REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

1                    CIVIL APPEAL NO. 1148 OF 2010

Nandkishore Lalbhai Mehta                              .... Appellant(s)

            Versus

New Era Fabrics Pvt. Ltd. & Ors.                    .... Respondent(s)

     WITH

2 CIVIL APPEAL NOs. 1131-1132 OF 2010

                                      3

                               J U D G M E N T

R.K. Agrawal, J.

Civil Appeal No. 1148 of 2010

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, 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 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  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 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)

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 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.

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.

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 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:-

“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…”

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 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 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  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.

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 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:

“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”.

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  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 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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