2008 Supreme(Bom) 1498

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SWATANTER KUMAR, & S.A. BOBDE, J.J.
M/s. Avdel Tools & Services- Appellant
Versus
M/s. Trufit Fasteners Private Limited- Respondent
APPEAL NO.324 OF 2008 IN NOTICE OF MOTION NO.1610 OF 2008 IN SUIT NO.1272 OF 2008 WITH NOTICE OF MOTION NO.3166 OF 2008 IN APPEAL NO.324 OF 2008
Decided ON : 16TH OCTOBER, 2008.

Headnote:Specific Relief Act, 1963 - Section 16(c)-Actual tender of money-Not a condition precedent for specific performance.-By the introduction of Section 16(c) of the newly introduced Act, the Specific Relief Act, 1963, it was expected of a plaintiff to make such a statement in the plaint itself. The words ’ready and willing’ imply that the plaintiff was prepared to carry out those parts of the contract to their logical end so far as they depend upon his performance. These acts may be of the nature which are to be performed before other side can be called upon to fulfil their promise while others may be to be performed subsequent thereto. Such averment was required to be made in the plaint and was not necessarily to be stated in the notice if at all served by the plaintiff on the defendant. The various Courts have even taken the view that readiness and willingness of a person seeking specific performance in a case where time is provided for performance, means that the person claiming performance has kept the contract subsisting with preparedness to fulfil his obligation and accept performance when the time for performance arrives. However, it may not necessarily mean that he had command of the necessary money throughout the existence of the contract. A purchaser to succeed in a suit for specific performance, need not show that he had the consideration money with him or he had arrangements for it, but he was ready and willing to go through with the contract. This is a question of fact. The Courts have also taken the view that actual tender of money is not a condition precedent for specific performance unless the contract to the contrary specifically states so.

       Specific Relief Act, 1963 - Section 16(c)-Contract-Performance of.-Respective party to a contract is expected to fully discharge its obligations in terms of the agreement. Furthermore, besides being ready and willing to perform its part of contract, it also should ensure that the conditions which are fundamental or are essence of the contract should be adhered to ad are duly performed. Adherence to fundamental condition to transaction requires strict compliance. A fundamental condition is such in the absence of which the contract cannot proceed. Fundamental term of a contract cannot be equated to simplicitor term of a contract. Non-performance of any of them would result in different legal consequences. The general rule is that performance of a contract must be precise and exact. The party is expected to perform the obligation under the contract exactly and within the time frame set by the contract. Standard by which such performance is to be examined would be strict in some cases while liberal in the others. Whether the time is essence of the contract or not is again a fact which as to be construed with reference to the terms of the contract and circumstances of the case. For this purpose, contract has to be construed as a whole and not with reference to a particular clause. The breach of which is complained of. One way to examine such complained breach is to find whether it goes to the root of the contract and also whether such a term places onus solely on a party or the term required performance which was divisible, in the sense, that clause partially imposes obligations on one and partially on the other party. Thus, whether it is an act of mutuality, and what was the conduct of the parties in relation to such a clause is an important consideration to find whether breach is of fundamental term of contract.

       Specific Relief Act, 1963 - Section 16(c)-Expression ’readiness and willingness’.-The true nature of the transaction must be examined and determined having regard to the intention of the parties as well as the circumstances attending thereto as also wording used in the documents in question. Readiness and willingness, therefore, is a matter of fact to be gathered from the pleadings of the parties and from the evidence led at final stage.

       Specific Relief Act, 1963 - Section 16(c)-Interpretation of Statute-Expression ’readiness and willingness’.-In fact, in face of Explanation I to Section 16 of the Act, there is hardly any doubt as to the true meaning and application of the expression ’readiness and willingness’ in cases relating to specific performance. It is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court. The purpose of this expression obviously is to ensure that the plaintiff is capable of performing the terms which he was expected to do so under the terms of the contract or even under the orders of the Court.

       Specific Relief Act, 1963 - Section 20-Suit for specific performance-Ready and willing.-The Court at this stage of the proceedings while considering application for interlocutory orders is to form a prima facie view and while considering various aspects for grant or decline of injunction the Court has to balance the equity between the parties. In a suit for specific performance, the Court is vested with wide discretionary powers in terms of Section 20 of the Specific Relief Act. This discretion has to be exercised in accordance with the settled precepts governing the subject and cannot be exercised arbitrarily. This principle would also be of help to the Court while deciding an interlocutory application for grant of injunction. No doubt readiness and willingness of the purchaser is a condition precedent to the grant of relief at final stage or even for that matter at interlocutory stage. Readiness and willingness must exist at all relevant times. But ’readiness and willingness’ is a term which has to be construed with certain clarity and has to be given a meaning relatable to the facts and circumstances of a given case. It has been repeatedly held by the Courts that readiness and willingness essentially does not mean exhibition of money by the purchaser. This attains significance and relevance for the reason that grant or refusal of injunction in a suit for specific performance would essentially depend upon prima facie satisfaction of the ingredients essential for decree for specific performance.

       Specific Relief Act, 1963 - Section 16(c) - Expression ’readiness and willingness’. - The true nature of the transaction must be examined and determined having regard to the intention of the parties as well as the circumstances attending thereto as also wording used in the documents in question. Readiness and willingness, therefore, is a matter of fact to be gathered from the pleadings of the parties and from the evidence led at final stage.

       Specific Relief Act, 1963 - Section 20 - Suit for specific performance - Ready and willing. - The Court at this stage of the proceedings while considering application for interlocutory orders is to form a prima facie view and while considering various aspects for grant or decline of injunction the Court has to balance the equity between the parties. In a suit for specific performance, the Court is vested with wide discretionary powers in terms of Section 20 of the Specific Relief Act. This discretion has to be exercised in accordance with the settled precepts governing the subject and cannot be exercised arbitrarily. This principle would also be of help to the Court while deciding an interlocutory application for grant of injunction. No doubt readiness and willingness of the purchaser is a condition precedent to the grant of relief at final stage or even for that matter at interlocutory stage. Readiness and willingness must exist at all relevant times. But ’readiness and willingness’ is a term which has to be construed with certain clarity and has to be given a meaning relatable to the facts and circumstances of a given case. It has been repeatedly held by the Courts that readiness and willingness essentially does not mean exhibition of money by the purchaser. This attains significance and relevance for the reason that grant or refusal of injunction in a suit for specific performance would essentially depend upon prima facie satisfaction of the ingredients essential for decree for specific performance.

       Specific Relief Act, 1963 - Section 16(c) - Expression "Readiness and Willingness" - Purpose of - To ensure that plaintiff is capable of performing his part of contract - Not essential for plaintiff to actually tender to defendant or to deposit money in Court except when he so directed by Court. - It is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court. The purpose of this expression obviously is to ensure that the plaintiff is capable of performing the terms which he was expected to do so under the terms of the contract or even under the orders of Court.

       Specific Relief Act, 1963 - Sections 16© and 35 - Suit for specific performance of contract - "Ready and willing" - Plaintiff sought injunction to restrain defendant - Vendor from alienating property in dispute - Plaintiff shown capable of discharging his obligation for performing his part of contract - Readiness and willingness of plaintiff - Can be determined only after taking evidence in suit - Plaintiff not required to demonstrate it by actual deposit of money or to show that he had means by which he can pay amounts payable under agreement. - In Court’s considered view, it could be determined only after taking the evidence as to whether the plaintiff was ready and willing to perform its obligation or not against the MOU. As far as capacity of the plaintiff for discharging material obligations in regard of the payment or amount is concerned, it was not expected of the Appellant to demonstrate by actual deposit of money and/or show that it had means by which it could pay amounts payable under the MOU. That in fact may amount to prejudging the issue which is bound to be framed in the suit ultimately. However, in the present Appeal, the Notice of Motion No. 3166 of 2008 ha been taken out to which an affidavit has been filed and even the cope of the documents have been annexed thereto show that the partner of the Partnership concerned of the Appellant and in fact who has signed the plaint and the affidavit is possessed of more than the required sum.

       Specific Relief Act, 1963 - Section 36 - Interim injunction - Grant of - Powers of Court - Suit for specific performance of contract - Plaintiff sought - injunction for restraining defendant - Vendor from alienating property - Defendant contended breach of contract and time being essence of contract, parties at serious dispute regarding termination of contract and its consequence - Such matter to be answered finally only after permitting parties to lead evidence. - The correspondence placed on record including letters dated 20th December 2007, 12th February 2008, 28th February, 2008 and 31st March, 2008 clearly show that the parties were at serious disputes with regard to the termination of the contract and its consequences. It is a matter which has to be answered finally only after the parties have been permitted to lead evidence.