NANDKISHORE LALBHAI MEHTA vs. NEW ERA FABRICS P.LTD..

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1148 OF 2010 Nandkishore Lalbhai Mehta .... Appellant(s) Versus New Era Fabrics Pvt. Ltd. & Ors. .... Respondent(s) WITH CIVIL APPEAL NOs. 1131-1132 OF 2010 J U D G M E N T R.K. Agrawal, J. Civil Appeal No. 1148 of 2010 JUDGMENT 1) This appeal has been filed against the judgment and order dated 06.05.2008 passed by the Division Bench of the High Court of Judicature at Bombay in Appeal No. 245 of 2006 in Suit No. 1414 of 1979 whereby the High Court allowed the appeal filed by respondents herein while setting aside the decree dated 12.12.2005 passed by the learned single Judge of 1 Page 1 the High Court in favour of the appellant herein in Suit No. 1414 of 1979 for specific performance of the agreement dated 19.10.1977. Brief facts: 2) (a) In October, 1977, Respondent Nos. 1 and 2 agreed to sell their respective right, title and interest in the property admeasuring approximately 13011 sq. yards or thereabouts of Mahim T.P.S. III, Plot No. 264 opposite Matunga Western Railway in favour of Shri Nandkishore Lalbhai Mehta – the appellant herein which was resolved under an Agreement for Sale dated 19.10.1977 on certain terms and conditions. (b) The relevant terms of the agreement are as under:- 1. Area of the Property : 13011 Square Yards. JUDGMENT 2. Price : Lumpsum price of Rs. 78,06,600/- (Rupees Seventy-eight lacs six thousand and six hundred only); It is agreed that the price shall not be revised or amended for any reason whatsoever including any legislation or otherwise; 5. Payment : Rs. 11,50,000/- (Rupees Eleven lacs fifty thousand only) to be paid as earnest to your Solicitor Mr. D.H. Nanavati as follows:- (a) Rs. 7,50,000/- (Rupees Seven lacs fifty thousand only) on confirmation of this letter by you and balance of Rs. 2 Page 2

The time for the payment thereof has expired and you will therefore offer the same to the other side and on their accepting to extend the time till the payment thereof under the said two Consent Terms the said amount will be paid by you to them; in the event of their declining and insisting on going on with the suit or your settlement of the suit as per the Consent Terms not materializing you will return the said amount to me on such refusal or settlement falling through and I will not be entitled to any interest thereon or costs. In the event of my failing to pay to your Solicitor the sum of Rs. 7,50,000/- on the execution thereof and Rs. 4,00,000/- (Rupees four lacs only) on th or before 24 October 1977 you will be entitled to forfeit the amount of Rs. 7,50,000/- paid by me till such default and the Agreement herein will stand automatically cancelled. I enclose herewith my Solicitors’ cheque of Rs. 7,50,000/- (Rupees Seven lacs fifty thousand only) in your Solicitor’s favour which may be cashed after confirmation by you of the terms contained herein, if the terms are not confirmed you will return the said cheque to me; JUDGMENT (b) : Half of the balance of the consideration money mentioned in the paragraph 2 above will be paid by me on receipt of the permissions under Sections 22 and 27 of the Urban Land (Ceiling & Regulation) Act 3 Page 3

6. Sale : The sale shall be subject to permission being obtained under Sections 22 and 27 of the Urban Land (Ceiling & Regulation) Act, 1976. The sale shall also be subject to the property being converted from Industrial Zone to residential use. The sale shall also be subject to your being able to settle with your labour and your labour agreeing to the sale contemplated herein. If N.O.C and change of users and the permission provided herein are not obtained within a period of 9 months from the date hereof and if you are not able to settle with your labour and to get them to agree to the sale herein contemplated you will not be bound to complete the sale herein contemplated and the Agreement will survive only to the extent of the return of my money which will be paid within 6 months of the expiration of the aforesaid nine months with interest at 18 % per annum from the date of refusal of any of the permission or consent or agreement set out above, till the repayment of money with interest and till then you will not be entitled to do any act, deed, matter or thing whereby or by reason whereof the security created as herein provided in my favour will be affected or jeopardize in any manner whatsoever…... (emphasis supplied) JUDGMENT 4 Page 4

(c) Pursuant to the said agreement, the appellant herein paid a sum of Rs. 11,50,000/- as part of earnest money in two installments of Rs. 7,50,000/- and Rs. 4,00,000/- each on 20.10.1977 and 24.10.1977 respectively. (d) Pursuant to Point No. 6 of the agreement dated 19.10.1977, the sale was subject to the permission being JUDGMENT obtained under Sections 22 and 27 of the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as ‘the ULC Act’); the property being converted from industrial zone to residential use and to give vacant possession of the land after settling with the labour. (e) In order to materialize the agreement, further steps were taken. Respondent No. 1, vide letter dated 08.11.1977, 5 Page 5 intimated the Labour Union about the Agreement and requested to give their consent to the same. Vide letter dated 09.11.1977, Respondent No. 2 approached the Arbitrator,

into residential zone from industrial zone. (f) Vide letter dated 05.12.1977, Mill Mazdoor Sabha-Labour Union informed the respondents that they were not agreeable to the sale of the said property. (g) Respondent Nos. 1 & 2 informed this fact to the appellant herein vide letter dated 15.12.1977 stating that the agreement stood cancelled and they would return the amount of Rs. 11,50,000/- with interest and also withdrew the application made to the Arbitrator, Town Planning Scheme for conversion JUDGMENT of the property from industrial to residential zone. (h) The appellant herein waived the stipulation/condition of obtaining the consent of the labour but inspite of the efforts, the agreement did not materialize. (i) Being aggrieved, the appellant herein filed Suit No. 1414 of 1979 before the High Court of Bombay for specific performance of the agreement dated 19.10.1977. Learned 6 Page 6 single Judge of the High Court, vide order dated 12.12.2005, decreed the suit in favour of the appellant herein. (j) Being aggrieved by the order dated 12.12.2005,

No. 1414 of 1979 before the High Court. The Division Bench of the High Court, by order dated 06.05.2008, allowed the appeal of the respondents herein setting aside the decree of specific performance granted by learned single Judge of the High Court. (k) Against the said order, the appellant has preferred this appeal by way of special leave before this Court. Civil Appeal Nos. 1131-1132 of 2010 (l) The aforesaid appeals have been filed against the order JUDGMENT dated 12.12.2008 passed by the Division Bench of the Bombay High Court wherein the cross-objections filed by the appellant herein were dismissed. These appeals were tagged with the main appeal at the SLP stage vide order dated 02.04.2009, hence will be disposed of by this common judgment. 3) Heard Mr. P.H. Parikh, learned senior counsel assisted by Mr. P.V. Yogeswaran, learned counsel for the appellant and 7 Page 7 Mr. Vinod A. Bobde, learned senior counsel and Mr. Shivaji M. Jadhav, learned counsel for the respondents. Rival Submissions:

the Agreement for Sale dated 19.10.1977 executed by the parties is not in dispute. The appellant had always been ready and willing to discharge his obligations and the plea of the respondents that there was no concluded agreement relying upon Clause 10 of the agreement was neither raised in the written statement nor any issue was framed by learned single Judge. Thus, it was not open to the defendants-respondents herein to plead that there was no concluded agreement. It was correctly negated by the learned single Judge. In fact, the JUDGMENT respondents were acting dishonestly as the agreement was terminated by them within two months of its execution. In fact, the agreement itself contemplated a period of nine (9) months and the plea taken by the respondents herein that the Mill Mazdoor Sabha refused to agree to the sale vide letter dated 05.12.1977 was within a very short time and the respondents did not take sufficient steps to get the consent of 8 Page 8 the Mill Mazdoor Sabha/labour/workmen. It appears that the respondents were in dire financial position and required money to perfect their title by making balance payment to the

herein paid a sum of Rs. 7.5 lakhs received from the appellant to the Zaveris to perfect their title and after getting the same done, they dishonestly terminated the agreement. Learned senior counsel further submitted that the Division Bench had erred in reversing the judgment of the learned single Judge on the basis that was not even pleaded by the respondents. In fact, the Division Bench had wrongly reversed the judgment on the ground that the important facts including documentary evidence that were relied upon by the appellant were not JUDGMENT pleaded in the plaint and the plaint was not even amended. Even though, an objection was raised by the respondents before the court that certain evidence were outside the scope of the plaint but no such objections were raised at the stage of final hearing. He further submitted that as the parties had contested the matter before the learned single Judge on the basis of the concluded agreement, the Division Bench was not 9 Page 9 at all justified in holding the agreement in question to be contingent in nature. In support of his contention, learned senior counsel relied upon a decision of this Court in

Others (1964) 2 SCR 495 wherein it was held that where all the terms are crystallized between the parties, the execution of a formal agreement is not a pre-requisite for the grant of specific relief. He further submitted that in view of the documents having been filed before the court and exhibited as P-27 to P-42, the Division Bench had wrongly held that they were outside the scope of evidence as these documents were not pleaded in the plaint nor was any amendment preferred. According to learned senior counsel, the only requirement JUDGMENT under the Code of Civil Procedure, 1908 is that the plaint must contain essential pleas or contentions and it is not necessary to plead evidence. In paragraph Nos. 33 and 35 of the plaint, a specific plea was taken by the appellant that the respondents were on a false pretext seeking to wriggle out their contractual obligations and in support of the plea of false pretext, the appellant was entitled to adduce evidence to show 10 Page 10 that the refusal on the part of the Mill Mazdoor Sabha/labour to permit the sale of the suit property was nothing but an eye wash by the respondents. To establish this fact, the appellant

one of the trade union office bearers, viz., Mr. Vasant Gupte, President and this evidence could not be shut out as the respondents were aware about it. 5) He further submitted that the Division Bench has wrongly held the agreement dated 19.10.1977 to be a contingent contract. No specific plea was raised by the defendants-respondents herein regarding it to be a contingent contract and further no specific issue was framed. According to him, on a correct construction and interpretation of the JUDGMENT agreement, it cannot be termed as a contingent contract and it is always open to the party in whose favour a specific term is inserted to waive the term and seek specific performance of the remainder of the obligations. According to him, learned single Judge had categorically recorded, on appreciation of evidence on record that the labour union had actually consented to the sale of the property on certain terms being 11 Page 11 fulfilled, as is clear from Exhibit Nos. 43 and 44. Further, the grant of relief of specific performance is a matter of discretion and if it has been granted by the learned single Judge, the

where the court had perceived dishonest conduct on the part of the defendants-respondents herein. Elaborating it further, learned senior counsel submitted that the appellant had waived the express term relating to the consent of the labour vide letter dated 19.04.1978 nearly six (6) months prior to the institution of the suit and, therefore, the respondents cannot take advantage of a stipulation which the party for whose benefit it was made has expressly waived the same for performance of his other obligations. This aspect has not been JUDGMENT considered or dealt with by the Division Bench. Further, the Division Bench wrongly held that the appellant did not really mean to purchase the suit property and that the agreement of purchase of the suit property was a financial transaction. This plea was not even raised by the respondents herein in their written statement. As far as permission under the ULC Act is concerned, learned senior counsel relied upon a decision 12 Page 12 of this Court in The Maharao Sahib Shri Bhim Singhji vs. Union of India and Ors. (1981) 1 SCC 166 and submitted that sub-Section (1) of Section 27 of the Act is invalid insofar

urbanisable land with a building or a portion only of such building, which is within the ceiling area. Such property will therefore be transferable without the constraints mentioned in sub-section (1) of Section 27 of the ULC Act. 6) Learned senior counsel further submitted that the Annual Reports of Respondent No. 1 categorically demonstrate that the workers were retrenched and as per Form-6, Respondent No. 1 had only 69 employees and if the workers were provided their legal dues they were willing to consent to JUDGMENT the sale of the suit property. The Annual Reports/Balance Sheets of the Respondent No. 1 have been specifically appreciated by learned single Judge whereas the Division Bench had not at all considered the same. According to learned senior counsel, the appellant was justified in relying upon the letters Exhibited at P-27 to P-42 and filing the same before the Court which had material bearing on the issue and 13 Page 13 it could not have been excluded. In support of his submission, he relied upon a decision of this Court in Pasupuleti Venkateswarlu vs. Motor & General Traders

“4 …..If a fact, arising after the lis has come to court and has a fundamental impact on the right to relief or the manner of moulding it, is brought diligently to the notice of the tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy…..” 7) Learned senior counsel for the appellant further submitted that during the pendency of the present proceedings, the respondents have earned by way of rental charges from the suit premises a sum of Rs. 64,57,46,800/- for the period 23.10.1978 till September 2012 as principal amount and if interest is computed thereupon it comes to Rs. JUDGMENT 160,87,15,887/- as on September 2012. However, as on June 2014, the respondents have earned by way of rental charges upon the said premises a sum of Rs. 87,42,65,200/- as principal amount and if interest is computed thereupon @ 18% per annum, it comes to Rs. 226,89,85,346/-. It is further submitted that the appellant at the time of entering the agreement was 54 years and now he is 91 years. The suit was 14 Page 14 filed in the year 1979 and he had suffered all these years for no fault of his. He believed in the agreement and complied with all the terms and conditions. Learned senior counsel

Division Bench of the High Court dated 06.05.2008 should be set aside and that of the learned single Judge dated 12.12.2005 be restored. Finally, in the alternative, he submitted that in case the suit for specific performance is not decreed and the appellant is given damages, it should be just, fair and equitable and not only Rs. 78 lakhs as given by the learned single Judge. 8) In reply, learned senior counsel for the respondents submitted that in the plaint filed by the appellant, a specific JUDGMENT case of the labour union colluded with the present respondent was pleaded. However, at the time of leading of evidence, a completely new case vis., of two letters dated 05.12.1977 and 10.01.1978 has been made out which are the documents handed over to the appellant by one Mr. M.P. Agarwal. A specific objection was raised that such evidence could not be allowed to be led, or documents have been produced in the 15 Page 15 absence of pleadings in the plaint whereupon learned single Judge while noting the aforesaid objection held that this issue would be decided while hearing the matter finally. Instead of

not, learned single Judge erroneously accepted the version contained in the letters dated 05.12.1977 and 10.01.1978 as produced by the appellant. According to him, no evidence can be led in the absence of any pleading and if there is any new ground, new plea or allegation of fact inconsistent with the previous pleadings of the parties, steps ought to have been taken to amend the plaint which has not been done for reasons best known. 9) Learned senior counsel further submitted that unless JUDGMENT and until there is an amendment of the pleadings, no evidence with regard to the facts not pleaded can be looked into, for which he relied upon a decision of this Court in Bachhaj Nahar vs. Nilima Mandal & Anr. (2008) 17 SCC 491 wherein it was held as under:- 16 Page 16

( i ) No amount of evidence can be looked into, upon a plea which was never put forward in the pleadings. A question which did arise from the pleadings and which was not the subject-matter of an issue, cannot be decided by the court. ( ii ) A court cannot make out a case not pleaded. The court should confine its decision to the question raised in pleadings. Nor can it grant a relief which is not claimed and which does not flow from the facts and the cause of action alleged in the plaint. ( iii ) A factual issue cannot be raised or considered for the first time in a second appeal. 11. The Civil Procedure Code is an elaborate codification of the principles of natural justice to be applied to civil litigation. The provisions are so elaborate that many a time, fulfilment of the procedural requirements of the Code may itself contribute to delay. But any anxiety to cut the delay or further litigation should not be a ground to flout the settled fundamental rules of civil procedure. Be that as it may. We will briefly set out the reasons for the aforesaid conclusions. JUDGMENT 17 Page 17

JUDGMENT 18 Page 18

“ 10 . … If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial , then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely, in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it ? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another. ” JUDGMENT (emphasis supplied) 19 Page 19 16. The principle was reiterated by this Court in Ram Sarup Gupta v. Bishun Narain Inter College :

JUDGMENT (emphasis supplied) 17. It is thus clear that a case not specifically pleaded can be considered by the court only where the pleadings in substance, though not in specific terms, contain the necessary averments to make out a particular case and the issues framed also generally cover the question involved and the parties proceed on the basis that such case was at issue and had led evidence thereon. As the very requirements indicate, this should be only in exceptional cases where the court is fully satisfied that the pleadings and issues generally cover the case subsequently put forward and that the parties being conscious of the issue, had led evidence on such issue. But where the court is not satisfied that such case was at issue, the question of resorting to the exception 20 Page 20

10) Learned senior counsel further submitted that merely because the documents have been exhibited and also because in some of the documents one of the witnesses had identified the signature of the person who is alleged to have signed the document, does not establish that the contents of the documents have been proved. In support of this contention, learned senior counsel placed reliance on the decision of this JUDGMENT Court in Shalimar Chemical Works Limited vs. Surendra Oil and Dal Mills (Refineries) and Others (2010) 8 SCC 423 wherein it was held as under:- “3. In course of the trial, the appellant produced before the court photocopies of registration certificates under the Trade and Merchandise Marks Act, 1958 along with the related documents attached to the certificates. The photocopies submitted by the appellant were “marked” by the trial court as Exts. A-1 to A-5, “subject to objection of proof and admissibility”. At the conclusion of the trial, the court 21 Page 21

“All the above documents i.e. Exts. A-1 to A-5 are marked subject to objection of proof and admissible (sic admissibility) and also mention so in the deposition of PW 1. PW 1 in his cross-examination has admitted that all the above documents are xerox copies. He has also admittedly not filed legal certificate for the same. Section 31 of the Trade and Merchandise Marks Act, 1958 specifically reads as follows: ‘31. Registration to be “prima facie” evidence of validity . —(1) In all legal proceedings relating to a trade mark registered under this Act (including applications under Section 56), the original registration of the trade mark and of all subsequent assignments and transmissions of the trade mark shall be “prima facie” evidence of the validity thereof.’ Therefore, the plaintiff has to file the originals of the registration ( sic certificates) or the certified copies thereof. Exts. A-1 to A-4 are xerox copies. It is well-settled law that xerox copies are not admissible in evidence. Once those documents are not held admissible, the plaintiff cannot be permitted to rely on it. These documents Exts. A-1 to A-4 are basic documents of the Trade and Merchandise Marks Act.” 9. Mr P.P. Rao, learned Senior Advocate, appearing for the appellant assailed both, the procedure adopted by the trial court and the view taken by the Division Bench of the High Court, on the basis of the provisions of Order 41 Rule 27. Mr Rao submitted that if the trial court was of the view that the xerox copies of the documents in question were not admissible in evidence, it ought to have returned the copies at the time of their submission. In that event, the appellant would have substituted them by the original registration certificates and that would have been the end of the matter. But once the xerox copies submitted by the appellant were marked as exhibits, it had no means to know that while pronouncing the judgment, the court would keep those JUDGMENT 22 Page 22

“ 20 . … The objections as to admissibility of documents in evidence may be classified into two classes: ( i ) an objection that the document which is sought to be proved is itself inadmissible in evidence; and ( ii ) where the objection does not dispute the admissibility of the document in evidence but is directed towards the mode of proof alleging the same to be irregular or insufficient. In the first case, merely because a document has been marked as ‘an exhibit’, an objection as to its admissibility is not excluded and is available to be raised even at a later stage or even in appeal or revision. In the latter case, the objection should be taken when the evidence is tendered and once the document has been admitted in evidence and marked as an exhibit, the objection that it should not have been admitted in evidence or that the mode adopted for proving the document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. The latter proposition is a rule of fair play. The crucial test is whether an objection, if taken at the appropriate point of time, would have enabled the party tendering the evidence to cure the defect and resort to such mode of proof as would be regular. The omission to object becomes fatal because by his failure the party entitled to object allows the party tendering the evidence to act on an assumption that the opposite party is not serious about the mode of proof. On the other hand, a prompt objection does not prejudice the party tendering the evidence, for two reasons: firstly, it enables the court to apply its mind and pronounce its decision on the JUDGMENT 23 Page 23

(emphasis in original) 15. On a careful consideration of the whole matter, we feel that serious mistakes were committed in the case at all stages. The trial court should not have “marked” as exhibits the xerox copies of the certificates of registration of trade mark in face of the objection raised by the defendants. It should have declined to take them on record as evidence and left the plaintiff to support its case by whatever means it proposed rather than leaving the issue of admissibility of those copies open and hanging, by marking them as exhibits subject to objection of proof and admissibility. The appellant, therefore, had a legitimate grievance in appeal about the way the trial proceeded. 16. The learned Single Judge rightly allowed the appellant’s plea for production of the original certificates of registration of trade mark as additional evidence because that was simply in the interest of justice and there was sufficient statutory basis for that under clause ( b ) of Order 41 Rule 27. But then the Single Judge seriously erred in proceeding simultaneously to allow the appeal and not giving the respondent-defendants an opportunity to lead evidence in rebuttal of the documents taken in as additional evidence. 18. The judgment and order dated 25-4-2003 passed by the Division Bench is set aside and the matter is remitted to the learned Single Judge to proceed in the appeal from the stage the originals of the registration certificates were taken on record as additional evidence. The learned Single Judge may allow the respondent-defendants to lead any rebuttal evidence or make a limited remand as provided under Order 41 Rule 28. JUDGMENT 24 Page 24 19. In the result, the appeal is allowed, as indicated above but with no order as to costs”. 11) Further, learned senior counsel relied on H. Siddiqui

held as under:- “12. The provisions of Section 65 of the 1872 Act provide for permitting the parties to adduce secondary evidence. However, such a course is subject to a large number of limitations. In a case where the original documents are not produced at any time, nor has any factual foundation been laid for giving secondary evidence, it is not permissible for the court to allow a party to adduce secondary evidence. Thus, secondary evidence relating to the contents of a document is inadmissible, until the non-production of the original is accounted for, so as to bring it within one or other of the cases provided for in the section. The secondary evidence must be authenticated by foundational evidence that the alleged copy is in fact a true copy of the original. Mere admission of a document in evidence does not amount to its proof. Therefore, the documentary evidence is required to be proved in accordance with law. The court has an obligation to decide the question of admissibility of a document in secondary evidence before making endorsement thereon. (Vide Roman Catholic Mission v. State of Madras , State of Rajasthan v. Khemraj , LIC v. Ram Pal Singh Bisen and M. Chandra v. M. Thangamuthu .) 13. The trial court decreed the suit observing that as the parties had deposed that the original power of attorney was not in their possession, question of laying any further factual foundation could not arise. Further, the trial court took note of the fact that the respondent herein has specifically denied execution of power of attorney authorising his brother, R. Viswanathan to alienate the suit property, but brushed aside the same observing that it was not necessary for the appellant-plaintiff to call upon the defendant to produce the original power of attorney on the ground that the photocopy of the power of attorney was shown to the respondent herein in his cross-examination and he had admitted his signature. Thus, it could be inferred that it is the copy of the power of JUDGMENT 25 Page 25

“ 40 . … Admissibility of a document is one thing and its probative value quite another—these two aspects cannot be combined. A document may be admissible and yet may not carry any conviction and weight or its probative value may be nil.” 16. In Madan Mohan Singh v. Rajni Kant this Court examined a case as a court of fifth instance. The statutory authorities and the High Court had determined the issues taking into consideration a large number of documents including electoral rolls and school leaving certificates and held that such documents were admissible in evidence. This Court examined the documents and contents thereof and reached the conclusion that if the contents of the said documents are examined making mere arithmetical exercise it would lead not only to improbabilities and impossibilities but also to absurdity. This Court examined the probative value of the contents of the said documents and came to the conclusion that Smt Shakuntala, second wife of the father of the contesting parties therein had given birth to the first child two years prior to her own birth. The second child was born when she was 6 years of age; the third child was born at the age of 8 years; the fourth child was born at the age of 10 years; and she gave birth to the fifth child when she was 12 years of age. 17. Therefore, it is the duty of the court to examine whether the documents produced in the court or contents thereof have any probative value”. JUDGMENT 26 Page 26 12) Further, in R.V.E. Venkatachala Gounder vs. Arulmigu Viswesaraswami & V.P. Temple and Another (2003) 8 SCC 752 it was held as under:-

JUDGMENT 27 Page 27

13) Learned senior counsel further submitted that the appellant has taken a case of collusion between the JUDGMENT defendants-respondents herein with the labour union and in the cross examination of Shri N.L. Mehta (PW-1), it has been conceded by him that he had no material to show that the refusal of permission by the workmen was instigated by the defendants-respondents herein. In view of this admission alone, the appellant is not entitled to any relief as he has failed 28 Page 28 to prove his own case. He further submitted that if a condition of a contract is for mutual benefit of both the parties then such a condition cannot be waived by a party

provides that the vendor will not be bound to complete the sale, if the labour does not consent to it. This clause was included as the subject matter of sale was not a running business as a going concern but a sale of land per se , meaning thereby, that the business which was being conducted would have to be shut down. In such a situation, permission of the Labour Commissioner was required under Section 25-O of the Industrial Disputes Act, 1947 before closing down the unit. Further, Regulation 56(3)(c)(1) of the Development Control JUDGMENT Regulations, 1991 also required permission of the Labour Commissioner in case of conversion from industrial to residential use of the land is purported. Therefore, these two conditions were not only for the benefit of one party and in fact, it was for the benefit of both the parties. Such a condition cannot be waived unilaterally. 29 Page 29 14) In support of this claim, reliance was placed on HPA International vs. Bhagwandas Fatehchand Daswani and Others (2004) 6 SCC 537 wherein it was held that:-

JUDGMENT 100. In the case before us, we have not found that the vendor was guilty of rendering the suit for sanction infructuous. It did terminate the contract pending the suit for sanction but never withdrew that suit. The vendee himself prosecuted it and rendered it infructuous by his own filing of an affidavit giving up his claim for the interest of reversioners. In such a situation where the vendor was not in any manner guilty of not obtaining the sanction and the clause of the contract requiring the Court’s sanction for conveyance of full interest, being for the benefit of both the parties, the contract had been rendered unenforceable with the dismissal of the sanction suit. 30 Page 30

102. On behalf of the vendee, support for his claim was sought from the following observations of Lord Atkinson: “The application to contracts such as these of the principle that a man shall not be permitted to take advantage of his own wrong thus necessarily leaves to the blameless party an option whether he will or will not insist on the stipulation that the contract shall be void on the happening of the named event. To deprive him of that option would be but to effectuate the purpose of the blameable party. When this option is left to the blameless party it is said that the contract is voidable, but that is only another way of saying that the blameable party cannot have the contract made void himself, cannot force the other party to do so, and cannot deprive the latter of his right to do so. Of course the parties may expressly or impliedly stipulate that the contract shall be voidable at the option of any party to it. I am not dealing with such a case as that. It may well be that the question whether the particular event upon the happening of which the contract is to be void was brought about by the act or omission of either party to it may involve a determination of a question of fact .” (emphasis supplied) 103. As has been observed by Lord Atkinson, it is always a question of fact to be determined in each case as to who is guilty of the act or omission to render the contract void or unenforceable. In the case of New Zealand Shipping Co. Ltd on facts the ultimate conclusion reached unanimously by Their Lordships was that the clause of the contract in that case was a stipulation in favour of both the parties and the situation was not brought about by any of the parties to give rise to avoidance. It was found that the failure to fulfil the JUDGMENT 31 Page 31 contract was not due to any fault on the part of the respondents but was due to a cause beyond their control.

105. In this situation, even if we come to a conclusion that the vendee had rightly tried his utmost to obtain the Court’s sanction and cannot be blamed for transposing himself as a co-plaintiff and prosecuting the sanction suit, the sanction sought could not be obtained for reasons beyond the control of the parties. The vendor cannot be held guilty of the breach as to entitle the vendee to seek specific performance of life interest of the vendor. The contract entered into between the parties was for conveying full interest in the property, namely, life interest of the vendor and chance of succession of reversioners. The contract was one and indivisible for full interest. There is no stipulation in the contract that if sanction was not obtained, the vendor would transfer only his life interest for the same or lesser consideration. On the contrary, the contract stipulated that if the sanction was not granted, the contract shall stand cancelled and the advance money would be refunded to the purchaser”. JUDGMENT 15) Further, in Irwin v Wilson [2011] EWHC 326 (Ch), it was held thus:- 32 Page 32

“Without seeking to define the precise limits within which a contracting party seeking specific performance may waive a condition on the ground that it is intended only for his benefit, it seems to me that in general the proposition only applies where the stipulation is in terms for the exclusive benefit of the plaintiff because it is a power or right vested by the contract in him alone… , or where the stipulation is by inevitable implication for the benefit of him alone … If it is not obvious on the face of the contract that the stipulation is for the exclusive benefit of the party seeking to eliminate it, then in my opinion it cannot be struck out unilaterally. I do not think that the court should conduct an enquiry outside the terms of the contract to ascertain where in all the circumstances the benefit lies if the parties have not concluded the matter on the face of the agreement they have signed.” 24. In a decision of the New Zealand Court of Appeal, to which Mr Carlisle referred me, namely Globe Holdings Ltd v Floratos [1998] 3 NZLR 331 (and to which I shall return later) there is (at page 334) a citation from an earlier decision of the same court (Hawker v Vickers [1991] 1 NZLR 399 at 402-3) setting out the following statement of the approach in law: JUDGMENT “A party may waive a condition or provision in a contract which is solely for that party’s own benefit and is severable. In such a case the other party is denied the right to treat the condition as unsatisfied and is obliged to complete notwithstanding the loss of that advantage. The question is one of construction of the contract. It turns on whether the stipulation is in terms or by necessary implication for the exclusive benefit of the party, and the answer is derived from consideration of the contract as a whole in the light of the surrounding circumstances…” 33 Page 33

JUDGMENT “…there is nothing inconsistent in providing expressly or by necessary implication for unilateral waiver of a condition up to a certain date and thereafter for allowing either party to avoid the contract for non fulfilment of the condition. Such a provision simply recognises the commercial reality that the nature and significance to the parties of a condition in a contract may change over time or at a point in time. If the contract [sic] is fulfilled or waived, the parties then have the certainty of an unconditional contract. If not 34 Page 34

JUDGMENT 35 Page 35 condition precedent to the contract. Brightman J put the matter thus (at 426b):

JUDGMENT 16) Learned senior counsel for the respondents further submitted that as in the present case, the workmen had refused to grant their consent for the sale, the contract stood 36 Page 36 frustrated being contingent upon the said condition and, therefore, discretionary remedy of specific performance cannot be granted. To substantiate this claim, he relied on a decision

Agarwal and Others (2006) 7 SCC 470 wherein it was held as under:- “9. It is not disputed that the parties to the agreement were aware of the proceedings pending before the ceiling authorities. It is also not in dispute that the Central Government was the appropriate authority to deal with the matter as the lands pertained to a cantonment area. The agreement envisaged that the defendant would obtain necessary sanction from the competent authority. It was made clear that he had not submitted any layout nor had he got any sanction therefor. 23. It was, therefore, not a case where the trial court found that the defendant had committed a fraud on the statutory authorities or on the court. The expression “fraud” in our opinion was improperly used. It must be noticed that admittedly when the agreement was entered into, the proceedings under the 1976 Act were pending. The parties might have proceeded under a misconception. It is also possible that the defendant had made misrepresentation to the plaintiff; but the question which was relevant for the purpose of determination of the dispute was as to whether having regard to the proceedings pending before the competent authority under the 1976 Act, the defendants could perform their part of the contract. The answer thereto, having regard to the order of the competent authority dated 8-8-1980, must be rendered in the negative. JUDGMENT 25. It was, therefore, not a case where a notice under Section 26 of the 1976 Act could have served the purpose and in the event, the competent authority did not exercise its statutory right of perception ( sic purchase) within the period stipulated thereunder, the defendant was free to execute a deed of sale in favour of any person he liked. 37 Page 37 26. Strong reliance has been placed by Mr Nageswara Rao on a decision of this Court in HPA International v. 1 Bhagwandas Fateh Chand Daswani . Our attention in particular has been drawn to the following observations:

28. In this case, we are concerned with a situation where the sanction, it will bear repetition to state, has expressly been refused. 29. Dharmadhikari, J. in that case itself has noticed a judgment of the House of Lords in New Zealand Shipping Co., Ltd. v. Scoiete des Ateliers et Chantiers de France wherein it was held that a man shall not be allowed to take advantage of his own wrong, which he himself brought about. 30. The parties were aware of the proceedings under the 1976 Act. The plaintiff-respondents were also aware that sanction under the said Act is necessary. The consequence for non-grant of such sanction was expressly stipulated. Even the parties were clear in their mind as regards the consequences of wilful non-execution of a deed of sale or wilful refusal on their part to perform their part of contract. JUDGMENT 31. We may notice that Lord Atkinson in New Zealand Shipping took into consideration the inability or impossibility on the part of a party to perform his part of contract and opined the principle that man shall not be permitted to take advantage of his own wrong, which he himself brought about. 32. Our attention has rightly been drawn by Mr Gupta to the deed of sale executed by the defendant in favour of others. By the said deeds of sale all the six co-sharers have 38 Page 38 sold portions of their house properties and lands appurtenant thereto. The total land sold to the purchasers by all the six co-sharers was below 900 sq. m.

34. We have noticed the reports of the Commissioner appointed both by the trial court and the learned Single Judge of the High Court. The Commissioner appointed by the trial Judge in his report stated: “… I also found some numbers were painted in black on the compound wall inside the western compound wall as 3-42-67 and I also found one small brick mound near the middle unfinished room touching the western compound wall. I also found some numbers on the gate painted in black as 65-66-67-68-69. While I was proceeding with the execution of warrant, some persons brought a board and tied it to the gate which contained some letters painted as ‘This land and construction area Cantonment H. Nos. 3-42-65 to 3-42-69 belong to Murthy Cooperative Housing Society — Trespassers will be prosecuted’.” 35. It was, therefore, accepted that the plots mentioned therein had already been sold to Murthy Cooperative Housing Society. The said Cooperative Society, it is beyond any cavil of doubt, purchased the land from the original owners pursuant to or in furtherance of the exemption accorded in that behalf by the competent authority in exercise of its power under Section 20 of the 1976 Act. The land sold to the Cooperative Society which might have included the vacant land and which was the subject-matter of the agreement but was not the subject-matter of the suit. They were not parties thereto. The sanction accorded in their favour by the competent authority had never been put in question. JUDGMENT 36. The Advocate-Commissioner appointed by the trial court, observed: 39 Page 39 “ Opinion and observation. —Taking all the aforesaid facts and circumstances I conclude that Plot No. 2 in Survey No. 71 as mentioned in the agreement of sale Ext. A-2 in the trial court and House Nos. 3-9-51/A, B, C and D situated in Survey No. 71/part, West Marredpalli on which I conducted the local inspection are the same.”

38. The High Court, in our considered view, also committed a manifest error in opining that the appellants should have questioned the orders passed by the competent authority. If they have not done so, the same would not mean that the Division Bench could go thereinto suo motu. 39. Furthermore, Section 20 of the Specific Relief Act confers a discretionary jurisdiction upon the courts. Undoubtedly such a jurisdiction cannot be refused to be exercised on whims and caprice; but when with passage of time, the contract becomes frustrated or in some cases increase in the price of land takes place, the same being relevant factors can be taken into consideration for the said purpose. While refusing to exercise their jurisdiction, the courts are not precluded from taking into consideration the subsequent events. Only because the plaintiff-respondents are ready and willing to perform their part of contract and even assuming that the defendant was not entirely vigilant in protecting his rights in the proceedings before the competent authority under the 1976 Act, the same by itself would not mean that a decree for specific performance of contract would automatically be granted. While considering the question as to whether the discretionary jurisdiction should be exercised or not, the orders of a competent authority must also be taken into consideration. While the court upon passing a decree for specific performance of contract is entitled to direct that the same shall be subject to the grant of sanction by the authority concerned, as was the case in Chandnee Widya Vati Madden v. Dr. C.L. Katial and Nirmala Anand v. Advent Corpn. (P) Ltd. ; the ratio laid down therein cannot be extended to a case where prayer for such sanction had been prayed for and expressly rejected. On the face of such order, which, as noticed hereinbefore, is required to be set aside by a court in accordance with law, a decree for specific performance of contract could not have been granted”. JUDGMENT 40 Page 40 17) Learned single Judge decreed the suit for specific performance by directing the respondents herein to apply to

industrial/commercial to residential use and also to apply for the permission under the ULC Act and in the event the permission is not granted by the authorities then a decree in terms of prayer b(i) to b(v) of the plaint shall be granted. In the present case, permission was applied for and rejected by the Labour Commissioner as well as the office of the Joint Director of Industries on 02.03.2006 and 28.02.2006 respectively. The permission under the ULC Act under Section 22 also came to be rejected on 06.03.2006. Thus, if at all, JUDGMENT without admitting that the appellant had succeeded making out of case for a decree of specific performance, the appellant would have only become entitled for damages. 18) Learned senior counsel further submitted that the respondents terminated the contract on 15.12.1977, that is, within two month. The question of waiver of a condition would not at all arise so as to revive the contractual obligations into 41 Page 41 existence and thereby claim his contractual rights under the contract so revived. It is settled position of law that once a contract has been terminated, either on the breach of the

by the other or by frustration of the contract due to circumstances beyond the control of either of the parties, the contract legally comes to an end between the parties. Then there is no question of any contract/agreement subsisting between the parties, what follows is only the legal consequences which may have been contemplated in the terms of the contract e.g. liquidated damages, etc. However, the parties are at liberty to mutually novate the contract by bringing into existence a new contract altogether which would JUDGMENT replace the old contract between the parties and the terms of the new contract take the place of the old contractual terms. It will not only be illogical but also absurd to contend that once the contract has been terminated by a party, it will still subsist in the background and either of the parties may be able to waive a condition attached to that contract so as to revive that contract from a period of slumber. This will in fact 42 Page 42 amount to saying that even though a contract has been terminated by putting it to an end but it is actually still available, at the option of one of the parties, to be revived back

contractual condition. In order to substantiate this claim, learned senior counsel placed reliance on K. Narendra vs. Riviera Apartments (P) Ltd. (1999) 5 SCC 77 which held as under:- “36….. We are clearly of the opinion that at one point of time the contract had stood frustrated by reference to Section 56 of the Contract Act. We do not think that the subsequent events can be pressed into service for so reviving the contract as to decree its specific performance”. 19) According to learned senior counsel, Clause 6 of the agreement which provides for a period of nine (9) months was JUDGMENT only for obtaining No Objection Certificate (NOC) from the Urban Land Ceiling authorities and from the authority for conversion of land from commercial to residential use. There was no time period provided for obtaining consent from the labour union and once the Labour Union on 05.12.1977 and again on 10.01.1978 declared their intention not to negotiate, the contract stood frustrated, and therefore, the question of 43 Page 43 specific performance of the contract did not arise. He further submitted that without prejudice to the aforesaid submissions, the Division Bench, even after holding that the

documents which were filed beyond the stated case in the plaint, nevertheless examined the case of the appellant on the strength of even those documents, more specifically, letters dated 05.12.1977 and 10.01.1978. 20) Learned senior counsel further submitted that letter dated 05.12.1977 as produced by the respondents is in line with the same letter which has been obtained through RTI. On the other hand, the letter on which the appellant is relying upon does not match with the one obtained through the JUDGMENT Labour Commissioner’s Office. Moreover, the Division Bench has found version of the appellant to be untrustworthy as according to it the post-script as introduced by the plaintiff was found to be inconsistent with the main body of the letter. Further, letter dated 10.01.1978, produced by the appellant is also an interpolated document as Mr. Vasant Gupte (PW-2) in his statement had said that this letter must have been sent by 44 Page 44 the Mill Mazdoor Sabha and the post-script might have been written by Mr. Pathak as it bears his signature. The Division Bench has therefore rightly held that it cannot be relied upon.

08.11.1977 (Exh. P-4) and letter dated 10.02.1978 (Exh. P-15) make it clear that the respondent had offered the full amount of dues to the workmen and not 60 per cent as is sought to be suggested in the two letters filed by the appellant. Even letters dated 14.12.1978 and 15.12.1978 (Exhibit Nos. P-39 and P-40) have adversely been commented upon by the Division Bench. So far as letter dated 10.06.1978 is concerned, the Division Bench has found that PW-2 had no personal knowledge with regard to the facts stated in the letter and that JUDGMENT Mr. Pathak who is said to have written this letter was not alive. 21) It is further submitted that the respondents have deposited a sum of Rs. 11,50,000/- along with interest thereon which is lying with the Registry of the Bombay High Court in a Fixed Deposit which amount can be paid over to the 45 Page 45 appellant and the Division Bench has rightly set aside the order of the learned single Judge. 22) In reply, it has been stated that the additional documents

consideration as they were not part of the record before the learned single Judge or before the Division Bench and no leave has been obtained from the court. 23) A reading of Clause 6 of the agreement stipulated the period of nine (9) months for all the formalities to be observed. It also applied to obtaining consent of the labour. According to learned senior counsel for the appellant, the decree of specific performance or any decree cannot be set aside vide an interim order, more so, when this Court, in its order dated 11.02.2008 JUDGMENT had directed that the order of status quo passed on 08.12.2006 shall continue till the disposal of the appeal by the High Court. It was, therefore, submitted that the appeal be allowed and respondents be directed to execute the sale deed in favour of the appellant. 46 Page 46 Discussion: 24) From the rival submissions noted above, the only

19.10.1977 by the respondents was justified or not especially when the appellant claims that the respondents had colluded with the labour for not making them agreeable to the sale. 25) In the plaint filed before the High Court of Bombay being Suit No. 1414 of 1979, a specific case was set up by the appellant in paragraph 33 that the defendants are wrongfully seeking to back out of the agreement for sale on false and wrong pretexts and at the instigation of the defendants and in JUDGMENT collusion with them, the said Mill Mazdoor Sabha has refused to give its permission to the sale of the mill premises. Relevant portion of paragraph 33 of the plaint filed by the appellant in Suit No. 1414 of 1979 is reproduced below:- .The Plaintiff says that the Defendants are however “… wrongfully seeking to back out of the said agreement for sale on the false and wrongful pretexts. At the instigation of the defendants and in collusion with them the said Mil Mazdoor Sabha has also allegedly refused to give its permission to the 47 Page 47 sale of the mill premises of Defendant No. 1 to the plaintiff. The plaintiff says that the alleged refusal of the said Mill Mazdoor Sabha to consent to the sale of the said Mills property to the Plaintiff has been instigated by the Defendants and the same is collusive and the same is made a false pretext to enable the Defendants to back out of the said agreement for sale dishonestly and wrongfully….” (emphasis supplied) 26) The Mill Mazdoor Sabha, which is a union of workmen of the respondents herein, vide letter dated 05.12.1977, informed the respondents that they are not agreeable to the sale of the mill premises. This was reiterated by the Mill Mazdoor Sabha vide letter dated 10.01.1978. The appellant, however, relied upon the alleged letters dated 05.12.1977 and 10.01.1978 which according to them have been handed over by Shri M.P. Agrawal-a former Director of the Respondent No. 1. The letters dated 05.12.1977 and 10.01.1978 which were sent by JUDGMENT the respondents to the appellant are re-produced below:- “Dear Sir, th This has reference to the meeting held in your office on 29 November, 1997 when our representatives and your Directors were present. In this connection we have to inform you that we have been informed by your employees that they are not agreeable to your selling the Mill premises. The employees have given us a representation to the effect that they are not agreeable to your selling of the Mill premises. In accordance with the workers representation we have to inform you that we are not agreeable and therefore we cannot give our consent to the sale of the mill premises. 48 Page 48 In the circumstance there is no question of your setting the payment of the workers’ dues as proposed by you. Please also note that we are also moving the labour commissioner in the regard. Yours faithfully,

th We want to make it clear that our letter of 5 December 1977 is final and we do not agree to the proposed sale. We hereby treat this matter as closed as far as we are concerned and we will not meet you or any one else for any discussion further, in respect thereof. Yours truly for MILL MAZDOOR SABHA Sd/- Asst. General Secretary The aforesaid letters were marked as Exhibit D-10 and Exhibit P-11 respectively. The letters which the appellant had filed subsequently being JUDGMENT marked as Exhibit Nos. P-27 and P-28 are also reproduced below:- “Dear Sir, This has reference to the Meeting held in your office on th 29 November, 1977 when our representatives and your directors were present. In this connection we have to inform you that we have been informed by your employees that they are not agreeable to your selling the Mill Premises. The employees have given us a representation to the effect that they are not agreeable to 49 Page 49 your selling of the Mill premises unless you provide alternate employment and pay full compensation to those workers who do not want alternate employment as per the law. In the circumstances there is no question of your setting the payment of the workers’ dues as proposed by you. Please also note that we are also moving the Labour Commissioner in this regard. ( emphasis supplied ) Yours faithfully, Assistant General Secretary Copy to Commissioner of Labour P.S. Your proposal to pay 60% compensation only to the workers is not acceptable hence we object to the sale. Signed Assistant Secretary General” “Dear Sir, At your instance the undersigned met your proposed th purchaser on 9 January 1978. th We want to make it clear that our letter of 5 December, 1977, is final and we do not agree to the proposed sale. We hereby treat this matter as closed as far as we are concerned and we will not meet you or any one else for any discussion further, in respect thereof. JUDGMENT Yours truly for MILL MAZDOOR SABHA Sd/- Asst. General Secretary P.S. : In the discussion you mentioned that in case we agree you would shift the Factory to Andheri or Thane are and provide alternate work to the workers on first priority basis and those workers who do not agree to this you would compensate fully. We are agreeable to this proposal as stated in the presence of the workers and as such we agree to your proposed sale. ( emphasis supplied ) Sd/- Asstt. General Secretary” 50 Page 50 27) It may be mentioned that in the plaint filed by the appellant, the plea set up was that at the instigation of the defendants and in collusion with them, the Mill Mazdoor

premises of Defendant No. 1 to the plaintiff. It was not a case set up by the appellant that the Mill Mazdoor Sabha had agreed to the proposed sale on certain conditions offered by the respondents. In view of the settled position of law, fresh pleadings and evidence which is in variation to the original pleadings cannot be taken unless the pleadings are incorporated by way of amendment of the pleadings. In our considered opinion, the Division Bench of the High Court was perfectly justified in holding that unless the plaint is amended JUDGMENT and a specific plea is taken that the Mill Mazdoor Sabha had agreed for the proposed sale on certain terms and conditions offered by the respondents herein, the two letters viz., Exh Nos. P-27 and P-28 could not have been taken into consideration at all. Further, it is the case of the appellant that the aforesaid two letters were given by one Shri M.P. Agrawal-a former Director of the Respondent No. 1. Shri M.P. 51 Page 51 Agrawal has not been produced as a witness so as to establish that these two letters were in fact given by the Mill Mazdoor Sabha. Further, in the statement of Mr. Vasant Gupte (PW-2),

Mill Mazdoor Sabha and the post-script might have been written by Mr. Pathak as it bears his signature. He had not stated that it was written in his presence. Mere identifying the signature of Mr. Pathak does not prove the contents of the said letter which is being relied upon by the appellant. Even if the two letters viz., Exh. Nos. P-27 and P-28 are taken into consideration, from a reading of the said letters, it appears that the contents are contradictory of one another. In the letter dated 05.12.1977 (Exh. P-27), in the underlined portion JUDGMENT reproduced above, we find that the Mill Mazdoor Sabha had demanded an option to provide alternate employment and to pay full compensation to those workers who do not want alternate employment as per the law. In the note below the said letter, a mention has been made that a proposal was given to pay 60 per cent compensation which was not acceptable. 52 Page 52 28) In the earlier part of the letter dated 10.01.1978 (Exh. P-28), it has been specifically mentioned that they do not agree to the proposed sale and the matter be treated as closed.

the proposal given in the discussion and to the proposed sale. Letter dated 10.01.1978 is contradictory to the earlier part of the letter, and therefore, in our considered opinion, the Division Bench had rightly disbelieved these two letters viz., Exh. P-27 and Exh. P-28. 29) From the aforesaid discussion it is absolutely clear that the Mill Mazdoor Sabha categorically refused to give their consent to the sale of the mill premises. 30) The submission that the appellant has waived the JUDGMENT condition regarding taking of consent from the labour for the proposed sale and, therefore, this could not be a ground for cancelling the contract is misconceived. In the agreement dated 19.10.1977, it was specifically mentioned that the sale also be subject to your (defendants) being able to settle with your labour and your labour agreeing to the sale contemplated herein and if you are not able to settle with your labour and to 53 Page 53 get them to agree to the sale herein contemplated you will not be bound to complete the sale. The moment labour do not agree to the sale contemplated, under the terms of the

sale. The maximum period of nine (9) months does not mean that once the labour had declined to give their consent for the proposed sale, the contract subsists for a period of nine (9) months and it cannot be terminated before that period. The agreement for sale is a contingent agreement depending upon obtaining permission under Section 22 and Section 27 of the ULC Act, property being converted from industrial zone to residential use and settlement with the labour and the labour agreeing to the sale contemplated therein. If any of the JUDGMENT conditions are not fulfilled, the respondents were not bound to complete the sale and the appellant was only entitled for return of the money with interest @ 18% per annum from the date of refusal of any of the permission or consent or agreement mentioned above. As in the present case we find that the Mill Mazdoor Sabha has not given its consent to the proposed sale, agreement for sale could not have been 54 Page 54 performed and had ceased. The appellant is only entitled to refund of the amount along with interest @ 18% per annum stipulated therein.

that the High Court was right in setting aside the decree passed by learned single Judge of the High Court. We do not find any merit in these appeals, hence, the appeals fail and are hereby dismissed with no order as to costs. Interlocutory Applications, if any, are disposed of accordingly. ...…………….………………………J. (RANJAN GOGOI) . …....…………………………………J. (R.K. AGRAWAL) JUDGMENT NEW DELHI; JULY 8, 2015. 55 Page 55