# NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS PVT. LTD. & ORS

- **Citation:** [2015] 7 S.C.R. 631
- **Court:** Supreme Court of India
- **Decided:** 2015
- **Case number:** Civil Appeal No.1148 of 2010
- **Bench:** RANJAN GOGOi, R.K. Agrawal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nandkishore-lalbhai-mehta-v-new-era-fabrics-pvt-ltd-ors-30939
- **Pages:** 58

## Headnote

A
B
Specific performance: Sale of suit property by
respondent subject to consent of Labour Union -Appellant- c
buyers paid earnest money as per the agreement to the
respondents-buyers - Labour Union refused to give the
consent for sale of the suit property- Respondent informed
this fact to the appellant that the agreement stood cancelled
and that they would return the amount - Appellant waived D
the condition of obtaining the consent of labour but still
agreement did not materialize- Suit for specific performance
by appellant- Single judge of High Court decreed the suitDivision Bench set aside the decree - On appeal, held: In
the plaint filed by appellant, specific case was pleaded by E
appellant that the Labour Union colluded with the respondents
- However, at the time of leading the evidence, case was
made out that Labour Union agreed to the proposed sale on
certain conditions offered by respondent - Such evidence
could not be allowed to be led in the absence of pleadings in F
the plaint - Since there was new plea or a/legation of fact
inconsistent with the previous pleadings of the parties, steps
ought to have been taken by appellant to amend the plaint
which was not done - As the Labour Union did not give its G
consent to the proposed sale, agreement for sate could not
have been performed and had ceased - Appellant is only
entitled to refund of the amount along with interest @ 18%
per annum stipulated therein.
H
631
632
SUPREME COURT REPORTS
[2015] 7 S.C.R.
A
Dismissing the appeals, the Court
HELD: 1. In the plaint filed by the appellant, the
plea set up was that at the instigation of the defendants
and in collusion with them, the Mill Mazdoor Sabha has
B refused to give its permission to the sale of the mill
premises of Defendant No. ·1 to the plaintiff. It was not a
case set up by the appellant that the Mill Mazdoor Sabha
had agreed to the proposed sale on certain conditions
offered by the respondents. In view of the settled
C 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. The Division Bench of the
High Court was perfectly justified in holding that unless
D the plaint is amended and a specific plea is taken that
the Mill Mazdoor Sabha had agreed for the proposed sale
on certain terms and conditions offered by the
respondents, the two letters viz., Exh Nos. P-27 and P28 could not have been taken into consideration at all.
E Further, it was the case of the appellant that the said two
letters were given by the former Director of Respondent
No. 1. He was not produced as a witness so as to
establish that these tw<;> letters were in fact given by the
F Mill Mazdoor Sabha. Further, in the statement of PW-2,
he has only stated that the letter must have ben sent by
the Mill Mazdoor Sabha and the post-script might have
been written by Mr. Pathak as it bears his signature. He
had not stated that it was written in his presence. Mere
G identifying the signature of Mr. Pathak would not prove
the contents of the said letter which was 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
H are contradictory of one another. In the letter dated
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 633
PVT. LTD. & ORS.
05.12.1977 (Exh. P-27), the Mill Mazdoor Sabha had A
demanded an option to provide alternate empk>yment
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 was made that a
proposal was given to pay 60 per cent compensation B
which was not acceptable. In the earlier part of the letter
dated 10.01.1978 (Exh. P-28), it was specifically
mentioned that they do not agree to the proposed sale
and the matter be treated as closed. However, in the note,
it was mentioned that they are agr

## Text

_Characters 0–39,732 of 103,458. This is a partial read: ask again with offset=39732 for what follows._

[2015] 7 S.C.R. 631
NANDKISHORE LALBHAI MEHTA
v.
NEW ERA FABRICS PVT. LTD. & ORS.
(Civil Appeal No.1148 of 2010)
JULY08, 2015
[RANJAN GOGOi AND R.K. AGRAWAL. JJ.)
A
B
Specific performance: Sale of suit property by
respondent subject to consent of Labour Union -Appellant- c
buyers paid earnest money as per the agreement to the
respondents-buyers - Labour Union refused to give the
consent for sale of the suit property- Respondent informed
this fact to the appellant that the agreement stood cancelled
and that they would return the amount - Appellant waived D
the condition of obtaining the consent of labour but still
agreement did not materialize- Suit for specific performance
by appellant- Single judge of High Court decreed the suitDivision Bench set aside the decree - On appeal, held: In
the plaint filed by appellant, specific case was pleaded by E
appellant that the Labour Union colluded with the respondents
- However, at the time of leading the evidence, case was
made out that Labour Union agreed to the proposed sale on
certain conditions offered by respondent - Such evidence
could not be allowed to be led in the absence of pleadings in F
the plaint - Since there was new plea or a/legation of fact
inconsistent with the previous pleadings of the parties, steps
ought to have been taken by appellant to amend the plaint
which was not done - As the Labour Union did not give its G
consent to the proposed sale, agreement for sate could not
have been performed and had ceased - Appellant is only
entitled to refund of the amount along with interest @ 18%
per annum stipulated therein.
H
631
632
SUPREME COURT REPORTS
[2015] 7 S.C.R.
A
Dismissing the appeals, the Court
HELD: 1. In the plaint filed by the appellant, the
plea set up was that at the instigation of the defendants
and in collusion with them, the Mill Mazdoor Sabha has
B refused to give its permission to the sale of the mill
premises of Defendant No. ·1 to the plaintiff. It was not a
case set up by the appellant that the Mill Mazdoor Sabha
had agreed to the proposed sale on certain conditions
offered by the respondents. In view of the settled
C 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. The Division Bench of the
High Court was perfectly justified in holding that unless
D the plaint is amended and a specific plea is taken that
the Mill Mazdoor Sabha had agreed for the proposed sale
on certain terms and conditions offered by the
respondents, the two letters viz., Exh Nos. P-27 and P28 could not have been taken into consideration at all.
E Further, it was the case of the appellant that the said two
letters were given by the former Director of Respondent
No. 1. He was not produced as a witness so as to
establish that these tw<;> letters were in fact given by the
F Mill Mazdoor Sabha. Further, in the statement of PW-2,
he has only stated that the letter must have ben sent by
the Mill Mazdoor Sabha and the post-script might have
been written by Mr. Pathak as it bears his signature. He
had not stated that it was written in his presence. Mere
G identifying the signature of Mr. Pathak would not prove
the contents of the said letter which was 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
H are contradictory of one another. In the letter dated
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 633
PVT. LTD. & ORS.
05.12.1977 (Exh. P-27), the Mill Mazdoor Sabha had A
demanded an option to provide alternate empk>yment
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 was made that a
proposal was given to pay 60 per cent compensation B
which was not acceptable. In the earlier part of the letter
dated 10.01.1978 (Exh. P-28), it was specifically
mentioned that they do not agree to the proposed sale
and the matter be treated as closed. However, in the note,
it was mentioned that they are agreeable to the proposal C
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, the Division Bench rightly
disbelieved these two letters. [Paras 27 to 29] (686-C-H; 0
687-A-E]
2. The submission that the appellant has waived
the condition regarding taking of consent from the labour
for the proposed sale and, therefore, this could not be a
ground for cancelling the contract is misconceived. In E
the agreement dated 19.10.1977, it was specifically
mentioned that the sale also be subject to defendants
being able to settle with labour and labour agreeing to
the sale contemplated and if they are not able to settle F
with labour and to get them to agree to the sale herein
contemplated they will not be bound to complete the
sale. The moment labour do not agree to the sale
contemplated, under the terms of the contract, the
respondents were not bound to complete the sale. The G
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 H
634
SUPREME COURT REPORTS
[2015] 7 S.C.R.
A agreement depending upon obtaining permission under
Section 22 and Section 27 of the ULCAct, property being
converted from industrial zone to residential use and
settlement with the labour and the labour agreeing to
the sale contemplated therein. If any of the conditions
B are not tulfilled, 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. [Para 30] [687C G-H; 688-A-D]
D
E
F
G
H
. Bachhaj Nahar vs. Nilima Manda/ & Anr. 2008 (14)
SCR 621: (2008) 17 SCC 491; Shalimar Chemical
Works Limited vs. Surendra Oil and Dal Mills
(Refineries) and Others 2010 (10) SCR 703: (2010) 8
SCC 423; H. Siddiqui (Dead) By Lrs. vs. A. Ramalingam
2011 (5) SCR 587 : (2011) 4 sec 240; R. V.E.
Venkatachala Gounder vs. Aru/migu Viswesaraswami
& V.P Temple and Another2003 (4) Suppl. SCR 450:
(2003) 8 SCC 752; HPA International vs. Bhagwandas
Fatehchand Daswani and Others 2004 (3) Suppl.
SCR 31: (2004) 6 SCC 537; Irwin v Wilson [2011]
EWHC 326 (Ch); M. Meenakshi and Others vs.
Metadin Agarwal and Others 2006 (5) Suppl.
SCR 505: (2006) 7 SCC 470; K. Narendra vs. Riviera
Apartments (P) Ltd. 1999 (3) SCR 777: (1999) 5 SCC
77 - relied on.
Chandnee Widya Vati Maden vs. Dr. C.L. Katia/ and
Others (1964) 2 SCR 495;
The Maharao Sahib Shri Bhim Singhji vs. Union of
India and Ors. (1981) 1 SCC 166; Pasupu/eti
Venkateswarlu vs. Motor & General Traders 1975 (3)
SCR 958: (1975) 1 SCC 770 - referred to.
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 635
PVT. LTD. & ORS.
Case Law Reference
A
(1964) 2 SCR 495
referred to.
Para4
(1981) 1 sec 166
referred to.
Para 5
1975 (3) SCR 958
referred to.
Para 6
B
2008 (14) SCR 621
relied on.
Para 9
2010 (10) SCR 703
relied on.
Para 10
2011 (5) SCR 587
relied on.
Para 11
c
2003 (4) Suppl. SCR 450
relied on.
Para 12
2004 (3) Suppl. SCR 31
relied on.
Para 14
2006 (5) Suppl. SCR 505
relied on.
Para 16
D
1999 (3) SCR 777
relied on.
Para 18
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
1148of2010
E
From the Judgment and Order dated 06.05.2008 in
Appeal No. 245 of2006 in Suit No. 1414of1979 passed by
the Division Bench of the High Court of Judicature at Bombay.
WITH
F
C.A. Nos. 1131-1132of2010
P. H. Parikh, Vinod A. Bobde, Harin P. Raval, Kavin .
Gulati, Parag P. Tripathi, Gopal Jain, Mamta Sadh, Lalit Bhasin,
G
Nina Gupta, Mudit Sharma, P.V. Yogeswaran, ParvezA. Khan,
Vishal Prasad, Shivaji M. Jadhav, Rahul Jain, Kamna Sagar,
Anando Mukherjee, Kuna I Bahri, Sunil Kumar Verma, Ankur
Saigal, Sh ally Bhasin Maheswari for the appearing parties.
The Judgment of the Court was delivered by
H
636
. SUPREME COURT REPORTS
[2015] 7 S.C.R.
A
R. K. AGRAWAL, J. Civil Appeal No. 1148 of 2010
1) This appeal has been filed against the judgment and
order dated 06.05.2008 passed by the Division Bench of the
High Court of Judicature at Bombay in Appeal No. 245 of 2006
in Suit No. 1414of1979 whereby the High Court allowed the
B appeal filed by respondents herein while setting aside the
decree dated 12.12.2005 passed by the learned single Judge
of the High Court in favour of the appellant herein in Suit No.
1414 of 1979 for specific performance of the agreement dated
19.10.1977.
c
Brief facts:
2) (a) In October, 1977, Respondent Nos. 1 and 2
agreed to sell their respective right, title and interest in the
o property admeasuring approximately 13011 sq. yards or
thereabouts of Mahim T.P.S. 111, 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.
E
(b) The relevant terms of the agreement are as under:-
1.Area of the Property : 13011 Square Yards.
F 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;
G
H
5. Payment
: Rs. 11,50,000/-(Rupees Eleven lacs
fifty thousand only) to be paid as
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 637
PVT. LTD. &ORS. [R. K.AGRAWAL, J.)
earnest to your Solicitor Mr. D.H. A
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. B
4,00,000/-(Rupees four lacs only) on
or before 241h October 1997 time
being of the essence. Provide fur:ther
that the sums of Rs.7,50,000/- c
(Rupees Seven lacs-fifty thousand
only) be utilized by you New Era
Fabrics Pvt. Ltd. for the purpose of
carrying out the Consent Terms in the
High Court and small Causes Court D
suit mentioned above.
The time for the payment thereof has
expired and you will therefore offer the
same to the other side and on their E
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 F
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 G
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/-
H
638
A
B
c
D (b)
E
F
G
SUPREME COURT REPORTS
[2015] 7 S.C.R.
(Rupees four lacs only) on or before
24th October 1977 you will be entitled
to forfeit the amount of Rs. 7,50,000/
- paid by me till such default and the
Agreement herein will stand
automatically cancelled. I enclose
herewith my Solicitors' cheque of Rs.
7,50,000/- (Rupees Seven lacs fifty
thousand only) in your Solicitor's
favour which may be cashed after
confirmation by you of the terms
contained herein, ifthe terms are not
confirmed you will return the said
cheque to me;
: Half of the balance of the consideration money mentioned in the
paragraph 2 above will be paid by me
on receipt of the permissions under
Sections 22 and 27 of the Urban Land
(Ceiling & Regulation) Act being
obtained as also the permission for
conversion into residential user being
obtained as well as your settling with
your labour and getting their
permission as herein provided and
vacant possession of the said land
being handed over to me and the
balance of the consideration by equal
quarterly installments to be paid within
one year from the date of possession
of the plot being handed over to me
as herein provided;
H 6. Sale
: The sale shall be subject to permiss-
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 639
PVT. LTD. &O~S. [R. K.AGRAWAL, J.]
ion being obtained under Sections 22 A
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 B
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 c
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 D
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 E
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, F
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 G
provided in my favour will be affected
or jeopardize in any manner
whatsoever. .....
(emphasis supplied)
H
640
.._. · SUPREME COURT REPORTS
[2015] 7 S.C.R.
A
B
: You will sign such application forms,
etc. for the aforesaid permissions as
may be necessary, as well as forms
for permissions of building
Department from B.M.C. and
sanction of plans etc. for new
construction on the said property and
any other permission from Town
Planning or any other Department;
C 8. Vacant possession : Vacant possession shall be handed
over to me within 3 months of all the
D
above mentioned permissions being
obtained and your settling with your
labour agreeing to the sale herein
contemplated .....
( c) Pursuant to the said agreement, the appellant herein
paid a sum of Rs. 11,50,000/- as part of earnest money in two
installments of Rs. 7,50,000/- and Rs. 4,00,000/- each on
E 20.10.1977 and 24.10.1977 respectively.
(d) Pursuant to Point No. 6 of the agreement dated
19.10.1977, the sale was subject to the permission being
obtained under Sections 22 and 27 of the Urban Land (Ceiling
F 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.
G
(e) In order to materialize the agreement, further steps
were taken. Respondent No. 1, vide letter dated 08.11.1977,
intimated the Labour Union about the Agreement and
requested to give their consent to the same. Vide letter dated
09.11.1977, Respondent No. 2 approached the Arbitrator, Town
H Planning Scheme to have the said property converted into
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 641
PVT. LTD. & ORS. [R. K. AGRAWAL, J.]
residential zone from industrial zone.
(f) Vide letter dated 05.12.1977, Mill Mazdoor SabhaLabour 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
A
B
of Rs. 11,50,000/- with interest and also withdrew the
application madetotheArbitrator, Town Planning Scheme for c
conversion of the property from industrial to residential zone.
(h) The appellant herein waived the stipulation/condition
of obtaining the consent of the labour but inspite of the efforts,
the agreement did not materialize.
D
(i) Being aggrieved, the appellant herein filed Suit No.
1414 of 1979 before the High Court of Bombay for specific
performance of the agreement dated 19.10.1977. Learned
single Judge of the High Court, vide order dated 12.12.2005,
decreed the suit in favour of the appellant herein.
E
0) Being aggrieved by the order dated 12.12.2005,
Respondent Nos. 1 and 2 filed Appeal No. 245 of 2006 in Suit
No. 1414of1979 before the High Court. The Division Bench
of the High Court, by order dated 06.05.2008, allowed the F
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 ha~· preferred G
this appeal by way of special leave before this Court.
Civil Appeal Nos.1131-1132 of2010
(I) The aforesaid appeals have been filed against the H
642
SUPREME COURT REPORTS
[2015] 7 S.C.R.
A order dated 12 .12 .2008 passed by the Division Bench of the
Bombay High Court wherein the cross-objections filed by the
appellant herein were dismissed. These appeals were tagged
with the main appeal at the SLP stage vide order dated
02.04.2009, hence will be disposed of by this common
B judgment.
3) Heard Mr. P.H. Parikh, learned senior counsel
assisted by Mr. P.V. Yogeswaran, learned counsel for the
appellant and Mr. Vinod A. Bobde, learned senior counsel and
C Mr. Shivaji M. Jadhav, learned counsel forthe respondents.
Rival Submissions:
4) Learned senior counsel for the appellant submitted
0 that the Agreement for Sale dated 19.10.1977 executed by
the parties is not in dispute. The appellant had always been
ready and willing to discharge his obligations and the plea of
the respondents that there was no concluded agreement relying
upon Clause 10 of the agreement was neither raised in the
E written statement nor any issue was framed by learned single
Judge. Thus, it was not open to the defendants-respondents
herein to plead that there was no concluded agreement. It
was correctly negated by the learned single Judge. In fact, the
respondents were acting dishonestly as the agreement was
F 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
G did not take sufficient steps to get the consent of the Mill
Mazdoor Sabha/labour/workmen. It appears that the
respondents were in dire financial position and required money
to perfect their title by making balance payment to the Zaveris
under the consent terms. The defendants-respondents herein
H paid a sum of Rs. 7 .5 lakhs received from the appellant to the
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 643
PVT. LTD. & ORS. [R. K. AGRAWAL, J.]
Zaveris to perfect their title and after getting the same done, A
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
B.
ground that the important facts including documentary evidence
that were relied upon by the appellant were not pleaded in the
plaint and the plaint was not even amended. Even though, an
objection was raised by the respondents before the court that C
certain evidence were outside the scope of the plaint but no
such objections were raised at the stage of final hearing. He
further submitted that as the parties had contested the matter
before the learned single Judge on the basis of the concluded
agreement, the Division Bench was not at all justified in holding D
the agreement in question to be contingent in nature. In support·
of his contention, learned senior counsel relied upon a decision
of this Court in Chandnee Widya Vati Maden vs. Dr. C.L.
Katia/ and Others ( 1964) 2 SCR 495 wherein it was held that
where all the terms are crystallized between the parties, the E
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 · F
not pleaded in the plaint nor was any amendment preferred.
According to learned senior counsel, the only requirement
under the Code of Civil Procedure, 1908 is that the plaint must
contain essential pleas or contentions and it is not necessary
to plead evidence. In paragraph Nos. 33 and 35 of the plaint, G
a specific plea was taken by the appellant that the respondents
were on a false pretext seeking to wriggle out their contractual
obligations and in support of the plea of false pretext, the
appellant was entitled to adduce evidence to show that the
refusal on the part of the Mill Mazdoor Sabha/labour to permit H
644
SUPREME COURT REPORTS
[2015] 7 S.C.R.
A the sale of the suit property was nothing but an eye wash by
the respondents. To establish this fact, the appellant had
produced documents and also led oral testimony through one
of the trade union office bearers, viz., Mr. Vasant Gupte,
President and this evidence could not be shut out as the
B 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
C defendants-respondents herein regarding it to be a contingent
contract and further no specific issue was framed. According
to him, on a correct construction and interpretation of the
agreement, it cannot be termed as a contingent contract and
it is always open to the party in whose favour a specific term is
D inserted to waive the term and seek specific performance of
the remainder of the obligations. According to him, learned
single Judge had categorically recorded, on appreciation of
evidence on record that the labour union had actually consented
to the sale of the property on certain terms being fulfilled, as is
E clear from Exhibit Nos. 43 and 44. Further, the grant of relief
of specific performance is a matter of discretion and if it has
been granted by the learned single Judge, the Division Bench
ought not to have substituted its assessment where the court
F had perceived dishonest conduct on the part of the defendantsrespondents 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
G suit and, therefore, the respondents cannot take advantage of
a stipulatiarrwhich the party for whose benefit it was made
has expressly waived the same for performance of his other
obligations. This aspect has not been considered or dealt
with by the Division Bench. Further, the Division Bench wrongly
H held that the appellant did not really mean to purchase the suit
NANDKISHORE LALBHAI MEHTA v. NEW ERA FABRICS 645
PVT. LTD. & ORS. [R. K.AGRAWAL, J.]
property and that the agreement of purchase of the suit property A
was a financial transaction. This plea was not even raised by
the respondents herein in their written statement. As far as
permission under the ULCAct is concerned, learned senior
counsel relied upon a decision of this Court in The Maharao
Sahib Shri Bhim Singhjivs. Union oflndia and Ors. (1981) B
1 SCC 166 and submitted that sub-Section (1) of Section 27
of the Act is invalid insofar as it imposes a restriction on transfer
of any urban or urbanisable land with a building or a portion
only of such building, which is within the ceiling area. Such
property will therefore be transferable without the-6onstraints C
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, D
Respondent No. 1 had only 69 employees and if the workers
were provided their legal dues they were willing to consent to
the sale. of the suit property. The Annual Reports/Balance
Sheets of the Respondent No. 1 have been specifically
appreciated by learned single Judge whereas the Division E
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 F
it could not have been excluded. In support of his submission,
he relied upon a decision of this Court in Pasupuleti
Venkateswarlu VS. Motor & General Traders ( 1975) 1 sec
770 wherein it was held as under:-
"4 ..... If a fact, arising after the lis has come to c;c;>urt 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 ..... "
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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
B interest is computed thereupon it comes to Rs. 160,87, 15,887 /
- as on September 2012. However, as on june 2014, the
respondents have earned by way of rental charges upon the
said premises a sum of Rs. 87,42,65,200/-as principal amount
and if interest is computed thereupon @ 18% per annum, it
C comes to Rs. 226,89,85,346/-. It is further submitted that the
appellant at the time of entering the agreement was 54 years
and now he is 91 years. The suit was filed in the year 1979
and he had suffered all these years for no fault of his. He
0 believed in the agreement and complied with all the terms and
conditions. Learned senior counsel further submitted that the
judgment and order passed by the Division Bench of the High
Court dated 06.05.2008 should be set aside and that of the
learned single Judge dated 12.12.2005 be restored. Finally,
E 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.
F
8) In reply, learned senior counsel for the respondents
submitted that in the plaint filed by the appellant, a specific
case of the labour union colluded with the present respondent
was pleaded. However, at the time of leading of evidence, a
completely new case vis., of two letters dated 05.12.1977 and·
G 10.01.1978 has been made out which are the documents
handed over to the appellant by one Mr. M.P. Agarwal. A specific
objection was raised that such evidence could not be allowed
to be led, or documents have been produced in the absence
of pleadings in the plaint whereupon learned single Judge while
H noting the aforesaid objection held that this issue would be
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decided while hearing the matter finally. Instead of checking A
as to whether those documents can be relied upon or not,
learned single Judge erroneously accepted the version
contained in the letters dated 05.12.1977 and 10.01.1978 as
produced by the appellant. According to him, no evidence can
be led in the absence of any pleading and if there is any new B
ground, new plea or allegation of fact inconsistent with the
previous pleadings of the parties, steps ought to have been
taken to amend the plaint which has not been done for reasons
best known.
9) Learned senior counsel further submitted that unless
and until there is an amendment of the pleadings, no evidence
with regard to the facts not pleaded can be looked into, for
which he relied upon a decision of this Court in Bachhaj Nahar
c
vs. Nilima Manda/ &Anr. (2008) 17 SCC 491 wherein it was D
held-as under:-
"7. Feeling aggrieved, the plaintiffs filed a second appeal
before the High Court. The High Court by judgment dated
14-5-2004 allowed the second appeal. The High Court
held that the plaintiffs had failed to make out title to the
suit pr_operty. It however held that the plaintiffs had made
out a case for grant of relief based on easementary right
of passage, in respect of the suit property, as they had
claimed in the plaint that they and their vendor had been
using the suit property and the first defendant and DW 6
had admitted such user. The High Court was of the view
that the case based on an easementary right could be
considered even in the absence of any pleading or issue
relating to an easementary right, as the evidence available
was sufficient to make out easementary right over the
suit property. The High Court therefore granted a
permanent injunction restraining the first defendant from
interfering with the plaintiffs' use and enjoyment of the
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"right of passage" over the suit property (as also of the
persons living on the northern side of the suit property).
10. The High Court, in this case, in its obvious zeal to cut
delay and hardship that may ensue by relegating the
plaintiffs to one more round of litigation, has rendered a
judgment which violates several fundamental rules of civil
procedure. The rules breached are:
(1) 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.
(it) 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.
(iit) 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
'~elay or further litigation should not be a ground to flout
the settled fundamental rules of civil procedure. Be that
as it may. We will briefly set out the reasons for the
aforesaid conclusions.
12. The object and purpose of pleadings and issues is
to ensure that the litigants come to trial with all issues
clearly defined and to prevent cases being expanded or
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grounds being shifted during trial. Its object is a!so to
ensure that each side is fully alive to the questions that
are likely to be raised or considered so that they may
have an opportunity of placing the relevant evidence
appropriate to the issues before the court for its
consideration. This Court has repeatedly held that the
pleadings are meant to give to each side intimation of
the case of the other so that it may be met, to enable
courts to determine what is really at issue between the
parties, and to prevent any deviation from the course
which litigation on particular causes must take.
'
13. The object of issues is to identify from the pleadings
the questions or points required
1
to be decided by the
courts so as to enable parties to let in evidence thereon.
When the facts necessary to make out a particular claim,
or to seek a particular relief, are not found in the plaint,
the court cannot focus the attention of the parties, or its
own attention on that claim or relief, by framing an
appropriate issue. As a result the defendant does not
get an opportunity to place the facts and contentions
necessary to repudiate or challenge such a claim or relief.
Therefore, the court cannot, on finding that the plaintiff
has not made out the case put forth by him, grant some
other relief. The question before a court is not whether
there is some material on the basis of which some relief
can be granted. The question is whether any relief can
be granted, when the defendant had no opportunity to
show that the relief proposed by the court could not be
granted. When there is no prayer for a particular relief
and no pleadings to support such a relief, and when the
defendant has no opportunity to resist or oppose such a
relief, if the court considers and grants such a relief, it
will lead to miscarriage of justice. Thus it is said that no
amount of evidence, on a plea that is not put forward in
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the pleadings, can be looked into to grant any relief.
14. The High Court has ignored the aforesaid principles
relating to the object and necessity of pleadings. Even
though right of easement was not pleaded or claimed by
B
the plaintiffs, and even though parties were at issue only
in regard to title and possession, it made out for the first
time in second appeal, a case of easement and granted
relief based on an easementary right. For this purpose,
it relied upon the following observations of this Court in
C
Nedunuri Kameswaramma v. Sampati Subba Rao:
"6 . ... No doubt, no issue was framed, and the one,
which was framed, could have been more elaborate;
but since the parties went to trial fully knowing the rival
o
case and led all the evidence not only in support of
their contentions but in refutation of those of the other
side, it cannot be said that the absence of an issue
was fatal to the case, or that there was that mistrial
which vitiates proceedings. We are, therefore, of
E
opinion that the suit could not be dismissed on this
narrow ground, and also that there is no need for a
remit, as the evidence which has been led in the case
is sufficient to reach the right conclusion."
F
But the said observations were made in the context of
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absence of an issue, and not absence of pleadings.
1_5. The relevant principle relating to circumstances in
which the deficiency in, or absence of, pleadings could
be ignored, was stated by a Constitution Bench of this
Court in Bhagwati Prasadv. Chandramaul:
"10 . ... If a plea is not specifically made and yet it is
covered by an issue by implication, and the parties
knew that the said plea was involved in the trial, then
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the mere fact that the plea was not expressly taken in
the pleadings would not necessarily disentitle a party
from relying upon it if it is satisfactorily proved by
evidence. The general rule no doubt is that the relief
should be founded on pleadings made by the parties.
But where the substantial matters relating to the title
of both parties to the suit are touched, though indirectly
or even obscurely, in the issues, and evidence has
been led about them, then the argument that a particular
matter was not expressly taken in the pleadings would
be purely formal and technical and cannot succeed in
every case. What the Court has to consider in dealing
with such an objection is: did the parties know that
the matter in question was involved in the trial, and
did they lead evidence about it? If it appears that the
parties did not know that the matter was in issue at
the trial and one of them has had no opportunity to
lead evidence in respect of it, that.undoubtedly would
be a different matter. To allow one party to rely upon
a matter in respect of which the other party did not
lead evidence and has had no opportunity to lead
evidence, would introduce considerations of
prejudice, and in doing justice to one party, the Court
cannot do injustice to another." ·
(emphasis supplied)
16. The principle was reiterated by this Court in Ram
Sarup Gupta v. Bishun Narain Inter College:
"6. . . . It is well settled that in the absence of pleading,
evidence, if any, produced by the parties cannot be
considered. It is also equally settled that no party
should be permitted to travel beyond its pleading and
that all necessary and material facts should be
pleaded by the party in support of the case set up by
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,,,if. The object and purpose of pleading is to enable the
adversary party to know the case it has to meet. In
order to have a fair trial it is imperative that the party
should settle the essential material facts so that other
party may not be taken by surprise. The pleadings
however should receive a liberal construction; no
pedantic approach should be adopted to defeat justice
on hair-splitting technicalities. Sometimes, pleadings
are expressed in words which may not expressly make
out a case in accordance with strict interpretation of
law. In such a case it is the duty of the court to ascertain
the substance of the pleadings to determine the
question. It is not desirable to place undue emphasis
on form, instead the substance of the pleadings should
be considered. Whenever the question about lack of
pleading is raised the enquiry should not be so much
about the form of the pleadings; instead the court must
find out whether in substance the parties knew the case
and the issues upon which they went to trial. Once it is
found that in spite of deficiency in the pleadings
parties knew the case and they proceeded to trial on
those issues by producing evidence, in that event it
would not be open to a party to raise the question of
absence of pleadings in appeal."
(emphasis supplied) .
17. It is thus clear that a case not specifically pleaded
can be considered by the court only where the pleadings
in substance, though not in specific terms, contain the
necessary averments to make out a particular case and
the issues framed also generally cover the question
involved and the parties proceed on the basis that such
case was at issue and had led evidence thereon. As the
very requirements indicate, this should be only in
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exceptional cases where the court is fully satisfied that
the pleadings and issues generally cover the case
subsequently put forward and that the parties being
conscious of the issue, had led evidence on such issue.
But where the court is not satisfied that such case was at
issue, the question of resorting to the exception to the
general rule does not arise. The principles laid down in
Bhagwati Prasad and Ram Sarup Gupta referred to
above and several other decisions of this Court following
the same cannot be construed as diluting the well-settled
principle that without pleadings and issues, evidence
cannot be considered to make out a new case which is
not pleaded. Another aspect to,be noticed, is that the
court can consider such a case not specifically pleaded,
only when one of the parties raises the same at the stage
of arguments by contending that the pleadings and issues
are sufficient to make out a particular case and that the
parties proceeded on that basis and had led evidence
on that case. Where neither party puts forth such a
contention, the court cannot obviously make out such a
case not pleaded, suo motu".
10) Learned senior counsel further submitted that merely
'
because the documents have been exhibited and also
A
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because in some of the documents one of the witnesses had F
. 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 suppgrt of this contentibn,
learned senior counsel placed reliance on the decision of this
Court in Shalimar Chemical Works Limited vs. Surendra G
Oil and Dal Mills (Refineries) and Others (2010) 8 SCC
423 wherein it was held as under:-
"3.