Sanghi Bros (Indore) Pvt. Ltd. v. Kamlendra Singh

14. It is submitted that the defendant even brought Mr. Arshad Rashid (PW – 3) to induce the plaintiff No. 2, for entering into an agreement to help the defendant, by way of incurring expenses for the security and maintenance of the Suit Property and that the same would be adjusted in the total consideration of Rs. 2.50 crores, during the final disposal of the said property i.e., after the grant of probate.

15. It is submitted that the cause of action for filing the present suit arose in favour of the plaintiffs on or about 15th April 2004. On the said date, the High Court of Madhya Pradesh issued a show cause notice to the plaintiff and in response to the said notice, the plaintiff filed its reply. The defendant in his reply to the response of the plaintiff had inter alia stated that he had rescinded the MOU and cancelled the Powers of Attorney executed in favour of the plaintiff.

16. It is submitted that the alleged rescission has never been communicated to the plaintiffs by the defendant. The plaintiff was executing all its obligations w.r.t to the Agreement.

17. It is contended that even if there was such a rescission, the same would itself give rise to a fresh cause of action in favour of the plaintiff for instituting a fresh suit for specific performance against the defendant. It is further submitted that the defendant had dishonestly sought to revoke the MOU and Powers of Attorney.

18. It is submitted that the plaintiffs never consented to the revocation of the MOU and the Powers of Attorney. There would be no cause of action in favour of the plaintiffs, if the defendant had not made a statement in his reply before the High Court of Madhya Pradesh, of having allegedly revoked the MOU.

19. It is submitted that there is no necessity for the plaintiffs to challenge the revocation of the said MOU and the Powers of Attorney, since as on the date of the instant Suit, there is no communication regarding the revocation or cancellation of the MOU and Powers of Attorney. It is further submitted that even after the suit was filed, there has never been any valid revocation or cancellation of the MOU and Powers of Attorney.

20. It is submitted that as per the Clause 20 of the MOU, the defendant has wrongly interpreted the term „reviewed‟ as „renewed‟. The said Clause has been reproduced herein: ―20. That the Agreement shall remain valid until it is cancelled by the parties or at the instance of either party giving three months‘ notice, provided however that the parties shall review the Agreement after every year.‖ The two words are not synonymous and impart a completely different meaning. Hence, the Agreement was to be reviewed by the parties every year, did not amount to renewal of the same.

21. It is submitted that the plaintiffs have always kept the defendant updated with regard to the proceedings in the probate matter before the High Court of Madhya Pradesh. The plaintiffs had always discussed the matter with the defendant and had „reviewed‟ the MOU on numerous occasions every year.

22. Learned senior counsel for the plaintiffs further submitted that they were never in the possession of the Suit Property. However, in furtherance of the conditions of the MOU, the plaintiffs had deployed security guards for securing the said property and hence, in this way the plaintiffs had spent considerable amount.

23. It is submitted that the defendant had requested the plaintiffs that since he is not able to upkeep the property due to his old age, the plaintiffs may do so on behalf of the defendant. It was only at the request of the defendant that the plaintiff entered into the MOU.

24. It is further submitted that the defendant had signed the said MOU without any coercion and it was a voluntarily signed the said MOU without any coercion on behalf of the plaintiffs.

25. It is submitted that all the contentions made by the defendant are fanciful stories which are subsequent thoughts and have been made on behalf of the defendant with the mala fide intention for not executing the MOU.

26. It is further submitted that the defendant has always been ready and willing to perform his part of the contract as per the MOU, however, it was only around March 2004, when the defendant filed his reply before the High Court of Madhya Pradesh and expressed its unwillingness in performing his obligations in accordance with the MOU.

27. It is submitted that the defendant has given no reasons whatsoever for the alleged misrepresentation and what was the alleged inducement on behalf of the plaintiff. Further, the defendant has failed to produce any material on record as to what was the alleged mischief on behalf of the plaintiffs which led the defendant to revoke the MOU.

28. It is submitted in regard to Clause 16 of the MOU, that the same may be read in original for its interpretation in true spirit and the context in which it has been written. It is further submitted that the provisions of Sections 31 and 32 of the Indian Contract Act, 1872, have no bearing on in the present Suit.

29. It is submitted that the MOU in the present suit is not affected by Sections 31 and 32 of the Indian Contract Act, 1872. It is submitted that law cannot enforce a contingent contract thereby, the said MOU is not void, and it confers right and title in favour of the plaintiffs.

30. It is further submitted that even a contingent contract can be subsequently enforced and there is no bar in law regarding the same. In the present facts, the MOU is not a contingent contract and even if it was assumed for the sake of arguments, that the contract in question was contingent, the defendant having admitted that the contract is contingent. must act on his own admission and at the very least, be restrained from alienating or otherwise creating any third party interests in the said property.

31. It is submitted that the plaintiffs have always been willing to bear all the liabilities of the Suit Property in respect of the said premises, be it in the nature of property taxes or any other expenses.

32. It is submitted that the various expenses which have been incurred by the plaintiffs in pursuance of their obligations under the MOU, has been reproduced in the Schedule A, which is annexed with the plaint and the same amounts to a total sum of Rs. 20,79,049/-. The said amount includes expenses under the head of maintenance, legal, consultancy fees, miscellaneous expenses etc.

33. It is submitted that the plaintiffs have been willing to undertake their obligations under the MOU and have always fulfilled all the duties and obligations under the said MOU, in order to effectuate the terms of the Agreement.

34. The plaintiffs, in pursuance of the MOU and the Powers of Attorney, incurred huge costs both on the litigations, and on the upkeep, and maintenance of the Suit Property. The plaintiffs had done inter alia the following acts in pursuance of the said MOU: a) The plaintiffs have diligently made all the necessary arrangements to pursue the defendant's Probate Case throughout the proceedings before the Madhya Pradesh High Court at least till 21st February 2003, at which time the defendant had engaged legal representation himself. The plaintiffs had made all the necessary arrangements for the defendant to be represented in various litigations. b) The plaintiffs had till the first week of March 2003, also made arrangements for the security of the Suit Property, inter alia, by arranging security through a security agency. The guards were also provided with mobile phones and the cost of the same was borne by the plaintiffs. c) The plaintiffs had also provided a supervisor for the security guards who would look after the upkeep and maintenance of the Suit Property. All the above said expenses were incurred by the plaintiffs. d) The plaintiffs paid a sum of Rs 10,000/-, per month to the defendant in the form of monthly allowance and as part payment of the consideration under the MOU. The said payments were made regularly since December 1998, till March 2001, amounting to Rs. 2,80,000/-. e) The plaintiffs also paid the defendant a sum of Rs 15,000/- per month as consultancy fees as provided in Clause 4 of the MOU. Such payments were made for the months of December 1998, till August 2000, amounting to Rs. 2,70,000/. f) The plaintiffs had made arrangements for representation on behalf of the defendant before the Municipal Corporation of Delhi (hereinafter “MCD”) in or about March 2001, and also in March 2002, inter alia, to the effect that the said property being in the control of the Madhya Pradesh High Court, and that any action that was being sought to be taken ought to be done only after obtaining the permission of the Madhya Pradesh High Court. g) The details of the various expenses paid and/or incurred by the plaintiffs in connection with the above arrangements are detailed in Schedule A annexed with the present plaint. The plaintiffs have paid and/or incurred expenses/costs etc. to the tune of nearly Rs. 20,79,049/- in pursuance of the MOU till 31st March 2004.

35. It is further submitted that the said Property is still a leasehold property and the plaintiffs are willing to undertake all steps and expenses in order to convert the same to a freehold property if the same is necessary for execution of the terms of the Agreement.

36. It is submitted that that the factual background and circumstances as narrated in the plaint demonstrates that the defendant has now sought to renege on his obligations under the said MOU and hence, the plaintiffs are entitled both in law and in equity to seek specific performance of the contract under the same.

37. It is submitted that the cause of action arose around 15th April 2004, when the defendant filed his reply in response to the plaintiffs‟ show-cause notice before the Madhya Pradesh High Court and which put the plaintiffs on notice that the performance of the obligations on part of the defendant has been being refused. Hence, the present suit is within time and filed in the proper jurisdiction as also because the Suit Property is located in New Delhi.

38. It is submitted that, in view of the arguments advanced by the plaintiffs, the plaintiff is entitled to the reliefs sought in the plaint and the instant Suit deserves decreed in favour of the plaintiffs. (On behalf of the defendant)

39. Per contra, learned senior counsel appearing on behalf of the defendant vehemently opposed the averments made by the learned senior counsel for the plaintiffs and submitted that the present Suit has been filed with the sole objective of harassing the defendants and to coerce them which they are not legally entitled to. The present Suit is nothing but an abuse of the process of law.

40. It is submitted that the defendant is the owner only to the extent of 55% of the share in the Suit Property as per the Will of 1984, and that the MOU and Powers of Attorney were executed on account of misrepresentation and inducement by the plaintiff.

41. It is submitted that the defendant had acquaintance with the plaintiff No. 2, who was the managing director of the plaintiff No. 1 Company. The plaintiff No. 1 had misrepresented certain facts with regard to the alleged threat to the Suit Property.

42. It is submitted that the plaintiffs induced the defendant to enter into the Agreement since the defendant is an old person and not in a position to look after the said Property. Therefore, in order to protect the said property, the defendant should enter into some arrangement with the plaintiffs as the plaintiffs have good connections in Delhi. Hence, the plaintiffs coerced the defendant to sign the MOU in regard to the said property.

43. It is submitted that due to the misrepresentation and inducement of the plaintiffs, the defendant had also executed General Power of Attorney and Special Power of Attorney dated 2nd December 1998 in favour of the plaintiff No. 2. However, upon being aware of the mischief of the plaintiff, the defendant decided to revoke and cancel the MOU, General Power of Attorney and Special Power of Attorney.

44. It is further submitted that the defendant signed the MOU at a time when the plaintiffs had an opportunity to prevail upon the will of the defendant. The defendant was in litigation for grant of a probate which had put him under great mental pressure and the plaintiffs took advantage of the said situation, and obtained the signature of the defendant under duress.

45. It is submitted that the MOU which was signed by the defendant was done in haste and the same is reflected from the fact that the MOU was never executed on any stamp paper.

46. It is further submitted that in terms of the MOU, the plaintiffs had agreed to protect, preserve, maintain, repair and renovate the said property from time to time. However, the plaintiffs failed miserably to abide by the terms and conditions enumerated in the said MOU. The plaintiffs violated the covenants of the MOU from the very outset and kept the defendant unaware about the developments in respect of the Suit Property.

47. It is submitted that the plaintiffs had agreed to pay the municipal taxes, electricity dues and other expenses in terms of the MOU. However, the plaintiffs committed breach by allowing the property to deteriorate with mala fide intentions, thereby, causing depreciation in the value of the Suit Property.

48. It is also submitted that the plaintiffs even failed to pay municipal taxes to the MCD and due to the said default on part of the plaintiffs to pay the municipal taxes, the MCD issued a notice for attachment of the said Property.

49. It is further submitted that the defendant had already communicated to the plaintiffs, way back in back in May 2003, that he had revoked the Powers of Attorney and the MOU.

50. It is submitted that the defendant in its reply which was filed before the Madhya Pradesh High Court had avverred that the said documents stands cancelled and withdrawn. However, the plaintiffs are threatening the defendant to act and further create a third party interest in respect of the Suit Property on the basis of the said documents.

51. It is submitted that the defendant never received a sum of Rs. 2,80,000/- as part payment of the consideration under the said MOU, as alleged by the plaintiffs. It is also submitted that the defendant only received a sum of Rs. 2,70,000/- from the plaintiffs. It is further submitted that the defendant had returned the said sum of Rs. 2,70,000/- by way of demand draft bearing No. 533247 dated 22nd June 2004, to the plaintiffs. However, the same was returned by the plaintiffs to the defendant. It is submitted that the defendant is still willing to refund the said amount of Rs. 2,70,000/-.

52. It is submitted that to avoid any technicalities, the defendant revoked and cancelled the Powers of Attorney vide a registered deed of revocation of General Power of Attorney and Special Power of Attorney dated 26th April

2004.

53. It is submitted that the revocation of Powers of Attorney is duly registered before the Sub-Registrar, Delhi and the defendant also published a public notice, thereto, in the English Daily 'The Hindu' on 1st July 2004. Furthermore, the defendant had also sent a legal notice to the plaintiffs reiterating that the said documents stands revoked.

54. It is submitted that as per the Clause 16 of the MOU, the said agreement is valid only if it is reviewed every year. However, the MOU was never reviewed after its execution, by the parties. Therefore, the MOU is deemed to have become invalid in terms of Clause 16 and parties thereto, are discharged from performing their obligations under the said MOU.

55. It is further submitted that the said MOU being void and revoked by the defendant, therefore, reliance cannot be placed on the same. The defendant does not have any transferable title with regard to the execution of the MOU. The said MOU, therefore, is a contingent contract under Sections 31 and 32 of the Indian Contract Act, 1872.

56. It is submitted that a contingent contract refers to the concept to do or not to do something if some event, collateral to such contract does or does not happen, cannot be enforced by the law. Therefore, the MOU being void, does not confer any right and title in favour of the plaintiffs in respect of the said property.

57. It is further submitted that the plaintiffs have themselves failed to abide by their obligations of maintaining and up keeping the suit property as provided under the contract which is evident from its deteriorated condition. Moreover, the plaintiffs failed to make the payment of the dues and taxes leading to further litigation before the MCD.

58. It is further submitted that the plaintiffs never pursued or defended litigations on behalf of the defendant and neither does the plaintiffs possess any right to defend the interest of the defendant in a Court of law. Since, the defendant himself had to defend his own interest, he incurred the legal expenses in defending and pursuing the cases before various Courts.

59. It is submitted that the plaintiffs having no right or interest in the said property are not entitled to the relief as sought by them. It is denied that the plaintiffs have incurred any expenses in pursuance to the said MOU. It is also denied that the plaintiffs are entitled for any interest amount as alleged.

60. It is submitted that there haven‟t been any transactions between the parties as the agreement was null and void. Furthermore, it is denied that any cause of action arose in favour of the plaintiffs around 15th April 2004, and in pursuance of the said averment, there is no cause of action accrues in favour of the plaintiffs to file instant Suit.

61. In view of the submissions made in the foregoing paragraphs, learned senior counsel for the defendant prays that the Suit being devoid of any merit is liable to be dismissed.

ISSUES

62. In the light of the aforesaid rival pleadings, following issues were framed by the learned predecessor bench of this Court (check) on 3rd September 2007. Further, vide an order dated 1st December 2012, the Division bench of this Court in FAO (OS) 175/2004, modified the issue NO. 6 to the extent that „GPA‟ word was included in it and the modified issue is also mentioned herein. The issues framed along-with the findings against each of them for the reasons to follow are reproduced below.

1. Whether the Plaintiff is entitled to specific performance of documents executed in his favour in respect of Property No. A- 9/29, Vasant Vihar, New Delhi? OPP

2. If the Plaintiff is not entitled for specific performance, whether the Plaintiff is entitled for a money decree for recovery of Rs. 20,79,049/-? OPP

3. Whether the Plaintiff is entitled for interest? If so, on what amount, at what rate and for what period? OPP

4. Whether the Plaintiff is ready and willing to perform his part of the agreement? OPP

5. Whether the Plaintiff is entitled for a decree of permanent injunction as claimed by the Plaintiff? OPP

6. Whether the MOU, GPA and SPA dated 2nd December 1998 were revoked by the Defendants? If so, to what effect? OPD

7. Relief?

ANALYSIS AND FINDINGS

63. The matter was heard at length with arguments advanced by the learned counsels on both sides. This Court has also perused the entire material on record. This Court has duly considered the factual scenario of the matter and judicial pronouncements relied upon by the parties

64. At this stage, it is necessary for this Court to understand the scope and powers of a Court in a suit for specific performance of a contract. In Man Kaur v. Hartar Singh Sangha, (2010) 10 SCC 512, the following was observed by the Hon‟ble Supreme Court:

65. It is evident from the reading of the aforementioned judgement passed by the Hon‟ble Supreme Court that the law relating to specific performance as engrafted in the Act is an extremely important facet of civil law. The Act inter alia covers most aspects pertaining to the performance of contracts including the relief of injunction. Specific performance is an equitable relief granted by the Court to enforce contractual obligations between the parties. It is a remedy in performance as opposed to a claim seeking merely damages for the breach of a contract where pecuniary compensation is granted as relief for the failure to carry out the terms of the contract.

66. It may be apposite to note the undisputed facts of the case. By way of the present suit, the plaintiffs seek inter alia specific performance against the defendant and a direction from this Court to the defendant to transfer/assign/sell to the plaintiffs, the Suit Property i.e., the land admeasuring about 1200 square yards and structures thereto, bearing No. A- 9/29, Vasant Vihar, New Delhi. Further, the plaintiffs have also made an alternative prayer seeking money amounting to Rs. 20,79,049/-, as a way of compensation.

67. It is the admitted case of the parties herein, that Late Shri Maharaja Surendra Sinh ji (the deceased older brother of the defendant) executed his last Will and testament dated 5th November 1984, which is marked as Exhibit P-7, wherein subject to certain bequests, the entire Suit Property was bequeathed in its entirety to the defendant. The said will was under challenge before the High Court of Madhya Pradesh in Probate Case bearing No. CS (OS) No. 1 of 1998. The said case was further adjudicated in the favour of the defendant vide judgment dated 7th May 2010.

68. In the interregnum of the said Probate Case, the plaintiffs and the defendant entered into an MOU which is marked as Exhibit P-1, where under the plaintiffs agreed to pay the expenses for protecting, preserving and maintaining the Suit Property. Pursuant to which, the defendant was unable to repay the expenses incurred by the plaintiffs towards protecting, preserving and maintaining the said Property, and it was agreed that the defendant shall assign and/or sell and/or dispose of all his interest in the Suit Property to which the defendant is entitled as the major beneficiary as per the Will of 1984, in favour of the plaintiff No. 1.

69. Along with the said MOU, the defendant also executed a General Power of Attorney dated 2nd December 1998, which is marked as Exhibit P- 2 and a Special Power of Attorney dated 2nd December 1998, which is marked as Exhibit P-3, in favour of the plaintiff No. 2. It is also noted that the Powers of Attorney in favour of plaintiff No. 2 were, however, neither registered nor stamped.

70. It has been contended before this Court by the defendant that the said Powers of Attorney and MOU have been terminated in May 2003, and the same was informed by the defendant to the High Court of Madhya Pradesh in the above said Probate Case.

71. This Court‟s attention is drawn to the fact that the cause of action for the present suit arose only when the revocation of the MOU came to the knowledge of the plaintiffs and hence, the present suit was filed. Further, the defendant executed a deed of revocation of MOU and the Powers of Attorney on 28th June 2004, and the said revocation has not been challenged before this Court.

72. On the basis of the pleadings and evidences on record, the issues framed will now be discussed.

ISSUE NO. 1 & 4 Issue No. 1 - Whether the Plaintiff is entitled to specific performance of documents executed in his favour in respect of Property No. A-9/29, Vasant Vihar, New Delhi? OPP Issue No. 4 - Whether the Plaintiff is ready and willing to perform his part of the agreement? OPP

73. The above said issues will be discussed together since both relate to the plaintiffs‟ entitlement in seeking performance on the part of the defendant and willingness of the plaintiffs w.r.t the performance on their part. Evidently, both the issues will determine the plaintiffs‟ locus and right to seek the reliefs.

74. Before delving into the discussion on the issues mentioned hereinabove, it is important to first comment on the objection raised by the defendant that the MOU executed by him in favour of the plaintiffs‟ is not a valid contract. This contention of the defendant is not accepted by this Court because it is explicit from the terms and conditions of the said Agreement that the parties were expressly intending to form a legally binding relationship, thereby, obligating themselves to perform their part of the contract. There is a clear intent on the part of the parties which is not in violation of the essentials mentioned under Section 10 of the Indian Contract Act, 1872.

75. Furthermore, the defendant has objected to the contention of the plaintiffs that the entire portion of the Suit Property is the subject matter of the instant Suit. The defendant has stated in his written statement that he is the owner to only 55% share of the property and not an absolute owner. The said contention of the defendant cannot be accepted as it is evident from the bare reading of the Will of 1984, that the defendant is the owner to the Suit Property and it is only the schedule of sale proceeds or the rental incomes out of the Suit Property that has been divided among various people is to be apportioned.

76. The next fundamental objection raised by the defendant is that the documents executed by him in favour of the plaintiffs are not valid due to the same being unstamped and unregistered. In this context,the Hon‟ble Supreme Court in the matter of S. Kaladevi v. V.R. Somasundaram, (2010) 5 SCC 401, and R. Hemalatha v. Kashthuri, 2023 SCC OnLine SC 381, has clarified the dispute by stating that an unregistered agreement to sell can be admitted as an evidence in a suit for specific performance. Therefore, applying the principle of equity, the instant Agreement is also taken as a valid instrument executed between the parties.

77. Moreover, upon reading the terms and conditions of the Agreement, the intention of the parties is clear that the Agreement belongs to the sale of the Suit Property. The execution of the same has not been denied by the defendant, though the defendant has pleaded coercion by the plaintiffs, to execute the MOU.

78. Now, adverting to the issues, the plaintiffs are seeking specific performance by pleading that they had performed and have also been ready, and willing to perform the essential terms of the MOU which are to be performed by them continuously from the duration of the date of the MOU till the date of institution of the present Suit.

79. In this regard, the legal position under Section 16 (c) of the Act is clear and explicit. Section 16 of the Act provides that specific performance of a contract cannot be enforced in favour of a person who would not be entitled to recover a compensation for its breach. According to Section 16(c), “readiness and willingness” on the part of the plaintiff is a condition precedent for obtaining relief of grant of specific performance. It also provides that a court may not grant the relief of specific performance to a plaintiff who has failed to aver and prove that he has performed or has always been ready and willing to perform his part of the agreement.

80. To adjudicate upon the issues mentioned hereinabove i.e., whether the plaintiffs are entitled for the relief of specific performance, this Court deems it fit to discuss the same by discussing the following: a. Plaintiffs‟ readiness and willingness. b. Defendant‟s readiness and willingness. c. Creation of third party interests. d. Any other factors, if any.

81. The abovementioned points of discussion are deliberated herein below. Plaintiffs’ readiness and willingness

82. The plaintiff since the signing of the MOU, was ready and willing to perform the terms and conditions as stipulated therein. The conduct of the plaintiff makes it categorically clear that the plaintiff had complied with the terms of the MOU and never breached any of his obligations. On a bare perusal of the Plaint and evidence on record it becomes clear that the plaintiff has always been ready and willing to perform his part of the contract. In this regard, plaintiff No. 2 (PW-1) categorically deposed in its evidence and the same is also evident from the examination of the defendant.

83. It is prevalent from the undisputed facts that the MOU and Power of Attorneys were duly signed by the defendant. A bare perusal of the said documents reveals that the parties entered into a valid agreement that stipulated terms and conditions, thereby, agreeing to perform certain duties, as agreed upon.

84. It remains trite that the relief of specific performance is not a remedy of common law but is essentially in equity. Therefore, as per the Act, even while providing for various factors and parameters for the specific performance of the contract, it also provides for scenarios where the contracts are not specifically enforceable.

85. On a bare reading of the scheme enumerated in the provision of Section 16 of the Act, and going through the intent of the enactment, it is evident that no such bars as prescribed as per the provision apply to the instant suit. At this juncture, it is only pertinent to discuss the scope of the provision as to when a party to a particular contract becomes entitled to enforce the contract before a court of law thereby seeking specific performance.

86. The Hon‟ble Supreme Court in Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd., (2023) 1 SCC 355, has recently reiterated the scope and principles that a Court needs to follow while deciding upon an issue of entitlement in the suit for specific performance. It was held by the Hon‟ble Supreme Court that the relief of specific performance of a contract can only be granted when the party claiming such relief shows its readiness and willingness to perform its obligations under the contract.

87. Therefore, this Court is of the view that to decide the entitlement of the plaintiffs, it is simultaneously necessary to decide the readiness and willingness of the plaintiffs.

88. This Court for the purpose of ascertaining readiness and willingness referred to Section 10 of the Specific Relief Act, 1963 which states as follows: “The specific performance of a contract shall be enforced by the court subject to the provisions contained in sub-section (2) of section 11, section 14 and section 16.”

89. Section 16 (c) of the Specific Relief Act, 1963 states that, ―Specific performance of a contract cannot be enforced in favour of a person- (c) [who fails to prove] that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.‖

90. According to Webster‟s III New International Dictionary, „being ready‟ means, ―prepared for something about to be done or experienced…. equipped or supplied with what is needed for some action or event……prepared in mind or disposition so as to be willing and not reluctant: not hesitant: inclined, disposed.‖ „Willing‟ means, ―to be inclined or favourable disposed in mind‖.

91. It has been mandated in C.L. Jain v Gopi Chand, AIR 1990 Del 280, that readiness and willingness to perform a contract has to be a “continuous readiness and willingness” to perform the contract on his part from the date of the contract to the time of the hearing..

92. In the matter of Gomathinayagam Pillai v. Palaniswami Nadar, (1967) 1 SCR 227, it has been held by the Hon‟ble Supreme Court that in a specific performance suit, the plaintiff is required to establish that he has been willing to perform the conditions obligated upon him under the contract since the date of entering into the contract till the date of instituting the suit. The same principle has also been recapitulated by the Hon‟ble Court in the judgment of N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao & Ors., (1995) 5 SCC 115. The Hon‟ble Supreme Court in the said judgment has held that in order to appreciate the plaintiff‟s readiness and willingness in performing his part of obligations and duties with regard to the contractual conditions, the plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him. The relevant paragraph is reproduced below: “5. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract.”

93. Furthermore, in Angliglase Yohannan v. Ramlatha, (2005) 7 SCC 534, it has been held by the Hon‟ble Supreme Court that relief in the nature of specific performance of the contract must be warranted to the plaintiff if the same is evident from the conduct of the plaintiff. In addition, it is also the conduct of the defendant that has to be considered. The grant of relief must not only be based upon the scrutiny of the plaint, written statement, or the examination in chief. The said principle of „Unblemished Conduct‟ was also upheld in Umabai v. Nilkanth Dhondiba Chavan, 2019 SCC OnLine SC 203.

94. Adverting to the instant suit, this Court has referred to the following documents and witnesses to decide the plaintiff‟s readiness and willingness. The same has been reproduced below: a. Mr. Sharad Sanghi (PW[1]) - The plaintiff No.2 (before substitution) in the present Plaint. He is a signatory to the Agreement dated 2nd December 1998, and the attorney holder for the General Power of Attorney and Special Power of Attorney dated 2nd December 1998. He has been deposed about the facts as pleaded in the Plaint. Further, PW1- was also cross-examined in respect of the balance sheet of plaintiff No. 1, in reference to the amounts paid and expenses incurred by plaintiffs in compliance with the MOU and where it is shown in the balance sheet. b. Mr. M.K. Pandit (PW[2]) – He was an accountant with the plaintiff No. 1 Company and has deposed regarding the financial expenditure/payments done in pursuance to the Agreement dated 2nd December 1998. c. Statement of expenses incurred by the plaintiffs on behalf of the defendant (EX PW 2/1 to PW 530). d. Letter dated 27th April 1999, addressed by M/s Dadachandji Co. to the plaintiffs – Regarding the development of Transfer Petition before Hon‟ble Supreme Court (DW-1/P[1]). e. Letter dated 20th July 2001 written by defendant to Mr. B.R. Nima, Chief Accountant of plaintiff no. 1 (DW-1/P[4]) - For stopping the payment till reconciliation of accounts. f. Letter dated 2nd September 2001 written by defendant to Mr. M.K Pandit, Accounts manager of plaintiff No. 1 (DW-1/P[5]) – Regarding the statement of expenses. g. Letter dated 3rd November 2001 written by Mr. Raveesh Bafna, a functionary of the plaintiff to the defendant (DW-1/P[6]) – Regarding the development of Probate matter. h. Letter dated 11th March 2003 written by Mr. Raveesh Bafna, General manager to the defendant (DW-1/P14) – Regarding the withdrawal of security due to appointment of receiver. i.Reply dated 17th February 2004 (DW-1/P16), reply by filed by plaintiff no. 2 before the Madhya Pradesh High Court on the show cause notice – Regarding the issue of Chowkidar named Ashok. j.Cross-examination dated 18th November 2017, of DW-1.

95. This Court is of the view that the plaintiffs have, to some extent, shown their readiness and willingness to perform their duty and obligations in accordance with the terms enumerated in the MOU. Following acts of the plaintiffs embark upon the willingness to perform: k. The plaintiffs had till the first week of March 2003, made arrangements for the security by appointing of three security guard of the Suit Property. l.The plaintiffs also paid the defendant a sum of Rs 15,000/- per month as consultancy fees for the duration of December 1998 till May 2000, amounting to Rs. 2,70,000/. m. The plaintiffs paid a sum of Rs 10,000/- per month to the defendant in the form of monthly allowance and as part payment of the consideration under the MOU. The said payments were made since December 1998, till March 2001. n. The plaintiffs have incurred the expenses on account of litigation charges.

96. This Court while perusing the records of the Suit as mentioned hereinabove is of the view that acts done on behalf of the plaintiffs in pursuance to the MOU, is sufficient to prove the readiness and willingness on its part. The cross-examination and documents exhibited before this Court can be considered to be the acts of plaintiffs to perform their part in pursuance of the MOU. Defendant’s readiness and willingness & Creation of third party interests.

97. At this stage, it is relevant to consider the developments that have been made during the pendency of this Suit. It is observed that vide several interim orders dated 31st January 2005, 22nd January 2008, and 27th April 2015, this Court had directed the defendant not to create any third-party interest in the Suit Property by granting a stay.

98. The said stay was made absolute vide order dated 22nd January 2008 by the predecessor Bench of this Court. But the defendant in gross violation of this Court‟s order has already sold the property to one Mr. RC Agarwal for a sum of Rs. 4.50 Crores, who is also a respondent in an interim application bearing I.A No. 820/2015 pending before this Court.

99. It has further come to light that the possession of the Suit Property has been taken by Mr. R.C Agarwal on 4th February 2011. Further, a Sale Deed dated 5th April 2010, was also executed by the defendant in favour of Mr. R.C Agarwal. The defendant has received the full and final sale consideration of the said original Sale Deed which has been placed in the custody of this Court vide the order dated 30th August 2012.

100. In view of the above-mentioned judgments, it is apparent that the view taken by the Court is applicable to the instant Suit. The MOU in the instant Suit was executed in the year 1998. Since then, almost 25 years have elapsed. The performance of the contract would involve considerable hardship on the parties. The same is being said considering that a third-party interest has been created to such an extent that the revocation of that contract would lead to an increase in hardships warranting unjustified litigations.

101. Even otherwise, according to the provisions of Section 12 of the Act, the general rule is that the Court should not direct specific performance of a part of the contract when the contract becomes either „wholly or partly incapable of performance‟. The specific performance of the part of a contract can be directed only where the part which is left unperformed bears a small portion to the whole in value. In the present case, the part which is to be left unperformed bears substantial part the whole house, therefore, under the circumstances of the instant case, this Court do not consider it appropriate to pass the decree as prayed, thereby, directing the performance of the MOU.

102. In view of the above discussion of facts and circumstances even if it is accepted that the plaintiffs had been ready and willing to perform their part of the contract, in view of the fact that a long time has elapsed, the portion of the property against which specific performance has been sought, cannot be granted. The law in this regard is settled. The readiness and willingness of both the parties to the Contract has to be continuous and there cannot be any gap in the said conduct, on behalf of either of both the parties. In the instant Suit, it is evident from the conduct of the defendant that there is no continuity in his readiness and willingness which is also supported by the developments that have occurred in regard to the Suit Property.

103. Although, the plaintiffs‟ conduct has been unblemished all along the way but the same cannot be said for the defendant. The conduct of the plaintiff since his statement made before the Madhya Pradesh High Court has been evidently showing his unacceptance towards the performance of his part of the obligations under the MOU. Further, the defendant executed the revocation of Power of Attorney deed dated 28th April 2004, thereby revoking the Special Power of Attorney and General Power of Attorney. Moreover, the defendant also published a public notice thereto, in the English Daily 'The Hindu' on 1st July 2004, in pursuance to the said revocation and also sent legal notice to the plaintiffs reiterating that the said documents stand revoked.

104. It is also apparent from the conduct of the defendant that even after the stay on the Suit Property was made absolute, the defendant still in blatant violation of this Court had created third party interests. Any other factors, if any

105. It is a settled law that the specific performance is not granted by the Courts due to the various hardships which may be caused to the opposite party in case the specific performance is granted.

106. Furthermore, in the cases concerning immovable property irrespective of the fact whether time is of the essence or not as per the terms of the contract, the Court may infer that it is to be performed in a reasonable time. Time is not an essence of the Contract, in case of immovable property evolved in times when the prices and values were stable and inflation was unknown, however, in the present days where the prices of the property increases in a multi-fold manner, this factor plays an important role.

107. The Hon‟ble Supreme Court in the judgment of Nanjappan v. Ramasamy, (2015) 14 SCC 341 citing the case of Saradamani Kandappan v. S. Rajalakshmi, [(2011) 12 SCC 18, has observed that though the decree for specific performance is discretionary, yet the court is not bound to grant such a relief merely because it is lawful to do so. The jurisdiction of decreeing specific performance is the discretion of the Court and it depends upon facts and circumstances of each case. The Court would take into consideration circumstances of each case, conduct of the parties, recitals in the sale agreement and the circumstances outside the contract have to be seen as well. Furthermore, the Hon‟ble Supreme Court held that the Court has to see the totality of the circumstances, conduct of the parties and their respective interests under the contract while granting/refusing such relief. The relevant paragraphs of Nanjappan (Supra) has been reproduced herein:

122. In the light of the aforementioned judgment and the provision mentioned above, it is a settled law that the grant of the remedy of specific performance is a discretionary one. The party claiming such specific relief may be entitled to such specific performance but the Court has the discretion not to grant such specific relief. Such discretion, though, must be exercised by the Court with cogent reasoning and not arbitrarily. Since, the Court has to look into not only the facts as on the date of the institution of suit but also the conduct and rights of the parties, The Court has to award such relief which balances the rights of various parties.

123. Section 21 of the Act enunciates the scenario when the Court can award compensation. Under Section 21(3) of the Act, it is stated that in the event, where the Court adjudicates that specific relief cannot be granted to the party claiming such relief, due to a breach of the contract by the other party, the Court may grant a compensation as it deems fit. As per Section 21 (5) of the Act, in a suit for specific performance, the plaintiff cannot be awarded compensation unless the plaintiff claims the same. The plaintiff can claim such compensation at any stage of the proceeding and the Court shall then allow such compensation to him. The relevant provisions have been reiterated below for reference:

124. The principle governing Section 21 of the Act has been reiterated by the Hon‟ble Supreme Court in the judgment of Shamsu Suhara Beevi v. G. Alex, (2004) 8 SCC 569, and the relevant observations are as follows:

125. As per the Section 20 and Section 21 of the Act, this Court is vested with the discretion to award compensation to the party aggrieved in lieu of the specific performance. The above said principle has also been enunciated in a catena of judgments which have been discussed herein below.

126. Further, this Court has recently reiterated the principle in the judgment of Universal Petro-Chemicals Ltd. v. B.P. PLC, (2022) 6 SCC 157, and the same has been reproduced below:

133. Under Section 73 of the Indian Contract Act, 1872, the damages are calculated on the basis of the remoteness and hence, the same will be granted to the extent of such damages which have been suffered by the plaintiff.

134. The above said principle has been discussed by the Hon‟ble Supreme Court in the judgment of Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647, the relevant of the same are paragraphs are as follows:

27. The measure of the compensation is by the standards of Section 73 of the Indian Contract Act. Here again the English rule in Bain v. Fothergill [(1874) LR 7 HL 158: 31 LT 387] that the purchaser, on breach of the contract, cannot recover for the loss of his bargain is not applicable. In Pollock & Mulla on Contract (10th edn.) the law on the matter is set out thus: (p. 663) ―Where, therefore, a purchaser of land claims damages for the loss of his bargain, the question to be decided is whether the damages alleged to have been caused to him ‗naturally arose in the usual course of things from such breach‘; and in an ordinary case it would be difficult to hold otherwise.‖

28. Learned authors adopt the following observations of Farran C.J. in Nagardas v. Ahmedkhan [(1895) 21 Bom 175]: ―The legislature has not prescribed a different measure of damages in the case of contracts dealing with land from that laid down in the case of contracts relating to commodities.‖

135. In view of the aforementioned judgment, it is a well- settled principle that the Court shall award only such damages which has been suffered by the party. The burden of proof in regard to the same, shall lie on the party which is claiming such damages.

136. This Court is of the view that the plaintiffs are entitled to the relief of compensation as prayed in prayer (ii) and therefore, the plaintiffs‟ damages have to be ascertained by following the principles enumerated under Section 73 of the Indian Contract Act, 1872.

PRINCIPLE REGARDING BURDEN OF PROOF FOR CLAIM OF DAMAGES

137. This Court, for deciding the quantum of compensation, shall now deal with the aspect of burden of proof which the plaintiffs must discharge for being entitled to the compensation sought in the plaint.

138. Section 102 of the Indian Evidence Act, 1872, has been reiterated below for the reference of this Court: ―102. On whom burden of proof lies. –– The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.‖

139. In light of the aforementioned provision, w.r.t. the burden of proof, it is enunciated that the said burden lies on the person who will suffer the consequences, in the event it is found that there is no evidence at all.

140. The principle of onus probandi is followed in deciding the burden of proof of the evidences. The general principle behind the said principle is that a party, who alleges the affirmative of any proposition, shall prove it. The onus of proof lies upon the party who seeks to support his case by a particular fact of which he is supposed to be cognizant. The burden of proof in civil cases is of preponderance of events, unlike the criminal cases, wherein, the burden of proof is based on the principle of proving beyond a reasonable doubt.

141. The Hon‟ble Supreme Court has dealt with the aforesaid principle in detail in the judgment of Mahesh Dattatray Thirthkar v. State of Maharashtra, (2009) 11 SCC 141, and has held as follows:

153. Accordingly, the Suit is partly decreed and hence, stands disposed of. Pending applications, if any, stand dismissed.

154. The registry is directed to prepare the decree sheet accordingly.

155. The judgment be uploaded on the website forthwith.

JUDGE SEPTEMBER 6, 2023 gs/ryp/db