2015 Supreme(SC) 688

SUPREME COURT OF INDIA
RANJAN GOGOI, R.K. AGRAWAL, JJ.
Nandkishore Lalbhai Mehta – Appellant
Versus
New Era Fabrics Pvt. Ltd. & Ors. – Respondent
WITH CIVIL APPEAL NOs. 1131-1132, 1148 OF 2010
Decided On : 08-07-2015

IMPORTANT POINTS
Evidence or documents adduced in absence of pleading do not constitute legally acceptable evidence.
Mere marking as exhibit and identification of executor’s signature by one of witnesses does not prove contents of a document.
Contingent condition cannot be waived unilaterally by any party.
When the contract gets frustrated and becomes not capable of performance, suit for specific performance could not be decreed. Aggrieved party would be entitled for damages only.
Waiver of the contingent condition after termination of contract will not revive the contract.

Headnote:(a) Administration of Justice – Judicial propriety – Civil procedure – No evidence or document can be adduced in absence of pleading – Such material do not constitute legally acceptable evidence. (Para 9, 27)

       (2008) 17 SCC 491 – Relied upon

       (1975) 1 SCC 770 – Distinguished impliedly

       (b) Indian Evidence Act, 1872 – Section 65 r/w Order XLI Rule 27 and Order XIII Rule 4, Code of Civil Procedure, 1908 – Proving contents of a document – Mere marking as exhibit and identification of executor’s signature by one of witnesses – No enough. (Para 10)

       (2010) 8 SCC 423; (2011) 4 SCC 240; (2003) 8 SCC 752 – Relied upon

       (c) Administration of Justice – Waiver – Parties agreeing for sale of land owned by industrial concern – Meaning thereby that the unit had to be closed down – Requiring permission of Labour Commissioner u/s 25-O of Industrial Disputes Act, 1947 – Also required change of user necessitating permission of Labour Commissioner under Regulation 56(3)(c)(1) of the Development Control Regulations, 1991 – Clause 6 of agreement for sale therefore incorporating consent of labour Union – Such condition cannot be waived unilaterally by any party. (Para 13, 30)

       (2004) 6 SCC 537; [2011] EWHC 326 (Ch) – Relied upon

       (d) Specific Relief Act, 1963 – Section 16 – Contract contingent on consent of labour union – Labour union refusing consent – Contract getting frustrated and becoming not capable of performance – Suit for specific performance could not be decreed – Appellant would be entitled for damages only. (Para 16, 17, 30)

       (2006) 7 SCC 470 – Relied upon

       (e) Contract – Waiver – Respondent terminating the contract within two months due to impossibility of its performance owing to refusal of labour union to consent – Appellant thereafter waiving the condition of consent of labour union – Such act would not revive the terminated contract. (Para 18)

       (1999) 5 SCC 77 – Relied upon

       Facts of the case:

       In October, 1977, Respondent Nos. 1 and 2 agreed to sell their respective right, title and interest in the property 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.

       Pursuant to the said agreement, the appellant herein paid a sum of Rs. 11,50,000/-as part of earnest money in two installments of Rs. 7,50,000/-and Rs. 4,00,000/-each on 20.10.1977 and 24.10.1977 respectively.

       Pursuant to Point No. 6 of the agreement the sale was subject to the permission being obtained under Sections 22 and 27 of the Urban Land (Ceiling and Regulation) Act, 1976; the property being converted from industrial zone to residential use and to give vacant possession of the land after settling with the labour.

       Respondent No. 1, intimated the Labour Union about the Agreement and requested to give their consent to the same. Respondent No. 2 also approached the Arbitrator, Town Planning Scheme to have the said property converted into residential zone from industrial zone.

       Mill Mazdoor Sabha-Labour Union informed the respondents that they were not agreeable to the sale of the said property.

       Respondent Nos. 1 & 2 informed this fact to the appellant stating that the agreement stood cancelled and they would return the amount of Rs. 11,50,000/-with interest and also withdrew the application made to the Arbitrator, Town Planning Scheme for conversion of the property from industrial to residential zone.

       The appellant herein waived the stipulation/condition of obtaining the consent of the labour but inspite of the efforts, the agreement did not materialize.

       Being aggrieved, the appellant filed Suit before the High Court for specific performance of the agreement. Single Judge of the High Court decreed the suit in favour of the appellant.

       The Division Bench of the High Court allowed the appeal of the respondents setting aside the decree of specific performance granted by the single Judge.

       Finding of the Court:

       Appellant is not entitled to specific performance. He is only entitled to damages.

       Result: Appeals dismissed.