Commissioner appointed by the trial
court, observed:
39Page 40
“Opinion and observation.—Taking all the aforesaid facts
and circumstances I conclude that Plot No. 2 in Survey
No. 71 as mentioned in the agreement of sale Ext. A-2 in
the trial court and House Nos. 3-9-51/A, B, C and D
situated in Survey No. 71/part, West Marredpalli on
which I conducted the local inspection are the same.”
37. The learned Commissioner, therefore, only inspected
Plot No. 2 situated in Survey No. 71 and not the lands which
were the subject-matter of sale in favour of the subsequent
purchasers.
38. The High Court, in our considered view, also
committed a manifest error in opining that the appellants
should have questioned the orders passed by the competent
authority. If they have not done so, the same would not
mean that the Division Bench could go thereinto suo motu.
39. Furthermore, Section 20 of the Specific Relief Act
confers a discretionary jurisdiction upon the courts.
Undoubtedly such a jurisdiction cannot be refused to be
exercised on whims and caprice; but when with passage of
time, the contract becomes frustrated or in some cases
increase in the price of land takes place, the same being
relevant factors can be taken into consideration for the said
purpose. While refusing to exercise their jurisdiction, the
courts are not precluded from taking into consideration the
subsequent events. Only because the plaintiff-respondents
are ready and willing to perform their part of contract and
even assuming that the defendant was not entirely vigilant in
protecting his rights in the proceedings before the competent
authority under the 1976 Act, the same by itself would not
mean that a decree for specific performance of contract
would automatically be granted. While considering the
question as to whether the discretionary jurisdiction should
be exercised or not, the orders of a competent authority
must also be taken into consideration. While the court upon
passing a decree for specific performance of contract is
entitled to direct that the same shall be subject to the grant
of sanction by the authority concerned, as was the case in
Chandnee Widya Vati Madden v. Dr. C.L. Katial and Nirmala
Anand v. Advent Corpn. (P) Ltd.; the ratio laid down therein
cannot be extended to a case where prayer for such sanction
had been prayed for and expressly rejected. On the face of
such order, which, as noticed hereinbefore, is required to be
set aside by a court in accordance with law, a decree for
specific performance of contract could not have been
granted”.
40Page 41
17) Learned single Judge decreed the suit for specific
performance by directing the respondents herein to apply to
the concerned authorities for change of user of land from
industrial/commercial to residential use and also to apply for
the permission under the ULC Act and in the event the
permission is not granted by the authorities then a decree in
terms of prayer b(i) to b(v) of the plaint shall be granted. In
the present case, permission was applied for and rejected by
the Labour Commissioner as well as the office of the Joint
Director of Industries on 02.03.2006 and 28.02.2006
respectively. The permission under the ULC Act under Section
22 also came to be rejected on 06.03.2006. Thus, if at all,
without admitting that the appellant had succeeded making
out of case for a decree of specific performance, the appellant
would have only become entitled for damages.
18) Learned senior counsel further submitted that the
respondents terminated the contract on 15.12.1977, that is,
within two month. The question of waiver of a condition would
not at all arise so as to revive the contractual obligations into
existence and thereby claim his contractual rights under the
contract so revived. It is settled position of law that once a
contract has been terminated, either on the breach of the
terms of the contract by one party and subsequent repudiation
by the other or by frustration of the contract due to
circumstances beyond the control of either of the parties, the
contract legally comes to an end between the parties. Then
there is no question of any contract/agreement subsisting
between the parties, what follows is only the legal
consequences which may have been contemplated in the terms
of the contract e.g. liquidated damages, etc. However, the
parties are at liberty to mutually novate the contract by
bringing into existence a new contract altogether which would
replace the old contract between the parties and the terms of
the new contract take the place of the old contractual terms.
It will not only be illogical but also absurd to contend that
once the contract has been terminated by a party, it will still
subsist in the background and either of the parties may be
able to waive a condition attached to that contract so as to
revive that contract from a period of slumber. This will in fact
amount to saying that even though a contract has been
terminated by putting it to an end but it is actually still
available, at the option of one of the parties, to be revived back
to its original form and content through unilateral waiver of a
contractual condition. In order to substantiate this claim,
learned senior counsel placed reliance on K. Narendra vs.
Riviera Apartments (P) Ltd. (1999) 5 SCC 77 which held as
under:-
“36….. We are clearly of the opinion that at one point of time
the contract had stood frustrated by reference to Section 56
of the Contract Act. We do not think that the subsequent
events can be pressed into service for so reviving the
contract as to decree its specific performance”.
19) According to learned senior counsel, Clause 6 of the
agreement which provides for a period of nine (9) months was
only for obtaining No Objection Certificate (NOC) from the
Urban Land Ceiling authorities and from the authority for
conversion of land from commercial to residential use. There
was no time period provided for obtaining consent from the
labour union and once the Labour Union on 05.12.1977 and
again on 10.01.1978 declared their intention not to negotiate,
the contract stood frustrated, and therefore, the question of
specific performance of the contract did not arise. He further
submitted that without prejudice to the aforesaid
submissions, the Division Bench, even after holding that the
learned single Judge erred in looking at evidence and
documents which were filed beyond the stated case in the
plaint, nevertheless examined the case of the appellant on the
strength of even those documents, more specifically, letters
dated 05.12.1977 and 10.01.1978.
20) Learned senior counsel further submitted that letter
dated 05.12.1977 as produced by the respondents is in line
with the same letter which has been obtained through RTI.
On the other hand, the letter on which the appellant is relying
upon does not match with the one obtained through the
Labour Commissioner’s Office. Moreover, the Division Bench
has found version of the appellant to be untrustworthy as
according to it the post-script as introduced by the plaintiff
was found to be inconsistent with the main body of the letter.
Further, letter dated 10.01.1978, produced by the appellant is
also an interpolated document as Mr. Vasant Gupte (PW-2) in
his statement had said that this letter must have been sent by
44Page 45
the Mill Mazdoor Sabha and the post-script might have been
written by Mr. Pathak as it bears his signature. The Division
Bench has therefore rightly held that it cannot be relied upon.
Moreover, two undisputed documents i.e., letter dated
08.11.1977 (Exh. P-4) and letter dated 10.02.1978 (Exh. P-15)
make it clear that the respondent had offered the full amount
of dues to the workmen and not 60 per cent as is sought to be
suggested in the two letters filed by the appellant. Even letters
dated 14.12.1978 and 15.12.1978 (Exhibit Nos. P-39 and
P-40) have adversely been commented upon by the Division
Bench. So far as letter dated 10.06.1978 is concerned, the
Division Bench has found that PW-2 had no personal
knowledge with regard to the facts stated in the letter and that
Mr. Pathak who is said to have written this letter was not
alive.
21) It is further submitted that the respondents have
deposited a sum of Rs. 11,50,000/- along with interest
thereon which is lying with the Registry of the Bombay High
Court in a Fixed Deposit which amount can be paid over to the
appellant and the Division Bench has rightly set aside the
order of the learned single Judge.
22) In reply, it has been stated that the additional documents
which have been filed before this Court cannot be taken into
consideration as they were not part of the record before the
learned single Judge or before the Division Bench and no leave
has been obtained from the court.
23) A reading of Clause 6 of the agreement stipulated the
period of nine (9) months for all the formalities to be observed.
It also applied to obtaining consent of the labour. According to
learned senior counsel for the appellant, the decree of specific
performance or any decree cannot be set aside vide an interim
order, more so, when this Court, in its order dated 11.02.2008
had directed that the order of status quo passed on
08.12.2006 shall continue till the disposal of the appeal by the
High Court. It was, therefore, submitted that the appeal be
allowed and respondents be directed to execute the sale deed
in favour of the appellant.
Discussion:
24) From the rival submissions noted above, the only
question which is to be decided in the present appeals is as to
whether the termination of the agreement for sale dated
19.10.1977 by the respondents was justified or not especially
when the appellant claims that the respondents had colluded
with the labour for not making them agreeable to the sale.
25) In the plaint filed before the High Court of Bombay being
Suit No. 1414 of 1979, a specific case was set up by the
appellant in paragraph 33 that the defendants are wrongfully
seeking to back out of the agreement for sale on false and
wrong pretexts and at the instigation of the defendants and in
collusion with them, the said Mill Mazdoor Sabha has refused
to give its permission to the sale of the mill premises. Relevant
portion of paragraph 33 of the plaint filed by the appellant in
Suit No. 1414 of 1979 is reproduced below:-
 “….The Plaintiff says that the Defendants are however
wrongfully seeking to back out of the said agreement for sale
on the false and wrongful pretexts. At the instigation of the
defendants and in collusion with them the said Mil Mazdoor
Sabha has also allegedly refused to give its permission to the
sale of the mill premises of Defendant No. 1 to the plaintiff.
The plaintiff says that the alleged refusal of the said Mill
Mazdoor Sabha to consent to the sale of the said Mills
property to the Plaintiff has been instigated by the
Defendants and the same is collusive and the same is made
a false pretext to enable the Defendants to back out of the
said agreement for sale dishonestly and wrongfully….”
 (emphasis supplied)
26) The Mill Mazdoor Sabha, which is a union of workmen of
the respondents herein, vide letter dated 05.12.1977, informed
the respondents that they are not agreeable to the sale of the
mill premises. This was reiterated by the Mill Mazdoor Sabha
vide letter dated 10.01.1978. The appellant, however, relied
upon the alleged letters dated 05.12.1977 and 10.01.1978
which according to them have been handed over by Shri M.P.
Agrawal-a former Director of the Respondent No. 1. The
letters dated 05.12.1977 and 10.01.1978 which were sent by
the respondents to the appellant are re-produced below:-
“Dear Sir,
This has reference to the meeting held in your office on 29th
November, 1997 when our representatives and your
Directors were present.
In this connection we have to inform you that we have been
informed by your employees that they are not agreeable to
your selling the Mill premises. The employees have given us
a representation to the effect that they are not agreeable to
your selling of the Mill premises. In accordance with the
workers representation we have to inform you that we are
not agreeable and therefore we cannot give our consent to
the sale of the mill premises.
In the circumstance there is no question of your setting the
payment of the workers’ dues as proposed by you. Please
also note that we are also moving the labour commissioner
in the regard.
Yours faithfully,
Sd/-
Asstt. General Secretary
Copy to
Commissioner of Labour”
“Dear Sir,
At your instance the undersigned met your proposed
purchased on 9th January 1978.
We want to make it clear that our letter of 5th December
1977 is final and we do not agree to the proposed sale. We
hereby treat this matter as closed as far as we are concerned
and we will not meet you or any one else for any discussion
further, in respect thereof.
Yours truly
for MILL MAZDOOR SABHA
Sd/-
Asst. General Secretary
The aforesaid letters were marked as Exhibit D-10 and Exhibit
P-11 respectively.
The letters which the appellant had filed subsequently being
marked as Exhibit Nos. P-27 and P-28 are also reproduced
below:-
“Dear Sir,
This has reference to the Meeting held in your office on
29th November, 1977 when our representatives and your
directors were present.
In this connection we have to inform you that we have been
informed by your employees that they are not agreeable to
your selling the Mill Premises. The employees have given us
a representation to the effect that they are not agreeable to
49Page 50
your selling of the Mill premises unless you provide alternate
employment and pay full compensation to those workers
who do not want alternate employment as per the law. In the
circumstances there is no question of your setting the
payment of the workers’ dues as proposed by you. Please
also note that we are also moving the Labour Commissioner
in this regard. (emphasis supplied)
Yours faithfully,
Assistant General Secretary
Copy to
Commissioner of Labour
P.S.
Your proposal to pay 60% compensation only to the workers
is not acceptable hence we object to the sale.
Signed
Assistant Secretary General”
“Dear Sir,
At your instance the undersigned met your proposed
purchaser on 9th January 1978.
We want to make it clear that our letter of 5th December,
1977, is final and we do not agree to the proposed sale. We
hereby treat this matter as closed as far as we are concerned
and we will not meet you or any one else for any discussion
further, in respect thereof.
Yours truly
for MILL MAZDOOR SABHA
Sd/-
Asst. General Secretary
P.S. : In the discussion you mentioned that in case we agree
you would shift the Factory to Andheri or Thane are and
provide alternate work to the workers on first priority basis
and those workers who do not agree to this you would
compensate fully. We are agreeable to this proposal as stated
in the presence of the workers and as such we agree to your
proposed sale. (emphasis supplied)
Sd/-
Asstt. General Secretary”
27) It may be mentioned that in the plaint filed by the
appellant, the plea set up was that at the instigation of the
defendants and in collusion with them, the Mill Mazdoor
Sabha has refused to give its permission to the sale of the mill
premises of Defendant No. 1 to the plaintiff. It was not a case
set up by the appellant that the Mill Mazdoor Sabha had
agreed to the proposed sale on certain conditions offered by
the respondents. In view of the settled position of law, fresh
pleadings and evidence which is in variation to the original
pleadings cannot be taken unless the pleadings are
incorporated by way of amendment of the pleadings. In our
considered opinion, the Division Bench of the High Court was
perfectly justified in holding that unless the plaint is amended
and a specific plea is taken that the Mill Mazdoor Sabha had
agreed for the proposed sale on certain terms and conditions
offered by the respondents herein, the two letters viz., Exh
Nos. P-27 and P-28 could not have been taken into
consideration at all. Further, it is the case of the appellant
that the aforesaid two letters were given by one Shri M.P.
Agrawal-a former Director of the Respondent No. 1. Shri M.P.
Agrawal has not been produced as a witness so as to establish
that these two letters were in fact given by the Mill Mazdoor
Sabha. Further, in the statement of Mr. Vasant Gupte (PW-2),
he has only stated that the letter must have ben sent by the
Mill Mazdoor Sabha and the post-script might have been
written by Mr. Pathak as it bears his signature. He had not
stated that it was written in his presence. Mere identifying the
signature of Mr. Pathak does not prove the contents of the said
letter which is being relied upon by the appellant. Even if the
two letters viz., Exh. Nos. P-27 and P-28 are taken into
consideration, from a reading of the said letters, it appears
that the contents are contradictory of one another. In the
letter dated 05.12.1977 (Exh. P-27), in the underlined portion
reproduced above, we find that the Mill Mazdoor Sabha had
demanded an option to provide alternate employment and to
pay full compensation to those workers who do not want
alternate employment as per the law. In the note below the
said letter, a mention has been made that a proposal was
given to pay 60 per cent compensation which was not
acceptable.
28) In the earlier part of the letter dated 10.01.1978 (Exh.
P-28), it has been specifically mentioned that they do not agree
to the proposed sale and the matter be treated as closed.
However, in the note, it is mentioned that they are agreeable to
the proposal given in the discussion and to the proposed sale.
Letter dated 10.01.1978 is contradictory to the earlier part of
the letter, and therefore, in our considered opinion, the
Division Bench had rightly disbelieved these two letters viz.,
Exh. P-27 and Exh. P-28.
29) From the aforesaid discussion it is absolutely clear that
the Mill Mazdoor Sabha categorically refused to give their
consent to the sale of the mill premises.
30) The submission that the appellant has waived the
condition regarding taking of consent from the labour for the
proposed sale and, therefore, this could not be a ground for
cancelling the contract is misconceived. In the agreement
dated 19.10.1977, it was specifically mentioned that the sale
also be subject to your (defendants) being able to settle with
your labour and your labour agreeing to the sale contemplated
herein and if you are not able to settle with your labour and to
get them to agree to the sale herein contemplated you will not
be bound to complete the sale. The moment labour do not
agree to the sale contemplated, under the terms of the
contract, the respondents were not bound to complete the
sale. The maximum period of nine (9) months does not mean
that once the labour had declined to give their consent for the
proposed sale, the contract subsists for a period of nine (9)
months and it cannot be terminated before that period. The
agreement for sale is a contingent agreement depending upon
obtaining permission under Section 22 and Section 27 of the
ULC Act, property being converted from industrial zone to
residential use and settlement with the labour and the labour
agreeing to the sale contemplated therein. If any of the
conditions are not fulfilled, the respondents were not bound to
complete the sale and the appellant was only entitled for
return of the money with interest @ 18% per annum from the
date of refusal of any of the permission or consent or
agreement mentioned above. As in the present case we find
that the Mill Mazdoor Sabha has not given its consent to the
proposed sale, agreement for sale could not have been
performed and had ceased. The appellant is only entitled to
refund of the amount along with interest @ 18% per annum
stipulated therein.
31) In view of the above, we are of the considered opinion
that the High Court was right in setting aside the decree
passed by learned single Judge of the High Court. We do not
find any merit in these appeals, hence, the appeals fail and are
hereby dismissed with no order as to costs. Interlocutory
Applications, if any, are disposed of accordingly.

...…………….………………………J.
 (RANJAN GOGOI)
.…....…………………………………J.
 (R.K. AGRAWAL)
NEW DELHI;
JULY 8, 2015.

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