HARI STEEL AND GENERAL INDUSTRIES LTD. & ANR. versus DALJIT SINGH & ORS.

[2019] 6 S.C.R. 819

HARI STEEL AND GENERAL INDUSTRIES LTD. & ANR.

DALJIT SINGH & ORS.

(Civil Appeal No. 4265 of 2019)

APRIL 24, 2019

[R. BANUMATHI AND R. SUBHASH REDDY, JJ.]

Code of Civil Procedure, 1908 – Or. XII, r.6 – Judgment onadmission – Respondents-plaintiffs case that appellant no.2-defendant approached them for sale of suit property and thefranchisee rights in respect of the running business of automobilecompany ‘T’– Respondents alleged that the appellant companyconcluded the agreement for sale of the suit schedule property andthe running business for total consideration of Rs.55.50 crores –It is further alleged that respondents had paid an amount of Rs. 5crores i.e. Rs. 2 crore by cheque and Rs. 3 Crore by cash to theappellants – Dispute arose between the parties – Respondents filedsuit for specific performance of agreement to sell – Appellants-defendants raised preliminary objections stating that respondentshad forged/fabricated, the agreement to sell – While opposing thereliefs, appellants admitted that although an agreement was enteredinto with the respondents for the sale of land, but the said contractwas never crystallized, as the nature, extent and various clauseswere not finalised – Appellants also disputed receipt of Rs. 3 crores,which was allegedly paid by the respondents by way of cash –Respondent filed application u/Or.XII, r.6 – Single Judge of theHigh Court dismissed the application u/Or.XII, r.6 – However, theDivision Bench of the High Court set aside the order of the SingleJudge and allowed the application – On appeal, held: Mereadmission of entering into arrangement/agreement cannot be termedas categorical and unconditional admission for the purpose ofdelivering judgment by allowing the application filed u/Or.XII, r.6– Such admissions were erroneously treated as categorical andunconditional admissions by the Division Bench of High Court fordisposal of the application u/Or. XII, r.6 – Further, suit was filed on01.11.2006 and the application u/Or.XII, r.6 was filed on 09.02.2007– In the year 2010 issues, additional issues were framed and trial

Aalso commenced – In that view of the matter, there was no reason topass order now u/Or.XII, r.6 at this stage – In view of the seriousfactual disputes and the defence of the appellants in the suit, it isnot permissible for making roving inquiry for disposal of theapplication filed u/Or. XII, r.6 of CPC – When the trial has alreadycommenced, it is desirable to record findings on various contentiousBissues and disputes in the suit on merits by appreciating evidencebut at the same time there is no reason or justification to decree thesuit at this stage – For the aforesaid reasons, that the impugnedjudgment of the Division Bench of the High Court set aside and theorder of the Single Judge of the High Court restored.

CAllowing the appeal, the Court

HELD: 1. By applying the ratio laid down by Supreme Courtin the various judgments, it is to be held that there are nocategorical and unconditional admissions, as claimed by therespondents-plaintiffs. In view of the stand of the appellants that,Dthe pages 3 and 4 of the agreement dated 3.5.2005 are tamperedand their signatures are fabricated, when specific issue is alreadyframed, it cannot be said that there are categorical andunconditional admissions by the appellants. Mere admission ofentering into arrangement/contract itself cannot be consideredEin isolation, without considering the further objections of theappellants that certain pages in the agreement are fabricated. Incase the appellants prove that the agreement is fabricated asclaimed, post trial it goes to the root of the case on the claim ofthe respondents-plaintiffs. [Para 33][840-G-H; 841-A-B]2. In this case it is to be noted that the suit was filed onF1.11.2006 and written statement was filed on 25.01.2007 and theapplication under Order XII, Rule 6 was filed on 9.2.2007. In theyear 2010 issues and additional issues were framed and trial isalso commenced. In that view of the matter, there is no reasonto pass the impugned order now for decreeing the suit on claimedGadmissions, in exercise of power under Order XII, rule 6 of CPCat this stage. In view of the serious factual disputes and thedefence of the appellants in the suit, it is not permissible formaking roving inquiry for disposal of the application filed underOrder XII, Rule 6 of CPC. When the trial is already commenced,

it is desirable to record findings on various contentious issuesand disputes in the suit on merits by appreciating evidence butat the same time there is no reason or justification to decree thesuit at this stage. For the aforesaid reasons, the impugnedjudgment of the High Court cannot be sustained and is liable tobe set aside on this ground alone. [Para 37][842-E-G]

3. Further, it is also to be noted that the suit is for specificperformance of the agreement of sale. The relief sought isequitable and discretionary relief. The readiness and willingnesson the part of plaintiffs to execute the document is to be pleadedand proved. At first instance, in the plaint filed on 1.11.2006there was no such averment at all. Subsequent to the filing of thewritten statement, interlocutory application was filed on 20.3.2007to incorporate the plea of readiness and willingness on the partof the respondents-plaintiffs in the plaint, which was allowedsubsequently. The readiness and willingness on the part of therespondents-plaintiffs cannot be inferred merely on the groundthat they have deposited the balance amount after the impugnedorder is passed. Even in absence of refusal of the application foramendment of written statement, it is obligatory on the part ofthe plaintiffs to prove that they were willing and ready to performthe contract, to claim the equitable relief of specific performance.In the judgment relied on by the appellants in the case of AniglaseYohannan vs. Ramlatha and Ors., this Court has held that thebasic principle behind Section 16(c) read with Explanation (ii) ofthe Specific Relief Act, is that any person seeking benefit of thespecific performance of contract must manifest that his conducthas been blemishless throughout entitling him to the specificrelief. In the aforesaid judgment, this Court has further held thatthe court is to grant relief on the basis of the conduct of the personseeking relief. The said judgment of this Court also supports theplea of the appellants herein. [Para 38][842-H; 843-A-E; 844-A]

4. For the aforesaid reasons, the High Court fell in errorin passing the impugned judgment, decreeing the suit bydelivering the judgment on the application filed under Order XII,Rule 6 of CPC. The impugned judgment is liable to be set aside.[Para 40][844-C-D]

AHimani Alloys Limited v. Tata Steel Limited (2011) 15SCC 273 : [2011] 7 SCR 60 ; S.M. Asif v. VirenderKumar Bajaj (2015) 9 SCC 287 : [2015] 9 SCR 179 ;Balraj Taneja and another v. Sunil Madan and another(1999) 8 SCC 396 : [1999] 2 Suppl. SCR 258 ; AniglaseYohannan v. Ramlatha and Ors.(2005) 7 SCC 534 :B[2005] 3 Suppl. SCR 440 – relied on.

Kamal Kumar v. Premlata Joshi 2019 SCC Online SC12 ; Saradamani Kandappan v. S. Rajalakshmi andors. (2011) 12 SCC 18 : [2011] 8 SCR 874 ; BaldevSingh and Ors. v. Manohar Singh and another (2006)C6 SCC 498 : [2006] 4 Suppl. SCR 259 ; UshaBalashaheb Swami and ors. v. Kiran Appaso Swamiand ors. (2007) 5 SCC 602 : [2006] 4 Suppl. SCR259 ; Uttam Singh Duggal & Co. Ltd. v. United Bank ofIndia & Ors. (2000) 7 SCC 120 : [2000] 2 Suppl. SCR D187 ; Karam Kapahi & Ors. v. Lal Chand PublicCharitable Trust & Anr. (2010) 4 SCC 753 : [2010] 4SCR 422 ; Usha Rectifier Corporation (India) Limitedv. Commissioner of Central Excise, New Delhi (2011)11 SCC 571 : [2011] 1 SCR 347 ; Basant Singh v. JankiSingh & Ors. AIR 1967 SC 341 : [1967] SCR 1 ;EVijaya Myne v. Satya Bhushan Kaura 2007 (142) DLT483 ; Rajiv Srivastava v. Sanjiv Tuli and another AIR2005 Delhi 319 ; Thimmappa Rai v. Ramanna Rai andothers (2007) 14 SCC 63 : [2006] 6 Suppl. SCR 855 ;Ultramatix Systems Pvt. Ltd. v. State Bank of India &FOrs. (2007) 4 Mh.L.J. 847 – referred to.

HARI STEEL AND GENERAL INDUSTRIES LTD. & ANR. v.DALJIT SINGH & ORS.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4265of 2019.

From the Judgment and Order dated 02.08.2018 of the HighCourt of Delhi at New Delhi in FAO (OS) No. 268 of 2017.

Ranjit Kumar, P. S. Narsimha, Sr. Advs., Manish Aggarwal,Ms. Runul Rastogi, Ms. Snehalata Mall, Rahul G. Tanwani, V. C. Shukla,Ms. Sindoosa VNL, Ms. Saumya Jaykaran Singh, Rishi Raj Sharma,Dr. (Mrs.) Vipin Gupta, Advs. for the Appellants.

Shyam Divan, R. Basant, A. S. Chandhiok, Sr. Advs.,Mrs. Manmeet Arora, Ms. Kaveeta Wadia, Rishabh Bansal, ShashankTripathi, Keshav Sehgal, Ms. Samapika Biswas, Ms. Shruti Jose, AshishDholakia, P. S. Sudheer, Rohan Chawla, Rishi Maheshwari, Ms. AnneMathew, Bharat Sood,. Ms. Shruti Jose, Advs. for the Respondents.

The Judgment of the Court was delivered by

R. SUBHASH REDDY, J. 1. Leave granted.

2. This Civil Appeal is filed by the defendant Nos. 1 and 2 in theSuit in CS(OS) No.2046 of 2006, aggrieved by the judgment dated 2[nd]August, 2018, in FAO (OS) No.268 of 2017, passed by the High Courtof Delhi at New Delhi. By the aforesaid judgment, the Division Benchof the High Court, by setting aside the judgment dated 24.7.2017 passedin IA No.1557 of 2007 in CS (OS) No.2046 of 2006, has allowed theinterlocutory application and consequential prayers of the respondents-plaintiffs and decreed the suit with the following directions:-

“(i) The order dated 24[th] July, 2017 passed by the ld. Single Judgeon I.A. No.1557/2007 in CS(OS) No.2046/2006 is hereby setaside and quashed.

(ii) I.A.No.1557/2007 is hereby allowed and consequently theprayers of the plaintiffs in the suit, as prayed for,are decreed.

(iii) The Registry shall draw up decree sheet accordingly.

(iv) The appellants shall pay the balance amount of Rs. 50.50Crores to the defendant no.1 within period of three months and15 days from today.

(v) Upon receipt of the amount, the respondents shall forthwithexecute the sale deed in favour of the appellants as well as anyother documents, as may be required. It shall be the responsibilityof the respondent no.2 to complete the formalities includingobtaining permissions, if any, from any authority of departmentand ensure execution of the registered sale deed forthwith in favourof the appellants.

(vi) In case the respondents do not accept the payment of theamount from the appellants, the amount shall be deposited by theappellants in CS(OS)No.2046/2006 by way of cheque in the nameof Registrar General of this court. Upon the deposit, the saidcheque shall be encashed by the Registry and the amount thereofshall be kept in Fixed Deposit Receipt initially for period ofsix months to be kept renewed till further orders of the ld. SingleJudge in the suit proceedings.

(vii) In such eventuality, the appellants shall be entitled to seekappropriate remedy for execution of the judgment and decree byappropriate proceedings by the ld. Single Judge.

(viii) Given the delay caused by the respondents in the adjudicationof the matter and their conduct before the court, the respondentsshall pay costs to the appellants at the rate of Rs. 1 Lac for eachyear of the litigation w.e.f. 1[st] November, 2006 to July, 2018 beinga total of Rs. 11,50,000/- for the period of 11 1/2 years.

(ix) Costs of Rs. 1,00,000/- each are directed to be paid to theDelhi High Court Legal Services Committee; Delhi High CourtMediation and Conciliation Centre and the Delhi InternationalArbitration Centre, which shall be paid by the respondents within15 days from today and proof of deposit shall be filed with theRegistry. The copy of the receipts shall be made available to theappellants through counsel immediately upon the deposit.

(x) In case the respondents fail to deposit the costs as at S.no.(viii)& (ix) above, as directed, the appellants shall be entitled to deduct

the amount of costs out of the balance sale consideration and todeposit the costs of Rs. 1 lakh with each of the DHCLSC,DHCMCC & the DIAC. Proof of deposit shall be sent to thedefendants.

(xi) In view of the order we are passing regarding payment upto date costs in the suit, we are refraining from imposing furthercosts on the respondents in the present appeal.

(xii) The appeal is allowed in the above terms.”

3. The learned Single Judge has dismissed the application in I.A.No.1557 in the aforesaid suit, filed under Order XII Rule 6 of the CivilProcedure Code. The respondent Nos. 1 and 2 – plaintiffs, have filedthe aforesaid application for judgment, on admissions claimed by them inthe suit. The order of learned Single Judge is reversed by the DivisionBench on appeal, filed by the plaintiffs, by granting reliefs as referredabove.

4. The respondents-plaintiffs have filed the above said suit prayingfor decree for specific performance of agreement to sell, concluded on7.4.2005 and further recorded on 3.5.2005 between the respondents-plaintiffs and the appellants in respect of property bearing No.A-22,Mohan Cooperative Industrial Estate, Mathura Road, New Delhi. Theplaintiffs also sought decree of permanent injunction against theappellants-defendants and others to restrain them from selling, transferringor encumbering the suit property to third party and permanent injunctionagainst defendant Nos. 2 to 6 from transferring or encumbering theirshare holdings of 10 lakh shares in the appellant No.1/defendant No.1company. It was the case of the plaintiffs, that the appellant No.2 herein,as Managing Director and principal share holder of the appellant No.1company, approached the respondents-plaintiffs for sale of suit propertyand the business carried in the name and style of ‘South Delhi Toyota’including the goodwill of the business. It is their case that on 7.4.2005,the respondent Nos. 1 and 2 – plaintiffs and the first appellant companythrough its Managing Director/2[nd] appellant have arrived at concludedagreement for sale of the suit schedule property, transfer of the goodwilland franchisee rights in respect of the running business of ‘South DelhiToyota’ for total consideration of Rs.55.50 crores. It is their furthercase that pursuant to the said concluded contract on 7.4.2005, therespondents-plaintiffs have paid an amount of Rs.2 crores, i.e, Rs.1 crore

Ain cash and Rs.1 crore by cheque and the said amount was acknowledgedby the appellant No.2. It is their further case that they have entered intowritten agreement to sell on 3.5.2005, in pursuance of an understanding/agreement dated 7.4.2005. The breakup of the total considerationdisclosed in the agreement is as follows:-

B(i) Rs.49 crores for the purchase of the land and building bearingNo.A-22, Mohan Co-operative Industrial Estate, Mathura Road,New Delhi.

(ii) Rs.6 crore fifty lacs for the purchase of running business ofthe franchisee dealership of Toyata Kirloskar Motors PrivateCLimited carried on in the name and style of ‘South Delhi Toyota’.(iii) The difference in value of the assets and liabilities of therunning business, on the basis of the balance sheet agreed to befurnished on 15.6.2005.

5. It is the further case of the plaintiffs that they have paid furtherDamount of Rs.3 crores on the date of written agreement of sale dated3.5.2005 to the appellant No.1 company. In the agreement dated 3.5.2005,the aspect of payment of part consideration is recorded as follows:

“2(a) That out of the total consideration of Rs.55.50,00,000/-(Rs.Fifty five Crores Fifty Lacs only) the purchasers have paid toEthe vendor sum of Rs.5,00,00,000/- (Rs.Five Crores only) aspart consideration; at the time of execution of this Agreement toSell in the following manner:

a) Cheque no.840711 dt 7.4.2005 drawn on ICICI Bank, PunjabiBagh West, New Delhi – Rs.1,00,00,000/- (Rs. One Crore only)

Fb) Cheque no. 840633 dt 28.4.2005 drawn on ICICI Bank, PunjabiBagh West, New Delhi – Rs. 1,00,00,000/-

c) Cash – Rs.3,00,00,000/- ( Rs. Three Crores only)

The receipt of which the vendor hereby acknowledges.”

G6. The appellants-defendants in the suit, have filed their writtenstatement on 25.01.2007.

7. In the written statement filed, the appellants have raisedpreliminary objections stating that respondents-plaintiffs have forged/fabricated, the agreement to sell dated 3.5.2005, by forging the signaturesH

of Director of the appellant No.1, namely, Mr. Ram Dilawari, as such,they are liable for prosecution under Section 195(1)(b) of the CriminalProcedure Code. Further objection is also raised questioning the verymaintainability of the suit, in view of the proceedings initiated by them inI.A.No.61 of 2006 in CS (OS)No.1508 of 2005 under Section 340 of theCriminal Procedure Code, wherein they have challenged the genuinenessof the agreement dated 3.5.2005. They also pleaded that the suit isbarred by Section 16 of the Specific Relief Act, 1963, in absence of anyplea of readiness and willingness, to perform the contract on their part.

8. While opposing the reliefs as prayed for in the suit, theappellants-defendants have pleaded that although an agreement wasentered into with the respondents-plaintiffs for sale of land ad-measuring19074.69 sq. yards bearing no. A-22, Mohan Co-operative IndustrialEstate, Mathura Road, New Delhi, but the said contract was nevercrystallized, as the nature, extent and various clauses were yet to befinalized. It is pleaded that the same is evident from the fact that all thenecessary columns in the agreement dated 03.05.2005 were left blankand were to be filled, after mutual agreement only. Specific averment ismade, stating that respondents-plaintiffs in connivance with Mr.T.R. Aryai.e. 3[rd ]defendant have fabricated facts and figures including the signatureson the agreement. The appellants-defendants have disputed receipt ofRs.3 crores, which amount is allegedly paid by the respondents by wayof cash. It is pleaded that the respondents-plaintiffs have fraudulentlyincorporated the payment of Rs.3 crores, pertinently in cash, while onlythe payment of Rs.2 crores was made by cheque. In the writtenstatement specific allegation is made stating that, Mr. T.R. Arya(defendant No.3) has abused his position in appellant No.1 company, inconnivance with the plaintiffs and indulged in fraud. In the writtenstatement appellants have disputed the signatures on page nos. 3 and 4of the agreement dated 3.5.2005. While denying the various allegationsmade by the plaintiffs, the appellant-defendants while stating that inabsence of any finalized agreement to sell the property and in absenceof any cause of action suit is filed for specific performance and same isnot maintainable and is liable to be dismissed.

9. After filing of the written statement on 25.01.2007, in whichspecific averment is made to the effect that the respondents-plaintiffswere not ready and willing to perform the contract, the respondents-plaintiffs have filed I.A.No.3370 of 2007 on 20[th] March, 2007 for

Aamendment of the plaint, to incorporate the plea of their willingness andreadiness, and the same is allowed by order dated 16[th] April, 2007.

10. In the aforesaid suit, statement of the appellant No.2/defendantNo.2 was recorded on 21.9.2007. Thereafter, one Mr. Praveen KumarJolly who claimed earlier agreement in his favour for half portion of suitBproperty, also filed I.A.No.5422 of 2007 for his impleadment in the suitand same was allowed on 8.12.2008. He has also filed written statementsubsequently. In view of the contest for all the reliefs sought in the suit,issues and additional issues were framed on 02.02.2010 and 05.05.2010.The issues and additional issues framed in the suit read as under:-

C“Issues framed:

1. Whether the Plaintiffs are entitled to decree for specificperformance of the agreement to sell dated 03.05.2005 if so, towhat effect? OPP

2. Whether pages 3 and 4 of the agreement to sell dated 03.05.2005Dhave been executed by the defendant no.2 or not, if so to whateffect? OPD-1 to 6

3. Whether the receipt dated 07.04.2005 is forged and fabricated?OPD-1 to 6

4. Relief.E

Additional issues:

1. Whether there is concluded contract between the parties?OPP

2. Whether there have been insertion/interpolations in theFagreement relied upon by the Plaintiffs, consequently renderingthat agreement to sell enforceable? OPD.”

11. After filing written statement in the suit, respondent Nos. 1and 2/plaintiffs have filed I.A.No.1557 of 2007 under Order XII Rule 6of CPC, praying for judgment based on certain claimed admissions. AGcopy of the application filed in I.A.No.1557 of 2007 is placed on record.The aforesaid application is filed mainly claiming that the appellants inbail application nos.4109-4110 of 2006 seeking anticipatory bail inconnection with the crime registered on complaint filed by impleaded 4[th]respondent, have categorically admitted their readiness and willingness

to execute sale deed in their favour, in terms of the agreement dated3.5.2005. The bail applications referred above were filed in connectionwith the crime registered in FIR No.517 of 2006 on the file of PoliceStation Sarita Vihar, which was registered on the complaint filed by SriPraveen Kumar Jolly (First Buyer) registered for offences under Sections420 and 120B IPC. The aforesaid complainant, Sri Praveen Kumar Jollyhas alleged that during the subsistence of MOU entered in their favouron 24.5.2003, for portion of the schedule property have entered intoanother agreement with the respondent Nos. 1 and 2 on 3.5.2005. Thus,it is pleaded that the appellants herein by entering into multiple agreementshave committed the offence of cheating. Except claimed admissionsalleged to have been made by the appellants-defendants’ counsel duringthe hearing of the anticipatory bail application, no other admissions areclaimed in the application. The said interlocutory application is contestedby appellants and other defendants who have seriously disputed thegenuineness of the agreement dated 3.5.2005 alleging that pages 3 and4 of the agreement have been replaced and substituted by pages whichbear forged signatures of the defendant No.2. Further they also disputedstating that, all throughout the case of the appellants is only admittingreceipt of Rs.Two crores but not Rs.Five crores as claimed by theplaintiffs. Further, the relief sought in the interlocutory application isopposed by the appellants pleading that the forgery and fabrication ofthe agreement dated 3.5.2005 came to light when the said agreementwas produced by the plaintiffs in CS(OS) No. 1508 of 2005 filed by SriPraveen Kumar Jolly and immediately on receipt of copy of the agreementdated 3.5.2005, they also filed an application in I.A. No.61 of 2006 inCS(OS) No.1508 of 2005 under Section 340 of Cr.P.C., challenging thegenuineness of the agreement dated 3.5.2005. Thus, it is pleaded thatunless genuineness of the agreement dated 3.5.2005 is decided finally,no decree for specific performance can be claimed.

12. The learned Single Judge, by recording that there is seriousdispute with regard to payment of Rs.Five crores as per the agreemententered into by the appellants, and the alleged forgery of signatures onpages 3 and 4 of the agreement as claimed by the appellants-defendants,has held that such issues are to be resolved only post trial, after theparties adduce oral and documentary evidence. Further the learnedSingle Judge was of the view that to claim decree on admissions it isessential that admissions should be clear and unequivocal. With the

Aaforesaid findings, the learned Single Judge, by an order dated 24.7.2017,dismissed the application in I.A.No.1557 of 2007 by imposing cost ofRs.50,000/- on the respondents-plaintiffs.

13. Aggrieved by the order of the learned Single Judge, therespondents have preferred Appeal under Section 10 of the Delhi HighBCourt Act, 1966. The Division Bench, by the impugned judgment dated2.8.2018, has set aside the order of the learned Single Judge dated24.7.2017 and allowed I.A.No.1557 of 2007 by granting consequentialreliefs and permitted the respondents-plaintiffs to pay the balance amountof Rs.50.50 crores within period of three months and 15 days, fromthe date of the judgment. The Division Bench was of the view that theCappellants have admitted, entering into an agreement with therespondents-plaintiffs on 3.5.2005 and the receipt of Rs.Five crores isevident from the Director’s Report and balance-sheets of the companyfor the year ending on 31[st] March, 2005; 31[st] March, 2006 and 31[st]March, 2007. Further by holding that defence of the appellants in theDsuit is not genuine and contrary to the pleadings on court’s record aswell as statutory filings under Companies Act, and that there is no genuinetriable issue which could justify the trial in the suit, the Division Benchrendered judgment on claimed admissions.

14. Learned senior counsels Sri Ranjit Kumar and Sri P.S.ENarsimha, appearing for the appellants have made the followingsubmissions:

15. Though there are no categorical and unconditional admissions,as claimed by the respondents-plaintiffs, the Division Bench of the HighCourt went beyond the scope of the application and allowed the same.FThe suit was filed in the year 2006, in which written statement is alreadyfiled by the appellants. In view of the serious factual disputes raised bythe appellants claiming forgery of their signatures on pages 3 and 4 ofthe agreement to sell dated 3.5.2005 and the receipt of Rs.Five crores,specific issues are framed and findings on which can be arrived onlyafter trial. It is stated that the application filed under Order XII Rule 6Gof CPC is kept pending for more than decade and disposed of aftertrial is commenced in the suit; Categorical and unconditional admissionsalone can be considered for the purpose of grant of relief under OrderXII Rule 6 of CPC. Certain observations made in the criminal proceedingsin connection with the bail application are misconstrued as admissions

by the High Court for the purpose of deciding the application filed underOrder XII Rule 6 of CPC; The suit itself is for grant of specificperformance of agreement, which is discretionary and equitable relief,court can come to conclusions only after full fledged trial by answeringseveral contentious issues in the suit. Even the relief claimed underOrder XII Rule 6 is also discretionary one and no party can claimjudgment as matter of right. To support this plea, learned counsel hasplaced reliance on the judgment in the case of S.M. Asif vs. VirenderKumar Bajaj[1]. To substantiate his plea that admission should becategorical and unconditional, relied on the judgment of this Court in thecase of Himani Alloys Limited vs. Tata Steel Limited[2]. In supportof the plea that in suit filed for specific performance, it is mandatory toplead and prove readiness and willingness of the plaintiff to perform hispart of the contract, relied on the judgment in the case of Balraj Tanejaand another vs. Sunil Madan and another[3]. In support of the pleathat in view of the tampering and fabrication of the agreement of sale,same cannot be considered as valid and concluded contract for grantof discretionary and equitable relief, learned counsel has placed relianceon the judgment of this Court in the case of Kamal Kumar vs PremlataJoshi[4] and also the judgment of this Court in the case of SaradamaniKandappan vs. S. Rajalakshmi and ors.[5]. In support of his plea thatinconsistent pleas are permissible in the written statement, reliance isplaced on the judgment in the case of Baldev Singh and Ors. vs.Manohar Singh and another[6] and also on the judgment in the case ofUsha Balashaheb Swami and ors. vs. Kiran Appaso Swami andors.[7].

16. On the other hand Mr. Shyam Divan, learned senior counselappearing for the first respondent-plaintiff has made the followingsubmissions.

17. The impugned judgment is based on several admissions madeby the appellants to perform their contract entered on 7.4.2005 and3.5.2005; by referring to the provision under Order XII Rule 6 of CPC

1 (2015) 9 SCC 2872 (2011) 15 SCC 2733 (1999) 8 SCC 3964 2019 SCC Online SC 125 (2011) 12 SCC 186 (2006) 6 SCC 4987 (2007) 5 SCC 602

CDE

A1908 as substituted by Act 104 of 1976, it is submitted that wide meaningis to be given to the said provision; as per the amendment court isempowered to deliver judgment where admissions of fact have beenmade either in the pleadings or otherwise, whether orally or in writing.The appellants have made clear admissions before the court for securingfavourable orders, with regard to their admission of entering intoBagreement to sell and also receipt of Rs.Five crores amount towards thepart consideration; that balance-sheets and statutory forms which arefiled under the provisions of the Companies Act, 1956 on behalf of thefirst appellant company, also reveal admissions made by the appellants;in the pleadings in the suit filed by Mr. Praveen Kumar Jolly, the appellantsChave admitted the acceptance of the agreement as entered into, withoutany allegation of tampering and fabrication, without disputing receipt ofRs.Five crores, as such there are no grounds to interfere with theimpugned judgment.

18. In support of the plea that Order XII Rule 6 of CPC is to beDinterpreted widely and there is no need to narrow down the meaningcontrary to its objective, learned senior counsel placed reliance on thejudgment in the case of Uttam Singh Duggal & Co. Ltd. vs. UnitedBank of India & Ors.[8] and also in the case of Karam Kapahi &Ors. vs. Lal Chand Public Charitable Trust & Anr.[9]

E19. In support of the plea that entries made in the balance-sheetand Director’s report of the company are to be construed as admissions,reliance is placed on the judgment in the case of Usha RectifierCorporation (India) Limited vs. Commissioner of Central Excise,New Delhi[10].F20. In support of the plea that an admission made by party in aplaint signed and verified by him may be used as evidence against him inother suits, reliance is placed on the judgment in the case of BasantSingh vs. Janki Singh & Ors.[11]. Reliance is also placed by the DivisionBench of the Delhi High Court on the judgment in the case of VijayaMyne vs. Satya Bhushan Kaura[12] wherein the Division Bench of theGDelhi High Court has upheld the final order and judgment passed by the

8 (2000) 7 SCC 1209 (2010) 4 SCC 75310 (2011) 11 SCC 57111 AIR 1967 SC 341H12 2007 (142) DLT 483

learned Single Judge wherein specific performance was ordered relyingon certain admissions made by the defendant.

21. Mr. Basant, learned senior counsel appearing for respondentNo.2, by referring to Order XII Rule 6 of CPC has submitted that powerconferred as per the said provision is not only on application but courtmay, on its own, also deliver judgment based on admissions either in thepleadings or otherwise. As such, it is submitted that wide meaning is tobe given to the said provision, having regard to the object and theintendment of the Rule.

22. Mr. Dholakia, learned advocate appearing for respondent No.3has submitted that, several admissions of the appellants are evident fromthe balance-sheets filed before the Registrar of Companies. It is submittedthat in the absence of any application for revision of balance-sheet, entriesmade in such balance-sheets are rightly considered as admissions by theDivision Bench in the impugned judgment. In support of the plea, learnedcounsel has relied on the judgment in the case of Rajiv Srivastava vs.Sanjiv Tuli and another[13] and also the judgment in the case ofThimmappa Rai vs. Ramanna Rai and others[14] and the judgment inthe case of Ultramatix Systems Pvt. Ltd. vs. State Bank of India& Ors.[15]

23. Sri Ranjit Kumar, learned senior counsel in rejoinder argumentshas submitted that the admissions referred in the Order XII Rule 6 ofCPC must be in the same suit but no application can be entertainedbased on admissions alleged to have been made in another suit and alsoin criminal proceedings. By referring to the definition of “pleadings” asdefined under Order VI Rule 1 of CPC has further submitted that theterm “otherwise” referred to in Order XII Rule 6 of CPC is for thelimited purpose of ‘other than pleadings’ in the suit, but not to enlarge thescope of the application by covering admissions in other suits and criminalproceedings.

24. Sri P.S. Narsimha, learned senior counsel appearing for thesecond appellant has submitted that as much as the suit is for specificperformance of the agreement and the same is discretionary andequitable relief and in given situation, the court may also refuse grant

13 AIR 2005 Delhi 319

14 (2007) 14 SCC 63

15 (2007) 4 Mh.L.J. 847

Aof decree of specific performance, even if the agreement is held to beproved. Learned counsel has placed reliance on the judgment in thecase of Aniglase Yohannan vs. Ramlatha and Ors.[16].

25. Having heard the learned counsel for the parties, we haveperused the impugned order and other materials placed on record. TheBimpugned order is passed on an application filed by the respondents-plaintiffs, under Order XII Rule 6 of CPC. The said provision underOrder XII Rule 6 read as under:

“6.Judgment on admissions.-(1) Where admissions of fact havebeen made either in the pleading or otherwise, whether orally orCin writing, the Court may at any stage of the suit, either on theapplication of any party or of its own motion and without waitingfor the determination of any other question between the parties,make such order or give such judgment as it may think fit, havingregard to such admissions.

D(2) Whenever judgment is pronounced under sub-rule (1), adecree shall be drawn up in accordance with the judgment andthe decree shall bear the date on which the judgment waspronounced.”

26. The aforesaid Rule was amended by Act 104 of 1976, byEwhich several amendments were made to the Code of Civil Procedure,1908. Earlier to 1976 amendment, judgment on admissions was confinedonly on application in writing. By virtue of the amendment whetheradmissions are oral or in writing, court is empowered at any stage of thesuit to give judgment on such admissions.

27. In the case on hand, at first instance Memorandum ofFUnderstanding was entered into by the appellants with the respondentNo.4 i.e. Mr. Praveen Kumar Jolly on 24.05.2003 with respect to half ofthe suit property. It is the case of the appellants that due to non-complianceof the terms of MOU, by Mr. Praveen Kumar Jolly, the said MOU wasterminated in August, 2004 and subsequently an arrangement/contractGis entered into with respondent nos.1 and 2 – plaintiffs on 7.4.2005 andsubsequent agreement dated 3.5.2005. It is the specific case of theappellants that contractual terms were not crystallized as such therewere several blanks in the agreement dated 3.5.2005. While it is thecase of the respondents-plaintiffs that an amount of Rs. Five crores waspaid, i.e. Rs. Two crores by way of cheque and Rs.Three crores by wayof cash, the same is seriously disputed by the appellants-plaintiffs statingthat only an amount of Rs. Two Crores was paid and the payment of Rs.Three crores is fabrication of the agreement to sell dated 3.5.2005 onpages 3 and 4 of the document. Based on the earlier MOU by theappellants with Mr.Praveen Kumar Jolly i.e. 4[th] respondent herein, 4[th]respondent has filed suit for specific performance of the agreement inCS(OS) No.1508 of 2005 in which conditional order was passed. It isthe case of the respondents-plaintiffs that, when such conditional interimorder was notified in the newspaper, they have come to know about theearlier agreement entered into by the appellants with respondent No.4and they approached the 4[th] respondent and handed over the originalagreement dated 3.5.2005 and the receipt to the 4[th] respondent. It is thespecific case of the appellants that when they have come to know aboutthe document dated 3.5.2005 in the suit filed by 4[th] respondent herein,they have come to know tampering and fabrication of the document, assuch they have filed I.A.No.61 of 2006 in CS(OS) No.1508 of 2005under Section 340 of Cr.P.C., on 3.1.2006. The present suit in CS(OS)No.2046 is filed by the respondents-plaintiffs, subsequently, on 1.11.2006.In the said suit, the appellants-defendants have filed written statementon 25.1.2007 by raising specific preliminary objection that the agreementdated 3.5.2005 is forged and fabricated, as such, they are liable forprosecution under Section 195(1)(b) of Cr.P.C. In the written statement,apart from other allegations, specific plea is made that suit is barred inview of provisions of Section 16(c) of the Specific Relief Act, 1963, inabsence of any plea of readiness and willingness by the respondents-plaintiffs. While admitting the arrangement entered into with therespondents-plaintiffs, it is the case of the appellants that the terms ofthe agreement were not concretized. As such almost all the necessarycolumns were left blank in the agreement dated 3.5.2005. It is notnecessary to refer in detail the further averments made in the writtenstatement for the disposal of this appeal before us. Subsequent to thefiling of the written statement, the respondents-plaintiffs have filed thepresent application under Order XII rule 6 of CPC on 9.2.2007 for whichreply was filed by the appellants on 19.3.2007. In the reply filed onbehalf of the appellants and other defendants in I.A.No.1557 of 2006,opposing the relief sought for on the ground that in absence of anycategorical and unconditional admissions, relief cannot be granted. The

ABCD

EFG

Aapplication in I.A.No.1557 of 2007 is filed only on the ground that in thebail petition filed by the appellants, in connection with the criminal caseregistered, arising out of complaint filed by the 4[th] respondent, theappellants’ counsel has pleaded his readiness to fulfill the contract enteredinto on 3.5.2005. Except the said plea of admission there is no otheradmission, claimed in the application. The learned Single Judge hasBrightly rejected the application vide order dated 24.7.2017. In the orderthe learned Single Judge of the High Court has held that in view of thestand of the appellants that the agreement dated 3.5.2005 is fabricatedone and the signatures of the 2[nd] appellant are fabricated on pages 3 and4 of the agreement, such issues can be resolved only after trial. ButCsame is no ground to deliver judgment on claimed admissions. The learnedSingle Judge has held in paras 41 and 42 of the judgment as under:“41.The aforesaid raises serious dispute as to whether, or not,the defendants have actually received the amount of Rs.5 Croresunder the agreement, as alleged by the plaintiffs, or only Rs.2Crores by cheque as alleged by defendant Nos. 1 to 6. Thedefendants have alleged that the two pages of the agreement,which, inter alia, record the receipt of Rs.5 Crores by thedefendants under the agreement – including Rs.3 Crores in cash,have been replaced with pages which bear the forged signaturesof defendant No.2. On this aspect, additional issues were framedby the Court on 05.05.2010. Since the plaintiffs claim to havemade cash payments of very large amount of Rs.3 Crores underthe agreement, which have been disputed by the defendants, itwould be for the plaintiffs to prove the same, inter alia, by showingthe availability of such large amounts of cash with them on therelevant dates. In my view, till those issues are decided – whichare issues of fact, it cannot be said at this stage with certaintywhether the agreement dated 03.05.2005 relied upon by theplaintiffs is the one entered into between the parties, or not.

42. It is well-settled that to entitle plaintiff to decree onadmission, it is essential that the admission made by the defendantin respect of the plaintiffs case/claim should be clear andunequivocal. In the present case, the only admission made by thedefendant No.1 to 6 is in relation to their entering into theagreement/MOU with the plaintiffs for sale of the suit property;the goodwill of South Delhi Toyota, and; the net assets of the said

business. It was also agreed that the sale consideration for thesuit property was Rs.49 Crores; for the goodwill of the businessof South Delhi Toyota was Rs.6.50 Crores and; for the sale of thenet worth of the business of South Delhi Toyota, the same amountwas to be transferred to the defendants. To this extent, it couldbe said that there are admissions made by the defendants No. 1to 6. However, there is serious dispute as to whether the plaintiffshave paid Rs.5 Crores, i.e. Rs.2 Crores by cheque and Rs.3 Croresin cash to defendants No.1 to 6, or only Rs.2 crores by cheque.This dispute goes to the root of the mater. Unless and until thesaid dispute is resolved in favour of the plaintiffs, no decree forspecific performance of the agreement can be passed by the Court.Pertinently, the Court has already framed issues of fact on theaforesaid aspect.”28. On appeal the Division Bench has set aside the order of thelearned Single Judge and held that the appellants have admitted executionof the agreement dated 3.5.2005. At this stage, it is to be noticed that allthroughout, the case of the appellants is that though they have enteredinto arrangement/agreement on 7.4.2005 and 3.5.2005 with therespondents-plaintiffs and received Rs. Two crores by way of chequebut such agreement is fabricated by forging signatures on pages 3 and 4of the agreement. In view of such stand of the appellants, we are of theview that the mere admission of entering into arrangement/agreementdated 3.5.2005 cannot be termed as categorical and unconditionaladmission for the purpose of delivering judgment by allowing theapplication filed under Order XII Rule 6 of CPC. It is to be noticed atthis stage that even before filing of the present suit in CS(OS) NO.2046of 2006, when the document dated 3.5.2005 was produced in the suitfiled by the 4[th] respondent Mr. Praveen Kumar Jolly, the appellants havefiled I.A. No.61 of 2006 in CS(OS) No.1508 of 2005 on 3.1.2006. In theaforesaid I.A., there was challenge to the genuineness of the agreementdated 3.5.2005 which application was subsequently disposed of on7.12.2016. The present suit in CS(OS) No.2046 of 2006 was filedsubsequently on 1.11.2006. The Division Bench of the High Court hasproceeded on the premise that there is no dispute on the agreement tosell dated 3.5.2005. At this stage, it is to be noted that the suit in C.S.(OS)No.1508 of 2005 was filed for specific performance of the agreementby the 4[th] respondent and on production of the agreement to sell dated

A3.5.2005, they have already filed I.A.No.61 of 2006, alleging that therewas fabrication of the document dated 3.5.2005 and their signatureswere forged on pages 3 and 4. In view of such plea of appellants, weare of the considered opinion that such admissions are erroneously treatedas categorical and unconditional admissions by the Division Bench ofthe High Court for the purpose of disposal of the application filed underBOrder XII Rule 6 of CPC. Further, the Division Bench has relied onbalance sheets of the first appellant company for the years 2004-05,2005-06 and 2006-07 and also the letter alleged to have been addressedby the auditor. On the aforesaid documents, the plea of the appellants isthat such documents also are forged and fabricated balance sheets whichCwere submitted before the ROC by their auditor Mr. S.R. Varshney inconnivance with Mr. T.R. Arya (respondent No.3 herein), who is acommon chartered accountant for the appellants and respondent Nos. 1and 2. Allegations and counter allegations are made by the parties inrespect of balance sheets and other documents relating to the company,

the merits of which can be gone into only at the time of trial where theDparties will have opportunity of adducing evidence and explain their stand.

29. In the judgment in the case of Himani Alloys Limited vs.Tata Steel Limited (supra), nature and scope of Order XII Rule 6 hasbeen considered by this Court. In the aforesaid judgment this Court hasheld that the discretion conferred under Order XII Rule 6 of CPC is toEbe exercised judiciously, keeping in mind that judgment on admission isa judgment without trial which permanently denies any remedy to thedefendant. Para 11 of the judgment read as under:-

“11. It is true that judgment can be given on an “admission”contained in the minutes of meeting. But the admission shouldFbe categorical. It should be conscious and deliberate act of theparty making it, showing an intention to be bound by it. Order 12Rule 6 being an enabling provision, it is neither mandatory norperemptory but discretionary. The court, on examination of thefacts and circumstances, has to exercise its judicial discretion,Gkeeping in mind that judgment on admission is judgment withouttrial which permanently denies any remedy to the defendant, byway of an appeal on merits. Therefore unless the admission isclear, unambiguous and unconditional, the discretion of the Courtshould not be exercised to deny the valuable right of defendantto contest the claim. In short the discretion should be used onlyH

when there is clear “admission” which can be acted upon. (Seealso Uttam Singh Duggal & Co. Ltd. v. United Bank of India[(2000) 7 SCC 120] , Karam Kapahi v. Lal Chand PublicCharitable Trust (2010) 4 SCC 753 : (2010) 2 SCC (Civ) 262]and Jeevan Diesels and Electricals Ltd. v. Jasbir Singh Chadha[(2010) 6 SCC 601 : (2010) 2 SCC (Civ) 745] .) There is no suchadmission in this case.”

30. In the judgment in the case of S.M. Asif vs. Virender KumarBajaj (supra), this Court has held that the power under Order XII Rule6 of CPC is discretionary and cannot be claimed as right. It is furtherheld in the aforesaid case that where the defendants have raisedobjections, which go to root of the case, it would not be appropriate toexercise discretion under Order XII Rule 6 of CPC. Para 8 of thejudgment read as under:-

“8. The words in Order 12 Rule 6 CPC “may” and “make suchorder …” show that the power under Order 12 Rule 6 CPC isdiscretionary and cannot be claimed as matter of right. Judgmenton admission is not matter of right and rather is matter ofdiscretion of the court. Where the defendants have raisedobjections which go to the root of the case, it would not beappropriate to exercise the discretion under Order 12 Rule 6 CPC.The said rule is an enabling provision which confers discretion onthe court in delivering quick judgment on admission and to theextent of the claim admitted by one of the parties of his opponent’sclaim.”

31. In the judgment in the case of Balraj Taneja and anothervs. Sunil Madan and another (supra), while considering the scope ofOrder VIII Rule 10 and Order XII Rule 6 of CPC, this Court has heldthat the court is not to act blindly upon the admission of fact made bythe defendant in the written statement nor should the court proceed topass judgment blindly merely because written statement has not beenfiled by the defendant traversing the facts set out by the plaintiff in theplaint filed in the court.

32. In the aforesaid judgment, while considering the scope of OrderXII Rule 6 of CPC, post amendment by amending Act, 1976 this Courthas held as under:

“21.There is yet another provision under which it is possible forthe court to pronounce judgment on admission. This is containedin Rule 6 of Order 12 which provides as under:

“6. Judgment on admissions.—(1) Where admissions of facthave been made either in the pleading or otherwise, whetherorally or in writing, the court may at any stage of the suit,either on the application of any party or of its own motion andwithout waiting for the determination of any other questionbetween the parties, make such order or give such judgmentas it may think fit, having regard to such admissions.

(2) Whenever judgment is pronounced under sub-rule (1) adecree shall be drawn up in accordance with the judgment andthe decree shall bear the date on which the judgment waspronounced.”

22. This rule was substituted in place of the old rule by the CodeDof Civil Procedure (Amendment) Act, 1976. The Objects andReasons for this amendment are given below:

“Under Rule 6, where claim is admitted, the court hasjurisdiction to enter judgment for the plaintiff and to pass adecree on the admitted claim. The object of the rule is to enableEa party to obtain speedy judgment at least to the extent of therelief to which, according to the admission of the defendant,the plaintiff is entitled. The rule is wide enough to cover oraladmissions. The rule is being amended to clarify that oraladmissions are also covered by the rule.”

23. Under this rule, the court can, at an interlocutory stage of theFproceedings, pass judgment on the basis of admissions made bythe defendant. But before the court can act upon the admission, ithas to be shown that the admission is unequivocal, clear andpositive. This rule empowers the court to pass judgment and decreein respect of admitted claims pending adjudication of the disputedGclaims in the suit.”

33. By applying the ratio laid down by this Court in the aforesaidjudgments, it is to be held that there are no categorical and unconditionaladmissions, as claimed by the respondents-plaintiffs. In view of the standof the appellants that, the pages 3 and 4 of the agreement dated 3.5.2005

are tampered and their signatures are fabricated, when specific issue isalready framed, it cannot be said that there are categorical andunconditional admissions by the appellants. Mere admission of enteringinto arrangement/contract on 7.4.2005 and 3.5.2005 itself cannot beconsidered in isolation, without considering the further objections of theappellants that certain pages in the agreement are fabricated. In casethe appellants prove that the agreement is fabricated as claimed, posttrial it goes to the root of the case on the claim of the respondents-plaintiffs. Hence, we are of the view that the aforesaid judgments fullysupport the case of the appellants.

34. Learned counsel for the respondents-plaintiffs Sri ShyamDivan, relying on the judgment of this Court in the case of Uttam SinghDuggal & Co. Ltd. vs. United Bank of India (supra) has submittedthat in view of the balance sheets and resolutions of the company, theyare to be considered as admissions otherwise it will amount to narrowingdown the scope of the Rule itself. In the aforesaid judgment itself, thisCourt has held that when statement of admission is brought before the

Court, as long as the party making the statement is given sufficientopportunity to explain such admissions, judgment on admission can bedelivered. In the case on hand it is to be noted that the relief claimedunder Order XII Rule 6 of CPC by filing written application claimingadmission only based on the statement made by the advocate in the bailapplication, and there is no other pleaded admissions, in the applicationfiled by the respondents-plaintiffs. It is trite principle that any amountof evidence is of no help, in absence of pleading and foundation in theapplication. It is true that when categorical and unconditional admissionsare there, judgment on admission can be ordered, without narrowingdown the Rule but at the same time the judicious discretion conferred onthe court is to be exercised within the framework of the Rule but notbeyond. Even on balance sheets of the company and the note of one ofthe Directors, it is the specific case of the appellants that the thirdrespondent, in connivance with the respondents-plaintiffs, is also workingagainst the appellants. In that view of the matter the claim of therespondents-plaintiffs relying on the documents relating to company isto be considered with reference to the defence of the appellants duringtrial in the suit.

35. In the judgment in the case of Karam Kapahi & Ors. vs.Lal Chand Public Charitable Trust & Anr. (supra), this Court has

Ainterpreted the expression “otherwise” as used in Order XII Rule 6 ofCPC and has held that the scope of the said provision of the Order XIIRule 6 is wider in comparison to provision of Order XII Rule 1 of CPC.It is true that after amendment, scope of the Rule under Order XII Rule6 is expanded but at the same time the expression “otherwise” insertedin Order XII Rule 6 is also to be considered within the framework of theBRule but not beyond. In any event, even in given case, the admissionsare categorical and unconditional, whether any inference can be drawnon admissions having regard to documents placed on record, is matterto be considered having regard to facts of each case. There cannot beany straight jacket formula to extend the benefit of Order XII Rule 6 ofCCPC.

36. In the judgment in the case of Usha Rectifier Corporation(India) Limited vs. Commissioner of Central Excise, New Delhi(supra) relied on by learned senior counsel Sri Shyam Divan, this Courthas held that entries made in the balance sheets filed on behalf of theDcompany are to be treated as admissions and the appellant cannot turnaround and take stand, contrary to such admissions but in this case fromthe beginning it is the case of the appellants that the third respondent isin connivance with the respondents-plaintiffs.37. In this case it is to be noted that the suit was filed on 1.11.2006Eand written statement was filed on 25.01.2007 and the application underOrder XII Rule 6 was filed on 9.2.2007. In year 2010 issues and additionalissues were framed and trial is also commenced. In that view of thematter, there is no reason to pass the impugned order now for decreeingthe suit on claimed admissions, in exercise of power under Order XIIrule 6 of CPC at this stage. In view of the serious factual disputes andFthe defence of the appellants in the suit, it is not permissible for makingroving inquiry for disposal of the application filed under Order XII Rule6 of CPC. When the trial is already commenced, it is desirable to recordfindings on various contentious issues and disputes in the suit on meritsby appreciating evidence but at the same time there is no reason orGjustification to decree the suit at this stage. For the aforesaid reasons,we are of the view that the impugned judgment of the High Court cannotbe sustained and is liable to be set aside on this ground alone.

38. Further it is also to be noted that the suit is for specificperformance of the agreement of sale. The relief sought is equitable

and discretionary relief. The readiness and willingness on the part ofplaintiffs to execute the document is to be pleaded and proved. At firstinstance in the plaint filed on 1.11.2006 there was no such averment atall. Subsequent to the filing of the written statement, interlocutoryapplication No.3370 of 2007 was filed on 20.3.2007 to incorporate theplea of readiness and willingness on the part of the respondents-plaintiffsin the plaint, which was allowed subsequently. The readiness andwillingness on the part of the respondents-plaintiffs cannot be inferredmerely on the ground that they have deposited the balance amount afterthe impugned order is passed. Even in absence of refusal of theapplication for amendment of written statement, it is obligatory on thepart of the plaintiffs to prove that they were willing and ready to performthe contract, to claim the equitable relief of specific performance. Inthe judgment relied on by Sri P.S. Narsimha, learned senior counsel inthe case of Aniglase Yohannan vs. Ramlatha and Ors. (supra), thisCourt has held that the basic principle behind Section 16(c) read withExplanation (ii) of the Specific Relief Act, is that any person seekingbenefit of the specific performance of contract must manifest that hisconduct has been blemishless throughout entitling him to the specificrelief. In the aforesaid judgment this Court has further held that thecourt is to grant relief on the basis of the conduct of the person seekingrelief. Paras 12 and 13 of the judgment read as under:-

“12.The basic principle behind Section 16(c) read with Explanation(ii) is that any person seeking benefit of the specific performanceof contract must manifest that his conduct has been blemishlessthroughout entitling him to the specific relief. The provision imposesa personal bar. The Court is to grant relief on the basis of theconduct of the person seeking relief. If the pleadings manifestthat the conduct of the plaintiff entitles him to get the relief onperusal of the plaint he should not be denied the relief.

13. Section 16(c) of the Act mandates the plaintiff to aver in theplaint and establish the fact by evidence aliunde that he has alwaysbeen ready and willing to perform his part of the contract. Onconsidering almost an identical fact situation it was held by thisCourt in Surya Narain Upadhyaya v. Ram Roop Pandey 1995Supp (4) SCC 542 : AIR 1994 SC 542] that the plaintiff hadsubstantiated his plea.”

AThe said judgment of this Court also supports the plea of theappellants herein.

39. The learned counsels appearing for the appellants, have alsocontended stating that as per the directions of the High Court remainingbalance amount, as per the agreement dated 03.05.2005, is not depositedBby the respondents-plaintiffs, and the said amount is deposited by thirdparty who has no concern in the matter. In view of our findings recordedabove on other issues, we are of the opinion that it is not necessary todeal with the said contention.

40. For the aforesaid reasons we are of the view that the HighCCourt fell in error in passing the impugned judgment, decreeing the suitby delivering the judgment on the application filed under Order XII Rule6 of CPC. The impugned judgment is liable to be set aside. Accordingly,the same is set aside, with no order as to costs. Accordingly, the appealis allowed and the impugned judgment dated 2[nd] August, 2018 renderedin FAO(OS) No.268 of 2017 is set aside and the order of the learnedDSingle Judge dated 24[th] July, 2017 passed in I.A.No.1557 of 2007 isrestored. Consequently, the aforesaid I.A. No. 1557 of 2007 standsdismissed, with no order as to costs.

41. As it is pleaded that after the impugned order is passed, therespondents-plaintiffs have deposited the balance consideration amount,Ethey are entitled for the refund of the same along with accrued interest,if any.

42. We also make it clear that the findings and observations madeby this Court are confined only for the purpose of the application filed bythe respondents-plaintiffs under Order XII Rule 6 of CPC and allFcontentions of the parties are left open and it is open for the High Courtto record findings on various issues which fall for consideration in thesuit on its own merits. We also request the High Court to expedite thetrial in CS(OS) No. 2046 of 2006.

GAnkit Gyan

Appeal allowed.