Sunday, 13 December 2020

Whether promisee will have the right to put an end to contract if the contract is executed and there is no fundamental breach of contract?

 What is at once clear is that this clause provides for the promisee's right to put an end to the contract. The breach referred to therein, since it provides for the consequence of cessation of the contract, must be a breach of a fundamental or essential term of the contract. First of all, this right can be availed of by the promisee only so long as the contract remains "executory" and not when the contract is "executed". So long as the promisor is yet to perform any of his obligations under the contract or make good his representation or assurance given in the contract, the promisee retains his right to terminate the contract or treat it as having come to an end; and this right he can exercise only when the failure of the promisor is in respect of either performance of an essential obligation or making good of an essential representation or assurance. In the present case, the promisor, i.e. the Petitioner, had fully performed his obligations under the contract; he had carried out and fulfilled each of his commitments made in clause 5 of the deed. No doubt, as we have noted above, there was a further assurance on his part (clause 3) that he would not in future "write any letter or communication or complaint to any police authority/ies and/or any other judicial, quasi-judicial authority or statutory authority or any person or entity complainant about the subject matter of the present deed." The essence of this term was that the matter of the Petitioner's original complaint before EOW regarding the alleged forgery by the Respondent of the former's signature on the Placement Instruction of 15 November 2005 was finally closed and not reopened. It can, in the first place, be hardly said that this matter was reopened when the emails insinuating the Respondent's earlier 'not so straight' dealing or calling him a "forger" were addressed by the Petitioner's wife. This was, assuming that it could at all be called a breach of the settlement, no fundamental breach or failure to perform an essential obligation or make good an essential representation or assurance, entitling the Respondent to treat the contract of settlement as having come to an end.

 IN THE HIGH COURT OF BOMBAY

Arbitration Petition No. 167 of 2015

Decided On: 19.05.2020


 Jackie Kukubhai Shroff  Vs.  Ratnam Sudesh Iyer


Hon'ble Judges/Coram:

S.C. Gupte, J.

Citation: MANU/MH/0633/2020,2020(5) MHLJ 524

Read full Judgment here: Click here

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