Nusli N. Wadia; Maureen N. Wadia; Rajesh Batra v. Bastion Constructions

7. In the event, issue No.6 being answered in the negative, a. Whether the Plaintiffs in the alternative are entitled to recover from the Defendants Rs.14,00,00,000/- (Rs. Fourteen Crores only) paid by the Plaintiff to the Defendants as consideration for the sale of the suit properties along with interest thereon at the rate of 18 % per annum from the date of the suit till payment? b. Whether the Plaintiff in the alternative are entitled to recover from the Defendants damages as per particulars of claim set out in Exhibit 'GG' of the plaint? c. Whether the Plaintiff is entitled to enforce the charges on the suit property for recovery of its dues from the Defendants as claimed in the plaint by sale of the suit property?

8. Additional Issue – Whether the suit is not maintainable for want of the leave of the Charity Commissioner under Section 50 of the Bombay Public Trusts Act, 1950 for filing of the Suit? 8.1.1) We find that, the learned Single Judge has addressed each of the issues raised, as well as other relevant aspects that emerged in the matter, in the impugned Judgment. For the sake of clarity and a structured analysis, we shall now proceed to address the submissions pointwise or subject-wise, as deemed appropriate, in the sub-paragraphs that follow the arguments and thereafter summarise our findings in the reasons and conclusions.

9) Mr. Navroz Seervai, learned Senior Counsel for the Wadias has advanced the following submissions: a. What is the true construction and import of Clause 10 of the Contract: b. Whether Clause 10 is an Essential / Fundamental Term of the Contract or Not:

9.2) Clause 10 of the Offer Document (in respect of both Suit Properties[4] ) is reproduced herein for ready reference and provides as under: “10. It will be solely the responsibility of the Purchaser to obtain the Permission/Clearance/No Objection from the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976 to enable the Conveyance to be made and the amount paid will not be refundable on the ground that the requisite Permission/NOC/Exemption is not forthcoming or is refused.” (Emphasis supplied)

9.3) He argued that, it was for the Purchaser to obtain permission/clearance/NOC under the ULC Act. The in-built consequence of the permission/clearance/NOC not being obtained is provided in Clause 10

4 Vol II @ 318, 325 itself, viz. that the amount paid by the Purchaser would not be refundable and no Conveyance would be executed in favour of the Purchaser necessarily therefore, the Suit Properties continue to be owned by the Wadias’. Absent the said permission/clearance/NOC, Wadias’ obligation to execute a Conveyance, obviously, did not arise and the Suit Properties would continue to be owned by the Wadias. The Purchaser (Bastion) being entitled to specific performance could not, in law, and would not in fact, arise. Further, Clause 10 that without the Permission/Clearance/NOC under the ULC Act, the Conveyance could not be made. 9.3.1) This argument is partially correct. It is accurate to the extent that the obligation to obtain permission rested solely with the Purchaser, and that failure to do so would result in forfeiture of the consideration and no execution of the conveyance- leaving ownership of the properties with the Wadias. However, with the repeal of the ULC Act and the fact that the entire consideration had already been paid, the contractual obligation was rendered redundant, thereby entitling the Purchaser to specific performance.

9.4) He submitted that, the Learned Single Judge’s findings in Paragraphs 10-12 of the Impugned Judgment fly in the face of the express language of Clause 10, and as such, are liable to be interfered with and reversed. Judge’s interpretation of Clause 10 is ex-facie erroneous, being untenable in fact and in law. 9.4.1) This argument advanced by Mr. Seervai is rejected. The learned Single Judge, in paragraph 8, has applied the factual matrix to the relevant contractual clauses set out in paragraph 9 and has, in paragraphs 10 to 12 of the impugned Judgement, provided a clear and reasoned explanation as to why the contract could not be terminated. Clause 10 has been interpreted in consonance with settled legal principles and the evidence on record. We are in full agreement with the observations and conclusions of the learned Single Judge.

9.5) Mr. Seervai asserted that, there can be no doubt that obtaining permission/clearance/NOC was also a statutory requirement[5] and therefore an essential term of the agreement without compliance of which the Conveyance could not be obtained by the Purchaser. This critical aspect of the matter, though argued and placed in written submissions by the Wadias, has not even been dealt with or considered by the learned Single Judge in the impugned Judgment. 9.5.1) This assertion is incorrect. The case of Nathulal (supra) is not an authority on either essential term or statutory requirement and therefore not applicable to this case. A plain reading of paragraph 11 makes it evident that the learned Single Judge has duly addressed the issue. The conclusion was drawn after a comprehensive consideration of the arguments advanced,

5 Nathulal vs. Phoolchand, (1969) 3 SCC 120. in conjunction with the pleadings, evidence, and applicable law. We find no infirmity in the reasoning or conclusion.

9.6) He submitted that, in the absence of the NOC / permission being obtained and therefore, the condition imposed by Clause 10 not being fulfilled, there was no obligation on the Wadias to execute the Conveyance. In such circumstances, a suit for specific performance was not maintainable and if filed, ought to have failed. In the facts of the present case, without the NOC / permission being obtained, the Purchaser directly sought specific performance. This is in the teeth of and contrary to Clause 10, which expressly contemplates a Conveyance only if and when NOC / permission is obtained. It is no answer to say that the NOC / permission is no longer required, as that amounts to re- writing of the Contract, which the Court is not empowered to do. 9.6.1) This submission, in our view, is plainly incorrect. It is wholly untenable for a party who consciously offered the property for sale, accepted the entire consideration, and derived full benefit under the agreement, to terminate the contract after a lapse of five years and then contend that there was no obligation to execute the conveyance. Such a stance reflects a deliberate and distorted misreading of Clause 10, motivated solely by self-interest. It is a classic case of seeking to retain the benefit while disowning the corresponding obligation—an argument we unreservedly reject.

9.7) Mr. Seervai contended that, one test to judge whether in the circumstances, Clause 10 was an essential / fundamental term is to ask whether the Conveyance could be executed absent the ULC clearance / NOC / permission, at the time the Contract was entered into. Clearly, it could not. As such, Clause 10 is, necessarily and obviously an essential and fundamental term, as without its compliance, no Conveyance could be executed in favour of the Purchaser. 9.7.1) This argument is to be stated to be rejected. It is a non-starter. There is no basis to evaluate Clause 10 as an essential term solely with reference to the time when the contract was executed. Its relevance must be assessed at the point of termination. By the time the contract was purportedly terminated, the ULC Act had already been repealed, rendering Clause 10 redundant to the extent of the obligations contemplated therein. This contention is, yet again, thoroughly self-serving. The Learned Judge has succinctly and appropriately dealt with the issue in paragraph 11 of the impugned Judgement.

9.8) He further submitted that, a bare reading of Clause 10 would indicate that it imposes a consequence as harsh as losing the entire consideration for the Purchaser’s failure to obtain the NOC. This belies the view of the learned Single Judge that Clause 10 is only “relevant only from the standpoint of the purchaser”. It is impossible to conceive of how a clause that denies a party of its right to a conveyance and imposes a forfeiture of the entire consideration, can ever be termed as being nonessential. A clause that imposes a harsh and drastic penalty upon a party can never be termed as being for his or her benefit. Such a clause must, necessarily, be construed to be a fundamental and essential term of the contract. Similarly, a term the fulfillment of which alone would impose the obligation on the Wadias to execute a Conveyance has to be a fundamental and essential term without its fulfilment, further steps were not to be taken. 9.8.1) The argument that, it is impossible to conceive how a clause— which denies a party the right to conveyance and imposes forfeiture of the entire consideration—can be regarded as non-essential, is thoroughly misconceived. Such a submission could only be advanced when driven by self-interest. We find no flaw in the conclusion reached by the learned Judge, who has carefully evaluated the facts, evidence, and applicable legal principles to hold that Clause 10 is relevant only from the standpoint of the purchaser. This argument conveniently overlooks the fact that the Vendors had received the entire consideration, and that it was only after a lapse of five years—following the repeal of the ULC Act—that they attempted to reinterpret Clause 10 in their favour. In truth, the clause must be construed solely from the purchaser’s perspective.

9.9) Mr. Seervai submitted that, the view of the learned Single Judge that whether or not the permission under the ULC Act was obtained would have no bearing on the Contract as far as the Wadias is concerned is patently erroneous. If the permission / NOC / clearance under the ULC Act was not obtained or the same was rejected, or the same was not forthcoming [as indeed was the position in the present case], under Clause 10 the Wadias would not be obligated to execute the Conveyance and would, subject to ULC, be entitled to retain both the Suit Properties as also the monies paid by the Purchaser. How a clause that results in such a consequence from the Wadias’ perspective can ever be termed to have no bearing on the Contract as far as the Wadias is concerned is not clear ex facie the clause has a material, and indeed critical bearing even from the Defendant’s perspective. 9.9.1) In our view, this argument too amounts to a deliberate misreading of the learned Judge’s observations. While the argument is premised on Clause 10 as it stood on the date of execution of the agreement, the learned Judge’s reasoning is grounded in subsequent developments—specifically, the repeal of the ULC Act. Clause 10 undoubtedly had relevance while the ULC Act was in force; however, its effect was neutralized upon repeal. We therefore find no error in the conclusion drawn by the learned Judge.

9.10) He further submitted that, if the contract could be effectuated (i.e., the Conveyance executed) without the ULC clearance, then the term would not be a fundamental / essential term and its breach could not be called a repudiatory breach entitling termination of the Contract. However, if on the other hand, the Conveyance could not be executed in the absence of ULC permission / sanction / NOC, then the failure to obtain such ULC and did constitute a repudiatory breach warranting and justifying the termination of contract as also rendering the contract unenforceable and void. The essentiality of Clause 10 and it’s viewed in this light, i.e. without its compliance, nothing further could take place in performance of the Contract. 9.10.1) This argument too is premised on a flawed foundation. Clause 10 might have had legal significance had the ULC Act remained in force. However, following its repeal, the clause became redundant. The conclusion drawn by the learned Judge, therefore, is unassailable and does not warrant interference.

9.11) He submitted that, in a suit for specific performance the test to be applied is whether the NOC was necessary at the time of execution of the Contract and during the subsistence of the NOC under the ULC Act. If the NOC under the ULC Act was necessary/mandatory at the relevant time [i.e. when the agreement was entered into; that being the very basis of the agreement, as set out below] then the obligation to obtain the same is not capable of being dispensed with even in the light of subsequent events or the subsequent repeal of the ULC Act. 9.11.1) This argument too is based on a flawed foundation. The obligation is not being dispensed with but has become redundant on account of repeal of the Statute. Bastion has no role to play in the change.

9.12) Clause 10 was thus clearly a “promissory condition”. In this view of the matter, the learned Single Judge has erred in holding that clause 10 was not a “promissory condition”.

9.13) Anson (on Contract), 30th Edition at Page 149, defines a condition as a promise, as to fact or as to future conduct which forms an essential term of the contract. If the fact proves untrue or the promise is not fulfilled, the breach may be treated as a repudiation which entitles the innocent party to be discharged from further performance of the contract. Applying the aforesaid principle of contract law to the facts of the present case, it is clear that Clause 10 was a condition in the nature of a promise as to the obtaining of the NOC by the Purchaser. Thus, the obtaining of the NOC / clearance / permission under the ULC Act was an essential term of the contract. It can be further inferred that even without repudiating the contract, the Defendants were discharged from their obligation to perform the contract. 9.13.1) The learned counsel’s submission may have had some merit if the contract were to be viewed solely within the framework of the law prevailing prior to the repeal of the ULC Act. However, as rightly held by the learned Judge, that reasoning does not withstand scrutiny when examined in the context of the legal position after the repeal. Consequently, the definition of a “condition” as a promise, as drawn from Anson, has no relevance to the facts of the present case and stands entirely misapplied. Crucially, the fact that the obligation contemplated under Clause 10 stood discharged by operation of law due to the repeal of the ULC Act cannot be ignored. There was no question of repudiation of the contract, as the Plaintiffs had already paid the entire consideration, and the sole remaining obligation was for the Defendants to execute the conveyance in their favour.

9.14) Mr. Seervai contended that, in fact on the promise not being fulfilled, the Defendants treated the breach thereof as a repudiation which discharged the Defendants from further performance of the contract viz. execution of the Conveyance. The fact that the compliance of Clause 10 was an express term and fundamental basis of the Charity Commissioner's sanction under Section 36(1) and of the Agreement was stated by the Defendants in their termination Notice dated 25.11.2008[6] itself. The persistent failure to apply for NOC from 2002 to 2006 was inter alia the basis of termination by the Defendants. While dealing with the said aspect the Purchaser has in its reply dated 14.01.2009[7] merely stated that the Purchaser did not owe the Defendants any obligation to obtain the said NOC / permission. However, the Purchaser has not denied or disputed (i)

6 Vol. IV / P-44 / 780 7 Vol. IV / P-47 / 789 that the NOC was required to be obtained to enable conveyance and (ii) has not denied that it was a fundamental term of the sanction of the Charity Commissioner as also the Agreement between the parties. It has also not been denied that it was a condition of sale that the Purchaser was required to apply to the Competent Authority and fulfil Clause 10. The Purchaser merely chose to gloss over these facts by stating that in view of the repeal of the ULC Act, these facts have become irrelevant. Apart from the above, the contention in the reply dated 14.01.2009, issued post termination, is a complete volte face and is belied by the admissions contained in correspondence and cross-examination[8]. 9.14.1) In our view, the conduct of the Defendants in repudiating the contract is, at the very least, deeply dishonest. It is evident that, following the repeal of the ULC Act, the Defendants became motivated by greed and, unable to accept the resultant windfall in favour of the Plaintiffs, sought to resile from the agreement. The contention now advanced is founded upon a clear misreading and misapplication of the correspondence and the crossexamination on record. We find no merit in the submission, and accordingly reject it.

9.15) He contended that if it was the Purchaser’s case that Clause 10 was not an essential term, then it was for the Purchaser to plead so. The Purchaser has not pleaded so and the Plaint is silent in this respect. This,

8 Vol. II / P-29 / 370 / Para 1; Vol. II / P-27 / 366; See Footnotes 8 to 11, below. despite the contract having been terminated for non-performance of Clause

10. On the contrary, the conduct of the parties [including the Purchaser] subsequent to the Contract and prior to filing of the Suit clearly discloses that the Purchaser at all material times was aware, conscious and thus treated Clause 10 to be a fundamental / essential term / condition, by way of both writing, as confirmed in oral evidence by PW-1. In the absence of the fulfillment of Clause 10, the contract could not be completed by execution of a conveyance[9], as confirmed by the Purchaser itself. 9.15.1) In our view, the strategy adopted by the Defendants' Advocates appears to be deliberately fragmented—akin to the compound vision of a fly—projecting multiple perspectives on the same issue, seemingly with the intent to obfuscate rather than assist the Court in a fair adjudication. This contention appears calculated to manufacture yet another controversy where none exists. It cannot be disputed that Clause 10 was an essential term at the time of execution, when the ULC Act was in force. However, with the passage of time and the repeal of the ULC Act, the clause ceased to have operative effect and became redundant. Accordingly, while Clause 10 may have been essential at the time of execution, it no longer retained that character post-repeal. We therefore find no merit in the contention and reject it.

9.16) Mr. Seervai contended that, in fact if the Purchaser’s position was that Clause 10 was irrelevant from the Defendant’s perspective and the same was not essential, the Purchaser would have stated so, at least in the Suit if not prior thereto to the complete contrary, the Purchaser attempted to make a false show of compliance of Clause 10 and a false show of various steps allegedly taken by it to comply with Clause 10, thus highlighting how the Purchaser itself understood Clause 10 all throughout, even during the course of the trial of the Suit.

9.17) Accordingly, the Purchaser did not lead any evidence to suggest that Clause 10 was not a fundamental/essential term. On the contrary in cross examination10, PW-1 has repeatedly admitted and accepted that Clause 10 was a fundamental and essential term and that in the absence of NOC from ULC Authorities, no conveyance could be executed. The Purchaser has also recognized and acknowledged that because of the Charity Commissioner's sanction, no conveyance could be executed without ULC clearance. The only thing that PW-1 tried to improvise upon (clearly contrary to the express language of Clause 10) was that the obligation of the Purchaser would arise only upon the Defendants, the Trust, making the application for NOC.

9.18) He submitted that even during cross examination, it was not even remotely suggested by PW-I that the requirement of the Charity

10 Questions 140, 243-247, 268, 280, 360, 363, 535, 536, 538-542, 544, 545, 611, 683, 684, amongst others. Commissioner’s sanction could be dispensed with or waived. PW-1, in fact, in terms admits that this term was not dispensed with by the Defendant11 In fact, that the hurdle of ULC clearance was a determining factor was written and dictated by PW-1 himself12 in the Minutes of Meeting of 19.01.2002.13 9.19) He submitted that, the learned Single Judge has completely ignored all the above referred material [and other relevant material in this regard] which was on record before the Hon’ble Court with regard to the essentiality and relevance of Clause 10, including the inter partes correspondence and the oral evidence of PW-1, a partner in the purchaser- Firm and the purchaser’s main witness. To overcome the weight of evidence, oral and documentary, as regards Clause 10, the learned Single Judge has held that “The whole contract is before the Court and whether or not a particular term of it is essential or material, is a question of law. It is for this Court to construe the contract and hold a term to be essential or otherwise. It does not even matter if any witness of the Purchaser says otherwise.”. This is egregiously wrong and contrary to settled law14. The Learned Single Judge could not have ignored the oral evidence as also contemporaneous inter-partes correspondence, which is directly germane to

13 Vol. II / P-8 / 329; Vol. II / P-9 / 331 14 Transmission Corporation of Andhra Pradesh v. GMR Vemagiri, (2018) 3 SCC 716, Paras 10, 25, 26; Adani Power v. Gujarat Electricity Regulatory Commission, (2019) 19 SCC 9, Para 24; Bharat Aluminium Company v. Kaiser Aluminium Technical Services, Inc., (2016) 4 SCC 126, Para 10; Food Corporation v. Abhijit Paul, (2023) 15 SCC 40, Para 26. the interpretation and effect of Clause 10. The Learned Single Judge has ignored well settled principles of contractual interpretation to justify a patently erroneous finding. 9.19.1) In our view, it is wholly immaterial what the Plaintiff may have stated or done in relation to obtaining permission from the ULC Authorities. Having already paid the entire consideration to the Defendant, any act or omission on the part of the Plaintiff would operate solely to their own detriment and would not, in any manner, affect the Defendant’s obligations under the contract. This is precisely the conclusion drawn by the Learned Single Judge. The reliance placed on the decision in Transmission Corporation (supra) is clearly misconstrued. The judgement is in favour of the Plaintiff because it holds that if the contract is capable of interpretation on its plain meaning with regard to the true intention of the parties it will not be prudent to read implied terms on the understanding of a party, or by the Court, with regard to business efficacy. The contentions raised are nothing but a smokescreen—designed to divert the Court from the real issue and procure a finding that may subsequently be challenged to delay final adjudication. We, therefore, unhesitatingly reject these submissions.

9.20) Mr. Seervai submitted that, all of the above referred material demonstrated that not only were parties ad idem that Clause 10 was a material and essential term of the Contract, but they were also ad idem as to its effect and consequences. However, the learned Single Judge has erred by not even addressing this issue and instead proceeding in a manner entirely unknown to law, ignoring the evidence on record. All of the above referred material demonstrated that not only were parties ad idem that Clause 10 was a material and essential term of the Contract, but they were also ad idem as to its effect and consequences. However, the Learned Single Judge has gravely erred by not even addressing this issue and instead proceeding in a manner entirely unknown to law, ignoring the evidence on record.

9.21) Mr. Seervai submitted that, in the light of the above, including the evidence of PW-1, the reasoning and finding of the Learned Single Judge with respect to Clause 10 is ex facie erroneous, and in fact constitutes error apparent on the face of the Impugned Judgment.

9.22) He submitted that, the learned Single Judge’s holding that “Whether or not such permission, etc. came about, it would have no impact on the validity of the suit contract as far as the vendors were concerned” is egregiously and self-evidently wrong, as, if such permission was not forthcoming [as in the facts of the present case], the Purchaser’s entitlement to a Conveyance ceased, and the Contract effectively came to an end. This is the express language of Clause 10, which the Learned Single Judge has misinterpreted to the extent of virtually re-writing the clause.

9.23) Similarly, the learned Single Judge’s view that Clause 10 is only relevant from the standpoint of the purchaser is also egregiously wrong. If the consequence of not obtaining ULC clearance / ULC clearance being refused is that the Defendant is no longer obliged to execute a Conveyance in favour of the Purchaser [and consequently, may even retain the Suit Properties], it is inconceivable to state that Clause 10 is not relevant from the standpoint of the Defendant as well as the Purchaser. 9.23.1) In our view, it is entirely immaterial what the Plaintiff may have stated or done in relation to obtaining permission from the ULC Authorities during the period when the ULC Act was in force. It is undisputed that such permission was required at that time. However, following the repeal of the ULC Act—when the Purchaser had no role to play—such permission ceased to be necessary. These contentions are, therefore, wholly unwarranted, if not raised with the sole intent of securing a finding that could later be challenged, thereby prolonging the final adjudication. The underlying objective appears to be to deprive the Purchaser of the fruits of the bargain. This observation gains force from the fact that the entire consideration had already been paid to the Defendant; thus, any act or omission on the part of the Plaintiff would operate solely to their own detriment and would not, in any manner, dilute or discharge the Defendant’s contractual obligations. This is precisely the conclusion reached by the Learned Single Judge. The submissions advanced are nothing but a smokescreen—an attempt to divert attention from the core issue and delay resolution. We, therefore, unhesitatingly reject them.

9.24) He contended that the consequence of not obtaining permission under the ULC Act was germane for both parties. For the Purchaser, it was germane because the Purchaser would then not be entitled to a conveyance, and for the Defendant it was germane because the Suit Properties would no longer be subject to the Contract. 9.24.1) It is true that, on the date of the contract, the consequence of not obtaining permission under the ULC Act was significant for both parties. If such permission was not granted or was rejected, the Purchaser would not have been entitled to a conveyance. It is also true that this legal uncertainty was the very basis on which the suit properties were sold. Equally, the fact remains that the entire purchase price was demanded by the Defendants and was voluntarily paid by the Purchasers. As rightly held by the learned Judge, once the entire consideration had been received, any loss arising from the absence or rejection of permission would fall solely upon the Purchasers, who could not thereafter seek a refund. However, the subsequent repeal of the ULC Act—a development not contemplated by either party—altered the legal landscape. With that repeal, the Purchasers were no longer required to obtain permission from the ULC authorities.

9.25) Mr. Seervai asserted that, Clause 10 was an essential / fundamental term of the Contract, and its breach and/or non-compliance entitled the Defendant to terminate the Contract, as set out below.

9.26) He submitted that, the learned Single Judge’s view that “Once this restriction goes away, in this case because of the repeal of the ULC Act, Clause 10 cannot be said to prevent the purchaser from obtaining a conveyance. That appears to be the plain meaning and implication of the clause.” is also incorrect. The learned Single Judge has ignored the relevance of the Charity Commissioner’s sanction, the fact that the Suit Properties being affected by ULC was a determinative factor in the valuation, amongst other relevant factors. The repeal of ULC therefore has an altogether different consequence on the Contract than that as held by the learned Single Judge. 9.26.1) In our view, the learned Judge has arrived at the correct conclusion, and we find no anomaly in the reasoning adopted. The sanction granted by the Charity Commissioner was based on the valuation prevailing at the time, which was directly influenced by the applicability of the ULC Act. The Defendants received the entire consideration in light of the thenexisting legal risks and uncertainties. To now rely on a sanction granted five years earlier—when the ULC Act was in force—as a basis to deny the benefit of the contract to the Purchaser, after the repeal of the very statute that gave rise to those risks, is plainly dishonest. The Purchaser accepted and acted upon the risks associated with the prevailing legal regime; the Defendants cannot, with the benefit of hindsight, invoke a subsequent change in law to unjustly deprive the Purchaser of the fruits of the bargain. 9.26.2) Additionally, in the face of the plain language of Clause 10 as also the documentary and oral evidence on record, the Learned Single Judge has fallen back on what, in the Learned Single Judge’s view, “appears” to be the “implication” of Clause 10. In the face of the plain language as understood by the parties, it is inconceivable how the Learned Single Judge could fall back on his own conjecture, surmise, and implication. The observation made by the learned Judge is appropriate and rooted in the findings of the case; it is neither a conjecture, nor a surmise, nor an implication as alleged by learned counsel.

9.27) Mr. Seervai submitted that, similarly the finding that “In other words, non-fulfilment of the promise contained in Clause 10 does not have any consequence for the vendors. It only has a consequence for the purchaser. If that is so, breach of that promise cannot entitle the vendors to treat the contract as discharged or to be released from all further performance of the contract. The intention of the parties, as can be gathered from the terms of the contract and the subject matter to which it relates, is not to make clause 10 as a 'promissory' condition from the point of view of the Defendants vendors. The entire consideration is receivable by the Defendants for their promise to sell the property, without reference to the condition or promise contained in clause 10.” is entirely incorrect, as the evidence itself revealed. Non-fulfillment of Clause 10 has a direct consequence for the vendors (i.e. the Defendants) viz. that the Defendants are entitled to retain the monies paid by the Purchaser and are also not obliged to execute any Conveyance in respect of the Suit Properties. This is a very material consequence, which the learned Single Judge has completely ignored. 9.27.1) This submission amounts to nothing more than an unwarranted and gratuitous parsing of a well-reasoned Judgment and is wholly uncalled for. It is accordingly rejected. 9.27.2) Additionally, obtaining of the Permission/Clearance/NOC under the ULC Act was, in fact, the determining factor in the fixation of the contract price when the contract was entered into15, as set out below. As such, compliance of Clause 10, which requires obtaining of Permission/Clearance/NOC under the ULC Act, is, necessarily, a material and essential term, as its compliance was itself a determining factor in the fixation of the contract price.

9.28) Mr. Seervai asserted that, obtaining ULC clearance was a fundamental term / condition precedent has been categorically laid by the Hon’ble Supreme Court in a number of decisions16 9.29) He submitted that, the argument of the Purchaser that Clause 10 was entirely for their benefit and therefore, could be waived by the

15 This is elaborated upon in greater detail when dealing with the voiding of the Charity Commissioner’s sanction, and the question of discretion to grant specific performance. 16 V.R. Sudhakara Rao & Ors. v. T. Y. Kameswari - (2007) 6 SCC 650; K. Narendra v. Riviera Apartment Pvt. Ltd., AIR 1999 SC 2309; Pushparani S. Sundaram v. Pauline Manomani James, (2002) 9 SCC 582. Purchaser is fallacious. During the subsistence or continuance of the ULC Act, this submission could never have been made. Clause 10 was not for the Purchaser’s benefit as claimed by the Purchaser, but was a pre-requisite and essential condition required to be fulfilled before the Purchaser could claim an entitlement to Conveyance (and possession) of the Suit Properties.

9.30) He submitted that, Clause 10 of the contract between the parties was impressed with the sanction of the Charity Commissioner which sanction could not be ignored by either party as it formed the basis of the contract being given life. Thus, it had to be performed. Even otherwise NOC of ULC Authority being a mandatory statutory requirement, was an implied essential term of the Contract.

9.31) Further, obtaining the NOC of the ULC Authorities was a mandatory statutory requirement which neither party could have waived or ignored since the consequence thereof would have rendered the contract void and the same could never have fructified17. In these circumstances, it is not possible to submit, as the Purchasers have done, that Clause 10 of the Agreement was for their sole benefit which therefore could be waived. Thus, far from proving readiness and willingness to comply with Clause 10 of the Agreement, the Purchaser, after repeal, has sought to disown Clause No.10.

17 Nandlkishore Lalbhai Mehta v. New Era Fabrics, (2015) 9 SCC 755, Paras 3, 5, 43 9.31.1) The reliance on V R Sudhakara Rao and others (supra) as well as Nandkishore Mehta (supra) is entirely misplaced and argued out of context because obtaining ULC permission was a condition till such time that the ULC Act was in force but became redundant on repeal. The above submissions, in our view, amounts to a needless repetition and mere reiteration of earlier contentions in different words. In light of our findings above, it does not merit any further consideration.

9.32) Mr. Seervai urged us to note that, the Purchaser could never have made a submission against the essentiality prior to the repeal of the ULC Act. In fact, the Purchaser did not disown Clause 10 prior to the repeal of the ULC Act. On the contrary by letters dated 04.04.200518 and 25.01.200619, during the subsistence of the ULC Act, the Purchaser claimed that it was actively pursuing the ULC Authorities. The Learned Single Judge has completely overlooked the said letters and their effect. Not only has this been established to false, but importantly at the relevant time, the Purchaser knew that the Purchaser had to comply with Clause 10 and that it was the sole responsibility of the Purchaser to comply with the same20,

18 Vol. II / P-27 / 366 19 Vol. II / P-29 / 370 / Para 1 20 Section 16 of the Specific Relief Act, 1963; V.R. Sudhakara Rao & Ors. v. T. Y. Kameswari - (2007) 6 SCC 65; Pushparani S. Sundaram v. Pauline Manomani James, (2002) 9 SCC

582. In the case of Pushparani (supra), the aspect of ULC clearance has been considered from the point of view of being a term, the non-performance of which disclosed lack of readiness and willingness on the part of the Purchaser under Section 16(c) of the Specific Relief Act. It is clear that had it not been for the fact that the obtaining of the NOC of the ULC Authorities is an essential term of a contract, the Hon’ble Supreme Court would not have given it the importance it did while holding that non-obtaining of the permission by the Purchaser in that case exhibited a lack of readiness and willingness to perform an essential term, disentitling the Purchaser from getting specific performance. and that such compliance was an essential term. This is an admission by the Purchaser that obtaining ULC permission / clearance / NOC was an essential term of the contract. 9.32.1) In our view, the learned Judge has appropriately and comprehensively considered the effect of Clause 10 in the impugned judgment. The reasoning is self-explanatory and warrants no interference.

9.33) In so far as the Purchaser's argument that, time to comply with Clause 10 was not made the essence of the contract is concerned, the Defendants have never stated that time was of the essence of the contract for fulfillment of Condition No. 10. However, the Defendants have stated the following: a. that the obligation imposed by Clause 10 had to be fulfilled within a reasonable time. b. that there was a complete failure on the part of the Purchaser in fulfilling the said obligation / condition. c. that the said obligation/ condition was a pre-condition to execution of Conveyance. d. that the failure in complying with Clause 10 amounted to a repudiatory breach of the fundamental / essential term of the contract; and e. that this breach entitled the Defendants to terminate the contract. 9.33.1) This submission too does not lie in the mouth of the Defendants who have without any demur accepted the entire consideration when the suit property was at risk of being acquired under the ULC Act and now seek to renege from the contract merely because the ULC Act is repealed taking help of the action or inaction on the part of the Plaintiffs in obtaining the permission from the ULC authorities. The learned Judge has rightly observed in paragraph 12 that – “In our case, as noted above, clause 10, rather than entitling the Defendants to treat the contract as discharged for want of permission from the ULC authorities, simply allowed the Defendants to withhold the conveyance on the ground that it cannot be executed in the absence of a ULC permission. There is clearly no time limit for performance of the purchaser’s obligation of obtaining the ULC permission. As noted above, there is a good reason for not providing such time limit. Payment of consideration to the vendors is not dependent upon or subject to the ULC permission. So long as the permission does not come through, the purchaser does not get his conveyance, since for want of such permission the conveyance is not possible under the ULC Act, but it has no other consequence as far as the vendors are concerned. In other words, non-fulfilment of the promise contained in Clause 10 does not have any consequence for the vendors. It only has consequence for the purchaser. It that is so, breach of that promise cannot entitle the vendors to treat the contract as discharged or to be released from all further performance of the contract. In view of the above observations we do not find in reason to interfere. c. Whether the Purchaser was ready and willing to perform the essential term of the Contract, viz. Clause 10:

10) Mr. Seervai submitted that, on a plain reading of Clause l0, the obligation to obtain the permission/NOC/clearance/exemption from the ULC Authorities was cast solely upon the Purchaser. Section 16 (c) of the Specific Relief Act mandates that the Purchaser must plead and prove that it was, at all material times ready and willing to perform the essential terms of the contract. “At all material times” means from the time of entering into the agreement, till the hearing of the Suit21. In purported discharge of this mandatory requirement of law, the Purchaser has pleaded that it performed its obligations under the agreement and continued to be ready and willing to perform its obligations22. Similarly, in such purported discharge, in his Examination in Chief, PW-1 has once again made a bare statement of the Purchaser’s readiness and willingness23. In the Written Statement, the Defendant has denied the claim that, the Purchaser was ready or willing to comply with Clause 10 and that in fact the termination was inter alia on the ground that the Purchaser had failed to perform its contractual obligation under Clause 1024.

24 Written Statement, Paras 27, 29, 42 10.1) However, the evidence and record establish that from the date of the Agreement till November 2007, the Purchaser did absolutely nothing to obtain NOC from the ULC Authorities. The Purchaser did not even apply for the NOC25. This is despite it being the Purchaser’s obligation, and the Purchaser being empowered to apply in terms of the Trust’s letter dated 02.01.2003. The Purchaser has acknowledged that the said letter was a letter of authority given by the Trust to the Purchaser26. There is absolutely no explanation as to why the Purchaser did not apply for the permission / clearance / NOC, necessitating an adverse inference being drawn by the Court, viz, that the Purchaser had not the slightest desire to apply for, let alone obtain, the ULC NOC.

10.2) Mr. Seervai submitted that, the Purchaser had to make efforts which included making / preparing the application for the NOC / permission. However, even after the letter of authority was given to the Purchaser, there was complete inaction on the part of the Purchaser towards compliance of Clause 10.

10.3) He submitted that the Purchaser has refused to fulfill its obligation by failing to apply for and obtaining the requisite NOC from the ULC Authorities. Far from asking the Defendants to apply [which may have been consistent with the afterthought plea raised by the Defendant] the Purchaser (falsely, as it so turned out) kept assuring the Defendants that it 25 PW – I, Q. Nos 561, 563, 594, 595, 596, 611, 696, 1184 and 1185 26 PW-1, Q. Nos. 552, 554, 555, 560 is actively pursuing the ULC Clearance27. As such, the Purchaser deliberately misled and induced the Defendants to believe that the Purchaser was taking steps to comply with Clause 10 of the Agreement.

10.4) However, the record reveals that between 02.01.2003, when the Defendant Trust authorized the Purchaser to apply under the ULC Act for the NOC / Clearance, and 03.10.2006, the Purchaser did not take any steps [or was in any event unable to establish that it took any steps]. Even going by what the Learned Single Judge has held, viz. that after an application, 2-3 years would be a reasonable time within which the NOC / Clearance could be expected [Para 12 of the Impugned Judgment], then had the Purchaser been ready and willing, it would have taken steps on 02.01.2003 or shortly thereafter, which would have been decided by the authorities well before 03.10.2006 [more than 3 years later]. The fact that the Purchaser did not do so demonstrates [if not establishes] the lack of readiness and willingness on the part of the Purchaser.

10.5) He submitted that in fact, even after 03.10.200628, since the Purchaser had taken no steps, the Trust made an application to the ULC Authorities for NOC. Even after this, however, the Purchaser did nothing for 14 months. The Purchaser did not even follow up with the said application made by the Trust.

28 Appeal No.289 of 2015 / Ex. – R / 211 10.5.1) The above submissions are, to say the least, devoid of substance and appear to have been advanced merely for the sake of argument. The real question is this: what conceivable prejudice could be caused to the Defendants—who have already received the entire sale consideration—in relation to the Plaintiff’s readiness and willingness to comply with Clause 10? We see no reason to delve into the Plaintiff's 'readiness and willingness' to obtain ULC permission, as the full consideration had already been paid. Clause 10 simply provides that the Defendants were not obliged to execute the conveyance if the requisite permission was not obtained or was rejected—nothing more, nothing less. Upon the repeal of the ULC Act, no such permission was required. It is as straightforward as that. The legal principles laid down in the authorities relied upon are not in dispute; however, they have no application to the facts of the present case.

10.6) After the repeal of the ULC Act, the Purchaser has simply sought to wish away Clause 10 of the Agreement. Thus, it is clear that right from the time that the contract was entered into the Purchaser had no intention to apply for and obtain the NOC from the ULC Authorities. The Purchaser had decided to sit tight and in fact sat tight and did nothing. The Purchaser waited for almost 5 years till the ULC Act was repealed. In other words, the Purchaser was never ready and willing to perform its obligation under clause 10.

10.7) After the Defendants' Application dated 03.10.2006, Orders dated 31.10.200629 and 11.12.2006 were passed under Section )) of the ULC Act. Even at this stage the Purchaser did nothing, despite the drastic consequences of those Orders. Since, the Purchaser claims to have appointed consultants, the Purchaser ought to have known about the Section 8(4) orders. However, the Purchaser did not take any steps to set aside the orders. In fact, the Purchaser alleges that he was not even aware of the orders till May 200830 - this is patently unbelievable, exposing the falsity of the Purchaser’s case, and PW-1’s testimony.

10.8) Mr. Seervai submitted that, the Defendants had to independently at their own cost and expenses and without any assistance or involvement of the Purchaser, adopt proceedings against the said Section 8(4) Orders, including filing Writ Petition No. 6050 of 200831 before this Court. These proceedings were adopted by the Defendants in their own right, at their own cost to protect their own interest and not for any alleged or claimed interest of the Purchaser. In the said Writ Petition, there is absolutely no reference to the Purchaser, the sanction of the Charity Commissioner, or anything to do with the transaction with the Purchaser. As such, the Writ Petition was filed and prosecuted de hors the Agreement with the Purchaser, as with the Orders dated 31.10.2006 and 11.12.2006

29 Vol. III / P-35 / 467 30 PW-1, Q.Nos. 1196 31 Vol. III the contract having come to an end, the question of referring to the same could not, and did not, arise.

10.9) He submitted that the Learned Single Judge has failed to even consider or take into account these aspects in the impugned Judgment.

10.10) The total and complete inaction on the part of the Purchaser, and its failure to obtain the ULC clearance / NOC, apart from being a repudiatory breach entitling the Defendants to terminate the contract, shows the complete lack of readiness and willingness on the part of the Purchaser to perform its obligation. This lack of readiness and willingness constitutes a personal bar against the Purchaser from seeking enforcement of the Agreement.

10.11) In reply to the termination notice32 (with the comfort of the ULC Act having been repealed), the Purchaser (for the very first time) falsely alleged that there was no obligation cast on the Purchaser to obtain NOC from the ULC Authorities. Even during the course of arguments before the Learned Single Judge, and as recorded in the Impugned Judgment, it was urged on behalf of the Purchaser that except for making payment, there was no other obligation on the Purchaser. This stand – contrary to the Contract, amounting to an open refusal to fulfill and essential term - should have immediately denied specific performance to the Purchaser. The Learned Single Judge gravely erred in this regard.

32 Vol. IV / Exh. P-46 / 789 10.12) Mr. Seervai submitted that, the steps taken by the Defendant viz., making the application for ULC clearance is entirely irrelevant for determination as to whether the Purchaser was ready and willing to perform its obligation under Clause 10. The Purchaser cannot take advantage of this act on the part of the Defendants. In order to avoid the personal bar imposed by Section 16 of the Specific Relief Act, it is for the Purchaser to plead and prove that the Purchaser was at all times ready and willing to perform its obligation under Clause 10 of the contract. The Purchaser has not done so. This was irrespective of whether the Defendants application had been successful or unsuccessful33.

10.13) He submitted that, it is not the case of the Purchaser in the pleadings or in the evidence that by the Defendants making the application to the ULC Authorities, the Defendants waived the Purchaser's obligation to obtain the NOC from the ULC Authorities. Though this was argued by the Purchaser before the learned Single Judge, the same is impermissible inasmuch as the plea of waiver is unsupported by pleadings or evidence. Further, the Defendants submit that waiver is a question of fact which must

33 Pushparani (2002) 9 SCC 582; (in) Punjab Urban Planning & Development Authority vs. Shiv Saraswati Iron & Steel Re-rolling Mills (1998) 4 SCC 539. Significantly in Pushparani (supra), the Supreme Court refused specific performance to the Purchaser even though the Defendant had succeeded in obtaining ULC clearance, pursuant to her application for the same. It is submitted that this judgment is decisive to this case, and non- suits the Purchaser. be specifically pleaded and proved after an issue is framed on the question of waiver34. 10.13.1) In our view as well and as rightly held by the learned Judge, Clause 10 became redundant upon the repeal of the ULC Act— particularly in light of the fact that the entire consideration had already been paid to the Defendants. The reliance placed on the judgment in Pushparani (supra) is both misplaced and misconceived. In the present case, the Plaintiff had paid the entire sale consideration, whereas in Pushparani, only part payment had been made and additional conditions were stipulated. Similarly, the reliance placed on the judgment in Motilal (supra) is equally untenable. There is no question of waiver in the present case, as the requirement for permission itself ceased to exist upon the repeal of the ULC Act. The line of arguments now advanced have no bearing whatsoever on the factual or legal matrix of this case. They appear to be nothing more than subterfuge—arguments constructed as a smokescreen, with the apparent intent to mislead and distract the Court from the real issues. d. Whether the sanction of the Charity Commissioner under Section 36 of the Maharashtra Public Trusts Act, 1950 is still valid with the repeal of the ULC Act?

34 Motilal Padampat Sugar Mills Co. Ltd vs. State of Uttar Pradesh & Ors, (1979) 2 SCC409.

11) Mr. Seervai submitted that the sanction of the Charity Commissioner under Section 36 was clearly predicated upon ULC Clearance / NOC / Sanction being required, and being obtained prior to any Conveyance.

11.1) This is evident from inter alia (i) the Affidavits of Mr. Rajesh Batra, Trustee of the Trust, in support of the applications, which makes specific reference to the issue of ULC Clearance as a “negative factor”35; (ii) Mr. Kirit Kapadia, the valuer whose report was submitted to the Charity Commissioner, also specifically kept the “need for ULC clearances” in mind when submitting his valuation report, on the basis of which the Charity Commissioner’s permission was obtained3637. As such, obtaining of the NOC under the ULC Act was not capable of being dispensed with.

11.2) Mr. Seervai submitted that, the sanction of the Charity Commissioner cannot be read in isolation. It necessarily has to be read in the context of the application made by the concerned parties for sanction, the documents filed therewith, and the circumstances obtaining when such application was filed and made. To hold otherwise would be to assume that the Charity Commissioner, a statutory functionary discharging important statutory functions, acts with blinkers, and is not aware of the totality of the

35 Vol. I / P-3 / 74 / Para 5 36 Vol. I / P-3 / 104 / Para 7 37 The Purchaser itself was ad idem that the requirement of ULC clearance was a “negative factor” as confirmed by the Minutes of Meeting dated 19.01.2002 [Vol. II / P-8, P-9 / 329]. PW-1, Mr. Salim Juda, partner of the Purchaser Firm, himself dictated that portion of the said Minutes [Question 218]. circumstances before him [more so when they are expressly brought to his attention]. This is an untenable fiction and ought never to have been accepted by the Learned Single Judge.

11.3) It is a matter of record that, the parties while fixing the price and the Charity Commissioner while according to his sanction to such price did take into account the existence / hurdle of the provisions of the ULC Act and as such the price was a depressed price. Had the Charity Commissioner known that the contract between the parties, which had been arrived at for the sum of INR 14 Crores was to be kept in abeyance till the repeal of the ULC Act, the Charity Commissioner would not have sanctioned the sale at the price of INR 14 Crore – even otherwise, whether or not the Charity Commissioner would have accepted such a price is something in the realm of speculation, which itself renders the sanction void. 11.3.1) These submissions are wholly baseless and unwarranted in the context of the present case. By no stretch of the imagination can it be contended that the entire consideration received by the Defendants was to be held in abeyance, as argued. This contention deserves to be rejected outright. Clause 10 is self-explanatory; it contains no stipulation requiring the Defendants to return the consideration under any circumstance. It is only under Clause 7 that, upon rejection of sanction by the Charity Commissioner, the amount paid by the successful offeror was to be refunded. Moreover, as per clause 11, offers were for a lump sum amount, unconditional and for the entire land offered. Accordingly, the argument lacks even a semblance of substance and rests entirely on conjecture and surmise.

11.4) Further, the Purchaser has not denied that it was a fundamental term of the sanction of the Charity Commissioner as also the Agreement between the parties that ULC clearance would be obtained, i.e., to say that non-obtainment of the ULC clearance would render the Charity Commissioner’s sanction ineffective. It also not been denied by the Purchaser that it was a condition of sale that the Purchaser was required to apply to the Competent Authority and fulfill Clause 10. As such, the Purchaser has not disputed the Defendants’ claim in this regard.

11.5) He submitted that the effect of the repeal of the ULC Act, far from lifting the hurdle as contended by the Purchaser, on the contrary makes the sanction void. The sanction was given by the Charity Commissioner in the circumstances existing on the date of sanction viz., the hurdles and disadvantages of the ULC Act. In view of the repeal, the parties would have had to go back to the Charity Commissioner and seek fresh sanction in view of the repeal of the ULC Act. This jurisdiction is exclusively given to the Charity Commissioner under Section 36 of the Maharashtra Public Trusts Act. 11.5.1) In our view, there was never any question of denying the applicability of the term, as the ULC Act was very much in force at the relevant time. The contention that failure to obtain ULC permission would render the Charity Commissioner’s sanction ineffective is wholly devoid of merit. There exists no basis—either in law or on the record—to suggest that the sanction stands vitiated on such grounds. These arguments are speculative and entirely without substance. Moreover, there was no “failure to obtain” as alleged, since the ULC Act was repealed, thereby rendering the requirement to obtain such permission redundant. 11.5.2) It is wholly absurd to suggest that the repeal of the ULC Act rendered the Charity Commissioner’s sanction void. Such an argument might have been available to the Defendants under an entirely different set of contractual terms—but certainly not in the present case, and certainly not after the Defendants had already appropriated the entire consideration. In fact, Clause 10 of the Agreement expressly stipulated that the Defendants would be entitled to forfeit the entire consideration in the event that ULC permission was either not forthcoming or was rejected. The contract did not contemplate a scenario involving the repeal of the ULC Act. Thus, the Defendants had sufficiently protected themselves through contractual safeguards. No part of the agreement envisaged the requirement of seeking a fresh sanction from the Charity Commissioner in the event of repeal or otherwise. 11.5.3) Indeed, the operative portion of the Charity Commissioner’s sanction order reads as follows:

1. Application is allowed.

2. …

3. The sanction is subject to all the laws and rules applicable in that behalf and the following conditions: (a) The purchaser shall pay total consideration of 4,00,00,000 ₹ within a period of 3 months. (b) The trustees shall execute the conveyance deed after receipt of the total consideration as stated above and subject to compliance with all laws and rules.

(c) The purchaser shall be entitled to possession of the property after due execution of the conveyance deed as stated above.

(d) The trustees shall deposit the amount of sale consideration in a long-term fixed deposit with any nationalised bank or in government securities. This amount shall form part of the corpus of the Trust. (e) The trustees shall be entitled to use the said amount for achieving the objects of the Trust. 11.5.4) A plain reading of the Order makes it clear that the consideration was intended to be fully appropriated by the Trust and utilised for the fulfilment of its objectives. There was no occasion or legal requirement for seeking a fresh sanction, as is now sought to be argued.

11.6) Mr. Seervai contended that, the private contractual terms agreed between the parties had become a mandate of the law when the Charity Commissioner had granted the initial sanction. The parties are bound to obey the same, in totality. If on account of changed circumstances, the parties need to deviate from the sanction of the Charity Commissioner in any manner, they are necessarily required to go back to the Charity Commissioner and not ignore the terms of the sanction of the Charity Commissioner, or to re-write the terms by their unilateral acts. In these circumstances, because Clause 10 became impossible of performance, the sanction would become void and the further performance of the Agreement without fresh sanction from the Charity Commissioner would be legally impossible and practically impermissible. 11.6.1) There is no deviation from the sanction as alleged. The requirement in question has ceased to exist. More importantly, having received the entire consideration and utilised it for over five years—which strikes at the very core of the present issue—the Defendants now seek, under the garb of technical objections, to renege on the contract solely because the value of the suit lands has appreciated exponentially.

11.7) He submitted that, the Learned Single Judge has gravely erred, in Paragraph 13 of the Impugned Judgment, by holding that the “sanction was not specifically premised upon the condition of obtaining any ULC clearance; it was generally subject to all laws and rules applicable in that behalf.” First and foremost, this is not so. The applications made to the Charity Commissioner clearly reveal that the requirement of ULC clearance was specifically known and disclosed to the Charity Commissioner. Further, the phrase “all laws” necessarily includes the ULC Act, which was a critical issue before the Charity Commissioner when granting sanction under Section 36. Therefore, not expressly mentioning ULC is of no consequence. The construction of the sanction by the Learned Single Judge is thus patently erroneous and myopic. This is more so considering the nature of the permission required under the ULC Act [which the Charity Commissioner is deemed to be aware of as a statutory functionary], and the public interest purpose of such permission / NOC, which underlies Section 20 and the terms of the ULC Act [elaborated upon below]. 11.7.1) The learned Judge has considered all relevant arguments and has rightly rejected the contentions advanced by the Defendants. The submissions now sought to be re-agitated are unwarranted, overly fixated on minutiae, and deserve to be rejected outright.

11.8) In N. D. Constructions v. State of Maharashtra, (2012) 1 Bom CR 24138, [a matter concerning sanction of the Charity Commissioner under Section 36], though it was not urged or contended by any party before this Hon’ble Court that the price needs to be re-fixed or re-evaluated, a Division Bench of its own in Paragraph 28 of the judgement held that there may be a further appreciation in the land value in view of the repeal of the ULC Act. This was an additional ground for a fresh sale. The Division Bench ordered refund of the amount paid by the purchaser in that case, with interest. 11.8.1) In our view, reliance on this judgment is entirely misplaced, as the facts in that case are materially distinct from those in the present 38 (2012) 1 Bom CR 241. matter. It is not the Defendants’ case that the Charity Commissioner was misled, failed to apply his mind, or that any material facts were suppressed at the time sanction was granted. In the present case, pursuant to the sanction, the entire consideration was paid by the Purchaser and accepted by the Defendants. The conveyance was to be executed only upon receipt of the requisite permission—permission that has since become unnecessary due to the repeal of the ULC Act.

11.9) Further, in Rizvi Builders v. Joint Charity Commissioner39, despite full consideration having been paid to acquire the trust property, and sanction having been accorded by the Charity Commissioner, the sanction was effectively terminated because the transaction was not consummated within time for want of ULC clearance. Therefore, mere payment of [even full] consideration is not ground to say that the sanction of the Charity Commissioner is not vitiated. 11.9.1) The reliance placed on these judgments is misplaced and of no assistance to the Defendants. In that case, the Charity Commissioner’s sanction was expressly conditional upon completion of the sale within a stipulated period of one year. In contrast, no such time-bound condition

39 Judgment dated April 17, 2007 in Writ Petition No. 769 of 2007; to similar effect are the judgments in D. T. Mandriwala v. State of Maharashtra, Judgment dated July 20, 2007 in Writ Petition No. 1621 of 2007, and Feroz Malik v. Joint Charity Commissioner, Judgment dated March 12, 2008 in Writ Petition No. 4409 of 2007. was imposed in the present case. Accordingly, the judgment has no application to the facts at hand.

11.10) Additionally, view of Section 20 of the ULC Act, conditions would have been imposed in the NOC/clearance that was to be obtained by the Purchaser, which conditions would have attached to the Suit Properties. These conditions would have been in the public interest and would have been mandatory for the Purchaser to comply with [See T. R. Thandur v. Union of India, (1996) 3 SCC 69040, Para 11]. The Hon’ble Supreme Court has held one of these conditions that was imposed by the State of Maharashtra, viz providing dwelling units for weaker sections of society, is traceable to Article 21 [see Shantistar Builders v. Narayan Khimlal Totame,

11.11) Illustratively, some conditions that may have been imposed were: (i) construction of dwelling units for “weaker sections of society” – See Shantistar Builders v. Narayan Khimlal Totame (supra) Paras 6, (ii) surrender of FSI /constructed area to allottees nominated by Government – See Nargis Jal Haradhvala v. State of Maharashtra, (2015) 4 SCC 25942, Paras 11, 13; (iii) the land be used for a specified purpose for example a newspaper industry – See State of A. P. v. V. Venkateswara Rao, (2004) 4 SCC 22043, Para 5.

11.12) He submitted that the Charity Commissioner, as a state functionary discharging a public duty and function, was aware of the conditions on which the clearance under Section 20 would be granted. The fact that such conditions [illustratively set out above] would have to be complied with by the purchaser [in this case the Purchaser] would be a relevant criterion considered by the Charity Commissioner when deciding whether or not to grant sanction to the proposed transaction. That such conditions are in the public interest would also be a relevant consideration for the Charity Commissioner. Had the Charity Commissioner been aware that such conditions would not be imposed on the purchaser, the Charity Commissioner would [or at the very least may] never have granted sanction in the first place. 11.12.1) These submissions, in our view, are based on conjecture and surmise and fail to take into account the fact that the ULC Act has been repealed. They are, therefore, liable to be rejected.

11.13) Mr. Seervai submitted that the Learned Single Judge, by holding that “No doubt, the doing away of the restrictions has dramatically changed the value of the land. But if anyone is lawfully entitled to this bonanza, it is the Purchaser, who had fully paid a competent price in 2003 and was awaiting a conveyance on 27 November 2007, when the ULC Act was repealed” accepted that: (i) the conditions were onerous from a commercial/business/profit oriented party’s perspective; (ii) with such conditions now being done away with, there is a bonanza now coming to the Purchaser – this is a relevant factor when considering the validity of the sanction of the Charity Commissioner [as also other issues as set out below], as the Charity Commissioner would never have accorded sanction had such a “bonanza” been known. 11.13.1) These submissions are liable to be rejected outright. A party that voluntarily offered a property for sale cannot, after the passage of time and a change in market circumstances, seek to renege on the contract merely because the value of the property has subsequently appreciated. There was no compulsion exerted by the Purchasers upon the Trust to sell the property. The property was put up for sale by the Trust of its own volition. The Purchasers responded to that offer, agreed to the terms, and paid the entire consideration, even in the absence of a conveyance being executed. It was a commercial bargain freely entered into by the Defendants, and they cannot now be permitted to resile from it.

11.14) Mr. Seervai contended that, in view of the non-obtaining of clearance under Section 20, such conditions would not be imposed; the fundamental basis for the agreement is thus changed. The fact that the Defendant is a public charitable trust must be kept in mind in this regard. This aspect is elaborated upon below.

11.15) He submitted that the Learned Single Judge has, in Paragraph 13 of the Impugned Judgment, completely misconstrued the purport of the requirement of ULC clearance in the context of the sanction of the Charity Commissioner. The Learned Single Judge has, it is respectfully submitted, in a hyper-technical manner held that the sanction was not specifically premised upon the condition of ULC clearance. This flies in the face of the material that was placed before the Charity Commissioner at the time sanction was sought in the first place, as also the actual sanction. There is no requirement of the Charity Commissioner specifically referring to the ULC clearance. 11.15.1) We are unable to accept these submissions, particularly when the entire consideration has been received under the very contract now sought to be avoided. The requirement of ULC clearance had no bearing on the obligations of the Defendants under the contract. Their sole remaining duty was to execute the conveyance and deliver possession—nothing more. e. What is the effect of the Section 8(4) Order?

12) Mr Seervai next submitted that, the learned Single Judge has completely failed to even address this important issue in the Impugned Judgment, and the Defendants submission has not even been noted, despite the same being specifically urged.

12.1) If the Trial Court does not deal with an important issue that has been raised in the matter, the entire judgment is vitiated and liable to be set aside in Appeal.

12.2) De hors and without prejudice to all other submissions with regard to Clause 10 and the ULC clearance, on the passing of the said Section 8(4) Orders (Vol. III / Exh. P-35 / 467), Purchaser’s right to a Conveyance automatically and contractually, ended – this is the plain language and meaning of Clause 10. The passing of the Section 8(4) orders meant that the NOC / permission under the ULC Act was, in fact, refused. Clause 10 reads as under: “10. It will be solely the responsibility of the Purchaser to obtain the Permission/Clearance/No Objection from the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976 to enable the Conveyance to be made and the amount paid will not be refundable on the ground that the requisite Permission/NOC/Exemption is not forthcoming or is refused.”

12.3) The operative portion of the Section 8(4) Orders provides: “In view of the. above position the lands adm. 1212844.[8] Sq. Mtrs. as shown in the accompanying statement is declared as surplus vacant land with the declarant Trust. Final statement u/s 9. of the Act and notification u/s.10(1) of the Act should be issued accordingly.”

12.4) Under the scheme of the ULC Act, the Section 8(4) Orders were the first step towards acquisition of the Suit Properties [and the other lands of the Defendant-Trust], culminating in acquisition under Section 10 of the ULC Act. Upon the Section 8(4) Orders being passed, there is no question of any exemption under Section 20 being granted, i.e. the clearance / exemption that the Purchaser was required to be obtain under Clause 10 was “refused” or was not “forthcoming”. The NOC that the Purchaser therefore had to obtain was thus refused.

12.5) Mr. Seervai contended that, accordingly, in view of the provisions of Sections 9 and 10 of the ULC Act and the scheme of the ULC, it was held that the Suit Properties (together with numerous other properties of the Trust) were surplus vacant land, and therefore to be acquired and vested in the State Government. This necessarily means that Permission/Clearance/No Objection from the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976, under Section 20, was refused, under the scheme of the ULC Act.

12.6) He submitted that the effect of the refusal of the NOC on the contract in the light of Clause 10 has to be considered as on the date of the refusal, during the existence / continuance of the ULC Act, and not as on the date of the filing of the Suit. Everything that happened after the refusal [i.e. after the Section 8(4) Orders] is not germane in this regard. The ULC Act was repealed subsequently [06.12.2007], the Section 8(4) Orders were set aside subsequently [08.04.2009]. However, these subsequent events do not and cannot undo the effect of the Section 8(4) Orders.

12.7) He contended that the Contract, and more specifically Clause 10 contemplates and provide for a situation in which the permission / clearance / NOC is refused – the consequence of which is two-fold: (i) the Purchaser is not entitled to possession or Conveyance; and (ii) the Purchaser is not entitled to refund of the amounts paid by it.

12.8) Consequently, the Contract became incapable of performance on the date of the Section 8(4) Orders; as also on the date of the termination of the said Contract; as also and even on the date of the filing of the suit, due to the Section 8(4) Orders. Notably, the Section 8(4) Orders subsisted on the date of filing of the Suit. The relevant dates in this regard are as under: a. Section 8(4) Orders – 31.10.2006. b. The Suit was filed – 06.02.2009. c. The Section 8(4) Orders were quashed – 08.04.2009.

12.9) Significantly, Writ Petition No. 6050 of 2008 [filed by the Defendant-Trust, on its own, for its own purpose, and without reference to the Purchaser or the Contract] was pending even on the date of the filing of the Suit (06.02.2009). Thus, on the date of the filing of the Suit, the suit property was not in the ownership of the Defendant Trust. The question as to whether specific performance could have been granted, has to be seen on 06.02.2009, and not thereafter, taking into account subsequent events. Writ Petition No. 6050 of 2008 was only allowed on 08.04.2009. Since the Purchaser’s rights came to an end at all the relevant times as already stated hereinabove, including on 27.11.2007 when the ULC Act was repealed and on 06.02.2009, when the Suit was filed (long after repeal of the ULC Act), it can hardly be rationally suggested as a proposition of law that a contractual right to a conveyance stands “revived” as a result of the Defendants (of their own volition, and without reference to the Purchaser or the transaction with the Purchaser) succeeding, in April 2009, in getting the Section 8(4) orders set aside. In the circumstances there is no question of specific performance of the said Contract being granted to the Purchaser44.

12.10) He submitted that the significance and effect of the Section 8(4) Orders may be assessed by testing what would have happened had the Section 8(4) Orders not been challenged by the Trust. Had the Trust accepted the Section 8(4) Orders, the Trust’s land holdings, including the Suit Property, would have vested in the State Government; there would thus have been no question of any Conveyance being executed in favour of the Purchaser. This was the position on the date of filing of the Suit.

12.11) Mr. Seervai submitted that, any reliance on the repeal of the ULC Act is erroneous because as on the date of the repeal, the 8(4) Order was in force, and no conveyance was possible. 44 K. Narendra vs. Riviera Apartment Pvt. Ltd. - AIR 1999 SC 2309 12.11.1) In our view, the argument advanced is entirely presumptive. By no stretch of imagination can an order passed under Section 8(4) of the ULC Act be construed as a final order. It merely represents the initial step in the process of acquisition. The learned counsel has overlooked the statutory appeal mechanisms available under Sections 12, 13, and 33 of the ULC Act, as well as the revisional jurisdiction conferred upon the State Government under Section 34. In light of these provisions, the argument lacks legal foundation. 12.11.2) Furthermore, the order passed under Section 8(4) was in any event quashed on 8th April 2009. Accordingly, the argument that the learned Judge failed to consider or record submissions regarding the 8(4) order is of no consequence. It has no bearing on the judgment or the final outcome. This line of argument appears to be yet another attempt to deflect from the core issues and mislead the Court. f. Whether this is a fit case for the Court to exercise discretion to grant specific performance under Section 20 of the Specific Relief Act, 1963?

13) Without prejudice to the other submissions advanced in these submissions hereinbelow, Mr. Seervai submitted that as a result of the repeal of the ULC Act and even otherwise, it would be grossly and egregiously iniquitous to compel the Defendant Trust to sell the Suit Properties to the Purchaser for INR 14 Crore, when according to the Purchaser, it was worth at least INR 386 Crores45 in 2009 when the Suit was filed, and probably considerably more in 2015 when the Impugned Judgment was passed, and yet more today46. This was clearly something never contemplated or bargained by both the Purchaser and the Defendants47.

13.1) He submitted that it is evident from the entire record, including the record before the Charity Commissioner that with respect to the price of the Suit Properties, the ULC issue was the crucial and determinative factor both for the Trust to agree to sell as also for the Charity Commissioner to give his sanction for sale at the price of Rs.14 Crores. The Affidavits of Mr., Trustee of the Trust, in support of the applications, makes specific reference to the issue of ULC clearance as a “negative factor”. Similarly, Mr. Kirit Kapadia, the valuer whose report was submitted to the Charity Commissioner, also specifically kept the “need for ULC clearances” in mind when submitting his valuation report, on the basis of which the Charity Commissioner’s permission was obtained49. In fact, that the hurdle of ULC clearance was a determining factor was written and dictated by PW- 1 himself50 in the Minutes of Meeting of 19.01.200251.

51 Vol. II / P-8 / 329; Vol. II / P-9 / 331 13.2) He submitted that, in these circumstances, the grant of specific performance in the facts of this case is grossly unjust and inequitable, for the following reasons: a. In the circumstances existing in 2002, the Trust was faced with the prospect of the ULC Authorities acquiring the Suit Properties, as also having to deal with encroachments, defending litigations, payment of taxes, etc. b. The biggest danger was that of acquisition by the ULC Authorities. c. The Purchaser was aware of this danger. d. In these circumstances, as opposed to facing the prospect of the property being acquired, the Trust chose to get the best possible price in those given circumstances i.e., during the continuance of the ULC Act. e. Under these very same circumstances, the Purchaser offered a price which was less than what the price would have been in the absence of the ULC Act. f. In view of the provisions of the ULC Act, even if NOC from ULC Authorities was granted, viz., exemption under Section 20 of the ULC Act, the said NOC would have been impressed with several conditions in the public interest, as set out above. g. Significantly, these conditions [if imposed, had the Purchaser fulfilled its obligation to apply for, and obtain clearance under Section 20 of the ULC Act] in the public interest on the land would have inured even after lapse of the Act, by virtue of Section 3(1)(6) of the 1999 Repeal Act. h. While giving the offer of INR 14 Crores, the Purchaser also in these circumstances factored in these disadvantages / risks apart from the possibility that a substantial portion of the property could have been acquired. i. Therefore, for both the parties, the existence and the effect / consequences of the ULC Act was the fundamental and determinative factor in arriving at the price. Undisputedly the price is one of the fundamental term of any agreement. This price in the given circumstances also formed the basis on which the Charity Commissioner accorded his sanction looking to the best interest of the Trust. j. Now on account of the repeal of the ULC Act, the following events immediately occurred: i. The risk of acquisition of the property by ULC Authorities disappeared. ii. The possibility of conditions being imposed while granting exemption under Section 20 of the ULC Act also disappeared. The Suit Properties are thus free of all conditions / restrictions [imposed in the public interest] that would have accompanied the ULC Clearance, a prerequisite for the Purchaser to obtain a Conveyance in the first place. iii. As a consequence, the price of the property admittedly skyrocketed by an astronomical amount. iv. As such, the mere fact of repeal of the ULC Act changed the circumstances so drastically that the position that the parties were left in on the date of the repeal was completely altered and different from the position as they were in on the date of the contract. v. The above position is similar to what is stated in the judgment of K. Narendra Riviera52 as relied upon by the Defendants, where the Supreme Court quotes with approval Chitty on Contracts (27th Edition, 1994, Vol I, at pg. 1296) viz., that “Severe hardship may be a ground for refusing specific performance even though it results from circumstances which arise after the conclusion of the contract and for which the Purchaser is in no way responsible”. vi. As such, the repeal of the ULC Act had far reaching consequences for both the parties. The Purchaser stood to make astronomical gains out of an amount paid at the time of the contract on account of the then existing circumstances. k. The Defendants on the other hand stood to lose the benefit of the repeal despite being the owners on the date of the repeal. This despite the Defendants being entirely blameless for the contract not culminating in a conveyance, and the Purchaser being solely responsible for this state of affairs for 5 years, till the ULC Act was repealed.

l. As such, in the changed circumstances, to bind the Defendants to the price fixed in 2002, but to allow the Purchaser to reap exceptional and astronomical benefit and profit out of the same would be completely inequitable, and would be an improper and arbitrary exercise of discretion. Regrettably, the judgment has fallen into this error, thereby allowing the Purchaser to unjustifiably reap a huge windfall, while depriving the Trust of its valuable property. m. It is to be noted that, the Purchaser eventually quoted the price of INR 14 crores in view of the rigors of the ULC Act. Correspondingly, the Defendants had agreed to accept this price in view of the existing rigors of the ULC Act. It would cause severe hardships to the Defendants and would be inequitable to now force the Defendants to accept that price when the rigors and disadvantages of the ULC Act have ceased to exist. The inequity would be all the greater considering that the delay in conveying the property was entirely on account of the deliberate and calculated avoidance on the part of the Purchaser from applying for the NOC.

13.3) Mr. Seervai submitted that, the Learned Single Judge fell into grave error by holding that merely because the Defendant-Trust had received the monetary consideration upfront, no hardship is caused to it. Hardship may take many forms – in the context of a public charitable trust, the non- requirement of compliance with conditions imposed under Section 20 of the ULC Act [conditions in the public interest as aforesaid] is itself one instance / category of hardship.

13.4) He submitted that quite apart from the plea of the Defendants that the ULC repeal rendered the Agreement and the sanction of the Charity Commissioner void, even if it remained valid, the drastically changed circumstances would preclude / prevent the Hon'ble Court from exercising discretion to grant specific performance thereby giving the Purchaser an unjustified and unwarranted windfall gain, at the expense of the Trust.

13.5) He contended that a court of equity keeping in mind Section 20 of the Specific Relief Act will not grant specific performance to the Purchaser, especially a Purchaser who has been the cause of delay in seeking performance and has in fact defaulted in its obligation to perform a term of the contract, if by doing so, severe hardship is caused to the Defendants. This is even if the hardship is caused by an event which is subsequent to the contract and which affects the Defendants personally rather than the subject matter of the contract. An essential feature of this discretion and equitable consideration is the test of reasonable time taken in the period between the entering into the contract and the time at which specific performance is sought by the Purchaser.

13.6) He submitted that in this case it is clear that Clause 10 of the Agreement had to be performed within a reasonable period of time. The Purchaser who did nothing to perform that obligation, cannot, in equity be heard to say after a delay of 5 years that since the ULC Act is repealed he is relieved of that obligation. If on account of delay which is solely attributable to the Purchaser, the obligation becomes impossible of performance on account of a subsequent event (the Repeal) then in exercise of discretion in the grant of equitable relief, the Hon'ble Court ought not to exercise discretion in favour of the Purchaser. To do so is to put a premium on the Purchaser’s default/wrongdoing.

13.7) Mr. Seervai submitted that, further the fact that there is an astronomical rise in price of land (especially in urban areas) due to substantial lapse of time has now been judicially well recognized53. It is the Purchaser’s own case that at the time of filing the Suit, according to the Purchaser, the value of the property had risen to approximately INR 386 Crores54. The Hon'ble Court ought to exercise discretion guided by the aforesaid judicial principles. It is submitted that the increase from INR 14 Crores to INR 386 Crores is an astronomical rise in prices. Though lapse of time is one factor for not granting specific performance, the principle is that astronomical rise in prices makes enforcement of a contract inequitable. Now if another factor, viz. the repeal of the ULC Act also results in astronomical rise in price, then even on that count the relief of specific performance ought not to be granted, in exercise of equitable jurisdiction. 53 K.S. Vidyanandan & Ors. vs. Vairavan, AIR 1997 SC 1751; K. Narendra vs. Riviera Apartment Pvt. Ltd., AIR 1999 SC 2309.

54 It is estimated that the present value of the Suit Properties is approximately INR 900 Crores. In the present case it is both lapse of time and the repeal of the ULC Act which have led to the astronomical increase in price of the Suit Properties.

13.8) He submitted that the hardship that would be caused to the Defendants is on account of circumstances which could not be foreseen at the at time at which the contract was entered into. Grant of specific performance will give the Purchaser an unfair advantage over the Defendants.

13.9) Further, he submitted that it is solely the Purchaser who is responsible for the delay by not having obtained the NOC of the ULC Authorities within a reasonable time. It is submitted that though time was not the essence of the contract in this case, nonetheless, keeping in view the provisions of Section 46 of the Indian Contract Act, 1872, the Purchaser was required to comply with its obligations within a reasonable time55. Further, the Defendants were not required to perform their obligation to execute the conveyance until the Purchaser first performed its prior reciprocal obligations to obtain the NOC of the ULC Authorities, as required under the provisions of Sections 52 read with 54 of the Indian Contract Act56. In fact, Sections 52 read with 54 would indicate that the Purchaser could not claim performance of the reciprocal promise from the Defendants to execute the conveyance. The repeal of the ULC Act five years after the 55 K. Narendra vs. Riviera Apartment Pvt. Ltd., AIR 1999 SC 2309.

56 Nathulal vs. Phoolchand (1969) 3 SCC 120. Purchaser had to first comply with and fulfill its obligation cannot possibly make a difference to this principle of law.

13.10) If the result of the repeal of the ULC Act which was not foreseen at the time when the contract was entered into, results in the Purchaser making astronomical gains, not bargained for at the time of entering into the contract and consequently resulting in severe hardship and loss to the Defendants, a Public Charitable Trust, equitable principles would require that in the absence of any balance of the equities between the parties at the time of granting performance, performance ought not to be granted.

13.11) In Jayakantham v. Abhaykumar, (2017) 5 SCC 17857, the Hon’ble Supreme Court held that the conduct of the parties at the time of entering into the agreement and the circumstances under which the agreement was entered into are relevant factors to be considered when determining whether or not to grant specific performance. In that case, mere payment of a large part of the consideration in advance does not itself entitle a Purchaser to specific performance.

13.12) In Nanjappan v. Ramasamy, (2015) 14 SCC 34158, also a case where consideration was paid in advance, the Hon’ble Supreme Court refused to grant specific performance. In doing so, the Hon’ble Supreme Court took into account (a) the increase in the value of property in urban areas, resulting in an unfair advantage to the Purchaser, and great hardship to the defendant; and (b) the comparative hardship caused to the defendant. In the facts of that Nanjappan, the suit property was the defendant’s only property, where he had constructed a house, and was residing. In the present case, the Defendant is a Trust, established for charitable purposes, as against the Purchaser, a real estate developer. The question of comparative hardship, therefore, must square be answered in favour of the Defendant.

13.13) Without prejudice to the above, Mr. Seervai submitted that, in view of the words of Clause 10 of the Agreement that the amount will not be refundable as also Conveyance was not required to be executed in the event of (i) the exemption not forthcoming or (ii) the exemption being refused, on the orders dated 31.10.2006 and 11.12.2006 being passed, it is clear that the NOC of the ULC Authorities was not forthcoming. As such, in terms of the sanction of the Charity Commissioner, the contract became impossible of further performance viz., the Defendants could not execute the Conveyance. 13.13.1) The learned Judge has duly considered these arguments, as well as the judgments cited in that context, in paragraphs 19 to 29 of the impugned judgment. We are in full agreement with the view taken. The reliance placed on the judgment in K. Narendra (supra) is entirely misplaced and contextually irrelevant. Unlike the facts in that case, there is no consideration in the present matter that remained receivable by the Defendant contingent upon the Plaintiff’s performance or non-performance in obtaining ULC permission. g. Whether by virtue of the Repeal of the ULC Act, what was ordered to be specifically performed was a different contract from the one the parties entered into?

14) Mr. Seervai submitted that, the Trust is a public charitable trust, established under a Trust Deed dated 28.12.1973 (Vol. I / P-2 / 17). Clauses 4 and 5 of the Trust Deed provide the objects of the Trust, which are wholly and obviously charitable in nature.

14.1) In view of Section 20 of the ULC Act, conditions would have been imposed on the user of the Suit Properties, in the NOC/clearance that was to be obtained by the Purchaser. These conditions would have been in the public interest and would have been mandatory for the Purchaser to comply with. These conditions would have been in the public interest and therefore, broadly, aligned with the objects of the Trust. In view of the nonobtaining of sanction, such conditions would not be imposed; the fundamental basis for the agreement is thus changed. The fact that the Defendant is a public charitable trust must be kept in mind in this regard, as set out above.

14.2) These public interest conditions attaching to the Conveyance of the Suit Properties were, obviously, a relevant consideration when the Contract was consummated – these conditions were relevant in the minds of the Purchaser, the Defendant, as also the Charity Commissioner who accorded sanction.

14.3) With the repeal of the ULC Act, these conditions would no longer be applicable. Thus, by virtue of the repeal of the ULC Act, what was being sought to be specifically enforced was an altogether different contract from the one the parties entered into. There is a frustration of the contract that was entered into between the parties [See Naihati Jute Mills v. Khyaliram Jagannath, 1967 SCC OnLine 1059, Paras 5 – 9].

14.4) Given the nature of contract, even if the Defendants had not terminated the contract, the impossibility to perform Clause 10 of the Agreement / the changed circumstances, by virtue of the repeal of the ULC Act, rendered the Agreement void, being incapable of performance, and the Purchaser was not entitled to seek performance. In law, therefore, the Defendants were not required to terminate the Contract, as the Contract itself came to an end. 14.4.1) In our view, this argument represents yet another attempt to evade the contractual obligations willingly undertaken by the Defendants with full knowledge and without any element of coercion, fraud, or undue influence. By withholding execution of the conveyance for nearly fifteen years after having received the entire consideration, the Defendants have sought to frustrate a bona fide transaction. It would be wholly inconceivable for any court to grant relief in such circumstances, as doing so would effectively reward dishonesty and undermine the sanctity of commercial transactions. The repeated raising of frivolous defences and the consistent attempts to delay adjudication at every stage render the conduct of the Defendants palpably dishonest and mala fide, and such conduct deserves to be unequivocally condemned. h. Whether the Purchaser was in possession of the Suit Properties?

15) Mr. Seervai submitted that, the Purchaser has sought two reliefs in the Plaint. The Purchaser has sought both, a declaration that it is in valid and lawful possession of the Suit Properties [Prayer (b)], or in the alternative, a declaration that it is entitled to vacant and peaceful possession of the Suit Properties [Prayer (c)].

15.1) Clause 8 of the Offer Documents, i.e., the contract which the Purchaser seeks performance of, provides: “The Vendors will not be responsible to give vacant possession of the land. Possession such as its nature admits, shall be deemed to be given at the time of Conveyance.”

15.2) Similarly, the Order of the Charity Commissioner under Section 36 provides: “d) Purchaser shall be entitled to possession of property after due execution of Conveyance Deed as stated above” [Vol. II / P – 20 / 357].

15.3) He submitted that, there was thus no question, whether in terms of the Contract or in terms of the statutory sanction accorded on the basis of which the Contract was entered into, which statutory sanction was mandatory to comply with, that the Purchaser could ever have been in possession prior to the Conveyance deed being executed. Despite this, the Purchaser made a false claim to being in “physical control and effective possession” of the Suit Properties [Plaint # 25 / Appeal Memo /121].

15.4) He submitted that the evidence before the learned Single Judge clearly established that it was the Defendant Trust and not the Purchaser that was in possession of the Suit Properties. This is more particularly elaborated upon in the List of Dates, including: a. The Offer Documents, which made it clear that possession will be given only on Conveyance. b. The Order of the Charity Commissioner under Section 36(1), which made it clear that the Purchaser would be entitled to possession only on Conveyance. c. The Purchaser’s letters dated 15.11.2023, 04.04.2005, 25.01.2006, all of which make it clear, and affirm, that possession is not handed over by the Trust to the Purchaser. d. The fact that no claim by the Purchaser of it being in possession was ever made till the Contract was terminated.

15.5) Mr. Seervai submitted that, crucially, in the Order dated 08.04.2009 in Writ Petition No. 6050 of 2008, this Hon’ble Court rendered a definitive finding that the Defendant is in possession of the Suit Property (Vol. III @ 384). This finding on the possession of the Trust, is given keeping in mind the affidavit filed by Mr. V P Shah. To arrive at his finding on possession based on the said affidavit, the Learned Single Judge ignores the definitive finding of this Hon’ble Court that the Defendant is in possession of the Suit Property.

15.6) He submitted that in the Impugned Judgment, the learned Single Judge has entirely disregarded this overwhelming evidence and has effectively founded the entire finding on possession upon one sentence, torn out of context, in the Affidavit dated 05.10.2006 filed by the Trust’s authorized representative, in Writ Petition No. 114 of 2006. The Learned Single Judge has gravely erred, both in fact and in law, in this regard. The overwhelming material on record confirmed that the Purchaser was never put into possession of the Suit Properties. Further, the said Affidavit could never have been read in evidence owing to the provisions of Section 33 of the Evidence Act, as also the provisions of Section 1 of the Evidence Act60.

60 Padam Singhi v. Praful Desai, 2008 SCC OnLine Bom 183, Paras 14, 17, 22, 23. For Section 1, reference may be made to the judgment in Sudha Devi v. MP Narayanan,

15.7) He submitted that in the Impugned Judgment, the learned Single Judge has held that, the said Affidavit “effectively puts paid to the Defendants’ contention that … the Purchaser was not in possession or control of the suit properties.”61 However, the Learned Single Judge has not considered or engaged with the evidence of Mr. V. P. Shah (DW-1), the affiant of the said Affidavit, who has (a) explained the circumstances in which that Affidavit was executed62. Further, Mr. Shah was not cross examined on this aspect, nor was he confronted with the said Affidavit to give him an opportunity to explain the same63.

15.8) Mr. Shah’s Affidavit has clearly been read by the Learned Single Judge completely out of context. The said Affidavit, which is solely and exclusively relied upon to render an otherwise non-maintainable Suit maintainable, does not, at any place, state that possession of the Suit Property has been handed over to the Purchaser. No statement or averment regarding possession is made by Mr. Shah. Despite this, the said Affidavit is relied upon for that very purpose. This finding is not only erroneous, but is perverse.

15.9) The Affidavit is filed in a Writ Petition alleging unauthorized cutting of mangroves at the Suit Property (See Vol. V @ 962). It is to defend the allegations made in that Writ Petition that Mr. Shah has filed the

63 Vol. X / Q.141-145, 196 / Page 1817, 1835 Affidavit. Even in the Affidavit, Mr. Shah has not whispered a word about possession.

15.10) He submitted that relying on this Affidavit as the singular piece of evidence that turned the question of possession is clearly and egregiously erroneous, particularly when faced with the weight of the evidence to the contrary. One sentence which does not even speak of possession has been taken completely out of context to enable the Suit to be maintainable. This perverse and arbitrary finding ex-facie constitutes error apparent on the face of the Judgment and Order, vitiating it entirely and rendering it liable to be set aside in appeal. 15.10.1) We are unable to accept the sweeping rhetoric that, the learned Judge’s findings are ex facie perverse or arbitrary. The issue of possession has been carefully addressed by the learned Judge in paragraphs 16 to 18 of the impugned Judgment. Leaving aside the arguments, one must ask, having paid the entire purchase price to the Trust, what if anything, could the Trust legitimately retain? Particularly when Bastion had assumed all liabilities relating to the suit property, including its protection, was it not only logical that they also took possession to safeguard their interest? 15.10.2) What obligation remained on the Trust to protect the property? None. The Trust had received the full consideration. Beyond conferring juridical possession to enable Bastion to perfect title through execution of the conveyance, there was nothing further to deliver. The argument advanced is nothing more than a smokescreen designed to mislead the Court. 15.10.3) In our view, there was nothing beyond the prayers in the plaint, Clause 8 of the offer document, the Charity Commissioner’s order, the contemporaneous correspondence and the Court’s own findings that Mr. Seervai could rely upon to contend that the Trust remained in possession. What he was required to establish, but failed to do, was the Defendants’ continuing obligation to maintain and protect the property. That obligation, on the facts of this case, had clearly been assumed by Bastion, who had paid the entire consideration and taken responsibility for safeguarding the suit property. In the above context, the reliance placed on the judgment in Padam Singhi (supra) is equally misplaced and contextually irrelevant. 15.10.4) The prayers in the plaint clearly seek a declaration that the Plaintiff’s possession is lawful, and further seek possession in the legal sense i.e. juridical possession, as contemplated under law, as well as in the offer document, the Charity Commissioner’s order, and the parties’ correspondence. This position has been merely denied by the Defendants for the sake of form, without any substantive rebuttal. The learned Judge has appropriately appreciated both oral and documentary evidence and reached a well-founded conclusion that the Plaintiff was in physical possession and effective control of the suit property. We are in full agreement with that finding. i. Whether the Suit is not maintainable in view of Section 50 of the Maharashtra Public Trusts Act, 1950?

16) Mr. Seervai respectfully submitted that, the Learned Single Judge has gravely erred in construing Section 50 as also the judgment of the Hon’ble Supreme Court in Sainath Mandir Trust v. Vijaya64, (2011) 1 SCC

623. In Sainath Mandir (supra) the Hon’ble Supreme Court held:

31. Section 79(1) of the same Act also lays down that any question, whether or not a trust exists and such trust is a public trust or particular property is the property of such trust, is required to be decided under its statutory force by the Deputy or Assistant Charity Commissioner as provided under the Act and Section 80 bars jurisdiction of the civil court to decide or deal with any question which is by or under this Act to be decided or dealt with by any officer or authority under this Act. Thus, when the appellant Trust was in occupation and possession of the property in question then the respondent- Purchaser clearly could not have approached the civil court ignoring the specific provision under the Bombay Public Trusts Act, 1950 which has laid down provisions to deal with disputes relating to the property of the trusts.

32. It also cannot be overlooked that in the instant case, it is the original owner of the property i.e. Respondent 8 who had executed a deed of gift in favour of the appellant Trust and subsequently after ten years, executed a sale deed in favour of the predecessor of Respondents 1 to 7, who approached the Court for recovery of his property in which case it could perhaps have been available for the owner of the property to approach the civil court. But in the case at hand, it is the purchaser of the property, predecessor of Respondents 1 to 7 who filed the suit for possession which clearly can be construed as the suit for recovery of possession from the appellant Trust which was in possession of the property. In that view of the matter, it was the statutory requirement of the Bombay Public Trusts Act, 1950 to approach the Charity Commissioner before a suit could be instituted.”

16.1) Mr. Seervai submitted that, in the present case, admittedly no permission / sanction under Section 50 was obtained prior to the filing of the Suit. The Suit was thus hit by Section 50. The learned Single Judge has patently and gravely erred both in his interpretation of Sainath Mandir (supra) in Paragraph 35 of the Impugned Judgment, and his attempt to distinguish it on facts, when for all practical purposes there was no real difference on facts qua the principle of law laid down by the Court. Contrary to the express ruling in Sainath Mandir (supra) adverted to above, the Learned Single Judge has erroneously held that Section 50 permission was not held to be mandatory. 16.1.1) We are unable to agree with the submission advanced by Mr. Seervai. The learned Judge has lucidly explained the scope and applicability of Section 50 of the Maharashtra Public Trusts Act, in conjunction with the relevant provisions of the Code of Civil Procedure, as they apply to the facts of the present case. This analysis is clearly set out in paragraphs 31 to 33 of the impugned judgment, followed by cogent reasons in paragraphs 34 and

35. We fully concur with the view taken by the learned Judge and find no reason to interfere with the same. j. What are the factual questions at issue in the matter?

17) Mr Seervai argues that, there was a serious contest between the parties as to the Purchaser’s readiness and willingness to perform the essential terms of the Contract, viz. Clause 10. The learned Single Judge has avoided entering into that factual question by rendering an erroneous finding on whether Clause 10 of the Contract was an essential term of the Contract or not.

17.1) By erroneously holding that Clause 10 itself was not an essential term of the Contract, the Learned Single Judge has, in substance, avoided addressing this issue altogether.

17.3) There was also a serious contest between the parties as to whether in the facts of the present case, the Court ought to exercise discretion in favour of the Purchaser to grant specific performance under section 20 of the Specific Relief Act, 1963. 17.3.1) In our view, the findings of the learned Judge have been misconstrued by the Appellants to serve their own self-interest. The learned Judge has not overlooked or avoided any aspect of the matter. On the contrary, he has carefully sifted the material on record—separating the chaff from the wheat—and has crystallised each issue with clarity and precision. We unreservedly concur with his reasoning and find no basis to interfere with the conclusions drawn.

SUBMISSIONS OF MR.

18) Mr. Kadam learned Senior Counsel for Bastion (Plaintiff) submitted that the Plaintiff's pleaded case, in the Plaint was as under:

(i) The Plaintiff and Defendant arrived at a contract/agreement dated 18th March 2002 ("Suit Agreement") for sale of the Suit Properties for an aggregate consideration of Rs. 14 crores. [Ref: Appeal Memo/Plaint - Para 9/Pg.110]

(ii) As the Suit Properties belonged to the Defendant Trust, which was a

Public Charitable Trust, the Defendants made separate applications dated 30th April 2002 to the Charity Commissioner for sanctioning the sale thereof. The substance of the applications and its accompaniments was that the terms of the Suit Agreement for sale of the Suit Properties being on "as is where is basis", the risk of various claims/litigations, danger of trespasser and encroachment and risk of obtaining clearance under the Urban Land (Ceiling & Regulation) Act, 1976 ("ULC Act") was being taken by the Plaintiff. who would make payment of the consideration of Rs. 14 crores irrespective of the attendant risks and that that consideration was at a fair market value. which the Defendant could expect from the Suit Properties. [Ref: Appeal Memo/Plaint - Para 10/Pg.1101

(iii) The Plaintiff paid the entire consideration for the Suit Properties (i.e., the entire Rs. 14 crore) by 4 November 2003: [Ref: Appeal Memo/Plaint –

(iv) Upon making the entire payment by November 2003, the Plaintiff immediately thereafter took effective control of the suit properties and had taken on hand the completion of the retaining wall of the nala and its training and the with the consent and knowledge of the Defendants appointed security agency called "Om Security Services" who has a long standing association with the Plaintiff's partner Salim Judha, to look after the suit properties. [Ref: Appeal Memo/Plaint – Para 14/Pg.1131

(v) The Defendant (at the Plaintiff's request) addressed a Letter dated 22nd March 2006 to the Collector, Mumbai Suburban, inter-alia, recording that it had agreed to sell the Suit Properties to the Plaintiff [Ref: Appeal Memo/Plaint – Para 20/Pg.1191

(vi) The Defendants have at the behest of the Plaintiff made an application dated 3rd October 2006 to the Competent Authority for exemption of surplus vacant land comprised in the Suit Properties under Section 20 of the ULC Act; [Ref: Appeal Memo/Plaint - Para 24/ Pg.1201

(vii) In Writ Petition No. 114 of 2006, filed by one WAMA Group, and arraying the Defendant as a party respondent thereto, the Defendant filed an Affidavit dated 5th October 2006 confirming that ".. formal execution of conveyance in favour of Bastion Construction had not yet taken place, for want of permission from the competent authority under the Urban land Ceiling Act, 1973......Hence, although, the formal execution of the conveyance in favour of Bastion Construction remains to be executed for all real and practical purposes and intent Respondent No. 8 has transferred its rights in the plot to Bastion Construction...Bastion Construction is not developing the plot as a developer engaged by Respondent No. 8, but in its own right..."; Ref: Appeal Memo/Plaint - Para 22/ Pg.119 r/w Para 26 & 27/Pg.121-1231

(viii) The Defendants have for all real and practical purposes and intent transferred to the Plaintiff their rights in the Suit Properties. The Plaintiff is protecting the suit properties in its own right and on its own account and only a formal conveyance thereof remained to be executed in favour of the Plaintiff, as the permission of the Competent Authority under the ULC Act, which was in force till November 2007, was awaited: [Ref: Appeal Memo/Plaint - Para 28/ Pg.124J

(ix) The ULC Repeal Act was notified by Notification dated 6th December

2007, issued by the Government of Maharashtra, and by which the ULC Act ceased to apply to the Suit Properties with effect from 29th November 2007; [Ref: Appeal Memo/Plaint - Para 30/ Pg.1251

(x) By virtue of this repeal, the condition in clause 10 of the Suit Agreement ceased to apply and the Defendants were bound to execute conveyance of the Suit Properties in favour of the Plaintiff: [Ref: Appeal Memo/Plaint -

(xi) By Letter dated 12th February 2008 the Plaintiff called upon the

(xii) By Letter dated 30th May 2008 the Defendant, inter-alia, called upon the-Plaintiff to obtain a confirmation from the Competent Authority that the Defendant could execute conveyance of the Suit Properties in favour of the Plaintiff; [Ref: Appeal Memo/Plaint - Para 33/ Pg.126]

(xiii) The Plaintiff addressed a Letter dated 5th August 2008 to the

Defendant forwarding a copy of the decision of the Bombay High Court in the Voltas case wherein the Court has, inter alia, held that surplus vacant land that is not taken over by the State Government prior to notification of the Repeal Act will stand released. [Ref: Appeal Memo/Plaint - Para 35/Pg.127]

(xiv) The Competent Authority (in response to an application that had been made by the Plaintiff in February 2008) by Order dated 4th October 2008 noted that no order had been passed in respect of the Suit Properties under Section 10(5) of the ULC Act and in view of the Repeal Act the Suit Properties are outside the purview of the ULC Act and that accordingly the Competent Authority did not have any objection to transfer the Suit Properties; [Ref: Appeal Memo/Plaint- Para 37/Pg.128]

(xv) The Plaintiff forwarded a copy of the Order dated 4th October 2008, under cover of Letter dated 7th October 2008, and stated that by obtaining the said Order the Plaintiff had fully satisfied the Defendant's requirement indicated in their letter dated 30th May 2008 for executing the conveyance in favour of the Plaintiff, though in Plaintiff's view there was no requirement to obtain such order; [Ref: Appeal Memo/Plaint- Para 38/Pg.128]

(xvi) The Defendant by their Letter dated 25th November 2008 refused to execute conveyance of the Suit Properties and purported to determine / terminate the Suit Agreement and forfeit the entire consideration of Rs. 14 crores. inter alia, on the basis that the Plaintiff failed and neglected to apply to the Competent Authority for permission and that such failure has in in breach of the Suit Agreement and the basis of Order dated 27' December 2002 passed by the Charity Commissioner. 'Ref: Appeal Memo/Plaint- Para 39/Pg.128-1291 (xvii)The Plaintiff has discharged and performed all its obligations under the Suit Agreement and has at all material times been and continues to be ready and willing to perform its obligations under the terms of the Suit Agreement; [Ref: Appeal Memo/Plaint- Para 46/Pg.132]

(xviii) The Plaintiff accordingly sought. inter-alia, (i) specific performance of the Suit Agreement (ii) declaration that the Plaintiff is in possession of the Suit Properties and in alternate declare that the Plaintiff is entitled to possession or the Suit Properties; (iii) in alternate Defendants be decreed to pay to the Plaintiff damages of Rs.386,24,11,200/- together with interest at 18% p.a from the date of filing of the Suit till payment thereof. [Ref: Appeal Memo/Plaint— Prayers @Pg.138- 142] Gist of the Defendant’s Case.

19) He submitted that the summary of Defendant's pleaded case, in the Written Statement, is as under:

(i) It was mandatory to obtain the NOC for transfer the Suit

Properties unto the Plaintiff as per Clause 10 of the Offer Documents. It is clear as per the sanction order dated 27" December 2002 r/w the terms of the Offer Documents, that it was solely the responsibility of the Plaintiff to obtain the NOC under ULC Act. The Plaintiff failed to obtain the requisite permission within reasonable time. [Ref: Appeal Memo/Written Statement - Para 5.a r/w 5.b /Pg.276-278]

(ii) From 2003 till the year 2008, the Plaintiff took no steps to obtain the requisite permission from the Competent Authority and the condition as stated in the Offer Documents was not complied with. [Ref: Appeal Memo/ Written Statement-Para 5.e/Pg.279)

(iii) It was only after the ULC Act was repealed that the Plaintiff did apply to the Competent Authority for the permission.[Ref: Appeal Memo/Written Statement - Para 5.e/Pg.279]

(iv) The Charity Commissioner's order was a conditional order whereby the sale was accorded sanction only on the fulfillment of all conditions. Hence if the permission of the Competent Authority, is not necessary after the repeal of the ULC Act, then the Charity Commissioner becomes void. [Ref: Appeal the sanction granted Memo/Written Statement - Para 5.e/Pg.279 r/w Para 7/Pg.281-282]

(v) The Competent Authority could not have entertained the

Plaintiff's alleged application dated 5th February 2008 as it had become functus officio. [Ref: Appeal Memo/ Written Statement - Para 5.e/Pg.279j

(vi) The Competent Authority passed Orders dated 31st October 2006 and 11th December 2006 declaring various lands including the Suit Properties to be excess vacant land and sought acquisition thereof which was challenged by the Defendant in Appeal No.32 of 2007 before the Additional Commissioner, Konkan Division. By an Order dated 31st August 2007 there was a status quo order passed which was continued from timeto-time upto 10th December 2007. [Ref:, Appeal Memo/ Written Statement - Para 5.c/Pg.278] pendency of the aforesaid Appeal before the Additional Commissioner, Konkan Division, the ULC Act was repealed with effect from 29th November 2007 and Additional Commissioner refused to continue the interim order and hearing of the Appeal was adjourned sine-die. [Ref: Appeal Memo/Plaint- Para 5.c/Pg.278]

(vii) During the pendency of the aforesaid Appeal before the

Additional Commissioner, Konkan Division, the ULC Act was repealed with effect from 29th November 2007 and Additional Commission refused to continue the interim order and hearing of the Appeal was adjourned sinedie [Ref: Appeal Memo/Plaint-Para 5.c/pg.278]

(viii) The Defendants filed a Writ Petition No. 6050 of 2008 challenging the orders dated 31st October 2006, and 11th December 2006 passed by the Competent Authority which was allowed by an Order dated 8th April 2009. [Ref: Appeal Memo/Written Statement - Para 5.f/Pg.280

(ix) Defendants have stated at Paragraph 16 of their Written

Statement, [Ref: Appeal Memo/ Written Statement - Pg.284] that the contents of Paragraph 6 to 9 of the Plaint are substantially correct. Defendant has stated at Paragraph 18 of their Written Statement, [Ref: Appeal Memo/ Written Statement — Pg.285] that Paragraph 11 and 12 of the Plaint are substantially correct.

(x) For the sake of convenience of the Plaintiff, the Defendants made an application dated 3rd October 2006 to the Competent Authority for exemption under Section 20 of the ULC Act and permit the Plaintiff to develop the Suit Properties. [Ref: Appeal Memo/ Written Statement — Para 27/Pg.293]

(xi) Initiatives were taken by the Defendants for necessary permission under the ULC but delay were caused by the Plaintiff and therefore the transaction of sale could not be completed within time and inspite thereof the Plaintiff did not pursue the said application before the Competent Authority. [Ref: Appeal Memo/ Written Statement — Para 27 r/w Para 29/Pg.293-294] The Defendants made the application dated 3rd October 2006 as the Plaintiff for more than 3 years did not obtain permission of the Competent Authority. [Ref: Appeal Memo/Written Statement — Para 30/Pg.295-296].

(xii) The contentions raised by the Defendants in the Affidavit dated

5th October 2006 were rejected by the Hon'ble Division Bench of this Hon'ble Court. [Ref: Appeal Memo/ Written Statement— Para 29/Pg.294] In any event, in paragraph 17 of the Affidavit dated 5th October 2006, the Defendants had clearly stated that "...the legal ownership of the said plot still vests in Respondent No.8... ". [Ref: Appeal Memo/ Written Statement — Para 26/Pg.292]

(xiii) Without prejudice, it is stated that by an Order dated 8th April

2009 passed in Writ Petition No. 6050 of 2008 filed by the Defendants, the provisions of the ULC Act were no longer applicable to the Suit Properties and the same have devolved back upon the Defendants. In view of the change in circumstances, it would be necessary to obtain a fresh sanction from the Charity Commissioner and the Defendants are not bound to execute conveyance of the Suit Properties in favour of the Plaintiff. [Ref: Appeal Memo/Written Statement — Para 31/Pg.296]

(xiv) The value of the Suit Properties was determined and Charity

Commissioner's approval was obtained on the basis of several factors including that sanction of the Competent Authority under the ULC Act was mandatory. [Ref: Appeal Memo/Written Statement — Para 34/Pg.297] CIRCUMSTANCES IN WHICH THE DEFENDANT TRUST AGREED TO SELL THE SUIT PROPERTY.

20) Pursuant to the Plaintiff's offer to purchase the Suit Properties being accepted on 18th March 2002 [Ref: Ex. E & F @ Pg.173 & Pg.174 / Appeal Memo], the Defendants made two separate applications, both dated 30th April 2002, to the Charity Commissioner for sanctioning sale of the Suit Properties to the Plaintiff.

20.1) These applications, inter alia, record the background and circumstances in which the Plaintiff had decided to sell the Suit Properties. as follows and that the same was in the interest of the Defendants and there was compelling necessity: (a) The Plaintiffs had offered, at the meeting held on 19th January 2002, to purchase the Suit Properties for Rs. 14 crores. Pertinently during these meetings, the Plaintiff raised its offer from Rs. 8.25 crores to Rs. 14 crores. The same was duly accepted by the trust vide its letters of acceptance dated 18th March 2002 [Ref: Para 2.[3] r/w Pg.57 Vol 1 & Pg.179 Vol II]; (b) In the Affidavits in support of these applications the Defendant Trustees disclosed the compelling necessity for selling the Suit Properties as claims, pending litigations which, inter alia, included, "...various negative factors including the proximity of the BMC dumping ground, ULC clearance, low lying area requiring considerable filling, reservations, proximity of slums and slum like structures, nala running through the land, the market conditions and other relevant factors..." [Ref: Para 5/Pg.74/Vol I and Para 5/Pg.195/Vol II];

(c) The Defendant Trust also obtained and filed, along with these applications, Valuation Reports, from M/s Kirit G. Kapadia, which also disclosed these reasons being relevant while ascertaining the fair market value for the Suit Properties [Ref: Para 7/Pg.104/Vol I and Para 7/Pg.227/Vol II]; 20.2) In addition to the above applications filed before the Charity Commissioner, L.S. Lulla, Advisor to the Defendant Trust, prepared an Office Note dated 26th December 2000 which also disclosed the background, inter alia, recording that "...there is a risk of the State Government taking steps to proceed to take over the aforesaid 17 to 18 acres of surplus vacant land. This would be a tempting proposition for the State. It is accordingly for the consideration whether we should invite offers for each of the above two pieces of land making it, as usual, the responsibility of the Purchaser to obtain the NOC under the ULC Act.” Ref: Ex h P-58 4-4),Pg. 826-827/ Vol IV]

20.3) The Defendant's witness — DW-1 (Mr. V.P. Shah) has specifically deposed in evidence that the possibility of acquisition under the ULC Act was instrumental in the decision to sell the Suit Properties. This is by stating at para 8, Pg. 1767/Vol X of the DW-1's Affidavit in Evidence, that "under the circumstances as they then existed, i.e. the Suit Property becoming subject matter of acquisition proceedings, the said Trust agreed to sell the Suit Property at the best price available under the then prevalent circumstances." [Ref: Para 8, pg. 1767/Vol X].

20.4) In the course of cross examination, DW-1 confirmed that there were multiple reasons as to why the Defendant Trust had decided to sell the Suit Properties, including already existing encroachments, reservations, litigations and an apprehension that the Suit Properties may he acquired under the provisions of the ULC Act. Q.45 [Shown Clause 3 of the Invitation to Offer] This Clause says that the land is offered for sale on "as-is-where-is basis" subject to, inter alia. claims, if any, of encroachers. In this because there was already an encroachment on the suit land when the Invitation for Offer was issued? Ans. Yes, some encroachments were there. Q.46 Did the Trust apprehend that there could be further encroachments, because of which it was also necessary to include such a Clause ? Ans. Yes. Q.47 You. have said that as on the date of Invitation to Offer, there were already some encroachments on the suit land. Can you broadly indicate when such encroachments on the suit land were noticed by the Trust? Ans. Exact time is not known, but there was an encroachment on part of the suit property. Q.48 [Shown paragraph 8 of the Affidavit of Evidence in Examination-in-chief of the witness and the witness's attention is drawn to the sentence with "Under the circumstances... the then prevalent circumstances. " What do you mean by "the said Property becoming subject matter of acquisition proceedings"? Ans. This is the apprehension that the lands may be acquired under the provisions of the ULC Act. [Ref: Pg. 1795-1796/ Vol X]

20.5) Even the Impugned Judgement passed by the Learned Single Judge records the Defendant's contentions that "...the suit transaction was entered into in 2002, when the Defendants were faced with the prospect of the ULC authorities acquiring the suit land under the provisions of the ULC Act, which then governed the suit properties..." [Ref: Para 19, pg. 64/ Appeal Memo]

20.6) From the above material and evidence, it is clear that: a. the Defendant Trust took the decision to monetize the lands by selling the Suit Properties, at the best available price on account of multiple reasons (as set out in paragraph 4(b) above), including the encroachments on the Suit Properties and the significant apprehension within the Defendant Trust that the Suit Properties may be acquired under the provisions of the ULC Act; b. the Charity Commissioner duly sanctioned the sale of the Suit Properties vide Order dated 27th December 2002 in light of the compelling necessities recorded under the applications, the affidavit in support and the valuation reports and that the sale consideration would he in the beneficial interest of the Defendant trust which is in complete compliance with the requirement of Section 36 of the MPT Act [Ref: Pg. 310 and pg. 355/ Vol II]. RELEVANT CLAUSES OF THE SUIT AGREEMENT.

21) The Suit Agreement was therefore entered into in the aforesaid background. Some of the relevant clauses of the Suit Agreement are as follows:

(i) Clause 1: - "Offers are invited by F.E. Dinshaw Trust in respect of the aforesaid land. F.E. Dinshaw Trust is a registered Public Charitable Trust. What is offered for sale is the right, title and interest of these Vendors in the land on "as is where is" basis at the time of Conveyance."1pg.153 / Appeal Memo I

(ii) Cause 7:- "Sale will be subject to the sanction of the Charity

Commissioner; Maharashtra State. Bombay In the event of the Charity Commissioner: declining sanction in favour of the successful offeror, the amount paid by the successful offeror will be returned to him without interest.[pg.156 / Appeal Memo]

(iii) Clause 10:-. It will be solely the responsibility of the Purchaser to obtain the permission / Clearance / No objection from the Competent Authority under the Urban Land (Ceiling and regulation) Act, 1976 to enable the Conveyance to be made and the amount paid will not be refundable on the ground that the requisite Permission/NOC/Exemption is not forthcoming or is refused." [pg.157 / Appeal Memo]

(iv) Clause 19:-"The offers received including the enhanced offers if any made at the time of opening of the offers, will be considered by the Trustees within two months of the opening of the offers, during which period the offerors will not be entitled to withdraw their offers. In the event of rejection of all the offers, the amount paid by each of the offerors will be returned to them without interest. Within 6 months of the Acceptance of any offer by the Trustees, payment must be made of a further sum to make up along with the deposit of

21.1) The Defendant Trust applied to the Charity Commissioner for seeking an extension of time stipulated under the Order dated 27th December 2002. The Charity Commissioner vide its Order dated 25th March 2004 duly extended the time for payment of consideration by the Plaintiff to the Defendant Trust [Ref: Pg. 358/ Vol II]

21.2) Pursuant to the Sanction received and the Suit Agreement, the Plaintiff had paid the entire consideration for the Suit Properties (i.e., the entire Rs. 14 crore) by 4th November 2003 [Ref: Plaint/ Appeal Memo — Para 12/ Pg. 111 – 112]. vi.

ANALYSIS OF CLAUSE 10 OF THE SUIT AGREEMENT.

22) The primary contention advanced by the Defendant, in the present Appeal, centres around the interpretation of Clause 10 of the Suit Agreement.

22.1) Clause 10 of the Suit Agreement, reads as follows: "It will be solely the responsibility of the Purchaser to obtain the Permission/Clearance/No Objection from the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976 to enable the Conveyance to be made and the amount paid will not be refundable on the ground that the requisite Permission/NOC/Exemption is not forthcoming or is refused." [Ref: Pg.157/Appeal Memo]

(i) It was the Plaintiff's obligation to obtain necessary clearance under the provisions of the ULC Act before the conveyance of the Suit Properties could be made to the Plaintiff by the Defendant; and

(ii) The Plaintiff cannot seek a refund of the consideration paid under the

Suit Agreement in the event that ULC Clearance was not forthcoming or was refused. From a plain reading of this clause, it is evident that no timeline was provided for obtaining this ULC NOC.

22.3) The stark difference in language of clause 7 and 10 of offer document makes it clear that refund of consideration was contemplated ONLY if Charity Commissioner refused sanction for sale. The payment of agreed consideration was not dependent on the ULC Clearance.

THE PURPOSE OF CLAUSE 10 WAS TO PASS THE ENTIRE RISK OF ACQUISITION UNDER THE ULC ON THE PURCHASER.

23) Mr. Kadam submitted that, the purpose of clause 10 was to ensure that the risk was acquisition of the Suit Properties no longer rests with the Defendant trust.

23.1) In cross-examination, PW- 1 was asked the following questions with regard to risk of acquisition under the ULC: Q.140. Did you consider any factors with regard to the suit property before giving your offer? Ans. There were many factors and amongst them the biggest one is ULC, nala, filling, the property was open from all sides, unguarded, there were slums around the property. If it is acquired under ULC I would not get the money refunded and that was my risk. [Ref: Pg.1329/Vol VIII] Q.223. What enquiries did you make with regard to the suit properties as referred to in this part of paragraph 15? Ans. I made enquiries and as per discussion with Mr Lulla. I enquired about the ULC Notice to Mr. Dinshaw regarding acquisition and this Notice was also to be given to the Trust. The enquiry was also relating to the fact that if the ULC Notice is received then I have to pay full amount to the Trust and they will not refund any amount, I also made enquiry regarding the dumping ground, reservation, filling work, litigations etc. [Ref: Pg.1345-1346/Vol VIII] Q.267. Shown answer of the Witness to Question No. 247. What do you understand by the words "it was the responsibility of the purchaser to obtain permission/No objection under the ULC Act, 1976"? Ans. What I understood by these words is that I had no responsibility towards the Trust. It was my responsibility that if I do not obtain permission from ULC Authorities and if the property is acquired then I would not get my monies refunded and that was the risk. [Ref: Pg.1357Nol VIII]

23.2) No further questions were put to PW-1 to discredit his testimony, i.e., that Clause 10 of the Suit Agreement passed the risk of acquisition under the ULC onto the Plaintiff.

23.3) Mr. Kadam submitted that, the Defendant has not put forward any other explanation as to why the Suit Agreement required payment of the entire consideration to be made before the ULC NOC was obtained and further provided, in Clause 10, for the forfeiture of the entire consideration, in the event that the same was not obtained.

23.4) In cross examination, DW-1 was asked the following questions in relation thereto: Q57. Under the terms of the offer documents, the conveyance has been made subject to, inter alia, obtaining permissions. Why did the Trust not make the receipt of the entire consideration by the Trust also subject to the same condition? Ans. This was the general practice followed by us in respect of all sales. (Ref: Pg.1798/Vol X] Q60. Even if this Clause is a continuation of the so-called general practice of the Trust, can you as the Manazer of the Trust explain the rationale behind the Clause which requires full consideration to be paid much before the procurement of ULC clearance? Ans. Because there were many rigors and very hard procedures to get the NOC under the ULC Act and that is why, this condition was being mentioned by the Trust. [Ref: Pg.1799/Vol X] Q61. So, to put it differently, would you agree that the Trust wanted to avoid the "many rigors and very hard procedures „ as mentioned by you above, and therefore, wanted to receive the entire consideration prior to the procurement of such ULC clearance so as to safeguard its position? Ans. Yes, in the interest of the Trust. [Ref: Pg.1799/Vol X]

23.5) He submitted that, the above evidence of PW-1 and DW-1 clearly exposes the fact that the only reason Clause 10 was introduced into the Agreement to absolve the Defendant Trust of all risks associated with the Suit Properties, including any acquisition under the ULC Act.

23.6) He contended that Clause 10 is not a provision containing any promise to the Defendant that the Defendant has to receive or get on performance of the Suit Agreements. This Clause merely recognises the legal position that existed on the date of the Suit Agreements, i.e., that the Plaintiff cannot get a conveyance of the Suit Properties in view of the embargo contained in the ULC Act and absolved the Defendant Trust of any liability to refund the consideration in the event that the ULC NOC was not obtained.

23.7) He submitted that the observations of the Learned Single Judge contained in paragraph 11 of the Impugned Judgement, viz., that Clause 10 does not amount to a 'promissory condition' are rendered in this context. The Defendants in the present Appeal are attempting to misinterpret the intention of the parties behind Clause 10 of the Suit Agreements to suggest that this clause contained any 'promissory condition' made in favour of the Defendants. This is incorrect in light of the above material and evidence.

23.8) He submitted that, the Defendants’ purported reliance on the decisions of the Supreme Court in the cases of (1) Transmission Corporation of Andhra Pradesh Limited and Ors. v/s. GMR Vemagiri Power Generation Limited and & Anr.65 ( 2018 3 SCC 716:) and (2) Adani Power (Mundra) Limited vs Gujrat Electricity Regulatory Commission & Ors.66 2019 19 SCC 9, to contend that Clause 10 of the Suit Agreements was an essential term of the contract.

23.9) He submitted that, these judgements do not support the Defendant's case that Clause 10 was a 'promissory condition' towards the Defendant. The Learned Single Judge has categorically held that "...the obligation to obtain ULC permission/ clearance under Clause 10 was not an 'essential term' in the sense of being a `promissory condition', for the breach of which the Defendants would be entitled to terminate the suit agreement." From this finding it is clear that the Learned Single Judge has

66 2019 19 SCC 9 sought to draw a distinction between an 'essential term' and a `promissory condition' which entitles the Defendants to terminate the contract. The Defendants have wholly lost sight of this distinction drawn by the Learned Single Judge in the challenge now advanced in the present Appeal.

23.10) Mr. Kadam submitted that, in fact, these very judgements, hold that the Court must give effect to the business efficacy as agreed to by the parties in the contract. In the present case, the intention of the parties was, as the evidence above unequivocally demonstrates, to absolve the Defendant Trust of the risk of acquisition and to pass this risk on to the Plaintiff. [See: paragraph 26, Trans Co of AP v. GMR Vemagiri Power (supra); Paragraph 24, Adani Power v. GERC (supra)]

23.11) He submitted that, the learned Single Judge interpreted Clause 10 keeping in mind the intention of the parties. This is evident from the following findings: "These clauses, read together and in the context of the whole offer document, clearly imply that the suit properties were offered for sale by the Defendants on "as is where is" basis. That is to say, whatever be the claims and encumbrances including any pending litigation in respect of the property, whatever be the nature of possession being offered, whatever be the property taxes levied or leviable, the vendors owed no responsibility to the purchaser towards the same and no adjustment or refund of the consideration was contemplated on any ground whatsoever. Clause 10 of the terms was in keeping with this general stipulation......Whether or not such permission etc came about, it would have no impact on the validity of the suit contract as far as the vendors were concerned. In the event of such permission etc not coming through, the vendors would not he bound to either execute conveyance or refund money paid under the suit contract. Full payment of the consideration to the vendors was to be made within 6 months of the acceptance of the offer, without reference to the permission, etc of the Competent Authority, that is to say, whether or not such permission was forthcoming. By the same token, clause 10 does not entitle the vendors to terminate the suit contract and indeed there is absolutely no conceivable reason to terminate the contract for want of such permission, since neither the amount nor the manner of payment of consideration is dependent on such permission. Once payment is made, clause 10 is relevant only from the standpoint of the purchaser, since read with clause 19, in absence of a permission/NOC from Competent Authority it forbids the purchaser from either demanding a conveyance or refund of his money paid under the contract.... Once this restriction goes away, in this case because of the repeal of the ULC Act, Clause 10 cannot be said to prevent the purchaser from obtaining a conveyance..."

THE ULC ACT REQUIRED THE APPELLANT (i.e., HOLDER)

TO MAKE APPLICATIONS THEREUNDER

24) Mr. Kadam contented, as also the evidence indicates, that the application under the ULC Act had to be made by the Defendant Trust (i.e., holder) and only thereafter the Plaintiff's obligation to obtain the clearance would kick in. This is borne out from the evidence: Q.246. Would I be correct in saying that the responsibility to obtain the permission from the ULC Authorities was entirely upon the purchaser of the suit property under the terms of the offer of sale? Ans. To obtain the permission was my responsibility. They made application on 3rd October 2006 and it is only thereafter I had to obtain the permission. [Ref:pg.1351/Vol VIII] Q.361. What steps did you take to obtain the NOC from the ULC Authorities upto March 2003? Ans. I had not made the payment and unless the Trust applied, I could not take any steps to obtain NOC from ULC Authorities. [Ref:.1382/Vol VII ] Q.362. Is it your case that it was the obligation of the Defendants Trust to apply for and obtain the NOC from. the ULC Authorities? Ails. It is my case that it was the obligation of the Trust to apply for NOC from ULC Authorities and it is only thereafter I have to obtain the same. fRef:pg.1382/Vol VIII] Q.363. Therefore is it your understanding that you have to merely go and pick up the NOC from the ULC Authority and do nothing else? Ans. It is not my understanding that I have to merely go and pick tip the NOC from the ULC Authorities and do nothing else. But only when the Trust make application I have to obtain permission and the Trust made application at my instance on 3 October 2006 and thereafter the Act was repealed and then I made application for Conveyance I wrote several letters that the Act had been repealed and requested them to make Conveyance. I had sent the draft of Conveyance also. [Ref:pg.1382-1383/Vol VIII]

24.2) Section 2(1) of the ULC Act defines the expression to hold" as follows- "to hold" with its grammatical variations, in relation to any vacant land, means-

(i) to own such land; or

(ii) to possess such land as owner or as tenant or as mortgagee or under an irrevocable power of attorney or under a hire- purchase agreement or partly in one of the said capacities and partly in any other of the said capacity or capacities. Explanation.-Where the same vacant land is held by one person in one capacity and by another person in another capacity, then, for the purposes of this Act, such land shall be deemed to be held by both such persons; "

24.3) He submitted that a perusal of the various Sections of the ULC Act, including Sections 4 (2), 5, 6(1), 7, 9, 10, 16, 19(1), 20 and 21 clearly demonstrates that all steps required to be taken in relation to lands that are subjected to the ULC Act must be taken by the holder of such lands.

24.4) Sections 19(1), 20 and 21 of the ULC Act, which provide for the grant of an exemption to vacant land from the provisions of the ULC Act, clearly contemplate such grant to the 'holder' of such lands. This is clear from the plain language of these provisions.

24.5) Even the prescribed form under the ULC Rules which provide for making an application under Section 20 of the ULC Act, being Form 5. does not contemplate any category of persons. other than the holder, within the meaning of Section 2(1) of the ULC Act, to apply for the necessary exemption.

24.6) He submitted that the Hon'ble Supreme Court, in the case of State Bank of India v. Special Secretary Land of W.B. & Ors. - 1995 Supp (4) SCC 30 has clarified at paragraph 7 of the decision that it is only the 'holder" of the surplus vacant land, as defined in Section 2(1) of the ULC Act that can apply for an exemption under Sections 19 and 20. In that case, the State Bank of India held trust properties in the due course of executing and administering a trust for the benefit of the beneficiaries but was held not to be entitled to seek an exemption under these provisions of the ULC Act as it was not the 'holder' as defined under Section 2(1) thereof.

24.7) He submitted that in the present case, the Plaintiff clearly does not fall under any of the categories referred to in the definition of the expression “to hold" as contemplated in Section 2(1) of the ULC Act.

24.8) It is infact admitted by the Defendants in DW-1’s cross examination that the Plaintiff is not a "holder" under the provisions of the ULC Act.

24.9) Mr. Kadam submitted that, the Letter dated 2nd January 2003 addressed by the Defendant Trust to the Plaintiff, which, inter alia, directs the Plaintiff to take immediate action to obtain the requisite clearance cannot be said to constitute an "irrevocable power of attorney" within the meaning of Section 2(1) of the ULC Act such as to enable the Plaintiff to make the requisite application under Sections 19(1) or 20 thereof.

24.10) It is also pertinent to not that the provisions of the ULC Act. and in particular Section 2(1) and Section 20 thereof came up for consideration before the Hon'ble Supreme Court in the case of Special Officer & Competent Authority, Urban Land Ceilings, Hyderabad and Anr: v. P.S. Rao - (2000) 2 SCC 451 where the Supreme Court has at paragraphs 7 - 9 and 11 inter alia held that: a. The definition of the words "to hold - in Section 2(1) is relevant at the time of computation of the ceiling area and at the stage of the preliminary determination of excess and final determination, under Sections 8 and 9 of the Act, the excess is to be determined on the basis of the land permitted by the Act to be held by a person; b. It is not possible to make any meaningful application for exemption under Section 20(1)(a) or (b) unless the exact quantum of excess is determined under Section 10 after following the various provisions of the Act relating to statutory deductions and mode of computation; and c. Section 20 application is maintainable even if filed after an order of vesting of excess land is passed under

24.11) From the aforesaid decision, it, inter alia, becomes clear that: a. The procedure for determination of excess land commenced under Section 8 and concludes under Section 10; b. An application for exemption under Section 20 can be filed even after an order under Section 10 is passed; c. Clearly therefore, even the passing of an order under Section 8(4) of the ULC Act does not defeat the right of the holder of the surplus vacant land to seek an exemption under Section 20.

24.12) He submitted that in view of the aforesaid evidence, and the clear provisions of the ULC Act, the Defendants' argument on readiness and willingness is thoroughly misconceived. It is submitted that the application for exemption under the ULC Act was first required to be made by the Defendant Trust before the Plaintiff could obtain the same. In fact, and as detailed herein below, the Defendant Trust did make such an application (admittedly at the behest and request of the Plaintiff) on 3rd October 2006.

NO TIMELINE PROVIDED FOR OBTAINING ULC NOC

25) Mr. Kadam submitted that, DW-1 has, in relation to the timeline for obtaining the ULC NOC. deposed that [Ref: Para 14/ Vol 10 Pg.1769]: "14. The Plaintiff was required to obtain ULC clearance and/or the NOC, from the Competent Authority within a reasonable period of time...”

25.1) In cross-examination, DW- I was asked the following questions in relation to this deposition: Q.62. When drafting Clause 10 of the Invitation to Offer Document, why did the Trust not include a specific time frame for making the application to the ULC Authority and for obtaining ULC clearance? Ans. It was not possible and it was not being- done. Q.64. You have also said that it was "not possible" to indicate a specific time frame in Clause 10. Why was that so? Ans. There was no guarantee that the clearance of the ULC Authority will be received in a specified time. Q.65. [Shown paragraph 14 of the Affidavit of Evidence in Examination-in-chief of the witness and his attention is drawn to the first sentence and in particular the phrase "within a reasonable period of time".] Considering that the Charity Commissioner's approval was granted on 27th December 2002, what is your understanding of a "reasonable period of time" within which the ULC clearance was to be obtained? Ans. I think it should be maximum period of 2-3 years. Q.66. If you have this clear understanding of reasonable period of time within which the ULC clearance was to be obtained, why was this specific time limit of 2-3 years not included in Clause 10 of the Invitation to Offer? Ans. We were never mentioning this time limit as per our practice in the Offer Document. Q.67. You have not answered my previous question above. If you as a Manager of the Trust have a clear idea of the reasonable period of time being 2-3 years, why was this not incorporated in the Offer Document? Ans. This period varies in each case. The facts of the case are different. Q.68. [Witness's attention is drawn to the second sentence of paragraph 14 of the Affidavit of Evidence in Examination-inchief of the witness and in particular the phrase "as soon as possible".] Are you in a position to say specifically. how much time would constitute "as soon as possible" for obtaining ULC clearance? Ans. This is the maximum time I have mentioned earlier i.e. 2-3 years. [Ref: Pg.1799-1801/VoI X]

25.2) He contended that the above cross-examination demonstrates: a. DW-1 accepted that it was not possible to provide any fixed time for which ULC NOC could be obtained; b. the reasonable period of 2-3 years was the general belief of the trustees and act of DW-I himself DW-1 referred to identify these trustees.

25.3) He submitted that it is therefore clear that the Defendant Trust intentionally did not provide for any timeline in the Suit Agreements for obtaining ULC NOC because the trust was well aware of the fact that there was no guarantee that the clearance would be obtained within a specified time.

25.4) This is further evident from the fact that time has not been made the essence of the contract for the purposes of obtaining the ULC NOC under Clause 10 of the Suit Agreements. On the other hand, the Defendant Trust expressly made time of the essence for the payment of consideration under Clause 19 of the Offer Document. There is no grievance with regard to the payment of consideration being within time.

25.5) He submitted that it is in this context of facts, the conduct of the parties, and the evidence adduced the Learned Single Judge rightly held at paragraph 11 of the Impugned Judgement as follows: "....In the present case, what we are concerned with is, whether or not the particular term, namely, clause 10, is a 'promissory' condition, that is to say, its breach would entitle the innocent party to be discharged or released from further performance of the contract. Whether a particular term is such a promissory' condition must depend upon the intention of the parties to be gathered, in each particular case, from the terms of the agreement itself, and from the subject matter to which it relates. In our case, as noted above, clause 10, rather than entitling the Defendants to treat the contract as discharged for want of permission from the ULC authorities, simply allowed the Defendants to withhold the conveyance on the ground that it cannot be executed in the absence of a ULC permission. There is clearly no time limit for performance of the purchaser's obligation of obtaining the ULC permission. As noted above, a there is a good reason for not providing such time limit. Payment of consideration to the vendors is not dependent upon or subject to the ULC permission. So long as the permission does not come through, the purchaser does not get his conveyance, since for want of such permission the conveyance is not possible under the ULC Act, but it has no other consequence as far as the vendors are concerned. In other words, non-fulfillment of the promise contained in Clause 10 does not have any consequence for the vendors. It only has a consequence for the purchaser If that is so, breach of that promise cannot entitle the vendors to treat the contract as discharged or to be released from all further performance of the contract. The intention of the parties, as can be gathered from the terms of the contract and the subject matter to which it relates, is not to make clause 10 as a 'promissory' condition from the point of view of the Defendants vendors...” [Ref: Pg. 53/ Appeal Memo]

25.6) He submitted that the Defendants have failed to make out any case in appeal to justify interference with this finding in the Impugned Judgement.

THE OBLIGATIONS CONTAINED IN CLAUSE 10 ARE NOT IN THE NATURE OF RECIPROCAL PROMISES

26) Mr. Kadam next submitted that, the Appellant has sought to assail the Impugned Judgement, inter alia, on the ground that Clause 10 of the Suit Agreement comprises reciprocal obligations or promises such that the Defendant was obliged to execute a conveyance only after the Plaintiff fulfilled its obligation to obtain the NOC of the ULC Authorities.

26.1) This contention is evidently baseless because as held by the Learned Single Judge, Clause 10 does not contain any 'promissory condition'. The requirement to apply and obtain ULC clearance was not a promise made to the Defendant but a non-promissory condition required to be fulfilled for the conveyance to be executed as per the law prevailing at the time of the contract. Consequently, Section 52 of the Contract Act has no bearing or application in the facts of the present case.

26.2) He submitted that the decision in Nathulal v. Phoolchand — (1969) 3 SCC 120 relied on by the Defendants has no applicability in the facts of the present case where Clause 10 does not at all contain reciprocal obligations. In fact, the decision in that case was on account of the vendor being required to establish his title/ entitlement to the land so as to enable the vendor to convey the same. without hindrance, to the purchaser. It was on such clear title being established that the reciprocal promise to make payment of the balance consideration would arise. This decision is not an authority for the proposition that getting statutory clearances for a conveyance of property is a reciprocal promise to be performed prior to the promise of conveyance. This judgment, to the extent that it considers the aspect of reciprocal promises, only says that the vendor making out a clear title to the property is a reciprocal promise to be first performed before claiming balance consideration.

26.3) In any event and strictly without prejudice and only for the sake of argument, it is submitted that the Plaintiff on obtaining the clarification letter dated 4th October 2008 [Ref: P-69/ Pg. 1034 — 35/ Vol V] as forwarded to the Defendants on 7th October 2008 [Ref: P-43/ Pg. 778 — 9/ Vol IV] had duly performed any purported obligation to obtain the requisite clearance under the ULC Act so as to enable the Defendants to comply with their obligation to execute a conveyance in favour of the Plaintiff. The Defendants therefore could not have terminated the Suit Agreements for any failure of Clause 10 after the Plaintiffs had duly complied with this purported obligation.

PLAINTIFF ACTIVELY PURSUED THE SUIT AGREEMENT AND ACTED IN

FURTHERANCE THEREOF IN MULTIPLE WAYS INCLUDING BY PURSUING ITS OBLIGATION TO OBTAIN THE ULC NOC:

27) Mr. Kadam submitted that, in performance of the Plaintiff's obligations under the Suit Agreement, the Plaintiff has: a. Paid full consideration to the Defendants by November 2003; b. Incurred significant expenditure towards guarding the Suit Properties by appointing security guards and constructing a wall; c. Carried on improvement works on the Suit Properties, including training the nalla; d. Appointed consultants to ascertain the process for obtaining ULC clearance, including to ascertain whether the Plaintiff would be able to make the application in its own name; and e. calling upon the Defendant to make an application to the competent authority so as to enable the Plaintiff to obtain the requisite clearance.

27.1) He submitted that in regard to the appointment of the security personnel for guarding the Suit Properties, DW-1's cross evidence that the same was at the behest and under the aegis of the Plaintiff: Q.122. Prior to 2nd July 2003, is it not correct that the Trust had no dealing or interaction with Mr. Shyam Pandey, the Proprietor of Om Security Services? Ans. Yes. It is correct. Q.123. Prior to 2nd July 2003, did the Trust issue any public notice or advertisement indicating that it was looking to engage a security agency for protecting the suit property? Ans: No. [Ref: Pg.1815-1817/Vol X] Q.131. So therefore it is your case, that it is a matter of sheer coincidence that Mr Shivam Pandey lands up in your office and asks to be appointed as a security agent to guard the suit property just about the time when Mr Lulla told you that he had discussions with Mr Batra for appointing security guards to protect the suit property. Is that correct ? Ans. It is not correct. Mr. Judha had told Mr. Lulla about Om Security's work of protecting the suit property. Accordingly, Mr. Lulla had told Mr. Judha to brine Shri. Pandey of Om Security. [Ref: Pg.1817/Vol X]

27.2) PW-1 was cross examined extensively on the obligation to obtain the ULC NOC. The relevant cross examination is as follows: Q.285. At the time of entering into the transaction, did you consult such expert, especially when the notice for acquisition was expected against the Defendants? Ans. Yes. I had consulted the expert. Q.286. Who was the person you had consulted? Ans. I had consulted Mr. Dinesh. Q.287. What is it that he informed you? Ans. He informed me that if the owner makes application then we can start the process. [Ref: pg.1361/ Vol VIII] Q.390. Can you explain why the said professionals could not obtain the permission of ULC Authorities within a reasonable time from the date of their appointment? Ans. Unless and until the Trust made the application even the professionals could not obtain the permission from the ULC Authorities within a reasonable time from the date of appointment. [Ref: pg.1390/ Vol VIII] Q.404. When according to you did the Plaintiff make the first application/request to the Defendants Trust to make application to the ULC Authorities? Ans. After making the full payment I had requested the Trust several times orally to make application and for the first time the Plaintiff made request in writing to the Trust in 25th May 2006 for making application or NOC of ULC. The Witness had checked the document at Exhibit 'P-31' and given the exact date i.e. 25th May 2006. [Ref: pg.1395/ Vol VIII] Q.407. When was the first time that Plaintiff requested the Defendants to make application to ULC Authorities? Ans. Immediately after the Plaintiff made full payment the Plaintiff requested several times to the Trust to make application for NOC to the ULC Authorities. (Ref: pg.1396/ Vol VIII] Q.408. How soon after the last payment was made do you remember having made a request to the Defendants to make the application for NOC to ULC Authorities? Ans. The last payment was in November 2003 and immediately thereafter the Plaintiff started requesting the Trust to make application for NOC to ULC Authorities. [Ref: pg.1396/ Vol VIII] Q.421. Under Clause 10 of the Terms of Offer when according to you was the obligation of the Plaintiff arise for obtaining NOC from ULC Authority? Ans. As per Clause 10 of the Terms of Offer the obligation of the Plaintiff, according to me would arise for obtaining NOC from ULC Authority, only after the Trust made an application and when the full payment was made and the permission of the Charity Commissioner was obtained. [Ref: p[2].1396/ Vol VIII] Q.437. In what manner where the Plaintiff actively pursuing obtaining ULC clearance from the time Plaintiff made full payment and prior to January 2006? Ans. The Consultant of the Plaintiff were following to find out whether there is any policy under which there is no need for no objection from the Owner. Q.438. Other than that did the Plaintiff do anything else towards obtaining ULC permission? Ans. The Plaintiff could not do anything else towards obtaining ULC permission till the time owner applied for permission front ULC. [ Ref: pg.1407/ Vol VIII] Q.442. Would I be correct in saying that the Plaintiff were not anxious to obtain clearance from ULC Authority to enable execution of conveyance? Ans. When the full payment was made by the Plaintiff they were interested in developing the property and therefore the Plaintiff was very much anxious to obtain clearance from the ULC Authority to enable execution of conveyance but the Trust were not makin,t; any application to ULC Authority. Witness volunteers and says that I have invested my entire life saving in the said property and therefore the Plaintiff was making all the efforts required to get the ULC permission. [Ref: pg.1408/ Vol VIII]

27.3) He submitted that a brief summary of the relevant correspondences, and material in respect of the improvement works carried on by the Plaintiff on the Suit Properties is as follows: Sr. No. Date and Reference Particulars

1. 02.07.2003 Ex.D-1 A letter addressed by PW-3 (Pandey) of Om Securities at the instance of the Plaintiff to the Defendants offering security for the Suit Properties.

2. 02.07.2003 Ex.D-2Vol VII/1165-1166 The Defendants vide its letter dated 2nd July 2003 addressed to PW-3 (Pandey) of Om Securities appointed his security services to guard the Suit Properties.

3. 20.10.2003 Ex. P-60 Letter by Mahavir Constructions, through its Proprietor, Hasmukh Doshi, recorded the terms on which Mahavir Constructions was appointed as Contractor by the Plaintiff for carrying out the construction of the retaining wall of nalla.

4. 15.11.2003 Ex-P-107 Ex-22 Letter of the Plaintiff to the Defendant for seeking permission to carry out work of nalla on the Suit Propeties. Letter by Defendant giving permission to the Plaintiff to carry out construction of the retaining wall of nalla

5. 17.11.2003 Ex.P-91 Letter addressed by the Plaintiff’s Architect (who was PW-4 and has stated in his affidavit of evidence at para 4-7/Pg 1710-1712-Vol X, that he was appointed by the Plaintiff) informing the Storm Water Drain Department of the Municipal Corporation that their client would be undertaking the work of construction of the retaining wall of the nalla.

6. 02.06.2004 Ex. P-61 Letter addressed by the Storm Water Drain Department of the Municipal Corporation to Vol IV/835 Plaintiff’s Architect.

7. 04.04.2005 Ex.P-27/VII/ Pg.366-367 Letter addressed by the Plaintiff to the Defendants, inter-alia, stating that the Plaintiff shall reimburse the cost incurred by the Defendants on security guards and that Mr. Shyamdhar Pandey of OM securities shall be the de facto agent of the Plaintiff, and the appointment of such security shall be at the risk of the Plaintiff.

8. 25.11.2005 Ex.P-63 Letter addressed by the Plaintiff to the Collector, Mumbai Suburban District requesting permission to carry out filing work.

9. 25.01.2006 Ex. P-29 The Plaintiff’s letter seeking the Defendant’s NOC for permission to be issued by the Collector for carrying out filing on the Suit Properties.

10. 22.03.2006 Ex. P-30 Letter addressed by the Defendant to the Collector, Mumbai Suburban District referring to the requirement that NOC of the Defendant who are the owners be obtained for carrying on filing on the Suit Properties.

11. 17.04.2006 Ex. P-64 Permission granted by the Collector for carrying on filing work on the Suit Properties to the Defendant through the Plaintiff on the conditions mentioned therein.

12. P-78, 80/Pg 1044, 1046 Vol V Various documents such as sketches of security cabins, digital images, etc., concerning the security arrangement made by the Plaintiff on the Suit Properties.

27.4) He submitted that the above evidence and documents additionally demonstrate that the Plaintiff was at all times affirming the contract, abiding by the same and acting in furtherance thereof.

27.5) He submitted that the Learned Single Judge has considered the above material and evidence, inter alia at paragraphs 17 and 18 of the Impugned Judgement, albeit in the context of deciding whether the Plaintiff was in possession of the Suit Premises.

BOTH PARTIES HAVE, BY THEIR POSITIVE ACTS, AFFIRMED THE SUIT AGREEMENT RIGHT UPTO TERMINATION AND THEREFORE ANY COMPLAINT OF NON-PERFORMANCE UNDER CLAUSE 10 IS, IN ANY EVENT IS IRRELEVANT AND AS AN AFTERTHOUGHT

28) Mr. Kadam next submitted that it is an admitted position that the Defendant had, at the request of the Plaintiff applied for ULC permission on 3rd October 2006 [Ref: Exh P-33 @Pg. 376-377/Vol Ill.] This was a clear, unequivocal and positive act by the Defendant affirming the Suit Agreement as continuing to bind the parties.

28.1) He submitted that without prejudice to the Plaintiff's arguments on the procedure to be followed under the ULC Act as set out above, even assuming strictly for the sake of argument that the Plaintiff had been unable to obtain the ULC NOC- within a “reasonable time" as contended by the Defendant, the fact of the matter is that the Defendant, by making the Application dated 3rd October 2006 seeking ULC clearance, at the request of the Plaintiff, and, going by the Defendant's own case, as a “concession" to the Plaintiff, has unequivocally affirmed the Suit Agreement.

28.2) DW- I has, in the course of cross-examination squarely admitted that the application made on 3rd October 2006 was at the request of the Plaintiff and was a concession to the Plaintiff. The relevant questions are as under: Q.91. If, according to you, Mr. Judha had assured you even in 2006 that ULC clearance would be obtained, why is it that the Defendants then made an application for the same clearance on 3rd October 2006 ? Ans. Since the Plaintiff could not obtain the ULC clearance till October 2006, he made a special request to make an application. to the ULC Authority for development of the land for IT purposes. This was a concession which is normally not being done by the Defendants' Trust. Q.92 What was this special request made by the Plaintiff to Defendants ? Ans. It was prior to 3rd October 2006. [Ref: pg1807/Vol X] Q.165. [Shown Clause 10 of the Terms and Conditions (Exhibit P-6) and also Exhibit P-33 being application dated 3rd' October 2006.] As the Defendants filed an application under Section 20 of the ULC Act (Exhibit P-33), did the Defendants expect the purchaser to obtain clearance under Section 20 of the ULC Act under Clause 10 of the terms and conditions? And: As 1 have stated earlier, normally, we do not make applications directly to the ULC Authority. This was a concession to the Plaintiff and this was also requested by the Plaintiff [Ref: pg.1826/ Vol X] Q.169. If you say that under Clause 10, you expected the purchaser to obtain permission/clearance/ no objection, apart from the exemption under Section 20, then why did the Trust make an application under Section 20 alone when it made the application referred at Exhibit P-33? Ans: ULC clearance was expected from the Plaintiff However, since he could not obtain the clearance, it was a special request made by him-to us to make application under Section 20. As I have said earlier. This was a concession in this case. (Ref: pg.1827/ Vol X)

28.3) He submitted that in these circumstances, any alleged or purported delay on the part of the Plaintiff in making an application or obtaining the ULC NOC under Clause 10 for the period between November 2003 and October 2006 becomes entirely irrelevant and redundant.

28.4) He submitted that the Learned Single Judge has, in the Impugned Judgement, appreciated the above evidence in the following terms: [Ref: Pg.55/Appeal Memo] "12.... There cannot be any requirement of time as being of essence for its performance. Besides, the Defendants themselves had actually applied for ULC clearance by their application dated 3 October 2006. If that so, surely the Defendants did not treat the contract as repudiated by the Plaintiff by any breach as of 3 October 2006. Having applied for ULC clearance on 3rd October 2006, the Defendants were required to await the clearance for some reasonable period and could not have treated any breach on the part of the Plaintiff as repudiatory breach,within such reasonable period..."

28.5) Mr. Kadam submitted that, the Defendants have failed to make out any case to dislodge the aforesaid finding in the present Appeal and have been unable to give any reason, even in the course of arguments of the present Appeal, to explain why the Defendant Trust made this application in the event that it considered the Plaintiff to be in breach of its obligations under Clause 10 of the Suit Agreement.

28.6) In fact, the Defendants continued to treat the Suit Agreement to be alive and binding on the parties even after 3" October 2006. The Defendants have confirmed their obligation to convey the Suit Properties to the Plaintiff right till the date of the Termination Notice issued on 25th November 2008.

28.7) This is evident from the following facts which transpired after the Application dated 3' October 2006 was filed by the Defendant:

(i) The Manager of the Defendant i.e. DW-1 (V. P. Shah) filed an Affidavit dated 5th October 2006 in PIL No.114 of 2006, inter-alia, stating as follows: “12. The formal execution of a conveyance in favour of Bastion Construction has not yet taken place, for want of permission from the competent authority under the Urban Land Ceiling Act, 1973.

13. Hence, although, the formal execution of the conveyance in favour of Bastion Construction remains to be executed for all real and practical purposes and intent Respondent No. 8 has transferred its rights in the plot to Bastion Construction.

14. Bastion-Construction is not developing the said plot as a developer engaged by Respondent No. 8, but in its own right..." [Ref. Exh. P-34 @Pg. 378-381/Vol II]

(ii) The Plaintiff addressed a letter dated 12th February 2008 requesting the Defendants to execute a conveyance of the Suit Properties in the Plaintiff's favour since the entire consideration for sale of the Suit Properties was paid, the Charity Commissioner's permission had been obtained, and in view of the Repeal Act being adopted by the State of Maharashtra. [Ref. Exh. P-67 * Pg.1026- 1030/ Vol V].

(iii) The Defendants addressed a letter dated 30th May 2008 to the Plaintiff (acknowledging receipt of letter dated 12th February 2008) whereunder the Defendants; inter alia, contended that the provisions of the ULC Act continue to apply to the Suit Properties and called upon the Plaintiff to obtain a confirmation in writing from the Competent Authority that the Defendants could execute the conveyance despite the Orders dated 31st October 2006 and 11th December 2006.[Ref. Ex. P-38 *Pg.708-710/ Vol IV]

28.8) In fact, even prior to the Application dated 31 October 2006 filed by the Defendant, the Plaintiff vide its letter dated 25th May, 2006 requested the Defendant to convey the portion of the Suit Property admeasuring 30,000 square meters, which was reserved for P.G. and were not covered by the ULC Act. [Ref. Ex. P-31 @Pg.374 / Vol III]. In response to the aforesaid letter, the Defendant simply asked for the DP remark to consider the same and did not allege breach of the Suit Agreement at all.

28.9) He submitted that from the above. it is evident that the Defendant in no manner ever contended/informed to the Plaintiff that the Suit Agreement has stood frustrated or any other ground for that matter which the Defendant seeks to agitate before this Hon'ble Court. In fact, it is evident that the Defendant consistently affirmed the Suit Agreement, including on-oath before this Hon'ble Court as well as in correspondence with the Plaintiff.

28.10) The effect of having made the Application dated 3rd October 2006, and these subsequent positive acts set out herein above, is that the Defendants could not treat any prior delay as ground for a repudiatory breach of the contract. Looked at from this perspective, the fact of the application being made negates the grounds of termination as contained in the Defendants' letter dated 25th November 2008 [Ref: Ex. P- 44, pg. 780-784/ Vol. IV]. The termination letter dated 25th November 2008, conspicuously fails to mention the fact that the Defendants made the application dated 3rd October 2006. Accordingly, the suit contract remained valid, subsisting and binding as between the Plaintiff and Defendants and was treated as such by the parties.

28.11) The following passage from Chitty on Contracts, as affirmed by the Hon'ble Supreme Court in the case of Ganga Retreat & Towers Ltd. and Anr.: v. State of Rajasthan and Ors. reported in (2003) 12 SCC 91 at para 30, is relevant in the present case: "Once an innocent party has elected to affirm the contract, and this has been communicated to the other party, then the choice becomes irrevocable. There is no need to establish reliance or detriment by the party in default. Thus the innocent party, having affirmed, cannot subsequently change his mind and rely on the breach to justify treating himself as discharged."

28.12) He submitted that the doctrine of affirmation is also explained by the UK Supreme Court of Judicature (Court of Appeal), in the case of Tele 2 International Card Company SA & Ors. v. Post Office Ltd. — [2009] EWCA Civ 9 holding, inter alia. That...where, with knowledge of the relevant facts, the party that has the right to terminate the contract acts in a manner which is consistent only with it having chosen one or other of two alternative and inconsistent courses of action open to it (i.e. to terminate or affirm the contract), then it will be held to have made its election accordingly. (Emphasis supplied)

28.13) In fact, the Learned Single Judge has made specific note of the above facts in paragraph 12 of the Impugned Judgement, in the following terms: "It is submitted by learned Counsel for the Defendants that even after 3rd October 2006, the Plaintiff did nothing for 14 months; the Plaintiff did not follow up with the ULC authorities. Learned Counsel relied on the cross-examination of the Plaintiffs witness (Cross of PW[1], Question/Answer No.1196) and submitted that even, after the Defendants' application, when orders were passed under Section 8(4) of the ULC Act on 31st October 2006 and 11th December 2006, the Plaintiff did not take any steps to set aside the orders; it was the Defendants who had to adopt proceedings to challenge the order by filing a Writ Petition (Writ Petition 6050 of 2008). The fact of the matter is that the Defendants had applied for ULC clearance on 3rd October 2006 and would have to await the result of the application at least for a reasonable period of lime. It has been brought out in the cross-examination of the Defendants' witness (DW 1, cross: questions 65 to 69) that a period of about 2-3 years would be a reasonable period within which ULC clearance could be expected. As it happens, within about 13-14 months of the Defendants' application, the ULC Act was repealed and it was no longer necessary to obtain a ULC clearance before executing conveyance of the property. Soon after the repeal, the Plaintiff (vide its letter dated 12 February 2008) demanded conveyance of the suit properties. On that day, the Defendants had certainly not treated any purported breach of clause 10 by the Plaintiff as a repudiator", breach. Thus, at the relevant time the Defendants were bound to honour the requisition for conveyance in favour of the Plaintiff and would not be entitled to determine the contract. The Plaintiff has followed up its demand for conveyance by forwarding a draft conveyance (letter dated 3 April 2008). In response, the Defendants communicated to the Plaintiff (letter dated 30th May 2008) that they could execute the conveyance only after the Plaintiff obtained a confirmation in writing from the Competent Authority that no permission was required for such conveyance. Accordingly, an order dated 4th October 2008 was obtained by the Plaintiff from the Competent Authority conveying it’s no objection to the transfer of the suit properties. This no objection was conveyed by the Plaintiff to the Defendants- (letter dated 7th October 2008); and it was only thereafter, when there was absolutely no impediment to the execution of the conveyance, that the Defendants purported to terminate the suit contract (letter dated 25th November 2008). On 25th November 2008, the Defendants clearly had no right to treat the suit contract as having been repudiated by the Plaintiff by a breach and terminate the same. The termination of 25th November 2008 is clearly illegal and not binding on the Plaintiff. [Ref: Para 12/ Pg. 54/ Appeal Memo]

28.14) He submitted that in the backdrop of this specific finding as well as the earlier findings set out herein above with regard to the interpretation of Clause 10, its purpose and effect, the Learned Single Judge has, at paragraph 15 of the Impugned Judgement, concluded the issue on readiness and willingness, by observing, inter alia, as follows: “ It is to be borne in mind that such readiness and willingness must be for performance of "the essential terms of the contract" which are to be performed by the plaintiff; and the averment and proof tendered must be for performance of the contract "according to its true construction". Now, it is an admitted position that the Plaintiff here has performed all its obligations other than the obligation to obtain the ULC permission under Clause 10. I have already held above that according to the true construction of the contract, the obligation to obtain ULC permission/ clearance under Clause 10 was not an 'essential term' in the sense of being a 'promissory condition', for the breach of which the Defendants would be entitled to terminate the suit agreement. The reasons for holding so equally apply to the determination as to whether or not the same is an essential term from the point of view of assessing the Plaintiffs readiness and willingness. The obligation to obtain ULC clearance was not a promissory condition; it was not subject to any time limit; its non-performance till 3rd December 2006 was at any rate not treated as a repudiatory breach by the Defendants; on 3rd October 2006, the Defendants applied for ULC clearance; and whilst this application was pending, the ULC Act was repealed, thereby doing away with the requirement of ULC clearance itself In the premises, the term is neither essential within the `meaning of Section 16(c) of the Specific Relief Act nor is the Plaintiff guilty of its nonperformance. It cannot be said that the Plaintiff was not ready or willing to perform any essential term of contract according to the true construction of the contract. The issue is answered in favour of the Plaintiff and against the Defendants. [Ref: Para 15/ Pg. 58 — 59/ Appeal Memo]

28.15) He submitted that the Wadias have sought to assail this finding on the singular basis / argument Learned Single Judge has wrongly held Clause 10 not to be an 'essential term' of the bargain despite both parties understanding this clause to be essential. This contention however entirely overlooks the context in which the Learned Single Judge holds Clause 10 to not be an 'essential term', i.e., firstly, in being a 'promissory condition' which would entitle the Defendants to terminate the contract: and secondly, within the meaning of Section 16(c) of the Specific Relief Act.

28.16) He submitted that the challenge by the Defendants to these findings is entirely misdirected in as much as it fails to appreciate the Learned Single Judge's reasons in the correct perspective and context in which the same were made.

REJOINDER OF MR SEERVAI

29) Mr. Seervai in rejoinder submitted as under:.

1. The Plaintiff has submitted that “both parties have, by their positive acts, affirmed the Suit agreement right upto termination and therefore any complaint of non-performance under Clause 10” is irrelevant.

2. First, and foremost, the Plaintiff’s contention with regard to “affirmation” is, as stated in the Plaintiff’s Note, based on the ratio of the judgments in Ganga Retreat & Towers v. State of Rajasthan, (2003) 12 SCC 91 and Tele[2] International Card Company SA v. Post Office Ltd., [2009] EWCA Civ 9. It is submitted that neither judgment supports the case of the Plaintiff if properly read as a whole, and not selectively as done by the Plaintiff, merely reading Paras 30, 45 and 47 of Ganga Retreat (supra). a. In Ganga Retreat (supra), the facts were as follows:

(i) the State of Rajasthan auctioned properties on the basis of certain terms and conditions, including as too FAR (i.e. FSI), with a represented FAR of 2.0 [Para 2];

(ii) Ganga Retreat was the successful bidder for the properties, and made payments for the same albeit with delay [Para 4]; (iii) Ganga Retreat then submitted plans for sanction to the Jaipur Municipal Corporation [Para 5]; (iv) the development control rules were amended, and the FAR was reduced from 2.0 to 1.75, and the land was subjected to the ULC Act [Para 6, 7]; (v) Ganga Retreat actually started construction on the basis of FAR 1.75, despite knowledge of the above [Para 45]. In these circumstances, Ganga Retreat was denied relief on the basis of “affirmation”, or, more accurately, election. What weighed with the Court was that by conduct, the fact that construction had taken place and the position was irreversible, and thus there was election by Ganga Retreat [Para 47]. None of the acts of alleged “affirmation” or “election” in the present case are of like nature, or even of similar nature – the alleged acts of “affirmation”, even if construed as the Plaintiff suggests, are in no way akin to the acts in Ganga Retreat (supra) – this is elaborated upon below. The reliance on the judgment is entirely misplaced and misconceived. b. In Tele[2] (supra), the facts were of a contract for sale of pre-paid phone cards [Para 5]. The alleged breach which led to the termination was a failure to provide a parent company guarantee, which Tele[2] failed to do for 1 year, during which however the contract remained alive [Para 7]. There was no dispute in that case that the parties continued to perform, which performance Post Office Limited continued to accept [Para 50]. It is in these circumstances that the Court applied the doctrine of election / affirmation, in Para 53. In the present case, there is no act that constitutes performance of the Suit Contract by the Plaintiff, which was accepted by the Defendant, that can be, or has been pointed to. The acts pointed by the Plaintiff to are not in the nature of performance of the contract by the Plaintiff which were accepted by the Defendant.

29.1) Additionally, the doctrine as enunciated in the above decisions is, in essence based on waiver and estoppel, and more particularly estoppel in pais [See HDIL v. MIAL, 2013 SCC OnLine Bom 1513, Paras 26-28]. Notably, this Hon’ble Court expressly distinguished the judgment in Tele[2] (supra) at Para 26. In the present case, it is inconceivable how the principle of waiver or estoppel or estoppel in pais can come into play, all being fundamentally equitable principles. The facts that form the basis of the alleged election / affirmation can never be the basis of a claim based on equity, as set out below.

29.2) The alleged acts of the Defendant which constitute such “affirmation” do not constitute the same: a. The Defendant’s application dated 03.10.2006 for sanction under Section 20 of the ULC Act was not an act of affirmation, but merely a concession to the Plaintiff; the obligation to obtain ULC sanction being the Plaintiff’s exclusively. The cross-examination of DW-1 in this regard [Q.91 in particular] makes it clear that this act by the Defendant was merely a concession. It is inconceivable how a concession, i.e. an act done by a party in good faith, though not obligated, can ever be an affirmation of a contract, or how the same can create any equity in favour of the opposite party, as is sought to be alleged. The relevant excerpts from the cross examination are as under67: DW-1, Mr. V. P. Shah: Q.91 If, according to you, Mr. Judha had assured you even in 2006 that ULC clearance would be obtained, why is it that the Defendants then made an application for the same clearance on 3rd October 2006? Ans. Since the Plaintiff could not obtain the ULC clearance till October 2006, he made a special request to make an application to the ULC Authority for development of the land for IT purposes. This was a concession which is normally not being done by the Defendants’ Trust. PW-1, Mr. Salim Judha: Q.696. I put it to you that at no point of time, the Defendants had dispensed with the requirement of the Plaintiff obtaining NOC from the ULC Authority. What do you want to say? Ans. It is true that till the time ULC Act was repealed, at no point of time the Defendants had dispensed with the

67 The reference to the transaction between the Trust at Valentine Properties Pvt. Ltd. is, strictly, not relevant to the issue of who could apply for the clearance under the ULC Act. The application by Valentine Properties Pvt. Ltd. was under Section 6 of the ULC Act, and not under Section 20 [See Vol. X @ 1858]. Section 6 is crucially and materially different, in that only the holder / person holding vacant land can invoke it, on its plain meaning; this is completely distinct from Section 20. The reference to the transaction with Valentine Properties Pvt. Ltd. on buttresses the point that the application dated 03.10.2006 was a concession to the Plaintiff, as no instance of the Trust actually applying was forthcoming. In any event, DW-1 Mr. Shah clarified this matter at Q.166 to 178. Rather than shaking Mr. Shah’s evidence, the facts pertaining to Valentine Properties Pvt. Ltd. only strengthens the same, and buttresses that under Section 20, the Plaintiff could have applied, and the Trust did so only as a concession. requirement of the Plaintiff obtaining NOC from the ULC Authority. b. Thus, apart from the conduct and understanding of the Defendant, the understanding of the Plaintiff, as evident from Q.696, shows that neither party considered the Defendant’s application dated 03.10.2006 for sanction under Section 20 of the ULC Act (at the behest of the Plaintiff) as constituting any alleged “affirmation”. The Plaintiff’s admission that the application dated 03.10.2006 was at the “behest” of the Plaintiff [Plaint, Para 24, Appeal Memo @ 120], is, in fact, an admission that the Plaintiff itself failed to apply, thereby demonstrating its lack of readiness and willingness. c. The reliance upon the Plaintiff’s payment for security services, nalla work, and filling carried out at the Suit Properties as acts of “affirmation” is contrary to the terms on which the Defendant permitted such acts: i. With regard to filling, the Defendant gave its permission on the basis of the Plaintiff’s letter dated 25.01.2006 [Exh. P-29, Vo. II @ 370], in which it was made clear that “We also confirm that this shall not mean or deemed to mean a transfer of the said land to us nor mean or deemed to mean that we are in possession of the said land nor shall we claim any equity on the ground of filing up the said land”. Further, filling is in no way performance of the Suit Contract accepted by the Defendant so as to constitute the basis of a claim for election. ii. Similarly, with regard to payment for security services and nalla work, the same was not done by the Plaintiff in compliance with any contractual obligation, and thus cannot form the basis of a claim of election by the Defendant. It is therefore thoroughly dishonest, disingenuous and iniquitous for the Plaintiff to allege that these acts constitute “affirmation”.

29.3) Whether or not the Defendant treated the Suit Contract as alive even after 03.10.2006, does not, and cannot, constitute “affirmation” by the Defendant such as to absolve the Plaintiff from its legal requirement of continuous readiness and willingness. In law, it was for the Plaintiff to establish and prove its readiness and willingness, which it has woefully failed to do [See Punjab Urban Planning & Development Authority vs. Shiv Saraswati Iron & Steel Re-Rolling Mills, (1998) 4 SCC 539, Para 10, where the Court held: “The plaintiff/Appellant must succeed or fail on his own case and cannot take advantage of weakness in the Defendant /Respondent’s case to get a decree.” (emphasis supplied)].

29.4) The correspondence exchanged between the parties in 2008, i.e. the letters dated 12.02.2008, 03.04.2008 and more particularly the Trust’s letter dated 30.05.2008, cannot constitute an act of “affirmation” or election, as by that date, the contract had already come to an end in view of the Section 8(4) Order, the Charity Commissioner’s sanction was no longer valid. Thus, this act by the Trust through its general manager [Mr. VP Shah], who is not skilled in law, cannot override the legal position that obtained as on that date. Additionally, without prejudice, the Trust merely stating that a confirmation letter may be obtained from the Competent Authority does not create an equity in favour of the Plaintiff – surely obtaining one single letter does not create any substantial equity in favour of a party so as to constitute estoppel in pais.

Act itself, and in its own name 30) The Plaintiff’s contention that “the ULC Act required the Appellant (i.e. the Holder”) to make applications thereunder”, and that only then could the Plaintiff “obtain” the ULC Clearance, is patently incorrect. Faced with the plain language of Clause 10, and the correspondence by the Plaintiff repeatedly affirming that it was the Plaintiff’s sole obligation to obtain ULC NOC/ clearance, the disingenuous submission distinguishing between applying for permission and obtaining it, was a belated afterthought post the termination of the contract. The contention flies in the face of Section 20 of the ULC Act, which provides as under:

20. Power to exempt.— (1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter— (a) where any person holds vacant land in excess of the ceiling limit and the State Government is satisfied, either on its own motion or otherwise, that, having regard to the location of such land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest so to do, that Government may, by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter; (b) where any person holds vacant land in excess of the ceiling limit and the State Government, either on its own motion or otherwise, is satisfied that the application of the provisions of this Chapter would cause undue hardship to such person, that Government may by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter: Provided that no order under this clause shall be made unless the reasons for doing so are recorded in writing. (2) If at any time the State Government is satisfied that any of the conditions subject to which any exemption under clause (a) or clause (b) of sub-section (1) is granted is not complied with by any person, it shall be competent for the State Government to withdraw, by order, such exemption after giving a reasonable opportunity to such person for making a representation against the proposed withdrawal and thereupon the provisions of this Chapter shall apply accordingly.

30.1) There is nothing in Section 20 to even remotely suggest that only the “holder” could apply thereunder. In fact, Section 20 is entirely to the contrary, and is a power that can be exercised suo motu by the State Government. This conclusively puts paid to the suggestion that only the “holder” could apply. Section 20 is an exemption provision and has nothing to do with who can apply for the exemption. The exemption can be given by Government “… on its own motion or otherwise…”, i.e. on the application of any person or entity, and not only the “holder”, as erroneously argued by the Plaintiff.

30.2) The reliance by the Plaintiff on the Urban Land (Ceiling and Regulation) Rules, 1976, is thoroughly misplaced and misleading. Form V @ Page 680, which was relied upon by the Plaintiff, is relatable to Rule 11. Rule 11, in turn, is relatable to Section 21 [and not Section 20]. Section 21, in terms, postulates a declaration by a person holding surplus vacant land that he will abide by the conditions set out in the Section. Form V @ Page 680 is clearly that very declaration, which in terms of the statute has to be made by the holder. This is not the same as the application for exemption under Section 20, which is what the present matter is concerned with.

30.3) In this context, the reliance upon the judgment in State Bank of India v. Special Secretary Land, 1995 Supp (4) SCC 30, Paras 5 and 7 is thoroughly misplaced. That decision was rendered in the context of Section 19 of the ULC Act and a claim made thereunder by SBI to be the “holder” of the land in question, and thus entitled to an exemption. The Supreme Court held that in the facts of that case, SBI as a trustee could not be said to be the “holder”, so as to claim the benefit under Section 19. Section 19, unlike section 20, specifically applies to a holder of land. The judgment has absolutely nothing to do with the facts of the present case and is therefore completely irrelevant.

31) The Plaintiff’s submission that the Section 8(4) Orders do not result in the Suit Contract coming to an end on the basis of the Plaintiff’s construction of the provisions of the ULC Act is incorrect and misdirected. First, the Section 8(4) Order dated 31.10.2006 [Vol. III @ 467 at 479] in the present case is in issue before the Court, and it is therefore this Order that must be considered. This Order directs as under: “In view of the above position the lands adm.1212844.[8] Sq. Mtrs. As shown in the accompanying statement is declared as surplus vacant land with the declarant Trust. Final statement u/s. 9 of the Act and notification u/s10(1) of the Act should be issued accordingly.” (emphasis supplied)

31.1) Thus, the Competent Authority has, in the Section 8(4) Order dated 31.10.2006 not only held that the Suit Properties are surplus vacant land, but that a final statement u/s. 9 of the Act, and a notification under Section 10(1) should be issued – i.e. the surplus vacant land should be acquired. Consequent thereon a final statement u/s. 9 was issued. Thus, steps towards acquisition were in fact initiated. It is submitted that not all Section 8(4) Orders are alike – the Order in the present case is clear in its terms, and recommends steps for acquisition, thus constituting refusal of exemption under Section 20.

31.2) That the Section 8(4) Order had drastic and serious effect is confirmed by the fact that the Defendant [for itself] filed Writ Petition NO. 6050 of 2008 [Vol. III] before this Hon’ble Court impugning the Section 8(4) Order [Prayer @ 438]. That Writ Petition proceeds on the basis inter alia that the Respondents therein would precipitate steps for execution of the Order dated 31.10.2006 [@ 427]. A Division Bench of this Hon’ble Court found merit in the Defendant’s contentions, and allowed the Writ Petition by Order dated 08.04.2009 [for a complete copy, See Defendant’s Convenience Compilation on ULC Permissions @ 145]. The Division Bench did not dispose of the Writ Petition on the basis that the same was academic, or that the Section 8(4) Order was, a nullity or meaningless or of no legal consequence absent further steps as is effectively contended by the Plaintiff at this stage. Thus, the Suit Contract having come to an end on such refusal, as explicitly stated in Clause 10 of the contract, the same could not stand revived by virtue of subsequent events [See N. L. Mehta v. New Era Fabrics, (2015) 9 SCC 755, Para 29; K. Narendra v. Riviera Apartment Pvt. Ltd., (1999) 5 SCC 77, Para 36, in which the Court held: “We do not think that the subsequent events can be pressed into service for so reviving the contract as to decree its specific performance.”]

31.3) In any event, in the present case, the question is the contractual covenant i.e. Clause 10, and not the provisions of the ULC Act in abstract or in vacuo. Under Clause 10, the moment the ULC exemption was refused or not forthcoming, the right to a conveyance ended, the Suit Contract having been frustrated. The consequence was that the contract came to an end. The Section 8(4) Order had that very effect, necessitating filing of an Appeal and thereafter a Writ Petition by the Defendant. The Plaintiff’s attempt to deflect the contractual issue of frustration by referring in abstract to the scheme of the Act and/or Section 8(4), and citing irrelevant judgments in that regard, is unavailing and misdirected. Significantly, there is no answer to the question of the contractual covenant i.e. Clause 10, and whether upon refusal of ULC permission the contract stood frustrated; and could not be revived by subsequent events.

31.4) The facts on the basis of which the Defendant submitted that the Suit Contract stood frustrated were pleaded in the Written Statement [Written Statement, Appeal Memo, Para c @ 278, Para e @ 279]. The argument was specifically canvassed before the Learned Single Judge [Vol. XII @ 2379 # 12], and was attempted to be met by the Plaintiff in Rejoinder submissions before the Learned Single Judge [Vol. X, Plaintiff’s Rejoinder Submissions, Para 12 @ 2413]. The Plaintiff was thus put to notice of the contention, which was squarely at issue based on the facts on record, and their legal effect and import.

31.5) It is therefore not open in Appeal, for the Plaintiff to argue that frustration was not pleaded, or that no issue was struck on it. Significantly, the Plaintiff did not object to the submission being made and argued before the learned single judge. Nor has the learned single judge refused to deal with this submission on any of these grounds. He has failed entirely to do so only because he has not dealt with the argument on the Section 8(4) Orders, and their effect.

31.6) Clause 10, and the Plaintiff’s disentitlement to a conveyance comes into effect the moment the permission under the ULC Act is either “not forthcoming” or “is refused”. Whilst the expression “refused” is, fairly, susceptible to two interpretations; one being a first refusal, and the other being a final refusal after exhaustion of all appellate remedies, in the present case, it is submitted that this is immaterial. The reality of the facts of the present case are that the permission was refused, and was never obtained, before which the ULC Act was repeated; thus, the facts that obtain the present matter are of refusal, without further caveat.

32) In Sainath Mandir Trust v. Vijaya, (2011) 1 SCC 623, the partyplaintiff who was non-suited on the basis of Section 50 of the Public Trusts Act was the private party [Respondent before the Supreme Court] who had filed the Suit against the public trust for title to and possession of the suit property [Para 4]. In this fact situation, which is akin to the present case, the plaintiff was non-suited on the basis of Section 50. Thus, the interpretation of Section 50 and the provisions of the Public Trusts Act canvassed by the Plaintiff flies in the face of the ratio of this judgment, and therefore ought to be rejected.

32.1) The Plaintiff has not contended that the judgment in Sainath Mandir (supra) is per incuriam; the judgment therefore binds this Hon’ble Court. Thus, the Plaintiff errs in relying upon the judgment in Vinayak Dev v. Shivram, (2005) 6 SCC 641, which is of a co-equal strength (2 Learned Judges) to Sainath Mandir (supra), when Sainath Mandir (supra) directly considers the provisions of Section 50, and renders a conclusive finding and interpretation thereof; Vinayak Dev (supra) is thus inapplicable to the facts of the present case. Further, decisions have held that when there are conflicting decisions of benches of co-equal strength, the later decision [in this case Sainath Mandir (supra)] ought to be preferred.

32.2) Further, having itself sought reliefs in respect of possession in the Suit, it is not open to the Plaintiff to contend, that too at this belated stage, that “in a suit for specific performance, the question of possession is really not germane to the main controversy and delivery of possession are inherent and ancillary to the relief of specific performance”. Having itself put the question of possession at issue, and sought reliefs in that regard, the Plaintiff cannot fall back on a contention the aforementioned contentions only to escape the consequences of Section 50 of the Public Trusts Act.

32.3) The reliance upon this Hon’ble Court’s Order dated 20.12.2024 passed in Chamber Summons No. 151 of 2018 is also misplaced. The said Order was passed at an incipient stage, when this Hon’ble Court had not heard the Appeal finally, or considered the evidence and the law in its fullness. Observations in interlocutory orders, such as the Order dated 20.12.2024, are not binding on the Court at the final hearing of the proceeding.

32.4) Most importantly, however, the Plaintiff has studiedly and conspicuously omitted to even attempt to address the evidence, including the correspondence addressed by it that makes it beyond any doubt that the Plaintiff was never in possession of the Suit Properties. This includes: a. The Offer Documents which make it clear that possession will be given only at the time of conveyance. b. The Charity Commissioner’s sanction dated 27.12.2002 which makes it clear that possession will only be given at the time of conveyance. c. The Trust’s letter dated 15.11.2003, wherein the Trust made it clear that possession was not parted with. d. The Plaintiff’s letter dated 04.04.2005, wherein the Plaintiff itself admitted that it is not in possession. e. The Plaintiff’s letter dated 25.01.2006, wherein the Plaintiff itself admitted that it is not in possession. f. The fact that no claim to being in possession was made till just prior to the termination of the Suit Contract.

32.5) Mr. Seervai submits that, rather than addressing the issue of possession, the Plaintiff has made a reference to a series of letters, not one of which speaks a whisper about possession of the Suit Properties. The Plaintiff has sought to place reliance upon irrelevant and immaterial evidence, rather than the evidence directly germane to the issue at hand.

33) He submitted that Mr. Shah’s Affidavit has clearly been read by the Learned Single Judge completely out of context. The said Affidavit, which is solely and exclusively relied upon to render an otherwise nonmaintainable Suit maintainable, does not, at any place, state that possession of the Suit Property has been handed over to the Plaintiff. No statement or averment regarding possession is made by Mr. Shah. Despite this, the said Affidavit is relied upon for that very purpose. This finding is not only erroneous, but is perverse. The Affidavit is filed in a Writ Petition alleging unauthorized cutting of mangroves at the Suit Property (See Vol. V @ 962). It is to defend the allegations made in that Writ Petition that Mr. Shah has filed the Affidavit. Even in the Affidavit, Mr. Shah has not whispered a word about possession.

34) It is not the Trust’s contention that the Charity Commissioner’s sanction was predicated upon the ULC Act clearance alone; there is no doubt that it was predicated upon numerous factors. However, what the record before the Learned Single Judge established is that the requirement of ULC clearance was a determinative factor in the transaction, as also in the sanction of the Charity Commissioner. It is for this reason that Clause 10 was specifically incorporated into the Suit Contract, i.e. keeping this critical factor in mind.

34.1) This is evident from inter alia (i) the Affidavits of Mr. Rajesh Batra, Trustee of the Trust, in support of the applications, which makes specific reference to the issue of ULC Clearance as a “negative factor”; (ii) Mr. Kirit Kapadia, the valuer whose report was submitted to the Charity Commissioner, also specifically kept the “need for ULC clearances” in mind when submitting his valuation report, on the basis of which the Charity Commissioner’s permission was obtained. As such, obtaining of the NOC under the ULC Act was not capable of being dispensed with.

34.2) Critically, both in the context of the sanction of the Charity Commissioner, as also on the question of discretion, the Appellant has failed to address the fact that in view of Section 20 of the ULC Act, conditions would have been imposed in the NOC/clearance that was to be obtained by the Plaintiff, which conditions would have attached to the Suit Properties. These conditions would have been in the public interest and would have been mandatory for the Plaintiff to comply with [see T. R. Thandur v. Union of India, (1996) 3 SCC 690, Para 11]. The Hon’ble Supreme Court has held one of these conditions that was imposed by the State of Maharashtra, viz providing dwelling units for weaker sections of society, is traceable to Article 21 [see Shantistar Builders v. Narayan Khimlal Totame, (1990) 1 SCC 520, Paras 11, 13].

34.3) Illustratively, some conditions that may have been imposed were: (i) construction of dwelling units for “weaker sections of society” – See Shantistar Builders v. Narayan Khimlal Totame, (1990) 1 SCC 520, Paras 6, (ii) surrender of FSI / constructed area to allottees nominated by Government – See Nargis Jal Haradhvala v. State of Maharashtra, (2015) 4 SCC 259, Paras 11, 13; (iii) the land be used for a specified purpose for example a newspaper industry – See State of A. P. v. V. Venkateswara Rao,

34.4) The Charity Commissioner, as a state functionary discharging a public duty and function, was aware of the conditions on which the clearance under Section 20 would be granted. The fact that such conditions [illustratively set out above] would have to be complied with by the purchaser [in this case the Plaintiff] would be a relevant criterion considered by the Charity Commissioner when deciding whether or not to grant sanction to the proposed transaction. That such conditions are in the public interest would also be a relevant consideration for the Charity Commissioner. Had the Charity Commissioner been aware that such conditions would not be imposed on the purchaser, the Charity Commissioner would [or at the very least may] never have granted sanction in the first place. 34.4.1) In our view, the reliance placed on T.R. Thandur (supra), Shantistar (supra), and Nargis Jal (supra) is entirely misplaced and contextually irrelevant. There is no occasion to examine the duties or awareness of the Charity Commissioner in relation to obtaining ULC permissions once the Defendants had received the entire consideration within the stipulated period. The Charity Commissioner’s consideration is relevant only as on the date of sanction and, at most, until the final payment is received by the Trust—not for events occurring thereafter.

35) As regards the exercise of discretion under Section 20, there is no gainsaying that it is not a rule of universal application that the rise in prices of urban immovable property is a ground to refuse to exercise discretion to order specific performance. The question of whether to exercise discretion or not is, inevitably, case-specific and fact specific.

35.1) In the present case, the astronomical price rise owing to the repeal of the ULC Act, and the centrality of the ULC clearance to the fixation of the price, coupled with the conditions under Section 20 that would have been imposed and the fact that the Plaintiff is a public charitable trust of repute are all material considerations that ought to weigh strongly against the exercise of discretion. None of the cases cited by the Plaintiff are in similar facts as the present case; and none have a fact situation where a buyer has failed to obtain ULC clearance, and thus benefited by a shocking windfall, at the cost of a Public Charitable Trust, that too without them being required to comply with the requirements of Section 20 conditions.

REASONS AND CONCLUSION:

36) Upon consideration of the pleadings, oral and documentary evidence, and the extensive submissions made on both sides, we hold that the learned Single Judge has correctly appreciated the legal and factual matrix. We endorse the analysis advanced by Mr. Ravi Kadam, learned Senior Counsel for the Respondent-Plaintiff, whose submissions, firmly rooted in legal authority and the record, materially assist this Court in resolving the dispute.

37) This appeal is manifestly an attempt to prolong litigation and deprive the Respondent of the benefit of a transaction voluntarily entered into, lawfully sanctioned, and substantially performed. The arguments presented are a brazen misdirection-while superficially logical, they are tailored to an entirely different factual matrix and bear no relevance to the present case.

38) We see no occasion to delve into the evidence, for the facts are straightforward and the documents relied upon are unambiguous and unequivocally reflect the true intent of the parties. The contentions now raised are craftily constructed, designed solely to muddy the waters and divert attention from the real issue at hand.

39) The case is simple. The suit property was sold by the Appellants on an “as is where is” basis, and the full consideration of 14 crores was ₹ received well before any conveyance was due. The Appellants’ subsequent refusal to execute conveyance rests on grounds that became irrelevant upon the repeal of the ULC Act.

40) The continued pendency of execution and the benefit of a stay Order dated 28th November 2016—now in effect for nearly eight years— has resulted in grave injustice to the Respondent. Bastion has been denied the fruits of a decree it secured over seven years ago, while the Appellants have suffered no prejudice.

41) We find that the contentions advanced by the Appellants, particularly as to the construction of Clause 10, readiness and willingness, the effect of the repeal of the ULC Act, and the Charity Commissioner’s sanction, are deliberately fragmented, akin to a fly’s vision, multiplying issues without merit and obscuring the real controversy.

42) The points that arise for our consideration in the present appeal are as follows: (a) Whether the Wadias were entitled to terminate the Contract, and if so, under which clause or ground; (b) Whether Clause 10 of the Contract constitutes an “essential” or “fundamental” term of the Contract, and whether the learned Judge correctly interpreted the its scope and effect;

(c) Whether non-compliance with Clause 10 would entitle the

(d) Whether the repeal of the ULC Act has any bearing on the sanction granted by the Charity Commissioner under Section 36 of the Maharashtra Public Trusts Act, 1950. (e) What is the effect of the order passed under Section 8(4) of the Urban Land Ceiling Act on the Contract; (f) Whether assertion of possession-based on permission to carry out work, or full payment of consideration- affects a claim for specific performance seeking possession to perfect title.

WHETHER THE WADIAS WERE ENTITLED TO TERMINATE THE CONTRACT, AND IF SO, UNDER WHICH CLAUSE OR GROUND?

43) In our view, the Wadias had no justifiable reason to terminate the agreement as they had already received the entire consideration of 14 ₹ crores for the suit property. Was the property sold under threat, coercion, or undue influence? The answer is a categorical “No.” The property was offered for sale and the Wadias obtained the requisite permission from the Charity Commissioner. The sale was effected on an “as is where is” basis.

43.1) As the record presently stands, the Wadias have terminated the contract. On what basis? Allegedly because Bastion failed to secure clearance from the competent authority under the ULC Act. Is this a valid ground under the contract for termination? In our view, emphatically not— especially since the Wadias have already received the entire consideration.

43.2) Was Bastion entitled to specific performance? Yes. Why? Because the learned Single Judge correctly held that, having received the entire consideration, the Wadias could not terminate the contract and forfeit the amount merely on grounds such as: i) Bastion did not take requisite steps; ii) Bastion was not ready and willing to comply with Clause 10; iii) Wadias took steps by filing petitions before the ULC authorities; iv) An order was passed under Section 8(4) of the ULC Act; or for any other reason. Once the Wadias had received the full consideration, neither in law nor in equity could they rescind the contract.

43.3) In this context, let us examine Clause 10. The clause requires Bastion to obtain permission from the ULC authorities “to enable the Conveyance to be made” by the Wadias, and further provides that the amount paid shall not be refundable in the event that such permission is not obtained or is refused.

43.5) The learned Single Judge's findings regarding Clause 10 of the agreement are reproduced below for ready reference. i. the Learned Single Judge has interpreted Clause 10 of the Contract to be of such nature that whether or not the permission under the ULC Act was obtained would have no bearing on the Contract as far as the Defendant is concerned. In terms, the Learned Single Judge held that: “Whether or not such permission, etc. came about, it would have no impact on the validity of the suit contract as for as the vendors were concerned”. ii. the Learned Singe Judge has further held that Clause 10 does not entitle the Defendant to terminate the Contract. iii. the Learned Single Judge has further held that want of permission under the ULC Act is not a reason to terminate the Contract since neither the amount nor the manner of payment or consideration were dependent on such permission. iv. the Learned Single Judge has further held once payment is made, Clause 10 is only from the perspective of the Plaintiff, and not the Defendant. v. the Learned Single Judge held that once the restriction under the ULC Act goes away, in this case because of repeal of the ULC Act, Clause 10 cannot be said to prevent the Plaintiff from obtaining a conveyance. vi. In summation, the Learned Single Judge has held that: “… Once this restriction goes away, in this case because of the repeal of the ULC Act, Clause 10 cannot be said to prevent the purchaser from obtaining a conveyance. That appears to be the plain meaning and implication of the clause”.

43.6) In paragraph 11, the Learned Singe Judge observed: “i. Whether or not a particular term of a contract is essential or material is a “question of law”, and it is for the Court to construe the contract and hold a term to be essential or otherwise. The Learned Single Judge has held that Clause 10 not an essential or material term, because according to him it is not a “promissory condition”. ii. The Learned Single Judge went so far as to say that it does not matter what a witness says in this regard. In terms, the Learned Single Judge held that “The whole contract is before the Court and whether or not a particular term of it is essential or material, is a question of law. It is for this Court to construe the contract and hold a term to be essential or otherwise. It does not even matter if any witness of the Plaintiff (Bastion) says otherwise.” (emphasis supplied) iii. The Learned Single Judge held that rather that entitling the Defendant (Wadias) to treat the Contract as discharged for want of permission under the ULC Act, Clause 10 only allowed the Defendant (Wadias) to withhold the conveyance on the ground that it cannot be executed in the absence of ULC permission. iv. The Learned Single Judge held that the Contract is “enforceable by the vendors without reference to” permission under the ULC Act.”

43.7) Then in Paragraph 12: i. The Learned Single Judge held that the fact that the ULC permission was applied for on 03.10.2006 by the Defendant (Wadias), meant that the Defendant itself did not treat the Contract as repudiated as of that date at least. ii. He further held that having “applied for ULC clearance on 3 October 2006, the Defendants were required to await the clearance for some reasonable period and could not have treated any breach on the part of the Plaintiff as repudiatory breach within such reasonable period”. iii. Thereafter, the Learned Single Judge held that a reasonable time was required to be waited for the ULC permission to be granted, which DW-1 said would be 2-3 years.

43.8) Viewed from another perspective, Clause 1 of the suit Agreement explicitly stated that the suit lands were offered for sale on an “as is where is” basis.

43.9) Pertinently, Clause 7 specifically stated that, the sale was subject to the sanction of the Charity Commissioner. If such sanction was refused, the amount paid by the successful purchaser would be refunded without interest. Therefore, only in the event that the Charity Commissioner declined to sanction the sale would the transaction stand cancelled with refund without interest.

43.10) Clause 10 imposed the responsibility of obtaining all permissions, clearances, and no-objection certificates under the ULC Act on the purchaser. The learned Single Judge rightly observed that the Wadias were not obliged to execute the conveyance on failure to receive or its refusal.

43.11) In other words, if permission was refused, Bastion could not claim a refund, and the Wadias would be entitled to forfeit the entire consideration. Thus, a suit for specific performance for execution of conveyance in favour of Bastion or refund based on refusal of ULC permission would not be tenable against the Wadias. However, it is clear that the parties had not contemplated repeal of the ULC Act. Undoubtedly, had this possibility been foreseen, the consideration would have been substantially higher. The fear of acquisition under the ULC Act was a principal reason for the sale by the Wadias.

43.12) The entire thrust of the Appellants’ case before us hinges on Clause 10 of the Contract. In this regard, we accept the analysis offered by Mr. Kadam that Clause 10 was not a “promissory condition” the breach of which would entitle the vendors to treat the contract as repudiated. Rather, as Mr. Kadam emphasized, Clause 10 was a risk-shifting provision intended solely to absolve the Appellants of any liability in the event ULC permission was not forthcoming. The clause did not impose any reciprocal obligation, nor did it render the Agreement voidable at the instance of the Appellants.

43.13) We also agree with Mr. Kadam’s submission that, Clause 10 must be interpreted in its proper commercial context. The Agreement expressly contemplated that the purchaser would assume the risk of not obtaining ULC clearance. The full consideration was to be paid and was in fact paid, irrespective of whether such clearance was obtained. Once the statute requiring that clearance was repealed, Clause 10 ceased to have any operative significance. The Appellants could not thereafter rely on a clause that had become legally redundant to justify termination of the Agreement.

43.14) Mr. Kadam correctly pointed out that even after the ULC repeal, the Appellants continued to act in furtherance of the Agreement by demanding a no-objection from the competent authority and accepting communications from the Purchaser indicating readiness and willingness to proceed with conveyance. These facts, as Mr. Kadam submitted, constituted clear affirmation of the contract by the Appellants and undermine any purported grievance based on Bastion’s conduct.

43.15) The argument advanced on readiness and willingness also stands squarely answered by Mr. Kadam’s submission that Clause 10 imposed no time-bound or promissory obligation. As the learned Single Judge has observed and we affirm Clause 10 merely permitted the Appellants to withhold execution of conveyance until clearance was obtained; it did not create a right to terminate. Once that clearance became unnecessary in law, no further legal or equitable barrier remained to the conveyance.

43.16) Accordingly, the parties’ intention as evidenced by the clauses can be clearly discerned. We therefore concur with Mr. Kadam’s submissions. It follows that if clearance under the ULC Act was not granted, the Wadias could forfeit the consideration and deny conveyance, but Bastion could not compel execution of conveyance.

43.17) In our view, the non-grant of ULC clearance would, at most, have the effect of inordinately delaying the execution of the conveyance and, consequently, the Plaintiff’s right to develop the suit property.

43.18) However, a rejection by the ULC authorities could have resulted in the acquisition of the suit land, thereby frustrating the contract. In such an event, Bastion would have lost the entire consideration paid, without any remedy against the Wadias.

43.19) The object of Clause 10 was to secure the Wadias the full purchase price irrespective of whether ULC clearance was ultimately granted. In either scenario, the Wadias stood to benefit—not only by having received the entire consideration but also, in the event of acquisition, from any compensation awarded.

43.20) From the purchaser’s perspective, the transaction was effectively akin to a lottery, where all material risks, including the refusal of permission, were squarely borne by Bastion.

43.21) We, therefore, concur with the view of the learned Single Judge that, the grant or refusal of ULC permission had no bearing on the contractual rights of the Wadias. The contractual arrangement operated to their advantage inasmuch as, even after receiving the entire consideration, they could not be compelled to execute the conveyance in the absence of such permission.

43.22) We further agree with the learned Single Judge that, in clause 10 there was no reciprocal obligation on Bastion that would entitle Wadias to terminate the contract. It was a defence available to the Wadias who could deny Bastion the grant of conveyance for want of permission or on account of rejection in the event Bastion sued Wadias for specific performance. Thus, Bastion could not claim specific performance on the ground that Wadias had a reciprocal obligation to convey the suit property having received the entire consideration.

43.23) We hold that the Wadias were not entitled to terminate the Agreement. Having received the full consideration, their essential remaining obligation was to execute the conveyance. There existed no legal or contractual basis to justify termination, particularly after the repeal of the ULC Act. The transaction was neither coerced nor contingent upon any future event beyond the limited scope of Clause 10. Whether clause 10 of the Constract is an “Essential” or “Fundamental” term and whether the learned Single Judge Correctly Interpreted it ?

44) Clause 10’s alleged essentiality has been repeatedly emphasized by Mr. Seervai. However, we are unable to accept his contention that failure to obtain clearance under the ULC Act constituted a repudiatory breach that rendered the contract void or unenforceable. The requirement to obtain such permission, even if statutory, was not an “essential term” of the contract, especially when the Wadias had received the entire sale consideration. The learned Single Judge rightly held that Clause 10 neither made payment nor conveyance contingent upon obtaining such permission.

44.1) Clause 10 imposed the responsibility of obtaining ULC permission on the Purchaser and allowed the Vendors to withhold conveyance in its absence. However, it did not entitle the Vendors to terminate the Agreement. We adopt Mr. Kadam’s analysis that Clause 10 was a risk-shifting provision, crafted to shield the Vendors from the risk of non-clearance, without constituting a promissory condition.

44.2) The clause did not contemplate a mutual obligation or reciprocal promise, but rather protected the Vendors from a refund obligation. Once the ULC Act was repealed, the statutory requirement ceased, and Clause 10 became legally redundant. The Appellants' reliance on this clause post-repeal is misconceived.

44.3) The Agreement, construed as a whole, and Clause 10 in particular, must be interpreted in its commercial context. The learned Single Judge correctly held that non-fulfilment of Clause 10 had no bearing on the Vendors' obligations after repeal. We affirm this view.

44.4) Correctly interpreting the clause, the Single Judge held that Clause 10 merely offered the Wadias a defence against conveyance in the absence of ULC clearance, but only so long as the Act remained in force. Following the repeal of the ULC Act, the basis for that defence ceased to exist. Thus, the clause could not be treated as a fundamental term, the breach of which would justify termination.

44.5) The Wadias’ conduct appears opportunistic and dishonest. Having received full consideration and sold the property on an “as is where is” basis, they now attempt to renege on the agreement solely to profit from the repeal of the ULC Act. Their only avenue to do so was by invoking Clause 10 to terminate the contract—a step unsupported by the clause’s actual language or purpose.

44.6) With regard to the caselaw relied upon under these arguments our comments are stated herein above are summarised as under: a) The case of Nathulal (supra) is not an authority on either essential term or statutory requirement and therefore not applicable to this case. b) The reliance placed on Transmission Corporation is clearly misconstrued. The judgement is in favour of the Plaintiff because it holds that if the contract is capable of interpretation on its plain meaning with regard to the true intention of the parties it will not be prudent to read implied terms on the understanding of a party, or by the Court, with regard to business efficacy. c) The reliance on V R Sudhakara Rao and others (supra) as well as Nandkishore Mehta (supra) is entirely misplaced and argued out of context because obtaining ULC permission was a condition till such time that the ULC Act was in force but became redundant on repeal. Whether non-compliance with clause 10 entitled the Wadia’s to terminate the Contract?

45) We fully agree with the learned Single Judge’s finding that Clause 10 is neither an essential nor material term and does not amount to a “promissory condition.” Its non-compliance did not entitle the Wadias to terminate the contract. Clause 10 does not stipulate that ULC clearance was a precondition for either payment or conveyance. With full consideration having already been paid by Bastion, any failure in obtaining such clearance, if at all, would prejudice Bastion alone. The Wadias, having suffered no loss, cannot now use Clause 10 to justify repudiation.

45.1) Mr. Seervai’s argument that the ULC clearance remained mandatory even after repeal is equally untenable. The very foundation of the suit for specific performance rests on the repeal of the ULC Act, rendering any such requirement under Clause 10 redundant. The assumption that Clause 10 was an essential term even after the statutory repeal is unsustainable.

45.2) The reliance on Anson (Contract, 30th Ed., p.149), which defines a condition as a promise, does not assist the Appellants. There is no unfulfilled promise or false representation that would justify repudiation. Since the Act was repealed, Bastion had no remaining obligation to secure clearance, and the Wadias, having already received the entire consideration, cannot refuse to execute the conveyance.

45.3) The essence of the matter is this; the Wadias, having voluntarily accepted full consideration and agreed to sell the property on an “as is where is” basis, cannot now deny Bastion conveyance simply because the ULC Act was repealed and the property value has appreciated. The Charity Commissioner’s prior requirement of ULC clearance cannot override the binding terms of the contract or absolve the vendor of the obligation to complete the sale.

READINESS AND WILLINGNESS TO PERFORM:

46) The arguments advanced by the learned senior counsel are, with respect, devoid of substance and appear to have been raised merely for the sake of argument. The pivotal issue is; what prejudice, if any, would the Defendants—who have already received full consideration, suffer due to any alleged failure on the part of the Plaintiff to comply with Clause 10? We find no nexus between the consideration paid and the obligation to obtain ULC permission, insofar as the Vendors are concerned. The contract explicitly permitted the Vendors to withhold conveyance in the absence of permission, but did not oblige them to refund the consideration—nothing more and nothing less.

46.1) As rightly held by the learned Single Judge, Clause 10 became redundant upon the repeal of the ULC Act, especially in light of the fact that the entire consideration had already been paid. The arguments now sought to be introduced are irrelevant to the legal and factual matrix of this case. They are no more than a smokescreen—an attempt to divert the Court from the real issues through misdirection.

46.2) Mr. Seervai’s contention that Bastion was not "ready and willing" to perform the essential term of the contract, i.e., Clause 10, and alleged that the learned Single Judge failed to consider this aspect, we are unable to agree. In Paragraph 15 of the impugned judgment, the learned Single Judge specifically held that Clause 10 is not an essential term within the meaning of Section 16(c) of the Specific Relief Act, 1963. The Judge concluded that the Plaintiff could not be said to have failed to perform an essential term of the contract "according to its true construction."

46.3) To place the issue in proper perspective, Section 16(c) of the Specific Relief Act bars enforcement of specific performance where a plaintiff fails to prove that they have performed or have always been ready and willing to perform the essential terms of the contract, other than those prevented or waived by the defendant. The explanation clarifies that in contracts involving payment, actual tender or deposit is not required unless directed by the Court, and readiness must be assessed in light of the true construction of the contract.

46.4) In the present case, Section 16(c) is not attracted. The ULC Act stood repealed, and thus the obligation to obtain ULC permission ceased to exist. Notably, the Wadias never terminated the contract on the ground of non-compliance with Clause 10 at any time before the repeal.

46.5) Mr. Seervai’s argument is, in our view, a red herring. The learned Single Judge neither misread Clause 10 nor failed to address Bastion’s readiness and willingness. The clause imposed risk only on the purchaser; it did not create a basis for the vendor to repudiate the contract. If anything, Clause 10 would be relevant had Bastion sought a refund—not specific performance. It cannot now be used to justify repudiation, particularly when the entire consideration has been received by the vendor.

46.6) The learned Single Judge has dealt with these issues comprehensively in Paragraphs 11 to 15 of the judgment. We find no error warranting interference.

46.7) The Appellants’ argument that the Plaintiff failed to apply for clearance is specious. As correctly submitted by Mr. Kadam and affirmed by the learned Single Judge, Clause 10 imposed no time-bound obligation. The Plaintiff acted upon the Agreement, paid full consideration, secured security services, and requested the Vendor to make the necessary applications. Once the ULC Act was repealed, there remained no legal bar to conveyance.

46.8) The Appellants themselves applied for exemption in October 2006, thereby affirming the contract. Their conduct negates any assertion of repudiation by the Purchaser. The requirement under Section 16(c) of the Specific Relief Act stands satisfied. Whether the Repeal of the ULC Act has any bearing on the sanction granted by the Charity Commissioner under Section 36 of the Maharashtra Public Trusts Act, 1950?

47) The next issue pertains to whether the sanction granted by the Charity Commissioner under Section 36(1) of the Maharashtra Public Trusts Act, 1950, continues to be valid notwithstanding the repeal of the Urban Land (Ceiling and Regulation) Act, 1976 (“ULC Act”).

47.1) The allegation that the Charity Commissioner’s sanction stood vitiated on account of repeal of the ULC Act is also devoid of merit. Mr. Kadam rightly submitted that the repeal did not alter the parties’ obligations or the legal effect of the sanction. The Charity Commissioner granted approval to a sale that was fully performed financially by the Plaintiff and for which no condition precedent of re-sanction upon statutory repeal was stipulated.

47.2) The learned Single Judge addressed this issue in paragraph 13 of the impugned judgment and rightly rejected the contention that the sanction had become void. Specifically: a. He held that the sanction was not rendered invalid merely because Clause 10 of the contract, requiring ULC clearance, was approved as part of the sanctioned transaction. b. He clarified that the sanction was not “specifically premised” on the procurement of ULC permission but was generally subject to the applicable laws at the time. c. Since the law at that time required ULC clearance prior to conveyance, the obligation then existed. However, with the repeal of the ULC Act, the legal landscape changed, and such clearance was no longer necessary. Consequently, the general condition of complying with the applicable law stood satisfied by virtue of the repeal.

47.3) The learned Judge also considered the judgments cited by the Defendants on this issue in Paragraphs 24 to 28 and correctly distinguished them.

47.4) The reliance placed on the judgments in N D Constructions (supra) and Rizvi Builders (supra), T R Thandur (supra) Shantistar Builders (supra) are misplaced and of no assistance to the Defendants. In N D Construction’s (supra) case, the Charity Commissioner’s sanction was expressly conditional upon completion of the sale within a stipulated period of one year. In contrast, no such time-bound condition was imposed in the present case. Accordingly, the judgment has no application to the facts at hand.

47.5) We find no perversity in the learned Single Judge’s reasoning. The repeal of the ULC Act did not vitiate or invalidate the Charity Commissioner’s sanction. On the contrary, the sanction expressly obligated the Wadias to execute the conveyance and deliver possession upon receipt of permission, whether under then-existing laws or as modified thereafter. The approval was not based solely on Clause 10 or the ULC regime, but also on considerations such as the property’s encumbrances, competing claims, and fair market value.

47.6) A subsequent rise in property value or the repeal of the ULC Act, occurring years later, does not permit the Wadias to renege on their obligation. They had already received full consideration under a validly sanctioned transaction. Any benefit arising from a change in law accrues to the purchaser, not to the vendor who has already been paid in full.

47.7) The argument that the sanction was rendered void upon repeal of the ULC Act is devoid of merit. The sanction order required compliance with applicable laws at the time of execution. No clause mandated a fresh sanction if the ULC Act was repealed. The consideration had already been paid and accepted; the repeal of the ULC Act imposed no new condition and created no vitiating circumstance. What is the effect of the Order passed under Section 8(4) of the Urban Land Ceiling Act on the Contract?

48) We find no merit in the submission made by the learned senior counsel regarding the order passed under Section 8(4) of the ULC Act. Such an order cannot be construed as a final determination or “final rejection” by the ULC authority. Rather, it represents merely an initial procedural step in the acquisition process.

48.1) The learned Single Judge has adequately explained— particularly in paragraphs 20, 23, and 24 of the impugned judgment—that the ULC proceedings do not affect the validity or enforceability of the contract, especially since the Wadias have already received the full consideration. Their reliance on the 8(4) order is thus wholly misplaced.

48.2) The argument is entirely speculative and legally untenable. It ignores the statutory appellate and revisional remedies available under Sections 12, 13, and 33 of the ULC Act, as well as the revisional jurisdiction conferred upon the State Government under Section 34. In this context, treating the Section 8(4) order as conclusive is both premature and contrary to statutory design.

48.3) We also adopt Mr. Kadam’s analysis that, the purported Section 8(4) order passed under the ULC Act could not, in law or equity, constitute a ground for rescission. As he demonstrated, the said order—ultimately quashed by a competent authority on 8th April 2009—was, at best, an interim administrative step. It had no final or determinative bearing on the rights of the parties under the Agreement. Consequently, the contention that the learned Single Judge failed to consider or address the implications of the Section 8(4) Order is irrelevant and without consequence. This argument appears to be a diversionary tactic aimed at shifting focus from the substantive issues and misleading the Court. Whether Discretion to grant specific performance ought to be exercised under Section 20 of the Specific Refief Ac, 1963?

49) To consider this issue, Section 20 of the Specific Relief Act is extracted below: “20. Substituted performance of contract.—(1) Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach. (2) No substituted performance of contract under sub-section (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency: Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency. (3) Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach. (4) Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach.”

49.1) This Section is misapplied to the facts of this case. The plea is based on the false premise of non-performance of promise. As explained earlier, we find no non-performance of promise. Assuming for the sake of argument that there was non-performance the Wadias had not filed a suit for specific performance against Bastion. The plea of non-performance is raised only after the ULC Act was repealed.

49.2) It is significant that, at the Plaintiff’s instance, the Defendants applied on 3rd October 2006 to the Competent Authority under Section 20 of the ULC Act seeking exemption for the surplus land forming part of the suit properties. Additionally, in Writ Petition No. 114 of 2006 (filed by the WAMA Group), the Defendants confirmed by affidavit dated 5th October 2006 that although the conveyance had not yet been formally executed, for all practical purposes, Bastion had been transferred rights over the land and was developing it in its own right.

49.3) This is reinforced by the Defendants’ own admission that they had, in all material respects, transferred their rights in the suit properties to the Plaintiff, and that only formal execution of the conveyance was pending due to the need for ULC clearance, which was still applicable at the time.

49.4) Following repeal of the ULC Act by notification dated 6th December 2007 (effective 29th November 2007), Clause 10 of the Suit Agreement ceased to have effect. Consequently, the Defendants were bound to execute conveyance in the Plaintiff’s favour.

49.5) The Plaintiff called upon the Defendants to do so by letter dated 12th February 2008. In response, by letter dated 30th May 2008, the Defendants insisted on confirmation from the Competent Authority that conveyance could be executed without contravening the ULC Act.

49.6) To comply with this demand, the Plaintiff wrote on 5th August 2008 enclosing a copy of the Bombay High Court’s decision in Voltas, which held that surplus land not acquired prior to repeal would stand released. Thereafter, by order dated 4th October 2008, the Competent Authority confirmed that no action under Section 10(5) had been initiated and, as such, the suit properties were outside the ULC Act’s purview. The Authority expressly stated it had no objection to the transfer.

49.7) The Plaintiff forwarded a copy of this order to the Defendants on 7th October 2008, asserting that this satisfied the condition imposed in the Defendants’ 30th May 2008 letter, albeit without conceding that such approval was necessary in the first place.

49.8) Despite this, by letter dated 25th November 2008, the Defendants wrongfully refused to execute the conveyance, purported to terminate the agreement, and sought to forfeit the entire consideration of 14 crores. This repudiation was allegedly based on the Plaintiff’s failure to ₹ secure permission—despite the fact that the law had changed and the Plaintiff had fulfilled all obligations under the Agreement.

49.9) In our view, the Plaintiff remained ready and willing at all times to perform its obligations under the Suit Agreement and accordingly sought: i) Specific performance of the Agreement; ii) A declaration of lawful possession or, alternatively, entitlement to possession;

49.10) Further, as regards Section 20 of the Specific Relief Act, we are satisfied that the Appellants have not demonstrated any hardship that would justify denial of specific performance. As Mr. Kadam rightly pointed out, this is not a case where performance would be inequitable; rather, it is a case where denial would reward strategic delay and opportunism. The Appellants accepted the entire consideration at a time when the risks were fully known and voluntarily shifted to the Purchaser. To deny conveyance now, after repeal of the ULC Act and appreciation in market value, would be to confer an unjust enrichment on the Appellants.

49.11) In view of the above, the reliance on the judgment in K. Narendra (supra) to contend that severe hardship may constitute a ground for refusing specific performance is nothing but a disingenuous reversal of roles, driven by mala fide intent and self-interest. At the cost of repetition, it was the Plaintiff who willingly assumed the risks and obligations associated with the transaction by offering and paying a consideration higher than any other received by the Trust. Now, with property values having appreciated exponentially following the repeal of the ULC Act, the Defendants raise a plea of 'hardship.' One is left to wonder what conceivable hardship is being asserted in such circumstances.

49.12) The reliance placed on the judgment in Jayakantham v. Abhaykumar68 is wholly baseless and unwarranted, as the facts of that case are entirely distinguishable. In Jayakantham, the agreement to sell was found, on facts, to be a mere security for a loan advanced by the purchaser to the vendor. In contrast, the present case involves a voluntary sale transaction duly sanctioned by the Charity Commissioner. It would therefore be both mischievous and inequitable to draw any parallel or rely upon that judgment in the present context.

49.13) Similarly, the reliance placed on the judgment in Nanjappan v. Ramasamy & Anr.69 is misconstrued and factually distinguishable from the present case as discussed hereinbelow.

49.14) We therefore concur with the reasoning of the learned Single Judge and the submissions of Mr. Kadam. The Appellants’ conduct in seeking to resile from a fully concluded and substantially performed transaction is devoid of bona fides. The decree for specific performance is liable to be upheld. Whether the repeal of the ULC Act, renders the contract different?

50) In this context, in Paragraphs 19 to 29 the Learned Single Judge discussed judicial discretion and the impact of price escalation. He rightly held that while such escalation may sometimes justify denial of relief, this is not such a case. The judgments cited by the Defendant that astronomical rise in price of land in urban areas is judicially recognized, whilst considering cases of specific performance. The learned Single Judge noted that there may well be circumstances, where it may be inequitable to grant the relief of specific performance. The Learned Single Judge ultimately rejected Wadias’ contentions, and held that it was a fit case to exercise discretion on the basis that the Defendants got their full price under the ULC regime at the time when it was the best available price. The Learned Single Judge held “Correspondingly, the Plaintiff had paid a competent price, and a full price at that, in 2003. The conveyance could not be effected in its favour despite payment of the entire price only due to ULC restrictions and pendency of ULC clearance. Now that the ULC restrictions have been done away with, the conveyance must follow. No doubt, the doing away of the restrictions has dramatically changed the value of the land. But if anyone is lawfully entitled to this bonanza, it is the Plaintiff, who had fully paid a competent price in 2003 and was awaiting a conveyance on 27 November 2007, when the ULC Act was repealed.”

50.1) The Wadias argue that the repeal of the ULC Act, eliminated the need for permission, caused the value of the property to appreciate, and thus, changed the nature of the contract, disentitling Bastion from relief. [Appeal Memo / Written Statement / Para 46 @ 304].

50.2) While it is true that post -repeal, no permission is required to hold excess vacant land, it logically follows that the requirement under Clause 10 no longer survives. As Bastion complied with the remaining conditions – payment of full consideration and obtaining the sanction from the Charity Commissioner – they are entitled to a conveyance.

50.3) In view of the above, the reliance placed on the judgment in Naihati Jute Mills Ltd. v. Khyaliram Jagannath70 is similarly misplaced and inapplicable to the facts of the present case. There is no question of invoking Section 56 of the Indian Contract Act, as the contract in question 70 (1967) SCC OnLine SC 10 was neither impossible of performance nor unlawful. On the contrary, the obligation under the contract became both possible and lawful by reason of the repeal of the ULC Act. Whether claiming to be in possession based on permission to carry out work, or on account of the entire consideration being paid, affects a suit for specific performance seeking poseession to perfect title?

51) As regards the factual question of whether the Plaintiff was in possession of the Suit Property or not, the learned Single Judge addressed the same at Paragraphs 16 to 18 of the Impugned Judgment. The Learned Single Judge has noted that the Contract makes it clear that possession was to be given only at the time of execution of the Conveyance. The Learned Single Judge records that “Besides the extensive oral evidence, which has stood the test cross-examination, there is voluminous documentary evidence in support of the Plaintiff's case of being in physical possession of the suit properties. There is evidence in the form of …”. The Learned Single Judge has placed heavy reliance upon the Affidavit dated 05.10.2006 filed by the Defendant in Writ Petition No. 114 of 2006, holding that this Affidavit “effectively puts paid to the Defendants' contention that whatever the Plaintiff did with respect to the suit properties was under an express authority taken from the Defendants for the purpose and that such authority was required because the Plaintiff was not in possession or control of the suit properties. On the other hand, it supports the Plaintiff's case that these authorizations in favour of the Plaintiff were made at the Plaintiff's request, only because the various authorities required official communications from the formal owners, and that for all practical purposes the control over the suit properties was exercised by the Plaintiff. Thus, the possession issue needs to be answered in favour of the Plaintiff. The Plaintiff was put in effective control and possession of the suit properties and continues to be so ever since.”

51.1) We are unable to accept the sweeping assertion that the learned Single Judge’s findings on possession are ex facie perverse or arbitrary. The issue has been carefully examined in paragraphs 16 to 18 of the impugned judgment. A fundamental question arises; having received the entire purchase price, what legitimate basis did the Trust have to retain possession of the property? Particularly when Bastion had assumed all liabilities relating to the property, including its protection, it was only natural and necessary that they also took possession to safeguard their interest.

51.2) Once the Trust had received full consideration, its obligation to protect the property ceased. Beyond conferring juridical possession— enabling Bastion to perfect title through execution of conveyance—there was nothing further to deliver. The contention to the contrary is merely a smokescreen designed to mislead and distract the Court.

51.3) There is nothing in the prayers of the plaint, Clause 8 of the offer document, the Charity Commissioner’s sanction, the contemporaneous correspondence, or the findings of the Court that support the Defendants’ claim that the Trust remained in possession. What Mr. Seervai was required to establish, but failed to demonstrate, was that the Trust had a continuing obligation to maintain or protect the property. On the contrary, Bastion had taken over those responsibilities upon full payment.

51.4) In the above context, the reliance placed on the judgment in Padam Singhi (supra) is equally misplaced and contextually irrelevant.

51.5) Similarly, the reliance placed on the judgment in Nanjappan v. Ramasamy & Anr.71 is misconstrued and factually distinguishable from the present case. That case involved part payment of consideration, and accordingly, the issue of the plaintiff’s readiness and willingness to perform was directly in question. In contrast, in the present case, the entire consideration has already been paid. The Plaintiff was only required to obtain ULC permission as a procedural entitlement to execution of the conveyance. With the repeal of the ULC Act, that requirement ceased to exist, leaving no surviving obligation. Consequently, the question of readiness and willingness to perform, as contended, does not arise.

51.6) The prayers in the plaint clearly seek a declaration of lawful possession by the Plaintiff and, in legal terms, seek juridical possession, distinct from mere physical custody. This is consistent with the contract, the Charity Commissioner’s sanction, and the surrounding correspondence. The Defendants' denials on this point are perfunctory and lack substantive rebuttal. The learned Single Judge has carefully appreciated both oral and documentary evidence to arrive at a reasoned conclusion; that Bastion was in physical possession and effective control of the suit property. We find no error on facts and on law with this conclusion and fully concur with learned Single Judge in that behalf.

51.7) Bastion’s claim is therefore one for juridical possession, symbolically rooted in the fact of full payment. No further inquiry is required. Upon the grant of specific performance, the Wadias are obligated to formally record delivery of juridical possession, distinct from physical possession, as required under law.

51.8) The learned Single Judge has correctly held that the Plaintiff was in effective possession, having secured the land and undertaken works. The Trust had no residual obligation to protect the land after receiving full consideration. The Plaintiff’s possession is consistent with the prayers in the plaint and the overall scheme of the Agreement. Whether the Suit is not maintainable in view of Section 50 of the Maharashtra Public Trusts Act, 1950?

52) In Paragraphs 30 to 36, the learned Single Judge considered whether the suit was barred by Section 50. He concluded that this was a suit for private rights and not public trust interests, and hence not governed by Section 50—just as such claims are not covered under Section 92 of the CPC.

52.1) The reliance placed on the judgment in Sainath Mandir Trust v. Vijaya & Ors72. is misplaced and inapplicable to the facts of the present case. In Sainath Mandir, the plaintiff was not in possession and had instituted a suit against the Trust, which asserted possession over the suit property. In contrast, in the present case, the Trust has already sold the property to the Plaintiff after obtaining sanction from the Charity Commissioner, who directed the Trust to execute a conveyance upon receipt of consideration and the necessary permission from the ULC authorities. The payment has been made in full, and the ULC Act has since been repealed. Therefore, the question of seeking prior permission of the Charity Commissioner to sue the Trust for execution of conveyance and delivery of juridical possession simply does not arise.

FACTUAL ISSUES:

53) We have examined the evidence in detail and find that the Defendants have failed to disprove the Plaintiff’s physical possession of the suit property, either through documentary evidence or in the course of cross-examination. The legal possession and ownership may be undisputedly with the Defendants. We therefore concur with the finding of the learned Single Judge, who rightly identified the sole factual issue as that of possession, and addressed it in Paragraph 7 in the following terms:"

53.1) We agree with Mr. Kadam’s submission that the issue of possession is not central to the adjudication and is merely incidental to the principal relief of specific performance of the agreement, as contemplated under Section 55 of the Transfer of Property Act, 1882. In particular, Section 55(1)(f) of the Act clearly stipulates that the seller is bound to deliver possession of the immovable property to the buyer upon completion of the sale. We also concur with Mr. Kadam’s contention that the Learned Single Judge did not rely solely on the Affidavit dated 5th October 2006 but took into account several documents while recording a finding on possession, as is evident from paragraphs 16 to 18 of the impugned judgment. In our view, Bastion’s claim is one of juridical possession, symbolic and legal in nature, arising from full payment of the consideration. No further deliberation is necessary. Upon the decree of specific performance, the Wadias are bound to record delivery of juridical possession, which is distinct from physical possession.

CONCLUSION

54) We find that this appeal is a classic instance of luxury litigation initiated by the Wadias, aimed solely at frustrating and delaying the Plaintiff’s legitimate rights. Through calculated and prolonged obstruction, the Defendants have succeeded in depriving Bastion of the conveyance and juridical possession they are lawfully entitled to. In our considered view, this proceeding amounts to an elite form of extortion and is a manifest abuse of the process of law. Such misuse of judicial machinery must be deterred in the strongest terms.

55) The issues involved were, in fact, straightforward and ought to have been resolved without delay. Instead, the Defendants’ engaged in a strategy of manufactured complexity, raising illusory issues where none existed—all while having accepted the entire sale consideration. Their conduct was designed solely to obstruct the Plaintiff from enjoying the fruits of their investment.

56) Ordinarily, we would have imposed exemplary costs upon the Defendants, who richly deserve to pay the same to the Plaintiff. However, in order to avoid further controversy and delay, we exercise restraint and award only a symbolic nominal sum by way of costs.

57) The Appellants’ submissions are devoid of merit. Their conduct in repudiating a fully performed and legally enforceable agreement is dishonest, opportunistic, and stands condemned. In view of the foregoing, we are of the view that, the impugned judgment of the learned Single Judge does not require any interference in this Appeal. There is no error either in law or on facts committed by the learned Single Judge while passing the impugned Judgment.

58) We dismiss the Appeal with costs quantified at 1 lakh, payable to ₹ the Respondent, Bastion withnin aperiod of four weeks from the date of uploading of present Judgment on the official website of High Court of Bombay. (KAMAL KHATA, J.) (A.S. GADKARI, J.)

59) At this stage, learned Advocate appearing for the Appellants, prays that, the operation and implementation of the present Judgment be deferred for a period of eight weeks to enable the said Appellants to test the correctness of this Judgment before the Hon’ble Supreme Court.

59.1) However, taking into consideration the request of learned Adovcate for the Appellants, the operation and implementation of the present Order is stayed for a period of seven weeks from the date of uploading of present Judgment on the official website of High Court, Mumbai. (KAMAL KHATA, J.) (A.S. GADKARI, J.)