Aperam Stainless Services And Solutions Precision Asa & Anr vs Jindal Saw Ltd & Anr

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment Reserved on : 15.04.2026
Judgment delivered on : 15.07.2026
Judgment uploaded on : 15.07.2026

+ RFA(OS)(COMM) 33/2019 & CM APPL. 34798/2019

APERAM STAINLESS SERVICES AND SOLUTIONS
PRECISION SAS & ANR .....Appellants

versus

JINDAL SAW LTD & ANR .....Respondents

Advocates who appeared in this case

For the Appellants : Mr. Jayant Bhushan, Sr. Adv. alongwith Ms.
Zeba Khair, Mr. Shashank Agarwal,
Amartya Bhushan, Advs.

For the Respondents : Mr. Ramakrishnan Viraraghavan, Sr. Adv.
with Mr. Dinesh Pardasani, Mr. Siddarth
Mehra, Ms. Pratiksha Dwivedi, Advs.

CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA

JUDGMENT

MANMEET PRITAM SINGH ARORA, J.

1. The present appeal is filed against the judgment dated 16.07.2019
passed by the learned Single Judge in CS (COMM) 1314/2016 [‘impugned
judgement’], whereby the suit for specific performance filed by Respondent
No.1/Jindal Saw Ltd was decreed through summary judgment under Order


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XIII A of the Code of Civil Procedure, 1908 [‘CPC’].
Aggrieved by the grant of specific performance without a full trial,
Appellant No.1/Aperam Stainless has preferred the present appeal
contending that several disputed questions of fact, particularly relating to
fraud, misrepresentation, valuation of shares and readiness and willingness
of the parties, required adjudication through oral evidence.
1.1.
By the impugned judgment, the learned Single Judge by exercising its
suo moto powers also decreed the connected suit filed by Appellant
No.2/Aperam Alloys Imphy SAS [‘Imphy’] for recovery of USD 450,000
towards goods supplied to the Respondent No.2/IUP Jindal Metals and
Alloys Ltd [‘IUP’]. Learned Single Judge was of the opinion that the decree
of specific performance in favour of Respondent No. 1 cannot be passed
without grant of the decree of payment of USD 450,000 against Respondent
No. 2/IUP. Though, no appeal has been filed against the said decree of
money, arguments have been addressed on the sustainability of the said
decree of USD 450,000 if the decree of specific performance is set aside.
We have considered this submission as well in this judgment.
FACTS
2. The facts stated in the appeal are as under: -
2.1 The dispute originates from a Joint Venture Agreement dated
12.08.2004 between Appellant No.1, a French company engaged in
precision stainless steel products, and Respondent No.1, pursuant to which a
joint venture company, Respondent No.2/IUP, was incorporated in India.
Initially, Appellant No.1 held 27% shareholding in Respondent No. 2/IUP,
which was subsequently reduced to 19.29%, while Respondent No.1 became


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the majority shareholder. According to the Appellant, serious differences
arose between the parties over the management and operation of the
Respondent No. 2/IUP, and Respondent No.1, by virtue of its majority
control, effectively excluded the Appellant from participation in the affairs
of the company and denied it access to financial and management
information.
2.2 In view of its exclusion from the management of the Respondent No.
2/IUP, Appellant No.1 sought to exit the venture and exercised its
contractual put option in 2009. However, Respondent No.1 did not act upon
the said request. Thereafter, Respondent No.1 repeatedly represented that
the Appellant’s shares in the Respondent No. 2/IUP had NIL value. The
Appellants disputed such assertions and alleged that Respondent No.1 had
failed to comply with the Joint Venture Agreement and the Articles of
Association by excluding it from board and shareholder meetings and
withholding information regarding the company's affairs.
2.3 The Appellant contends that, having been denied access to
Respondent No. 1’s financial information, it was compelled to rely upon the
representations made by Respondent No.1 during negotiations for its exit.
Pursuant to such negotiations, a valuation report dated 22.11.2013 prepared
by Chartered Accountant N.C. Aggarwal & Co., engaged by Respondent
No.1, valued Appellant No.1 ‘s shares at Rs. 1.20p per share. Relying upon
the said valuation, the parties entered into a Settlement Agreement dated
20.12.2013 [‘Settlement Agreement’], under which Appellant No.1 agreed
to transfer its shares in Respondent No. 2/IUP to Respondent No.1 for USD
50,000. The Settlement Agreement also separately provided for payment of


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USD 450,000 by Respondent No. 2/IUP to Appellant No. 2/Imphy towards
unpaid dues for goods supplied by Appellant No. 2/Imphy to Respondent
No. 2/IUP.
2.4 The Appellants assert that despite execution of the Settlement
Agreement and compliance with their obligations, Respondent No.1 and
Respondent No. 2/IUP repeatedly delayed completion of the transaction and
failed to perform their obligations for nearly three years. During this period,
the Appellants undertook a review of publicly available statutory records
and allegedly discovered that the valuation report dated 22.11.2023 had
grossly undervalued the Respondent No. 2/IUP company. According to the
Appellant, while the valuation report assessed the shares at Rs. 1.20p per
share, Respondent No.1’s own financial statements reflected the value of its
investment in the Respondent No. 2/IUP company at approximately Rs.
40.10p per share. On this basis, the Appellants alleges that Respondent No.1
deliberately misrepresented the value of the shares and fraudulently induced
it to enter into the Settlement Agreement at a substantially depressed
valuation.
2.5 Following further investigation, the Appellants concluded that the
Settlement Agreement had been procured by fraud and misrepresentation.
Consequently, by communications dated 13.09.2016, Appellant No.1
purported to avoid and terminate the Settlement Agreement insofar as it
related to the transfer of shares, while Appellant No.2/Imphy simultaneously
demanded payment of USD 450,000 due from the Respondent No. 2/IUP.
Shortly thereafter, Respondent No.1 instituted CS (COMM)
1314/2016 seeking specific performance of the Settlement Agreement,


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whereas Appellant No.2/Imphy instituted CS (COMM) 45/2017 seeking
recovery of the unpaid amount of USD 450,000.
3. Learned Single Judge vide impugned judgment decreed the suit for
specific performance of the Settlement Agreement dated 20.12.2023 sought
by the Respondent No.1 in CS (COMM) No. 1314/2016, directing Appellant
No.1 to, against receipt of consideration as mentioned in the said Settlement
Agreement, transfer the shares held by it in Respondent No.2/IUP in favour
of Respondent No.1 and to perform its other obligations under the said
Settlement Agreement.
4. It further, in exercise of its suo moto powers under Order XIIIA CPC
directed that Respondent No.2/IUP, under the said Settlement Agreement,
simultaneously with the amount of USD 50,000 towards the price of shares,
is also liable to pay the amount of USD 450,000 towards supply of material
for recovery of which amount CS (COMM) No. 45/2017 has been filed by
Appellant No.2/Imphy. It observed that there can be no decree for specific
performance of the said Settlement Agreement in favour of Respondent
No.1, without a decree being also passed in CS (COMM) No. 45/2017 in
favour of Appellant No.2/Imphy and against Respondent No.2/IUP, of
recovery of USD 450,000. It directed payment of interest pendente lite at
6% p.a. on the aforesaid amounts by Respondent No.1 and Respondent No.
2 respectively.
FINDINGS AND ANALYSIS
5. This Court has heard the learned counsel for the parties and perused
the record.


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6. Appellants have filed the aforesaid regular appeal seeking setting
aside of the impugned judgment and seeking a remand of the suit CS
(COMM) 1314/2016 for trial.
7. Appellant No.2/Imphy has not filed any appeal seeking setting aside
of the judgment passed in its favour in CS (COMM) No. 45/2017 directing
Respondent No.2/IUP to pay a sum of USD 450,000. This was also clarified
by the Appellants at the first hearing in this appeal on 02.08.2019, wherein it
was stated that the appeal is confined to the findings returned in CS
(COMM) 1314/2016. The relevant portion of the order dated 02.08.2019
reads as under:
“ RFA(OS)(COMM) 33/2019 & CM APPL. 34798/2019 (stay)
1. The appellant is aggrieved by the common judgment dated
16.07.2019 passed by the learned Single Judge in CS (COMM)
1314/16 filed by the respondent no. 1 (Jindal Saw Limited) against
the appellant no.1 (Aperam Stainless Services and Solutions
Precision SAS) and CS (COMM) 45/17 filed by the appellant no. 2
(Aperam Alloys IMPHY SAS) against the respondent no. 2 (IUP
Jindal Metal and Alloys Limited).

2. The present appeal is confined to the findings returned by the
learned Single Judge in CS (COMM) 1314/16 decreed in favour of
respondent no.1 by directing the appellant no. 1 herein to perform all
its obligations under the Settlement Agreement dated 20.12.2013,
particularly in respect of the transfer of shares of the respondent no.
2 held by the appellant no. 1, in favour of the respondent no. 1, on
the latter paying USD 50,000 with interest @6% per annum from
20.09.2016, till the date of the payment and against payment by the
respondent no. 2 to the appellant no. 2 of USD 450,000 with interest
@6% from 16.01.2017, till the date of payment.

3. We have heard the learned counsel for the parties, at the stage
of admission.

4. List on 14.11.2019, for admission.”



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8. On the hearing dated 15.04.2026, learned senior counsel appearing for
Respondent No.1 and Respondent No.2/IUP contended that since the
Appellants have not challenged the grant of money decree in CS (COMM)
45/2017, they cannot maintain a challenge to the grant of decree of specific
performance in CS (COMM) 1314/2016 as they both are intertwined and
find its basis in the Settlement Agreement, which is sought to be repudiated
by Appellant No.1 and Appellant No.2/Imphy in this appeal.
In reply, learned senior counsel for the Appellants stated that he
agrees that if the Appellants succeed in this appeal, the judgment has to be
set aside in its entirety and the decree of money granted in favour of the
Appellant No. 2/Imphy for USD 450,000 will also have to be set aside. He
states that the decree for money passed in CS (COMM) No. 45/2017 was
passed by the learned Single Judge on its own, as Appellant No.2/Imphy had
1
already withdrawn its application being I.A. No. 6764/2018 filed under
Order XIIIA CPC on 08.01.2019.
9. In these facts, we proceed to examine the merits of the challenge
raised by the Appellants to the impugned judgment for decree of specific
performance of the Settlement Agreement by the learned Single Judge in
exercise of its powers under Order XIIIA CPC, upon an application bearing
I.A. No. 6194/2018 filed by the Respondent No.1.
10. The Appellants have challenged the impugned judgment for a decree
of specific performance on the following grounds:
i. Respondent No. 1 had procured Appellant No. 1’s consent for

1
As recorded at paragraph nos. 29 to 38 of the impugned judgment


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the purchase price of USD 50,000 for transfer of its
shareholding [‘Aperam Shares’] in Respondent No.2/IUP by
fraud;
ii. Respondent No. 1 had itself failed to perform its obligations
under the Settlement Agreement in spite of requests and
reminders from Appellant No. 1;
iii. Respondent No. 1 was not ready and willing to perform its
obligations under the Settlement Agreement;
iv. The agreement to transfer Aperam Shares held by the Appellant
No.1 in Respondent No.2/IUP in terms of the Settlement
Agreement had been validly voided by Appellant No. 1.

ISSUE I: WHETHER THE PURCHASE PRICE OF USD 50,000 STOOD
VITIATED BY MISREPRESENTATION AND FRAUD

11. The oral submissions of the Appellants largely revolved around the
plea that Appellant No. 1’s consent for the purchase price of USD 50,000 for
Aperam Shares is vitiated by misrepresentation and fraud.
11.1 It is contended that the price of the Aperam Shares was actively
misrepresented and grossly undervalued by the Respondent No.1 with the
intent of deceiving the Appellant No.1 and inducing it to enter into the
Settlement Agreement, which amounted to fraud. It is contended that the
same is a triable issue and could not be decided summarily.
11.2 It is contended that allegations of fraud and misrepresentation go to
the very root of the contract and the same ought not to have been summarily


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dismissed without any opportunity to the Appellant No.1 to lead evidence to
prove its case, more so, when the Appellant No.1 sought to lead expert
evidence of an independent auditor in support of its case that the price for
the Aperam Shares was knowingly and falsely misrepresented by
Respondent No.1.

11.3 It is contended that the Settlement Agreement is voidable at the option
of the Appellant No.1 as it was arrived at without the free consent of the
Appellant No. 1 as regards the price of USD 50,000 for the Aperam Shares.
It is contended that all the ingredients of fraud have been pleaded by the
Appellant No. 1 in the written statement, and an opportunity ought to have
been afforded to the Appellant No.1 to prove the same through trial.
11.4 It is contended that the learned Single Judge failed to appreciate that
the exception to Section 19 of the Indian Contract Act, 1872 [‘Act of 1872’]
did not apply to cases of active misrepresentation and fraud. It is settled law
that in case of active misrepresentation, knowing the fact to be false, is
distinct from mere silence or concealment. It is not incumbent upon the
party defrauded to establish that it had no means of discovering the truth
with ordinary diligence. It is contended that in the present case, the
Appellant No.1 had been prevented by the Respondent No.1 from
participating in the management and affairs of Respondent No.2/IUP and it
had no means of obtaining any knowledge about the working, business,
financials and affairs of the Respondent No.2/IUP, and thus, it was
compelled to rely upon the representations of the Respondents during
negotiations for accepting the price of the shares, agreed to, on 20.09.2012.
Further, it is contended that active fraud is prima facie evident from the vast


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variation between the valuation of shares by Respondent No.1 in November
2013 for the purposes of the Settlement Agreement at Rs. 1.20p per share
and the valuation procured by Respondent No.1 for the purposes of its own
balance sheets for the periods ending March 31, 2013, as well as March 31,
2014, at Rs.40.10p per share, i.e. for the period just before and after the
valuation by the same Chartered Accountant i.e., M/s N. C. Aggarwal. It is
contended that no explanation has been provided for such a vast fluctuation
in the value of shares of the Respondent No.2/IUP.
11.5 It is contended that it is evident from KPMG's report dated
02.01.2017 [‘KPMG’s valuation report’] filed by the Appellant No.1, as
well, that Respondent No.1 valued the shares of the Respondent No.2/IUP
for the purposes of its own financial statements at Rs. 40.10p per share both
in March 2013 and in March 2014 whereas for the purposes of the
Settlement Agreement, the same were valued at Rs. 1.20p per share in
November 2013. It is also contended that KPMG has flagged numerous
factors which were not taken into consideration by the Chartered Accountant
M/s N. C. Aggarwal while carrying out the valuation.
11.6 It is contended that the plea of fraud was specifically pleaded in the
written statement and referred to the para-wise reply on merits at paragraph
10. The counsel relied upon the contents of KPMG’s valuation report to
contend that the valuation report dated 22.11.2013 submitted by the
Chartered Accountant N.C. Aggarwal [‘N.C. Aggarwal’s valuation report’]
was a fraud. It is contended that the Appellant No.1 did not have the means
to verify the correctness of the contents of the N.C. Aggarwal’s valuation
report or independently assess the value of the Aperam Shares.


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11.7 It is contended that the issue, whether the Appellant could have
verified the correctness of the price by due diligence or not, is an issue to be
determined post-trial and could not have been decided by the learned Single
Judge on the basis of the pleadings alone. The counsel stated that passing a
decree under Order XIIIA CPC on the basis of the pleadings has to be an
exception and not the norm.
11.8 Reliance was placed on Sangam (India) Ltd. v. National Highways
2
Authority of India , wherein the Division Bench of this Court held that
cases involving allegations of fraudulent misrepresentation and active
concealment do not lend themselves to disposal merely by invoking the
Exception to Section 19 of the Act of 1872 on the assumption that the
aggrieved party could have discovered the truth through due diligence.
11.9 Reliance was also placed on Niaz Ahmad Khan v. Parshotam
3
Chandra , wherein the Allahabad High Court, while considering the
exception to Section 19 of the Act of 1872, held that the question whether a
party had the means of discovering the truth with ordinary diligence is
intrinsically dependent upon the facts and circumstances of the case and
requires examination of the surrounding evidence.

11.10 It is contended that, however, without giving any consideration to
these facts, the learned Single Judge has held that there was no
misrepresentation qua price of the shares or that the consent of the Appellant
No.1 was not caused by valuation of Rs.1.20p of shares arrived at by the
Chartered Accountant N. C. Aggarwal, once the parties had agreed for the

2
2024 SCC OnLine Del 3667
3
1930 SCC OnLine All 252


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settlement at a lump-sum amount of USD 500,000. It is contended that in
doing so, the learned Single Judge had applied the Exception to Section 19
of the Act of 1872 that the contract would not become voidable where the
party whose consent was so caused by misrepresentation had the means of
discovering the truth with ordinary diligence, however, without considering
the fact that the Appellant No.1 had been prevented by the Respondent No.1
from participating in the management of Respondent No.2/IUP and had no
means of obtaining any knowledge about the working, business and
financials of the Respondent No.2/IUP.
11.11 It is contended that even otherwise, the question whether, at the time
of execution of the Settlement Agreement, the Appellant had the means of
discovering the correct value of the shares of the Respondent No. 2/IUP by
exercising ordinary diligence is a matter of trial and could not be decided by
the learned Single Judge in a summary hearing.
11.12 It is contended that the learned Single Judge erred in holding that the
Appellant No.1 has no response to the e-mail dated 20.09.2012, being prior
in time to the N.C. Aggarwal’s valuation report. It is contended that the e-
mail dated 20.09.2012 merely records oral discussions between counsels for
the parties in the course of negotiations and does not amount to a contract as
per law. It is contended that, moreover, paragraphs 10 of para wise reply in
the Written Statement filed by Appellant No.1 in CS(COMM)1314/2016
clearly shows that the Appellant No.1 has specifically pleaded that it relied
on the representations made by Respondent No.1 regarding the fair market
value of the shares of the Respondent No.2/IUP throughout the negotiations,
which finally culminated in the N.C. Aggarwal’s valuation report, after


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which the Settlement Agreement was signed.
12. The Respondents have rebutted the aforesaid arguments of the
Appellant with the following submissions:
12.1 It is contended that the Appellant’s whole argument of alleged fraud
is based upon the N.C. Aggarwal’s valuation report being a
misrepresentation of the true value of the Aperam Shares held in Respondent
No. 2/IUP. However, it is contended that the following facts will show that
the valuation of the shares contained in the Settlement Agreement was in no
way based on the N.C. Aggarwal’s valuation report. The said valuation
4
report was issued/prepared solely for compliance with RBI requirements, as
the parties could not have agreed on a value of the said shares in
contravention of the requirement of law present at the time, which required
the use of the ‘discounted cash flow method’. It is contended that, notably,
even in Clause 4(e) of the Settlement Agreement, it has been recorded that
either party has not made or relied on any representation regarding any fact
which was relied on in making the Settlement Agreement and thus, the said
report was not the basis of determination of the sale consideration.
12.2 It is contended that the settlement amount was finalised through
negotiations between the representative of parties from 30.12.2010 to
20.09.2012. It is contended that the settlement value recorded in the
Settlement Agreement decreased from USD 2 million (initially proposed) to
USD 1 million, and ultimately to USD 500,000. It is contended that,
crucially, the e-mail dated 20.09.2012 from the Appellant's counsel

4
Reserve Bank of India


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confirmed that the USD 500,000 was to be apportioned between the ‘value
of shares’ and the ‘cost of previously supplied materials’. At the time of the
Settlement Agreement, based on N.C. Aggarwal’s valuation report (aligned
with RBI Guidelines), USD 50,000 (slightly lower than the assessed value of
USD 51,409) was allocated to the shares, while the remaining USD 450,000
was assigned to the cost of supplied materials.
12.3 It is contended that the e-mail dated 20.09.2012, being the basis of the
Settlement Agreement, is clearly evident from ‘Recital K’ wherein it has
been recorded that ‘the Parties agreed on the settlement and are hereby
recording the terms thereof’.
12.4 It is contended that the above fact has been duly dealt by the learned
Single Judge in the impugned judgment wherein it was recorded that
Appellants herein had no response, neither in pleadings nor in the
arguments, to the contents of e-mail dated 20.09.2012, which is of much
before the N.C. Aggarwal valuation report qua which misrepresentation is
alleged. The learned Single Judge also records that once the parties on
20.09.2012 had arrived at such an agreement, they took time of over one
[‘1’] year till 20.12.2013 to sign the Settlement Agreement, where the
cumulative value of the Settlement Agreement remains frozen at USD
500,000 as agreed in teleconference on 10.09.2012. It is not the plea of the
Appellants that anything transpired between 20.09.2012 and 20.12.2013.
12.5 It is contended that the only response to this issue by the Appellants is
that the e-mail dated 20.09.2012 records the ongoing discussions between
counsels of the parties and is not a final settlement. It is contended that,


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notably, this stand has been raised by the Appellants for the first time in the
appeal and was not a part of the pleadings before the learned Single Judge. It
is contended that, further, in any case, there was no valuation report when
the parties had arrived at the settlement on 20.09.2012, pursuant to which
the Settlement Agreement was drafted, and the cumulative figure of the
settlement amount as well as the terms of the Settlement Agreement
remained the same.
12.6 It is contended that in terms of the Exception to Section 19 of the Act
of 1872, if the party whose consent was obtained through misrepresentation
had the means of discovering the truth with ordinary diligence, the contract
cannot be avoided. In the present case, since the parties were already in
dispute, Appellant No. 1 did not occupy a position of trust with the
Respondent and could have independently obtained its own valuation
instead of relying on the Respondent’s valuation. It is contended that
however, it is evident that the valuation through auditor was conducted
solely to comply with RBI requirements, and therefore, Appellant No.1
never obtained an independent valuation of the shares, hence, there can
certainly be no misrepresentation qua price which has been mutually agreed
after negotiations in September, 2012 and prior to the valuation by
Chartered Accountant N.C. Aggarwal.
12.7 It is contended that the share value(s), in N.C. Aggarwal’s valuation
report, KPMG’s valuation report and financial statements of Respondent No.
1 differ in the methodology used for arriving at the value of the share and
the purpose for which they were carried out. It is stated that the
methodologies used are distinct and not comparable. It is stated that the


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methodology employed in N.C. Aggarwal’s valuation report is as per RBI
Regulations and therefore, correct. It is contended that the methodology
employed in KPMG’s valuation report does not align with the RBI
requirements and is therefore not relevant.
It is contended that there is no need for oral evidence as, due to the
commercial nature of the transaction, all communications inter-se the parties
were documented in the form of e-mails and letters, which are admitted. The
only document relied upon by the Appellant, which was disputed by the
Respondent, is KPMG’s valuation report.
The Respondent contends that the Appellant has not challenged the
finding in the impugned judgment that there is no individual on behalf of the
Appellant, who is proposed to step into the witness box to lead oral evidence
with respect to the negotiations leading to the settlement recorded in the e-
mail dated 20.09.2012. It is further contended that no evidence is required to
be led on KPMG’s valuation report as the same does not contain the
valuation on the basis of the discounted cash flow method, as required by
the RBI Guidelines.
12.8 It is contended that the price settled between the parties was not based
on the market value of the shares but on the basis of the mutual settlement
arrived at between the parties, as recorded at Clause 1.1 of the Settlement
Agreement.
13. Learned Single Judge has given its findings on this issue at
paragraphs 39 to 50 and 54 of the impugned judgment which reads as under:
“39. I will first take up the defence of Aperam Stainless, of
misrepresentation. The defence is that the consent of Aperam Stainless to
sell all shares held by Aperam Stainless in IUP for USD 50,000 equal to


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USD 0.0185 per share was obtained by misrepresenting the fair market
value of the price which as per the RBI Regulations was to govern the sale
which required prior permission of RBI.

40. It is not in dispute that Aperam Stainless, whether for reasons
attributable to Jindal or for any other reason, since the year 2009 had no
participation in IUP, created in joint venture with Jindal in 2004.

41. It is also not in dispute that Aperam Stainless exercised the Put Option
on 3rd February, 2009 and whereunder the Jindal had a right to purchase
the shares held by Aperam Stainless.

42. The senior counsel for Aperam Stainless and Imphy had no response
whatsoever, neither in the pleadings nor in the arguments, to the e-mail
th
dated 20 September, 2012 which is of much before the valuation report
nd
of 22 November, 2013 qua which misrepresentation is alleged. The said
th
e-mail reproduced above shows that in the teleconference on 10
September, 2012 it was agreed between the parties that Aperam Stainless
will be paid a lump sum amount of USD 500,000/- being half of USD
1,000,000 earlier demanded and since the price to be paid by Jindal, of the
shares held by Aperam Stainless in IUP and to purchase which Jindal had
a preemptory right, was regulated, it was further agreed that if the agreed
amount of USD 500,000/- was more than the regulated amount/price
which could be paid towards share price, the excess/balance after adjusting
regulated amount/price, shall be paid towards due of Imphy.

43. I may highlight that the supplies by Imphy to IUP were between
January and March 2007 and the limitation prescribed by law for recovery
of price thereof, vide Article 14 of the Schedule to the Limitation Act,
1963, of three years, had lapsed in March 2010. It is not the plea that the
th
limitation stood extended. Thus, as on 20 September, 2012, the price of
the supplies from Imphy to IUP, even if any remaining, was not legally
recoverable.

44. This becomes clear as daylight, from a reading of some other
rd
unrebutted documents. Aperam Stainless, vide its letter dated 3 February,
2009 to Jindal, in accordance with Clause 7.2.1 of the JV Agreement,
communicated its decision to exercise its Put Option right over the
2,70,00,000 shares of IUP representing 27% of the share capital of IUP
and further informed that the price of the purchase and sale, again in
accordance with Clause 7.2.1 of the JV Agreement, shall be the value of
the initial contribution net of depreciation of the equipment supplied
during the period up to the date of exercise of the option calculated
according to a straight line method and the result of the said calculation
th
was 137.64 million Indian rupees. Jindal, vide its letter dated 30


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December, 2010 to Aperam Stainless, with reference to the Put Option
exercised by Aperam Stainless stated, that (i) in accordance with the terms
of the JV Agreement, Price Waterhouse Coopers (PWC) was appointed to
decide the fair market value of the shares held by Aperam Stainless in IUP
and PWC had submitted its report setting out the fair market value of the
IUP shares to be Nil; (ii) thus no amount was payable by Jindal to Aperam
Stainless for transfer of shares of Aperam Stainless in favour of Jindal;
and, (iii) since the Put Option had already become effective, Aperam
Stainless should immediately deliver the original share certificates and
execute the transfer forms in favour of Jindal. Aperam Stainless responded
th
to the said letter vide its letter dated 17 February, 2011 wherein (a) it
contested the valuation of PWC; (b) called upon Jindal to change the name
of IUP and to remove all references to IUP in the Articles of Association
of IUP; and, (c) proposed resolution of the disputes by a single settlement
and on this basis proposed to “settle outstanding issues for an aggregate
th
consideration of USD one million”. Jindal, vide its letter dated 7 April,
2011 communicated its refusal to settle for aggregate consideration of
USD one million and further stated that as per Regulations, the maximum
amount which could be paid towards the shares could not be more than fair
market value and as the shares were not listed on any stock exchange, the
th
valuation of PWC should be accepted. Jindal, vide its reminder dated 19
January, 2012 to Aperam Stainless, also intimated that Aperam Stainless
had ceased to continue to hold shares in IUP and the nominees of Aperam
Stainless had ceased to be the Directors of IUP and called upon Aperam
Stainless to transfer the shares. It was in the said background that the e-
th
mail dated 20 September, 2012 reproduced hereinabove was sent by
Aperam Stainless to Jindal, recording the agreement reached in the
discussion in the teleconference on 10th September, 2012, of payment by
Jindal to Aperam of USD 500,000 towards shares of IUP held by Aperam
Stainless and to purchase which Jindal had the first right, on Aperam
Stainless exercising Put Option. I may highlight that in the
th
correspondences detailed in this paragraph, of prior to 20 September,
2012, there was no reference to the dues/claims of Imphy and only in the
th
e-mail dated 20 September, 2012, while agreeing to lump sum payment
by Jindal of USD 500,000, it was provided that if the fair market value of
the shares was less than USD 500,000, the balance shall be paid in
settlement of amounts due from IUP to Imphy towards equipment.

45. It is not in dispute that the sale of shares could not take place without
RBI permission and for grant of which permission it was necessary that
the sale was either for a price invested towards equity less depreciation or
fair market value, whichever is more.

th
46. Once the parties on 20 September, 2012 had arrived at such an
th
agreement, they took time of over one year i.e. till 20 December, 2013, to


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th
sign the Settlement Agreement. The Settlement Agreement dated 20
December, 2013 mentions the same figure of 500,000 as agreed in
th
teleconference of 10 September, 2012 and recorded in the email dated
th
20 September, 2012. It is not the plea that anything transpired between
th th
20 September, 2012 and 20 December, 2013, to influence the total
consideration agreed. The only inference is that the consideration agreed to
in the Settlement Agreement was the consideration agreed to as far back as
th
on 20 September, 2012 and the parties, as per commercial exigencies,
agreed to, out of USD 500,000, appropriate USD 50,000 towards price of
shares and USD 450,000 towards price of material supplied.

47. However while signing the Settlement Agreement, the parties in
compliance of the requirement of RBI recorded therein that the
consideration of USD 50,000 for shares held by Aperam Stainless in IUP
was the fair market value of the shares and in support cited the valuation
report of N.C. Aggarwal & Company, Chartered Accountants and annexed
a copy of the report to the Settlement Agreement. N.C. Aggarwal &
Company, Chartered Accountants also have while certifying the valuation
taken care to specify the said valuation to be “considering the provisions
contained in Reserve Bank of India Circular No.RBI/2009 –
th
10/445/A.P.(DIR Series) Circular No.49 dated 4 May, 2010”.

48. Section 18 of the Contract Act defines “misrepresentation” as meaning
and including (i) positive assertion of that which is not true though he
believes it to be true; (ii) breach of duty which, without any intent to
deceive, gains an advantage of the person committing it, by misleading
another to his prejudice; and, (iii) causing a party to an agreement to make
a mistake as to the substance of the thing which is the subject of the
agreement. Section 14 defines “free consent” as consent which is not
caused, inter alia by misrepresentation. It however proceeds to further
provide that consent is said to be caused by misrepresentation when it
would not have been given but for the misrepresentation. Thus, even if
there is misrepresentation but is not the cause of the consent, there is no
misrepresentation in law, for it to be said that consent is not free. Finally,
Section 19 of the Contract Act provides that when consent to an agreement
is caused by misrepresentation, the agreement is a contract voidable at the
option of the party whose consent was so caused. It however again further
explains, that a misrepresentation which did not cause the consent does not
render a contract voidable and carves out an exception for a case where the
party whose consent was so caused by misrepresentation, had the means of
discovering the truth with ordinary diligence.

49. Applying the aforesaid law, the contemporaneous correspondence
between the parties does not support the plea of Aperam Stainless, of
Jindal having practiced any misrepresentation qua the valuation of the


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shares or of, the consent of Aperam Stainless to the Settlement Agreement
th
dated 20 December, 2013 of which Jindal is seeking specific
performance, being not free and the Settlement Agreement being voidable
at the option of Jindal. The first demand of Aperam Stainless, after
exercising the Put Option, for the price of its shares in IUP, which Jindal
had a preemptory right to buy, was of 137.64 million Indian rupees i.e.
equal to USD 2,008,463.39 i.e. of USD two million. However the same
was subsequently lowered by Aperam Stainless itself, to USD one million,
th
in its email dated 17 February, 2011. Finally, in the teleconference on
th
10 September, 2012 between Jindal and Aperam Stainless, a lump sum
amount of USD 500,000 i.e. half million was agreed, and knowing fully
well that the price which could be paid and received towards shares was
regulated by RBI, it was also agreed that if the said regulated price of
shares was less than USD 500,000, the balance amount remaining out of
USD 500,000, after appropriating the regulated price, would be paid and
received towards price of material supplied, which though on that date was
not legally recoverable from Jindal and/or from IUP. This is confirmed in
th
email dated 20 September, 2012. It is the agreement reached in the
th th
teleconference on 10 September, 2012 and confirmed in e-mail dated 20
September, 2012, which was given effect to in the Settlement Agreement
th
dated 20 December, 2013, relying on the report of N.C. Aggarwal & Co.
Chartered Accountants, by appropriating an amount USD 50,000 towards
price of shares and USD 450,000 towards price of material. Once the total
amount to be paid by Jindal and to be received by Aperam Stainless and
Imphy was settled voluntarily, appropriation of the same under different
heads was a matter of commercial exigencies and convenience of the
parties and it is not open to Aperam Stainless and/or Imphy to
subsequently claim that while the commitment qua USD 450,000
mentioned in the Settlement Agreement to be paid towards price of
materials binds Jindal, Aperam Stainless is not bound by the price agreed
to be appropriated of USD 50,000 towards the consideration of shares. The
documents establish that not only was it felt at the contemporaneous time
that if the entire amount of USD 500,000 was agreed to be paid towards
shares, permission therefore will not be granted by RBI, but even
otherwise, commercially it suited the parties to receive bulk of the total
amount of USD 500,000 already agreed / settled, to be paid and received
towards price of material and only the minimum towards price of shares.
The price of the shares to be paid to a foreign joint venture partner is
regulated, to prevent outflow of foreign exchange, and realizing the same,
the parties at the contemporaneous time felt that permission required
would be obtained if the price of shares was kept at minimum. In any case,
it cannot be said that the consent of Aperam Stainless was caused by
valuation of shares of N.C. Aggarwal & Co. Chartered Accountants. It
cannot also be forgotten that it is not as if there was any relationship of
trust between Jindal and Aperam Stainless, for Aperam Stainless to rely on


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rd
valuation got done by Jindal. Aperam Stainless, in the letter dated 3
February, 2009, exercising the Put Option and whereupon Jindal became
entitled to purchase the shares, itself was blaming Jindal for the state of
affairs of IUP and demanded the price of about USD two million as
aforesaid. This was followed by valuation got done from PWC, which
reported nil value of the shares. In pursuance thereto, Jindal was calling
upon Aperam Stainless to transfer the shares at nil value. This was
followed by negotiations as to price, with Aperam Stainless successively
bringing down its demand from that of USD two million, to USD one
million and then to USD half million, which was agreed to by Jindal.
There can certainly be no misrepresentation qua price which has been
agreed to after such negotiations. Moreover, since the relationship with
Jindal was already strained, the minimum due diligence expected from
Aperam Stainless exercising Put Option was, to have its own valuation
done. The case thus also falls in the exception to Section 19 of the
Contract Act. No case of misrepresentation is made out.

50. Once there is no misrepresentation, even if there were to be any
inadequacy of the price of shares, the same, vide Explanation 2 to Section
25 of the Contract Act, does not make the agreement void.

………

54. As far as the argument urged by the senior counsel for Aperam
Stainless / Imphy of fraud is concerned, the senior counsel also could not
controvert that there is no basis thereof in the pleading. The only argument
was that it is a plea of law which is not required to be pleaded. However
the said argument ignores that fraud is defined in Section 17 of the
Contract Act as an act committed by a party to a contract with the intent to
deceive another party thereto or to induce him to enter into the contract.
Thus the plea of fraud is a factual plea and Order VI Rule 4 of the CPC
also provides that in all cases in which a party pleads or relies on any
fraud, particulars shall be stated in the pleading. There are no particulars of
who with the intent to deceive whom had offered what inducement to enter
into the contract. I have in Om Prakash Vs. IOCL Officers Welfare
Society 2019 SCC OnLine Del 6719 dealt with the requirement of full
particulars for a plea of fraud and the need to reiterate the same is not felt.
In the absence of any foundation and pleadings, no credence can be given
to the arguments at the bar on the ground of fraud.”
[Emphasis supplied]


13.1 We note that the said finding of the learned Single Judge are based on
review of the undisputed correspondence exchanged between the parties on
03.02.2009, 30.12.2010, 17.02.2011, 07.04.2011, 19.01.2012 and the final e-


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mail dated 20.09.2012. The e-mail dated 20.09.2012 documents the terms
and conditions agreed between the parties at the teleconference held on
10.09.2012. The agreement recorded in the e-mail is that Appellant No.1
will be paid a lump-sum amount of USD 500,000 for the shares held in
Respondent No.2/IUP, and the said payment will be split between Appellant
No.1 and Appellant No.2/Imphy. The said correspondence predates the N.C.
Aggarwal’s valuation report dated 22.11.2013, which is the foundation of
the Appellants’ allegations of misrepresentation and fraud.
The e-mail dated 20.09.2012 issued by the attorney of Appellant No.1
to the attorney of Respondent No.1 reads as under:

“Please find below a summary of our discussions in the teleconference on
September 10, 2012. I would be grateful for your comments.

The following terms were agreed between the parties i.e. Aperam Stainless
Services & Solutions Precision successor to IUP (“Aperam”), Jindal Saw
Limited (Jindal) and IUP Jindal Metal & Alloys Limited (JVC):

1. Aperam will be paid a lump sum amount of USD 500,000 made up as
follows.

A) Shares

Jindal shall purchase all the shares of Aperam in the JVC and Jindal shall
pay Aperam a price for the shares equal to the Indian rupee value of the
shares calculated according to the current guidelines of the Govt. of India.
Against payment, Aperam shall transfer to Jindal all the shares that
Aperam holds in JVC.

B) the balance of the USD 500,000 shall be paid to Aperam by the JVC in
settlement of the amounts due by the JVC to Aperam for supplies of
equipment received by the JVC from Aperam.
……..
……..
At Closing the following shall take place.

a) Aperam shall sign the transfer form and transfer the share certificates to


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Jindal and Jindal shall simultaneously pay Aperam the agreed amount for
the shares.

b) the JVC shall pay Aperam the amount agreed for the equipment.”

[Emphasis supplied]


13.2 The learned Single Judge has concluded that the Settlement
Agreement records the sum of USD 500,000 towards consideration, as was
already agreed between the parties in the e-mail dated 20.09.2012. It records
that the commercial exigency of compliance with the RBI Regulations
required the payment to be made in two tranches, with USD 50,000
allocated towards the price of shares and USD 450,000 allocated towards the
price of the materials supplied by Appellant No.2/Imphy to Respondent
No.2/IUP. Learned Single Judge discussed in detail that Appellant
No.2/Imphy’s claim for the price of the materials supplied in the year 2007
was time-barred as of 20.09.2012 and 20.12.2013; however, the said
claim/liability has been acknowledged by the Respondents to give effect to
the transaction value of USD 500,000 as agreed in the e-mail dated
20.09.2012. Learned Single Judge, on review of the correspondence,
concluded that the consideration amount of USD 500,000 was agreed
between the parties on 20.09.2012 and the consent of the Appellant to this
consideration was not caused by the N.C. Aggarwal’s valuation report. It
concluded that no case of misrepresentation based on the N.C. Aggarwal’s
valuation report dated 22.11.2013 is made out. It further held that the
consideration of USD 500,000 was agreed to between the parties on
20.09.2012, after negotiations, and since the relationship between Appellant
No.1 and Respondent No.1 was strained, the learned Single Judge held that
Appellant No.1 was obliged to have undertaken its own valuation before


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agreeing to the value of the sale consideration as contemplated in an
exception to Section 19 of the Act of 1872.
13.3 Learned Single Judge has held that, the submission of the Appellants
that their consent to the valuation of Aperam Shares at USD 50,000 is
vitiated by fraud or misrepresentation, is not made out.
FINDINGS ON ISSUE NO. I
14. The substratum of the argument of the Appellants on this issue, is that
the decree of specific performance could not have been granted for the
Settlement Agreement vis-à-vis transfer of shares held by Appellant No.1 in
Respondent No.2/IUP, in favour of Respondent No.1 under Order XIIIA
CPC, as its consent for the price of USD 50,000 recorded therein is vitiated
by fraud and misrepresentation and this plea should be tested at trial by
giving it an opportunity to lead oral evidence of its auditor, who prepared
the KPMG report.
15. At the outset, we may note that allegation of misrepresentation on
valuation of USD 50,000 for Aperam shares was raised for the first time in
the e-mail dated 16.04.2016.
We further note that the Settlement Agreement was sought to be
5
terminated by the Appellant No. 1 vide letter dated 13.09.2016
[‘termination notice’] in part only, to the extent it recorded the agreement for
transfer of shares held by Appellant No.1 in Respondent No.2/IUP, in favour
of Respondent No.1 for USD 50,000. The letter recorded that Appellant No.
1 has recently learnt that its consent to the said valuation of USD 50,000 was

5
Annexure A-15 to the appeal at printed page 283


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vitiated by gross misrepresentation of valuation. It also recorded in the letter
that since the transfer has not been affected till date, i.e., 2013-2016, there
was a need to carry out a fresh and current valuation of Respondent No.
2/IUP and its shares.
6
By a separate letter dated 13.09.2016 , Appellant No.2/Imphy,
however, sought to enforce the Settlement Agreement against Respondent
No. 2 for payment of USD 450,000 for supply of goods. Prior to this, on
28.01.2016, RBI had granted its approval with respect to the remittance for
USD 450,000 by Respondent No.2/IUP to Appellant No.2/Imphy, though
the approval was given in the name of Appellant No. 1 instead of Appellant
No.2/Imphy. As per Appellant No. 2, there was thus no impediment for
making payment of debt of USD 450,000.
16. Having reviewed the correspondence exchanged between the parties
and the findings in the impugned judgment, we find that until the e-mail
dated 16.04.2016, Appellant No.1 had never alleged any misrepresentation
or fraud by Respondent No. 1 qua the valuation of USD 50,000 for the
transfer of Aperam Shares recorded in the Settlement Agreement. The
correspondence bears out that a firm agreement was arrived at between the
parties on 20.09.2012 for, both, sale of Aperam shares and payment of debt
due to Appellant No. 2, with the total consideration agreed as sum of USD
500,000, which also subsequently forms the basis of the Settlement
Agreement. The Settlement Agreement however clearly apportions the sum
of USD 500,000 in two parts of USD 50,000 and USD 450,000 respectively
for two distinct transactions. This agreement was arrived at between, their

6
Annexure A-15 to the appeal at printed page 277


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respective counsels, after due negotiations. Pertinently, the correspondence
exchanged between the parties in 2013-2015 shows that Appellants, through
their respective counsel, were continuously following up on the status of the
payments of USD 50,000 and USD 450,000, respectively. The price of the
transfer of Aperam shares was thus settled between parties as early as on
20.09.2012, which is much prior to the N.C. Aggarwal’s valuation report.
17. Pertinently, the Appellant has relied upon the averments made at
7
paragraph no. 10 of the written statement to contend that the finding of the
learned Single Judge at paragraph 54 of the impugned judgment, which
records that the particulars of fraud as required under Order VI Rule 4 CPC
have not been pleaded, is wrong. It is stated that sufficient particulars have
been set out in the written statement and thus, it is a fit case for deciding the
issue of fraud only after oral evidence has been led.
17.1 To test this plea, we will examine the written statement and the
mandate under Order VI Rule 4 CPC.
17.2 The relevant paragraph of the written statement of fraud reads as
under:
“10. Contents of Paragraph 10 of the Plaint are misleading and, hence, are
denied. As stated earlier, the Agreement dated 20 December 2013 was
entered into on account of a situation of complete deadlock created by the
Plaintiff in its attempts to oust Defendant No. 1 from the affairs of
Defendant No.3 Company and to wrest complete control. Since, Defendant
No.l was not able to constructively carry forward its intended business
plans for investment in the joint venture. Defendant No.l agreed to
negotiate a settlement with the Plaintiff. However, as the Defendant No.l
was kept out of the affairs of the Defendant No.3, it had no option but to
rely on the representations made by the Plaintiff as regards the valuation of
the Defendant No.3 Company. Plaintiff assured Defendant No.l that it had

7
At printed page 186 of the written statement filed by the Appellant No. 1 in CS(COMM) 1314/2016.


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employed best practices and that its auditor, N.C. Aggarwala & Co., was
well placed to carry out the valuation. Defendant No.l relied on the
valuation done by N.C. Aggarwala & Co. and, on that basis agreed to the
terms of the Agreement dated 20 December 2013. However, as stated
earlier, the Agreement dated 20 December 2013 is vitiated by the fraud
played by the Plaintiff and its auditors upon the Defendant No.l and, as
such, cannot be performed, least of all upon the request of and to the
benefit of the Plaintiff. It is denied that the valuation done by N.C.
Aggarwala & Co. was properly done or that the price of the shares
calculated by the said Chartered Accountant was as per Discounted Cash
Flow Method. Contents of the preliminary submissions are reiterated as
true and correct and the same may be read in response to the paragraph
under reply. The same are not repeated herein for the sake of brevity.”

We also find it apposite to reproduce Order VI Rule 4 CPC, which
reads as under:
“ORDER VI
4. Particulars to be given where necessary.— In all cases in which the
party pleading relies on any misrepresentation, fraud, breach of trust,
wilful default, or undue influence, and in all other cases in which
particulars may be necessary beyond such as are exemplified in the forms
aforesaid, particulars (with dates and items if necessary) shall be stated in
the pleading.”

17.3 The provision of Order VI Rule 4 CPC would require, in the facts of
this case, for the Appellant No. 1 to name the representative of the
Respondent(s) who allegedly made the representation qua the value of the
shares, the date when the misrepresentation or deceit happened and the name
of the representative(s) of the Appellant No. 1 to whom the
misrepresentation or deception was made. Thus, the name of the person(s),
the date of the alleged deception and the facts constituting the alleged
deception have to be specifically pleaded to meet the requirements of Order
VI Rule 4 CPC.
In this regard, it is apposite to refer to the judgment of the Supreme


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8
Court in Bishundeo Narain v. Seogeni Rai , wherein it was held that in
cases involving allegations of fraud, the party making such allegations must
set forth full and specific particulars thereof, and that general or vague
averments are insufficient. The Supreme Court emphasised that particulars
such as the nature of the representation, the person who made it, the person
to whom it was made, and the time, place and circumstances in which it was
made are essential, failing which the Court would be unable to arrive at a
proper conclusion. The relevant paragraphs read as under:
“ 22. We turn next to the questions of undue influence and coercion. Now it
is to be observed that these have not been separately pleaded. It is true they
may overlap in part in some cases but they are separate and separable
categories in law and must be separately pleaded. It is also to be observed that
no proper particulars have been furnished. Now if there is one rule which is
better established than any other, it is that in cases of fraud, undue influence
and coercion, the parties pleading it must set forth full particulars and the
case can only be decided on the particulars as laid. There can be no departure
from them in evidence. General allegations are insufficient even to amount to
an averment of fraud of which any court ought to take notice however strong
the language in which they are couched may be, and the same applies to
undue influence and coercion. See Order 6 Rule 4, Civil Procedure Code.
…

25. We will deal with the case of coercion first. It will be seen that the
plaintiffs' case regarding that is grounded on the single allegation that their
father was threatened with death. When all the verbiage is cleared away, that
remains as the only foundation. The rest, and in particular the facts set out in
Paras 8 to 12 about the ferocious appearance of Firangi Rai and his allegedly
high-handed and criminal activities and his character, are only there to lend
colour to the genuineness of the belief said to have been engendered in
Ghughuli Rai's mind that the threat of death administered to him was real and
imminent. But as regards the threat itself, there is not a single particular. We
do not know the nature of the threat. We do not know the date, time and place
in which it was administered. We do not know the circumstances. We do not
even know who did the threatening. Now, when a court is asked to find that a
person was threatened with death, it is necessary to know these particulars,
otherwise it is impossible to reach a proper conclusion.


8
1951 SCC 447


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26. It was argued that it is not necessary for a plaintiff to give particulars
and if the other side is not satisfied, there are provisions in the Code which
entitle him to ask for them. That is a grave misapprehension.”
[Emphasis Supplied]

17.4 Furthermore, reliance of the Respondents on the case of
Ranganayakamma and Another v. K.S. Prakash (Dead) by LRs. And
9
Others is also relevant in this regard. In the said judgment, the Supreme
Court reiterated that where a party seeks to avoid a transaction, settlement,
decree or contract on the ground of fraud, coercion, misrepresentation or
undue influence, the particulars thereof must be specifically pleaded and
proved in accordance with Order VI Rule 4 CPC. The Court held that vague
and general allegations are insufficient unless the pleadings disclose, inter
alia, when the representations were made, who made them, the nature and
contents of such representations, and the circumstances in which the alleged
fraud or misrepresentation occurred.
17.5 The Appellants have merely relied upon the contents of the financial
10
statements of Respondent No. 1 in its written statement dated 03.01.2017
to allege that the value of the Aperam shares held by the Appellant No.1 in
Respondent No.2/IUP company, as per the N.C. Aggarwal’s valuation report
is misleading, and therefore its consent to the said Settlement Agreement
executed on 20.12.2013 has been obtained by fraud.

17.6 However, a perusal of the averments in the written statement filed by
the Appellant No. 1 fails to set out the material particulars required for
establishing fraud, and therefore the finding of the learned Single Judge at

9
(2008) 15 SCC 673, at paragraph nos. 40, 41, 43 to 45.
10
At paragraph 17 of the written statement of Appellant No.1 in CS(COMM) 1314/2016


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paragraph 54 of the impugned judgment is correct and does not merit any
interference.
In our considered opinion, the plea of fraud raised by the Appellants
in the written statement does not satisfy either the pleading requirements
under Order VI Rule 4 CPC or the substantive requirements for establishing
fraud in law. It is well settled that fraud must be specifically pleaded with
full particulars and thereafter proved by cogent evidence. Mere assertions
that a transaction was unfair, that a valuation was incorrect, or that a party
subsequently considers the bargain disadvantageous do not by themselves
constitute fraud. In the present case, apart from a challenge to the
correctness of the valuation adopted in the N.C. Aggarwal valuation report,
no material facts have been pleaded or shown which would establish any
fraudulent representation by the Respondents in years 2012 and 2013 that
induced the Appellant No. 1 to agree to the settlement dated 20.09.2012 and
execute the Settlement Agreement. The allegations in the written statement,
therefore, remain unsupported by the foundational facts necessary to sustain
a plea of fraud and cannot defeat the enforcement of the Settlement
Agreement.

17.7 In the facts of the present case, the Appellants have failed to enlist the
particulars and details of fraud allegedly practised by the Respondents on the
Appellants in 2012 and 2013. Since Appellants and Respondents are
corporate entities, the Appellants were obligated to identify their
representative(s) who were allegedly defrauded by the representative(s) of
the Respondents. The Appellants also had to identify the alleged
representative(s) of the Respondents, who made the misrepresentation.


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However, the Appellants have not identified any such representatives of the
parties.
It is evident from the admitted documents that indeed Appellants had
agreed to the consideration of USD 50,000 for shares on the basis of their
own determination. It is for this reason Appellants are unable to identify any
relevant witness who participated in the negotiations to lead oral evidence to
prove their alleged allegations of fraud.
17.8 Moreover, the N.C. Aggarwal’s valuation report was always available
with the Appellants since 2013. The financial statements of Respondent No.
11 12
1 for the year ending 2013 and year ending 2014 , are publicly published
documents and were also always available to the Appellants in 2013 and
2014 respectively. No plea of fraud or misrepresentation was raised at any
time prior to issuing e-mail dated 16.04.2016. The counsel of Appellants
corresponded with Respondents for the implementation of the Settlement
Agreement between 2013 to 2015, there was no whisper of fraud or
misrepresentation vis-à-vis the agreement of total consideration amount of
USD 500,000 in the correspondence, or even the allocation of USD 50,000
for transfer of shares held by Appellant No. 1 and USD 450,000 for payment
of dues to Appellant No. 2. The Appellants, in the correspondence, however,
continuously protested the delay in payments and Closing of the Settlement
Agreement. The Appellant No. 2 on 16.04.2016 and 13.09.2016 demanded
payment of USD 450,000 as per the Settlement Agreement, and the plea of
misrepresentation and fraud was only raised by Appellant No. 1 for the first
time on 16.04.2016, limited to, fixation of sale consideration for the Aperam

11
Dated 30.09.2013
12
Dated 30.09.2014


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Shares.
17.9 In addition, the stand that N.C. Aggarwal’s valuation report is
misleading, and therefore the consent to the said Settlement Agreement, has
been obtained by fraud, was taken by Appellant No.1 for the first time in
their written statement, filed in CS(COMM) 1314/2016. No such plea was
raised in the correspondence exchanged between the parties between 2013 to
2016. This fact, in our opinion, shows that the allegation of fraud and
misrepresentation is a stand taken by the Appellants, as a ruse in view of the
disputes which have arisen between the parties with respect to the delay of
three [3] years in Closing the Settlement Agreement by the Respondents.
The written statement was filed with KPMG valuation report dated
02.01.2017, contending the correct price of the shares is Rs. 40.10p per
share. It is evident that Appellants, after issuing the termination notice and
upon being served with summons in the suit, went about building a defence
to sustain the plea of alleged misrepresentation and fraud. However, neither
at the contemporary time in 2012 or 2013 or anytime thereafter, the
Appellants harboured any doubt till 16.04.2016 with respect to their free
consent to the consideration of USD 500,000 agreed between the parties.

17.10 We therefore agree with the findings of the learned Single Judge that
since the Settlement Agreement expressly records that neither party has
relied upon the other party for any fact and has independently verified each
fact recorded in the agreement, N.C. Aggarwal’s valuation report was not
the basis of the settlement amount of USD 500,000 recorded in the said
Settlement Agreement; and the said amount of USD 500,000 was agreed
through negotiations between the parties, ably assisted by their counsels, as


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early as 20.09.2012. We also agree with the findings of the learned Single
Judge that the N.C. Aggarwal valuation report merely formed the basis of
the split of USD 500,000 for the allocation in favour of Appellant No. 1 and
Appellant No. 2/Imphy, respectively, but did not form the basis of the total
consideration of USD 500,000, which stood documented in the e-mail dated
20.09.2012. The findings of the learned Single Judge are duly borne out by
the documents relied upon by the Appellants and merit no interference.
18. We note that, the Appellants in the appeal and the written submissions
have submitted that they intend to lead expert evidence of an independent
auditor to substantiate their plea that the price of USD 50,000 for Aperam
Shares was knowingly and falsely misrepresented by Respondent No. 1. The
relevant para of the written submissions dated 22.01.2025 reads as under:
“20. Allegations of fraud and misrepresentation go to the very root of the
contract and the same ought not to have been summarily dismissed
without any opportunity to the Appellant No.1 to lead evidence to prove
its case, more so, when the Appellant No.1 sought to lead expert
evidence of an independent auditor in support of its case that the price for
the Aperam Shares was knowingly and falsely misrepresented by
Respondent No.1.”

18.1 The independent expert auditor is the same KPMG representative,
who has issued the valuation report dated 02.01.2017. The said auditor was
admittedly not privy to any negotiations held in 2009-2012 and 2013,
leading to execution of Settlement Agreement and is therefore, not
competent to depose on the allegations of fraud or misrepresentation. This
has been discussed later in the judgment.
13
18.2 The Supreme Court in P.V. Radhakrishna v. State of Karnataka

13
(2003) 6 SCC 443, at paragraph no. 10


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held that it is the fundamental rule of evidence that facts must ordinarily be
proved through direct evidence given by a witness who has personal
knowledge of those facts. A person can testify only to what he personally
saw, heard, perceived, or participated in, and not to what he subsequently
learnt from others or inferred from documents.
Therefore, where a party (i.e., Appellant No. 1) alleges that its consent
for sale consideration of USD 50,000 was procured by fraud or
misrepresentation during negotiations, the best and primary evidence must
come from the persons (counsels) who directly participated in those
negotiations in year 2012 and 2013 and to whom the alleged representations
were made, rather than from third-party experts who had no involvement in
the relevant events.
18.3 In our considered opinion, the oral testimony of an independent
valuation expert or auditor cannot, by itself, constitute proof of the fraud or
misrepresentation allegedly practised by the Respondents upon the
Appellants, which is stated to have induced the Appellants to agree to the
terms governing the transfer of Aperam Shares in Respondent No.2/IUP as
recorded in the e-mail dated 20.09.2012 and subsequently embodied in the
Settlement Agreement dated 20.12.2013. The alleged fraud as per Appellant
No. 1, pertains to the negotiations and representations said to have been
made between the parties leading to the consensus recorded in the aforesaid
documents. Consequently, evidence with respect to such alleged
representations could ‘only’ emanate from persons who participated in, or
had direct knowledge of, the negotiations culminating in the agreement
between the parties. Admittedly, the negotiations on behalf of the Appellants


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were conducted through their legal representatives and counsel.
Significantly, no such representative or counsel, who participated in the
negotiations has been identified or proposed as a witness to substantiate the
plea that any false representation was made by the Respondents which
induced the Appellants to agree to the settlement consideration of USD
500,000; and, therefore, the decision is evidently conscious and deliberate.
18.4 The absence of any such primary evidence further reinforces the
conclusion of the learned Single Judge that the plea of fraud and
misrepresentation lacks the necessary factual foundation and is unsupported
by any material capable of establishing that the Appellants' consent was
procured by deception. Also, we are of the considered opinion that the
reason for the absence of these particulars is that the parties negotiated the
price between 2009 and 2012, wherein the Appellants initiated their demand
with USD 2 million and ultimately agreed to a lump-sum amount of USD
500,000.
19. The Appellants are an established corporate entity, which has been
represented by competent counsel at each step of negotiations forming the
basis of the Settlement Agreement, since 2009 until the e-mail dated
20.09.2012, thereafter until execution of the Settlement Agreement dated
20.12.2013 and even during the follow-up of the implementation of the said
Settlement Agreement between 2013 and 2016.
The submission of the Appellants that they were defrauded into
agreeing to the sale consideration of USD 50,000 for the Aperam Shares
valued at Rs. 1.20p per share has been rightly rejected by the learned Single
Judge by referring to Exception 1 of Section 19 of the Act of 1872. The total


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consideration of USD 500,000 for the sale of Aperam Shares and repayment
to Appellant No.2/Imphy was agreed on 20.09.2012, and the Settlement
Agreement formalising the said agreement and allocating the amounts of
USD 50,000 and USD 450,000 was entered into on 20.12.2013. It was the
terms and conditions of the e-mail dated 20.09.2012 at paragraph 4 of the
said e-mail that the Appellants would be granted full access to all the
corporate documents, including minutes of the board and general meetings
of Respondent No. 2/IUP to satisfy itself that Respondent No.2 was
compliant with all its legal obligations. In fact, Settlement Agreement at
Article 2.1 acknowledged that Appellant No. 1 through its representative has
duly examined all the minutes of the board and general meetings as well as
corporate register of Respondent No.2/IUP. In this background of facts,
Article 4(e) of the Settlement Agreement which records that neither party
has relied upon any fact or representation of the opposite party assumes
significance and negatives the allegation of the Appellants that it relied upon
representations made by Respondents while agreeing to the price of USD
50,000 for the Aperam Shares.
20. The reliance placed by the Respondents on the judgment of the
Supreme Court in Reliance Eminent Trading and Commercial Private
14
Limited v Delhi Development Authority is apposite, and we find that the
allegation of alleged fraud and misrepresentation raised in the written
statement (including paragraph 10) failed to raise any pleas, which could
have succeeded at trial on the basis of the oral evidence of the independent
auditor on behalf of the Appellants.

14
2026 SCC OnLine SC 744, at paragraph nos. 59 and 60.


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21. The Appellant No. 1 has relied upon the judgment of Sangam (India)
v. NHAI (supra) and Niaz Ahmad Khan v. Parshotam Chandra (supra) to
contend that the Exception of Section 19 of the Act of 1872 would not be
applicable in cases of deliberate fraud by the defendant. However, in this
case in view of our findings that since the Appellant No. 1 has failed to
plead the necessary particulars of fraud as per Order VI Rule 4 CPC in its
written statement, its defence of fraud has been rightly held by the learned
Single Judge as a plea without foundation, and therefore we agree that
Appellant No. 1 has no real prospect of succeeding in defending against the
claim on this plea of fraud.
22. The aforesaid discussion shows that:
i. The negotiations for determining the terms of settlement recorded
between the parties in the Settlement Agreement, has its genesis in the
negotiations held between the parties through their counsels between
2009 and 2012. The sum of USD 500,000 was agreed between the
parties as on 20.09.2012 for two transactions i.e., transfer of Aperam
shares and repayment of debt due to Appellant No. 2/Imphy. This sum
of USD 500,000 was agreed much before the valuation report of N.C.
Aggarwal came into existence.
ii. The Settlement Agreement was executed on 20.12.2013 and sum of
USD 500,000 was split into USD 50,000 and USD 450,000 thereafter,
the Appellant No. 1 followed up for payment of USD 50,000 and
USD 4,50,000 respectively through its counsel regularly until 2015.
iii. The terms of the Settlement Agreement expressly record that the
Appellants exercised due diligence and independent decision making


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before executing the said Agreement.
iv. The allegation of misrepresentation on the valuation of USD 50,000
was raised by the Appellant No. 1 for the first time in its e-mail dated
16.04.2016.
v. The documentary evidence on the basis of which the Appellant No. 1
seeks to substantiate its plea of fraud is KPMG valuation report dated
02.01.2017, which came into existence a day prior to the filing of the
written statement on 03.01.2017.
vi. The Appellant No. 1 has failed to identify the representative of
Respondent No. 1 who allegedly misrepresented the price during the
negotiations leading to the issuance of the e-mail dated 20.09.2012
and subsequently execution of the Settlement Agreement dated
20.12.2013.
vii. The Appellant No. 1 has also failed to identify its representative, to
whom the alleged misrepresentation was made by the representative
of Respondent No. 1.
viii. Law requires that the evidence of fraud has to be given by the party
to personally saw, heard, perceived or participated in the negotiations.
Thus, the auditor who prepared the KPMG valuation report dated
02.01.2017 is not competent in law to prove the alleged plea of fraud
raised by Appellant No. 1.
ix. The Appellant No. 1 in its written statement has failed to provide the
requisite particulars of the person(s) who deceived and who were
deceived respectively, date of the alleged deception and the facts
constituting the alleged deception to meet the requirement of Order VI
Rule 4 CPC.


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x. The Appellant has therefore, failed to justify its plea that it has
evidence to prove the allegation of fraud by leading oral evidence.
xi. As per the admitted documents, all correspondence and negotiation,
held between the parties from 2009 to 2012 and 2013, was held
through their respective counsel. These facts belie the submission of
the Appellant No. 1 that it was defrauded into agreeing to the price of
USD 50,000 for the transfer of shares.
23. In view of the aforesaid discussion, we are in complete agreement
with the findings of the learned Single Judge, that there is no merit
whatsoever in the contention of the Appellants that Respondent No. 1
procured the consent of Appellant No. 1 to the purchase price of the Aperam
Shares at USD 50,000 by fraud or misrepresentation. The findings of the
learned Single Judge on this issue are accordingly upheld.
ISSUE II: WHETHER RESPONDENT NO. 1 WAS NOT READY AND WILLING
TO PERFORM ITS OBLIGATION UNDER THE AGREEMENT AND WAS
ITSELF IN DEFAULT
24. We shall now examine the correctness of the finding of the learned
Single Judge returned in exercise of its powers under Order XIII A CPC to
hold that Respondent No. 1 was always ready and willing to perform its
obligations under the Settlement Agreement in relation to the purchase of
the Aperam Shares as on 13.09.2016, being the date on which Appellant No.
1 purported to terminate the Settlement Agreement insofar as it pertained to
the transfer of the said Aperam shares.
25. Learned Single Judge has given its findings on this issue at
paragraphs 55, 56, 57 and 58 of the impugned judgment, which read as
under:


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“55. That leaves only the defence, of Jindal being not entitled to specific
performance for the reason of being itself in default.

56. However again, no explanation whatsoever has been given by
th
Aperam Stainless to the communications dated 11 August, 2014 and
th th
12 October, 2015 whereby the Settlement Agreement dated 20
December, 2013 was admitted to be pending closure and proposing
closure within “couple of weeks”. The same indicate that the time of
performance was extended.

57. It is admitted by Aperam Stainless in para no.24 of its written
statement in CS(COMM) No.1314/2016 that there were obligations to be
complied with also before closure. It is not in dispute that there could be
no closure without RBI permission. I have minutely perused, the
pleadings and do not find any plea that they were any defaults /
deficiencies by Jindal in securing the RBI permission. Once the closure
of the Settlement Agreement was not possible without RBI permission
th
which was obtained on 28 January, 2016, it cannot be said that Jindal
was in default, to be not entitled to specific performance.

st
58. The Specific Relief Act, 1963 has been amended with effect from 1
st
August, 2018 (notified from 1 October, 2018) to remove some
impediments imposed thereby to specific performance of contracts and to
facilitate specific performance. While Section 10 of the Act as it stood
prior to amendment, made the grant of the relief of specific performance
discretionary, post amendment, “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”. The senior counsel
for the Aperam Stainless has not argued that Section 11(2) or Section 14
or Section 16 are attracted or bar specific performance in the present
case, except as hereinabove mentioned. Jindal, on the contemporaneous
documents discussed hereinabove, is found to have performed and/or to
have been ready and willing to perform the essential terms of the
th
contract, and immediately on receipt of RBI permission on 28 January,
2016, called upon Aperam Stainless to perform its part and on refusal of
th
Aperam Stainless, filed the present suit on 20 September, 2016. Though
the amendment to the Specific Relief Act is of after the institution of the
suit, but it has been held in Adhunik Steels Ltd. Vs. Orissa Manganese
and Minerals (P) Ltd. (2007) 7 SCC 125 that the law of specific relief
in its essence is a part of the law of procedure, for, specific relief is a
form of judicial redress. With respect to procedural laws, it has been
consistently held that amendments thereto are retrospective. Reference if
any required may be made to Purbanchal Cables and Conductors Pvt.
Ltd. Vs. Assam State Electricity Board (2012) 7 SCC 462, Thirumalai
Chemicals Ltd. Vs. Union of India (2011) 6 SCC 739 and Rajendra


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Kumar Vs. Kalyan (2000) 8 SCC 99.”
[Emphasis supplied]
25.1 Learned Single Judge has rejected the submission of the Appellants
that the Respondent was not ready and willing to perform the Settlement
Agreement. Learned Single Judge has held that the permission from RBI for
making payment of USD 450,000 to Appellant No.2/Imphy was received on
28.01.2016, and the time for performance was extended by Appellant No. 1
15 16
vide communications dated 11.08.2014 and 12.10.2015 . In these facts,
the learned Single Judge held that Respondent No. 1 was not in default and
was entitled to specific performance of the Settlement Agreement in
CS(COMM) No. 1314/2016 filed on 20.09.2016.
26. Appellant has specifically challenged the readiness and willingness of
the Respondent No. 1 in its written submissions and the written statement.
26.1 It is contended that even otherwise, Respondent No.1 was not entitled
to the relief of specific performance of the Settlement Agreement in respect
of the sale of Aperam Shares by Appellant No.1 to Respondent No.1 as it
was not ready and willing to perform its own obligations under the
Settlement Agreement and was itself responsible for its non-performance. It
is contended that it is apparent from the pleadings and the correspondence
on record that the Appellants cooperated and supplied all the information
and documents required in terms of the Settlement Agreement to
Respondent No.1 by July 2014. The Appellants complied with the Closing
steps which had to be performed, and it was the Respondent No. 1, who
failed to perform its obligations in Closing this transaction.

15
Email at printed page 37 of defendant’s document in CS(COMM) 1314/2016
16
Email at printed page 79 of plaintiff’s documents in CS(COMM) 1314/2016


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26.2 It is contended that the learned Single Judge erred in holding that the
delay on the part of Respondent No.1 in Closing, was attributable to the
requirement for RBI permission for transfer of shares. It is contended that
neither did Respondent No.1 require any permission from RBI for making
payment of USD 50,000 for purchase of Aperam shares nor is it the case of
any party that such permission was required. It is contended that the
permission from RBI was required by the Respondent No. 2/IUP for seeking
revalidation of invoices for making payment of USD 450,000 to Appellant
No.2/Imphy for the goods admittedly supplied by it which is a distinct
obligation. Furthermore, the delay on account of applying for RBI
permission for revalidation of invoices was also caused by the Respondent
No.2/IUP. It was only on 25.08.2014 that the counsels for the Respondent
No.2/IUP informed the counsels for Appellant No.2/Imphy that RBI
permission was required for the said purpose and, even after allegedly
receiving the said permission after almost two [‘2’] years on 28.01.2016,
only informed the Appellant of the same more than a month later.
26.3 It is contended that the learned Single Judge has erred in holding that
the price for the Aperam Shares agreed between the Appellant and
Respondent No.1 was USD 500,000, when it is apparent from a plain
reading of the Settlement Agreement that the price for the Aperam Shares
was only USD 50,000. Ld. Single Judge failed to consider that as per the
terms of the Settlement Agreement, payment of USD 50,000 was to be made
by Respondent No. 1 to Appellant No. 1 while payment of USD 450,000
was to be made by the Respondent No.2/IUP to Appellant No.2/Imphy.
Thus, USD 450,000 could not have been a consideration for transfer of


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shares in favour of Respondent No.1. A bare reading would show that the
Settlement Agreement comprises two distinct and separate agreements
between two sets of parties to the Settlement Agreement, i.e. an agreement
for sale of shares of Appellant No. 1 in the Respondent No.2/IUP to
Respondent No. 1 for a consideration of USD 50,000 and an agreement for
payment of USD 450,000 by the Respondent No.2/IUP to Appellant
No.2/Imphy for goods supplied and, admittedly used by the Respondent
No.2/IUP.
26.4 It is contended that the learned Single Judge has erroneously held that
the interests of the Appellant No.1 and Appellant No.2/Imphy are one and
the same and that the amount of USD 450,000 was allegedly to be paid
towards consideration for the sale of Aperam Shares, however, due to
foreign exchange regulations preventing the same, the said amount was
appropriated towards payment for goods supplied by Appellant No.2/Imphy
to the Respondent No.2/IUP for commercial purposes. This narrative is
completely contrary to the very terms of the Settlement Agreement that is
sought to be specifically enforced by way of the Suit .
27. We note that Respondent No. 1 has not dealt with this ground of
challenge to the impugned judgment in its written submissions. However, in
the impugned judgment, the contention of the Respondent No. 1 is recorded
to the effect that it has always been ready and willing to perform its part of
the Settlement Agreement and asserted that there was no delay on its part. It
is stated that it issued repeated requests and reminders to Appellant No. 1 for
Closing the Settlement Agreement. It relies upon the fact that it obtained
permission from the RBI on 28.01.2016 for remittance of USD 450,000 to


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Appellant No. 2/Imphy.
FINDING ON ISSUE NO. II
28. At the outset, we may note that it is the pleaded case of Respondent
No. 1 in its plaint that the transaction for the transfer of shares is for
consideration of USD 50,000. The subject matter of CS(COMM)No.
1314/2016 is the specific performance of this transaction for the transfer of
Aperam Shares held by Appellant No.1 in Respondent No.2/IUP company
in favour of Respondent No. 1. The said transaction does not admittedly
require any permission from RBI.
Respondent No. 1 has pleaded in this plaint that it is the transaction of
payment of USD 450,000 by Respondent No.2/IUP to Appellant
No.2/Imphy, which required permission from the RBI, and the said
17
permission was received on 28.01.2016. In the plaint Respondent No. 1
has pleaded that it followed up with Appellants to provide the necessary
documents required for submission to RBI for obtaining permission to
facilitate payment of USD 450,000 and alleged that since Appellants
substantially delayed providing the said documents, this led to a delay in
procuring the permission from RBI. It is stated that after receiving
permission from RBI on 28.01.2016 for payment of USD 450,000,
Respondent No. 1 again approached Appellant No. 1 to execute further
documents for completing the sale and transfer of shares.
29. Having perused the plaint of CS(COMM) No. 1314/2016, we find that
it is a matter of record that no RBI permission was required by Respondent
No. 1 for effecting the transfer of USD 50,000 to Appellant No. 1 for

17
In CS (COMM)1314/2016 at paragraph 12 to 14 of the plaint


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Closing the sale of the Aperam Shares. To this extent, the challenge of the
Appellants to the finding of the learned Single Judge is well founded.
There is no dispute by Respondent No. 1 that no RBI permission was
required by Respondent No. 1 for effecting the transfer of USD 50,000 to
Appellant No. 1.

30. Respondent No. 1 in its plaint has stated that it followed up with
Appellants for obtaining documents, which were unduly delayed and has
relied upon this fact to justify the non-transfer of USD 50,000 towards the
consideration of USD 50,000 share transfer. However, we find this stand in
the plaint is negated by the documents, as discussed hereinafter.
31. The Settlement Agreement terms recorded at Article 3(1), stipulated
that the transactions would be closed between the parties within 30 days or
on any Closing date mutually decided between the parties.
In this background, we have reviewed the correspondence exchanged
amongst the parties, through their respective counsel, between February
18
2014 to December 2014. The e-mail dated 07.08.2014 at 13:26 issued by
the counsel of the Appellants to the counsel of the Respondents records that
all documents sought by the Respondents for completing the transfer of
shares inter-se the parties as well as for seeking permission from RBI for
remittance of USD 450,000 stood executed and submitted to the counsel of
the Respondents. The Appellants' counsel also provided the details of the
two-bank account(s) to which the payment(s) had to be transferred and
specifically inquired about the status of the transfer.
19
In response, vide e-mail dated 09.08.2014, the counsel for the

18
Email at printed page no. 191 in Pleadings II of the present appeal
19
Email at printed page no. 191 in Pleadings II of the present appeal


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Respondents sought further documents relevant for Closing the share
transfer transaction. Appellants’ counsel, vide reply e-mail dated
20
11.08.2014 at 01:54 PM, sought time to provide the additional documents.
However, in this e-mail, it specifically sought response from Respondents as
regard their financial position to make payment for USD 450,000 and also
recorded that he understands that Respondent No. 1 has the financial
capacity to make payment of USD 50,000 readily. Respondent’s counsel
21
replied to the said e-mail on the same date i.e., 11.08.2014 at 02:34 PM
and stated that it would revert regarding the financial position of Respondent
No.2/IUP to make the payment of USD 450,000. Appellant's counsel, vide
22
reply e-mail dated 13.08.2014 issued at 04:38 PM, conveyed that all
pending documents will be provided by end of August 2014 and suggested
that the Closing of the transaction be scheduled in first week of September
23
2014. Respondents counsel in its e-mail dated 25.08.2014 issued at 10:42
AM, stated that Respondents have to apply to the RBI for remittances to be
made by Respondent No.2/IUP for USD 450,000 and it is only then, once it
gets permission, will be in a position to plan the Closing.
24
Appellants' counsel, vide e-mail dated 30.09.2014 issued at 01:18
PM, communicated that all documents requested from the Appellants stand
delivered to the Respondents and sought a call for deciding the Closing. Vide
25
e-mail dated 06.10.2014 issued at 02:29 PM, Respondent No. 1’s counsel
informed the Appellants counsel that Respondent No. 1 would Close the

20
Email at printed page no. 37 of defendant’s document in CS(COMM) 1314/2016
21
Email at printed page no. 38 of defendant’s document in CS(COMM) 1314/2016
22
Email at printed page no. 39 of defendant’s document in CS(COMM) 1314/2016
23
Email at printed page no. 40 of defendant’s document in CS(COMM) 1314/2016
24
Email at printed page no. 41 of defendant’s document in CS(COMM) 1314/2016
25
Email at printed page no. 49 of plaintiff’s document in CS(COMM) 45/2017


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transaction once revalidation of the invoices of Appellant No. 2/Imphy was
received from the RBI, which was taking time. In response, Appellants
26
counsel, vide e-mail dated 06.10.2014 , issued at 03:28 PM expressed the
anxiety of the Appellants with respect to the delay in Closing the
transactions and reiterated that Respondents are under an obligation to pay
for the shares and the equipment received. It sought indication as regards the
time when the payments shall be made. Appellants counsel received no
27
response and followed up with an e-mail dated 08.10.2014 to enquire
about the Closing. Respondent No.1’s counsel vide e-mail dated
28
18.11.2014 informed the Appellants that documents in respect of
revalidation of invoices of Appellant No. 2/Imphy had been submitted to
29
SBI , the authorized dealer.
32. The review of the correspondence exchanged between the parties in
the year 2014 shows that vis-à-vis the transaction of share transfer from
Appellant No. 1 to Respondent No. 1, all documents sought by Respondent
No. 1 had been provided by Appellant No. 1 and were retained in custody of
Respondent No. 1’s counsel, as documented in the last e-mail dated
30.09.2014. However, Respondent No. 1 wilfully, without any reasonable
cause, did not close this transaction and instead pursued permission from
RBI for remittance of USD 450,000 for making payments to Appellant No.
2/Imphy.
30
33. Respondent No. 1’s counsel vide e-mail dated 01.12.2014 sought an

26
Email at printed page no. 42 of defendant’s document in CS(COMM) 1314/2016
27
Email at printed page no. 43 of defendant’s document in CS(COMM) 1314/2016
28
Email at printed page no. 50 of plaintiff’s document in CS(COMM) 45/2017
29
State Bank of India
30
Email at printed page no. 46 of plaintiff’s document in CS(COMM) 45/2017


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undertaking from Appellant No. 2/Imphy that it would not charge any
interest on the delayed payment of USD 450,000 for equipment; it was
stated that this undertaking had to be submitted to the RBI. Appellant No.
31
2’s counsel replied vide e-mail dated 18.12.2014 and clarified that it was
signing the undertaking only for the purpose of expediting the payment of
USD 450,000 and asserted that receiving the said payment as per the
Settlement Agreement was not conditional on the approval from RBI.
Further e-mails were exchanged on this issue of undertaking on 15.01.2015,
and the final draft of the undertaking required by RBI was shared by
Respondent No. 1’s counsel on 23.01.2015. Appellants' counsel, vide e-mail
32
dated 12.10.2015 expressed concern at the amount of time taken to achieve
the Closing and requested that the same be completed within the next couple
of weeks. Further e-mails were exchanged between the parties with
33
Appellants' counsel vide e-mail dated 16.10.2015 expressing concern about
the time taken for RBI permission to make payment of USD 450,000, stating
that the RBI permission was not a condition of the Settlement Agreement.
34. The review of the aforesaid correspondence shows that Appellants,
even in the year 2015, expressed concern over the time taken for the Closing
of the transactions and repeatedly sought an early Closing.
35. The RBI approval for remittance of USD 450,000 by Respondent
No.2/IUP to Appellant No. 2/Imphy was finally received by Respondent No.
1 on 28.01.2016. However, Respondent No.2/IUP even then, did not remit
the aforesaid amount of USD 450,000 to Appellant No.2/Imphy and did not

31
Email at printed page no. 189 in Pleadings II of the present appeal
32
Email at printed page no. 245-246 in Pleadings II of the present appeal
33
Email at printed page no. 46 of defendant’s document in CS(COMM) 1314/2016


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even inform the Appellants about the receipt of the permission for about a
month and a half.
34
Vide e-mail dated 09.03.2016 , Respondents’ counsel communicated
receipt of RBI approval to Appellants counsel but it did not remit USD
450,000 to Appellant No.2/Imphy or offer to remit USD 450,000. Instead, in
this e-mail Respondents’ counsel sought fresh documentation from
Appellant No. 1 for Closing the share transfer transaction of USD 50,000
between Appellant No. 1 and Respondent No. 1 within March 2016.
There is no clarity on record with respect to further documents
required by Respondent No. 1 on 09.03.2016 for Closing share transfer, as
all documents admittedly stood deposited with Respondent No. 1’s counsel
on 30.09.2014.
35
36. It is at this stage on 16.04.2016 , Appellants' counsel on behalf of
Appellant No. 1 communicated its unwillingness to proceed with
sale/transfer of the Aperam Shares for USD 50,000 on the plea that the price
is grossly undervalued and alleged misrepresentation. It sought the return of
the documents of share transfer executed by Appellant No. 1, which were
lying in the custody of the counsel for the Respondents in trust since
30.09.2014.
However, on behalf of Appellant No.2/Imphy the counsel
communicated its willingness to accept USD 450,000 for the equipment and
requested that the payment be made forthwith to avoid interest liability.
36
Respondent No.2/IUP issued a response on 03.06.2016 to the

34
Email at printed page no. 53 of plaintiff’s document in CS(COMM) 45/2017
35
Email at printed page no. 43 of plaintiff’s document in CS(COMM) 45/2017
36
Email at printed page no. 86 of plaintiff’s document in CS(COMM) 1314/2016


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aforesaid communication dated 16.04.2016 and stated that due to technical
glitches, the transaction of USD 450,000 under the Settlement Agreement
could not be completed. It stated however, that since the RBI permission has
been received, Appellant No. 1 should provide the documents requested vide
e-mail dated 09.03.2016 so that the share purchase transaction can be
concluded. In this letter dated 03.06.2016, the Respondent No.2/IUP did not
offer to make the payment of USD 450,000 but insisted that Appellant No. 1
complete the share transfer transaction with Respondent No. 1.
37. There was further correspondence exchanged between the parties
between June to August 2016 where Appellant No. 2/Imphy continued to
demand payment of USD 450,000 and Appellant No. 1 separately sought to
withdraw from the share transfer transaction and sought return of the
documents executed and handed over to the Respondent No. 1’s counsel.
38. Ultimately on 13.09.2016 Appellant No. 2/Imphy issued a letter and
sought remittance of USD 450,000. And, by a separate letter dated
13.09.2016 Appellant No.1 terminated the Settlement Agreement with
respect to the transaction of share transfer for USD 50,000 prompting the
Respondent No. 1 to file CS(COMM) No. 1314/2016 for specific
performance of the transaction of share transfer for USD 50,000.
39. The facts show that the transaction of share transfer between
Appellant No.1 and Respondent No. 1 for USD 50,000 was not subject to
any permission from the RBI. Appellant No. 1 had executed all documents
sought from it by Respondent No. 1 on or before 30.09.2014 and deposited
the said documents with the counsel for Respondent No. 1. Appellant No. 1


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repeatedly, vide e-mail dated 07.08.2014, 13.08.2014, 06.10.2014,
08.10.2014, followed up for early Closing of the transaction. However, the
Respondent No. 1’s counsel, by its e-mail dated 06.10.2014, stated that the
transaction would be closed only once it received revalidation of the
invoices from the RBI for payment to Appellant No. 2/Imphy. The
application for permission with RBI was filed only on 31.10.2014. Appellant
No. 2/Imphy provided all necessary documentation to Respondents for the
permission sought from RBI. Appellants, vide e-mails dated 12.10.2015 and
16.10.2015, expressed concern about the delay in receipt of RBI permission
and the consequent delay in payment. The RBI permission for payment of
USD 450,000 to Appellant No. 2/Imphy was received on 28.01.2016
however, this fact was communicated to the Appellants only on 09.03.2016.
Even at this stage, Respondent No. 1 did not remit USD 50,000 to Appellant
No. 1 for the share transfer transaction and instead, vide e-mail dated
09.03.2016, sought further documentation. So also, Respondent No.2/IUP
did not remit USD 450,000 to Appellant No. 2/Imphy despite having RBI
permission, whereas this was the sole ground for not making the payments.
40. The impact of the delay in performance from 2013 to 2016 on the
unwillingness of the Respondent No. 1 to close the transaction of shares
transfer is apparent and requires consideration.
41. In our considered opinion, the review of the e-mails and documents
exchanged between the parties shows that Respondent No. 1 unilaterally
linked the share transfer transaction with Appellant No. 1 for consideration
of USD 50,000 with the repayment obligation of Respondent No.2/IUP to
pay Appellant No. 2/Imphy USD 450,000. Respondent No.1 wilfully


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declined to pay USD 50,000 to Appellant No. 1 in 2014, even though all
documents required from Appellant No. 1 for share transfer stood executed
and deposited with its counsel as on 30.09.2014. Again, in 2015, it failed to
make payment despite Appellant No. 1 following up for payments.
Thereafter, when on 28.01.2016 the RBI permission for making payment of
USD 450,000 was received, even at this stage Respondent No. 1 failed to
make payment of USD 50,000 to Appellant No.1. Respondent No. 1 merely
issued an e-mail dated 09.03.2016 to Appellant No. 1 to execute further
documents. No details of the alleged documents are evident.
42. The record shows that there was no legal impediment for Respondent
No. 1 to make payment of USD 50,000 to Appellant No. 1 at any time after
execution of the Settlement Agreement in December 2013. The payment
was withheld entirely at the discretion of Respondent No. 1 as no statutory
permission was required for the said payment. The transaction had to be
closed as per the Settlement Agreement within 30 days i.e., 20.01.2014 or
any Closing date decided between the parties mutually. The justification for
non-payment is only discernible for the period until 30.09.2014, as
Respondent No. 1 was awaiting execution of the documents from Appellant
No. 1 and its nominee directors in terms of the Settlement Agreement.
However, since the said documents were also entirely received as on
30.09.2014 by the counsels for the Respondents, the withholding of USD
50,000 thereafter by Respondent No. 1 has been entirely its unilateral
decision, which prima facie shows its unwillingness to perform the contract.
43. The understanding of Respondent No. 1 that it is obliged to make the
payment of USD 50,000 to Appellant No. 1 immediately upon receiving


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duplicate share certificates and is not linked to payment of USD 450,000 by
Respondent No.2/IUP to Appellant No. 2/Imphy is also clear from
paragraph 11 of the plaint of CS(COMM) No. 1314/2016, wherein relevant
portion of paragraph 11 reads as under: -
“11. Some of the important clauses of the settlement agreement are:
(i) Plaintiff and Defendant No. 1 could not pursue the Joint Venture and
therefore wished to close the agreement.
(ii) The parties acknowledged that Defendant No. 1 and its directors had not
participated in the management of Defendant No. 1 company from March
2009 onwards.
(iii) The Closing date was to be the date falling in 30 days from the
Settlement Agreement or any other date mutually agreed between the
parties. Further, the following chronological events are to take place on the
closing date:
(a) Defendant No. 1 will get the duplicate share certificates
issued and submit all the other documents for transfer of shares.
(b) Simultaneously, on receipt of duplicate share certificates, the
Plaintiff will remit the Purchase price to Defendant No. 1.
(c) Defendant No. 1 nominees will resign from the Board of
Defendant No. 3 company.
(d) Defendant No. 3 company will make a payment of USD 450000
to Defendant No. 2 for the supply of materials received by the
Defendant No. 3
(e) Defendant No. 3 company will provide draft of amended articles
of association to Defendant No. 1
(f) Board meeting and Shareholders meeting will take place to give
effect to transfer of shares and other consequential requirements.
iv) The Settlement Agreement shall be binding upon the parties to the said
agreement.”
[Emphasis supplied]

37
44. Respondent No. 1 in its e-mail dated 01.07.2014 sought the bank
account details of Appellant No. 1 for effecting transfer of the share price.
38
Respondent No. 1’s e-mail dated 02.07.2014 addressed to Appellant No. 1
records at paragraph 5 that duplicate share certificates have been received
and are in the possession of Respondent No. 1. Thus, as on 01.07.2014

37
Email at printed page no. 183 in Pleadings II of the present appeal
38
Email at printed page no. 182 in Pleadings II of the present appeal


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Respondent No. 1 expressly represented to the Appellant No. 1 that it is
ready and willing to transfer USD 50,000, subject to Appellant No. 1
executing further documents required from it. All the documents required
stood executed by Appellant No. 1 as on 30.09.2014 admittedly. Respondent
No. 1 had no basis for not making the payment of USD 50,000 after
01.07.2014 and/or 30.09.2014. There is no explanation by Respondent No. 1
in the documents or the plaint. In these facts, the Respondent No. 1’s
assertion of readiness and willingness in the plaint cannot be accepted as an
undisputed fact so as to entitle the Respondent No. 1 to a decree of specific
performance under Order XIII A CPC. In our opinion Appellant No. 1’s
challenge to the said assertion in the written statement has a real prospect of
successfully defending against the claim of specific performance. Therefore,
in our opinion the Respondent No. 1’s application for summary judgment is
liable to be dismissed on this ground.
45. We are of the considered opinion that the aforesaid e-mails fail to
prima facie show that Respondent No. 1 was willing to perform the
Settlement Agreement. In fact, despite demands from Appellant No. 1 in
2014 and 2015 for remittance of USD 50,000, Respondent No. 1
unilaterally, and without any cause, withheld the said payment.
46. The learned Single Judge has held at paragraphs 56 and 58 that the
communications dated 11.08.2014 and 12.10.2015 addressed by the
Appellants indicate that the time for performance was extended. We are
unable to agree with this conclusion, as even in its e-mail dated 12.10.2015,
the Appellants expressed their distress at the non-closing of the transactions.
As discussed hereinabove, the documents required to be executed by


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Respondent No. 1, as per the agreement, as per the Settlement Agreement
for effecting the share transfer stood executed and delivered to Appellant
No. 1 as on 30.09.2014. Respondent No. 1 ought to have transferred a sum
of USD 50,000 to Appellant No. 1 immediately thereafter to close the share
transfer transaction.

47. The finding of the learned Single Judge at paragraph 58 that
Respondent No. 1, upon receiving RBI permission, immediately called upon
Appellant No. 1 to perform its part and, on the refusal of Appellant No. 1,
filed this suit is factually incorrect. This finding is prima facie incorrect for
the following reasons:
a) No RBI permission was required by Respondent No. 1 for making the
payment of USD 50,000. This payment could have been made by
Respondent No. 1 immediately after it had received all documents
from Appellant No. 1 for the said transfer in 2014. It is a matter of
record that all relevant documents stood executed and delivered by
Appellant No. 1 to Respondent No. 1 as on 30.09.2014.
b) The RBI permission was required by Respondent No. 2/IUP for
making payment of USD 450,000 to Appellant No. 2/Imphy;

c) Notwithstanding the above, even after the RBI permission dated
28.01.2016 for remitting USD 450,000 was received, Respondent No.
1 did not make payment of USD 50,000 to Appellant No. 1 and
instead, by an e-mail dated 09.03.2016, called upon Appellant No. 1
to furnish further documents; and


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d) The inaction of Respondent No 1 from 28.01.2016 to 09.03.2016 is
unexplained and unjustified. Moreover, the demand for further
documents by Appellant No. 1 is also not bona fide because all
documents required by Respondent No. 1 for completing the share
transfer stood executed by Appellant No. 1 and its nominee directors
in September, 2014. The said documents stood deposited with the
counsels for the Respondents in trust, awaiting the remittance of USD
50,000. This is duly documented in the e-mails exchanged between
Appellants and Respondents between July, 2014 to September, 2014,
and the e-mail dated 30.09.2014 is critical.
For the reasons noted above, the finding of the learned Single Judge at
paragraph 45 of the impugned judgment that sale of shares could not take
place without RBI permission is factually incorrect and is hereby set aside.
48. In CS(COMM) No. 1314/2016, Respondent No. 1 approached the
Court seeking specific performance of the transaction of share transfer
against Appellant No. 1 and sought directions only to this effect.
Respondent No. 2, however, did not independently approach the
Court to offer payment to Appellant No. 2/Imphy. In this suit, Respondent
No. 1 did not seek any direction to Respondent No. 2/IUP to make payment
of USD 450,000 to Appellant No. 2/Imphy. This further shows that the
transaction of share transfer between Appellant No. 1 and Respondent No. 1
is distinct and capable of completion on a standalone basis; and therefore,
Respondent No. 1 prima facie had no legal basis for withholding
performance of this transaction of USD 50,000 while awaiting the RBI
permission for remittance of USD 450,000 by Respondent No. 2/IUP to


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Appellant No. 2/Imphy.
49. Moreover, if Respondent No. 1 was indeed willing to complete the
overall settlement and was treating the payment of USD 450,000 to
Appellant No. 2/Imphy as inextricably linked with the transfer of the
Aperam Shares, there was no explanation for its failure, after the RBI
approval dated 28.01.2016, to ensure that Respondent No. 2/IUP forthwith
remitted the said amount to Appellant No. 2/Imphy. The sole justification
advanced by Respondent No. 1 for withholding the Closing of the
transaction until 2016 was the pendency of RBI approval for the remittance
of USD 450,000. Once that approval had admittedly been obtained,
Respondent No. 1 neither caused Respondent No. 2/IUP to discharge its
admitted obligation of remitting USD 450,000 nor itself remitted the
consideration of USD 50,000 payable for the transfer of shares. Instead, it
sought further documentation from Appellant No. 1, despite the admitted
position that all documents required for effecting the transfer of shares had
already been executed and delivered by 30.09.2014. This conduct raises a
substantial triable issue as to whether Respondent No. 1 was itself in default
of its contractual obligations.

50. In view of the aforesaid discussion, we are unable to sustain the
findings recorded by the learned Single Judge in paragraphs 45, 56, 57 and
58 of the impugned judgment to the effect that Respondent No. 1 was
continuously ready and willing to perform its obligations under the
Settlement Agreement, thus violating Section 16(c) of the Act of 1963, and
that the delay in completion of the transaction stood satisfactorily explained
by the requirement of RBI approval. The impugned findings are,


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accordingly, set aside.
ISSUE III: WHETHER THE SETTLEMENT AGREEMENT CONSTITUTED A
SINGLE LUMP-SUM TRANSACTION OR TWO DISTINCT AGREEMENTS,
AND WHETHER THE SHARE TRANSFER AGREEMENT WAS VALIDLY

VOIDED BY THE APPELLANT NO. 1

51. Appellants have contended that the learned Single Judge erred in
concluding that the agreed consideration for the transfer of the Aperam
Shares was a lump-sum amount of USD 500,000. It is submitted that, on a
plain reading of the Settlement Agreement, the consideration for the transfer
of shares by Appellant No.1 to Respondent No.1 was expressly fixed at
USD 50,000, whereas the separate amount of USD 450,000 was payable by
the Respondent No.2/IUP to Appellant No. 2/Imphy towards outstanding
dues for goods supplied. It is contended that these constitute two distinct and
independent arrangements between different parties under the Settlement
Agreement, and therefore the learned Single Judge wrongly treated the
entire sum of USD 500,000 as consideration for the transfer of Aperam
shares. The Appellants further submit that the finding that, the amount of
USD 450,000 was merely appropriated towards payment for supplied goods
due to foreign exchange regulations is contrary to the express terms of the
Settlement Agreement sought to be specifically enforced.
52. The Appellants have further contended that, in any event, the
agreement for transfer of the Aperam Shares stood validly voided by
Appellant No.1 upon discovery of the alleged fraud and misrepresentation
regarding the valuation of the shares. It is submitted that Appellant No.1, by
its communication dated 13.09.2016, validly rescinded the agreement
relating to the transfer of shares while continuing to affirm the independent
obligation of Respondent No.2/IUP to pay USD 450,000 to Appellant No.


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2/Imphy towards the goods supplied. It is, therefore, submitted that the
agreement relating to the transfer of shares had ceased to be enforceable
against Appellant No.1.
FINDING ON ISSUE NO. III
53. We note that, in paragraphs 44 and 49 of the impugned judgment, the
learned Single Judge proceeded on the premise that the consideration for the
transfer of the shares held by Appellant No.1 in Respondent No.2/IUP was
USD 500,000, with the payments of USD 50,000 and USD 450,000 being
split into two transactions merely for regulatory convenience. However, this
is neither the case pleaded by Respondent No.1 in the plaint nor by
Respondent No.2/IUP in its written statement in CS (COMM) No.45/2017.
We are, therefore, unable to sustain the rationale of the impugned judgment
which is based on a factual premise not arising from the pleadings. A plain
reading of the Settlement Agreement prima facie indicates two distinct
obligations between different parties, namely, the transfer of the Aperam
Shares by Appellant No.1 to Respondent No.1 for a consideration of USD
50,000 and the independent obligation of Respondent No.2/IUP to pay USD
450,000 to Appellant No. 2/Imphy towards the admitted dues for goods
supplied. Consequently, the finding that the consideration for the transfer of
shares from Appellant No. 1 to Respondent No. 1 was for a lump-sum
amount of USD 500,000 cannot be sustained. Respondent No. 1 and
Respondent No. 2 are, admittedly, distinct juristic entities and they are not
an alter ego. The reasons in the impugned judgment, however, treats
Respondent Nos. 1 and 2 as alter egos.
54. Equally, once the agreement relating to the transfer of Aperam shares


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is viewed as a distinct contractual arrangement, the Appellants’ plea that the
said agreement of shares transfer, due to lack of readiness and willingness,
was validly voided raises a substantial defence which requires adjudication
and cannot be rejected on the assumption that the Settlement Agreement
constituted one indivisible bargain for USD 500,000. These issues,
therefore, constitute triable questions, which could not have been
conclusively determined in summary proceedings.
ISSUE IV: WHETHER THE AMENDMENT TO THE SPECIFIC RELIEF ACT
1963 WILL APPLY RETROSPECTIVELY OR PROSPECTIVELY IN THE
PRESENT CASE

55. The learned Single Judge, at paragraph 58 of the impugned judgment,
held that the amendments introduced to the Specific Relief Act, 1963 [‘Act
of 1963’] by the Specific Relief (Amendment) Act, 2018 [‘2018
Amendment’], being procedural in nature, would apply retrospectively to the
present case, notwithstanding that CS (COMM) No. 1314/2016 had been
instituted prior to the amendment. Proceeding on this basis, the learned
Single Judge observed that, after the 2018 amendment, the grant of specific
performance is no longer a discretionary relief but is to be enforced by the
Court subject only to the limitations contained in Sections 11(2), 14 and 16
of the Act of 1963. Since none of the aforesaid statutory bars were found to
be attracted and Respondent No.1 was held to have been ready and willing
to perform its obligations under the Settlement Agreement, the learned
Single Judge concluded that the contract was liable to be specifically
enforced.

56. On this proposition of law, we would like to take note of the few
landmark judgments of Supreme Court.


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39
56.1 In Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt. Ltd. ,
the Supreme Court authoritatively settled the question regarding the
applicability of the 2018 Amendment to contracts and proceedings arising
from transactions executed prior to the amendment. The Court held that the
2018 Amendments are substantive in character and not merely procedural,
since they fundamentally alter the legal framework governing the grant of
specific performance by transforming what was previously an equitable and
discretionary remedy into a statutory remedy that the Court is ordinarily
bound to enforce, subject only to the exceptions expressly provided under
the Act. The Supreme Court observed that the true test is not the nature of
the parent enactment but whether the amendment itself creates new rights,
obligations or takes away vested rights. Applying this test, it held that the
amended Section 10 and the corresponding changes to the Act significantly
reinforced the sanctity of contracts by creating enforceable rights and
corresponding obligations that did not exist under the pre-amended regime.
While considering the observations made in Adhunik Steels Ltd. v.
40
Orissa Manganese & Minerals (P) Ltd. , the Supreme Court expressly
held that the reliance placed by several courts on the said decision to
characterize the Act of 1963 as purely procedural was misplaced. It clarified
that Adhunik Steels was decided in the context of the scope of Section 9 of
the Arbitration and Conciliation Act, 1996, and merely recognised that
injunction is a form of specific relief; it did not lay down as a proposition of
law that the provisions of the Act of 1963 are, stricto sensu , procedural or
that amendments thereto would necessarily operate retrospectively.

39
(2023) 1 SCC 355, at paragraph nos. 43 to 59.
40
(2007) 7 SCC 125, which was also relied upon by the learned Single Judge at paragraph 58 of the
impugned judgment.


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The Supreme Court expressly disapproved the reasoning that the 2018
amendments were procedural in nature and, therefore, retrospective. Relying
upon the settled principle that amendments affecting substantive rights are
presumed to operate prospectively unless the legislature expressly provides
otherwise or such intention arises by necessary implication, the Court held
that the 2018 Amendment creates new substantive rights and obligations
and, consequently, applies prospectively with effect from 01.10.2018. It was
accordingly held that the amended provisions do not govern contracts or
transactions entered into prior to the said date, nor do they affect the
substantive rights of parties which had accrued under the unamended law.
Relevant paragraphs of the judgement read as under: -
“48. We do not subscribe to the aforesaid reasoning provided by the High
Court for the simple reason that after the 2018 Amendment, specific
performance, which stood as a discretionary remedy, is not ( sic now) codified
as an enforceable right which is not dependent anymore on equitable
principles expounded by Judges, rather it is founded on satisfaction of the
requisite ingredients as provided under the Specific Relief Act. For
determination of whether a substituted law is procedural or substantive,
reference to the nature of the parent enactment may not be material. Instead,
it is the nature of the amendments which determine whether they are in the
realm of procedural or substantive law.

… …
57. In the light of the aforesaid discussion, it is clear that ordinarily, the
effect of amendment by substitution would be that the earlier provisions
would be repealed, and amended provisions would be enacted in place of the
earlier provisions from the date of inception of that enactment. However, if
the substituted provisions contain any substantive provisions which create
new rights, obligations, or take away any vested rights, then such substitution
cannot automatically be assumed to have come into force retrospectively. In
such cases, the legislature has to expressly provide as to whether such
substitution is to be construed retrospectively or not.

58. In the case at hand, the Amendment Act contemplates that the said
substituted provisions would come into force on such date as the Central
Government may appoint, by notification in the Official Gazette, or different


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dates may be appointed for different provisions of the Act. It may be noted
that 1-10-2018 was the appointed date on which the amended provisions
would come into effect.

59. In view of the above discussion, we do not have any hesitation in
holding that the 2018 Amendment to the Specific Relief Act is prospective
and cannot apply to those transactions that took place prior to its coming into
force.”

[Emphasis supplied]

56.2 This judgment on merits of the dispute was, however, recalled by the
Supreme Court hearing the review in M/s Siddamsetty Infra Projects Pvt.
41
Ltd. v. Katta Sujatha Reddy & Ors. . While the Court revisited its
findings on the interpretation of the contractual clauses, readiness and
willingness under Section 16(c) of the Act of 1963, and the exercise of
discretion in granting specific performance, the aforesaid observation on
principles of law that, the 2018 Amendment to the Act of 1963 is
prospective in operation and does not apply to transactions or suits governed
by the unamended Act, was expressly, neither recalled nor diluted. On the
contrary, the Court proceeded to determine the claim for specific
performance under the unamended provisions of the Act and reiterated that,
in suits governed by the pre-amendment regime, the grant of specific
performance continues to be an equitable and discretionary relief. Relevant
paragraph of the judgement read as under: -
“ F. Specific performance

38. The next issue is whether the petitioner is entitled to a decree for
specific performance. This Court held that the 2008 amendment to Section 10
of the Specific Relief Act does not apply retrospectively and decided the
matter based on Section 10 before the amendment. Section 10, before the
amendment, conferred courts with the discretion to provide a decree for
specific performance. In exercise of review jurisdiction, we must not disturb a

41
(2024) 20 SCC 140, at paragraph no. 32.


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finding unless there is an error apparent on the face of the record. Even
assuming that the grant of relief of specific performance continued to be
discretionary to a suit instituted before the date of the amendment, we are of
the opinion that this Court committed a grave error in its analysis of whether
the Court ought to use its discretionary power in this matter.”

[Emphasis supplied]

Thus, the legal position enunciated in Katta Sujatha Reddy (supra)
regarding the prospective operation of the 2018 amendment, was not
disturbed in the judgment passed in review. Though, the decision on merits
of the dispute was recalled.
56.3 This was also clarified by the Supreme Court in Annamalai v.
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Vasanthi , wherein the Court reiterated that the Specific Relief
(Amendment) Act, 2018 is prospective in operation and does not govern
suits arising out of transactions entered into prior to 01.10.2018. The
Supreme Court observed that although the judgment in Katta Sujatha
Reddy (supra) was subsequently reviewed in M/s Siddamsetty Infra
Projects Pvt. Ltd. v. Katta Sujatha Reddy (supra), the review judgment
did not hold that the amended provisions of Act of 1963 would apply to suits
instituted prior to the amendment.
57. Accordingly, the rights and liabilities of the parties for transactions
entered into or suits instituted prior to the 01.10.2018, are required to be
adjudicated under the unamended provisions of the Act of 1963, under
which the grant of specific performance continued to be an equitable and
discretionary relief to be exercised on settled judicial principles and the facts
and circumstances of each case. The Court is not bound to decree specific

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(2026) 3 SCC 769, at paragraph no. 47.


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performance merely because the contract is otherwise enforceable in law but
must examine whether the plaintiff has established continuous readiness and
willingness to perform its obligations under Section 16(c) of the Act of
1963, whether the conduct of the parties justifies the grant of equitable
relief, and whether the circumstances warrant the exercise of discretion in
favour of specific performance.
Pertinently, Section 16(c) exists on the statute even post the 2018
Amendment and therefore, the test of readiness and willingness has to be
satisfied by the buyer, i.e., the Respondent No. 1.
58. Since the Settlement Agreement in the present case was executed on
20.12.2013 and CS (COMM) No. 1314/2016 was instituted well before
01.10.2018, the learned Single Judge was not justified in applying the
amended provisions of the Act of 1963 on the premise that they were
procedural in nature. The present dispute is liable to be adjudicated under
the unamended Act, wherein the question whether specific performance
ought to be granted necessarily falls for consideration on the touchstone of
the equitable and discretionary principles embodied in the unamended Act
of 1963.

59. The Settlement Agreement was executed between the parties in
December 2013. The value for the share transfer, determined at USD
50,000, was agreed between the parties in September 2012, with the parties
expecting to close the agreement within 30 days. Respondent No. 1 failed to
make the said payment till 2016 even though Appellant No. 1 demanded
payment, when Appellant No. 1 finally terminated the transaction vide
notice dated 13.09.2016. The Respondent No. 1 approached the Court in


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September 2016 seeking specific performance, and the impugned decree
was passed on 16.07.2019. Though there is no stay of the said decree,
Respondent No. 1 has not approached this Court offering to deposit the
payment of USD 50,000 with the Court or make the payment directly to
Appellant No. 1.
These facts fail to persuade this Court to exercise its power to grant
the discretionary relief of specific performance in favour of Respondent No.
1 by way of a summary judgment.
CONCLUSION
60. In view of the detailed discussion and conclusions recorded in Issue
No. I of this judgment, we uphold the findings of the learned Single Judge
that the Appellants have failed to establish that their consent to the
Settlement Agreement, insofar as it records the consideration of USD 50,000
for the transfer of the Aperam Shares, was procured by fraud or
misrepresentation. The issue is decided finally against the Appellant No. 1
and in favour of Respondent No. 1.
61. However, in view of our findings on the issue of lack of prima facie
proof of Respondent No. 1’s willingness to pay the sum of USD 50,000 we
are unable to concur with the findings of learned Single Judge that
Respondent No. 1 was not in default of its obligations under the Settlement
Agreement and, was ready and willing to perform the same.
In view of the said finding, we are inclined to allow this appeal and
set aside the decree of specific performance of the Settlement Agreement
granted in favour of Respondent No. 1 in CS(COMM) No. 1314/2016.
62. Accordingly, the decree of specific performance granted by the


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learned Single Judge in the impugned judgment at paragraph 67(A) in
CS(COMM) 1314/2016 is hereby set aside and the matter is remanded back
to the learned Single Judge for trial, only on the issue of readiness and
willingness.
The Respondent No. 1 will have to prove at trial the reasons for not
transferring USD 50,000 in the year 2014 itself, despite receipt of all
relevant documents from Appellant No. 1 for effecting the share transfer
transaction as on 30.09.2014. It would also have to justify at trial the validity
of its demand for further documents from Respondent No. 1 vide e-mail
dated 09.03.2016. It would also have to explain the reasons for its inaction
between 28.01.2016 (i.e. receipt of RBI permission) and the issuance of the
e-mail dated 09.03.2016.
63. In view of our aforesaid findings, the appeal is allowed. Pending
applications, if any, are disposed of.
64. The Registry is directed to list this suit before the Roster Bench on
24.07.2026 for directions.
CS(COMM) 45/2017
65. Learned Single Judge by the impugned judgment in exercise of its suo
moto powers, decreed CS(COMM) 45/2017 in favour of Appellant No.
2/Imphy and directed Respondent No. 2/IUP to pay a sum of USD 450,000
in terms of the directions set out at paragraph 67(B). Similarly, though there
is no stay of the said decree, Respondent No. 2/IUP has not approached this
Court offering to deposit the payment of USD 450,000 with the Court or
make the payment directly to Appellant No. 2/Imphy. There is no


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explanation whatsoever from Respondent No. 2 for the aforesaid non-
payment.
66. Learned Single Judge, at paragraph 63 of the impugned judgment,
directed the payment of USD 450,000 on the finding that this payment is
expressly linked to the decree of specific performance. Respondents also
submit that payment of USD 450,000 can only be made after the transaction
of share transfer is concluded. Since we have set aside the decree of specific
performance of share transfer granted in CS(COMM) 1314/2016 not
accepted the finding that the two transactions are related, we also remand
this suit, this decree for payment of USD 450,000 is also set aside for fresh
consideration.
67. Moreover, learned senior counsel appearing on behalf of the
Appellant at the hearing held on 15.04.2026 had submitted on instructions
that indeed if the decree of specific performance is set aside in CS(COMM)
1314/2016 and the matter is remanded to trial, the Appellants have no
objection to the decree for payment of USD 450,000 also being set aside.
68. There can be no doubt with the proposition laid down by the Division
Bench in Bright Enterprises Private Ltd. and Ors. v MJ Bizcraft LLP
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and Ors that the jurisdiction under Order XIII-A of CPC is an exceptional
one and can be exercised only where the Court is satisfied that the defendant
has no real prospect of successfully defending the claim and there exists no
other compelling reason for directing a trial.
Accordingly, in view of the aforesaid facts, we clarify that it shall be

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2017:DHC:67-DB


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open to the parties to invoke the remedy under Order XIII A CPC, to decide
the claim of the agreed amount of USD 450,000 afresh. Any such
application shall be considered and decided independently by the learned
Single Judge on its own merits, having regard to the pleadings, documents
and other material placed on record.

69. In view of the aforesaid, the decree of payment of USD 450,000 along
with interest passed in CS(COMM) 45/2017 is hereby set aside, and the
matter is remanded back to the learned Single Judge.
70. The Registry is directed to list this suit before the Roster Bench on
24.07.2026 for directions.

MANMEET PRITAM SINGH ARORA, J



V. KAMESWAR RAO, J
JULY 15, 2026/ msh/AJ/AM




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