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1993 Supreme(Cal) 215
HIGH COURT OF CALCUTTA
Ajit Kumar Sengupta & Shyamal Kumar Sen, JJ.
Sitac Private Ltd.
VS.
The Statesman Ltd.
Appeal from Original Order No. 40 of 1988 Suit No. 12 of 1987
Decided on : April 30, 1993
Advocate Appeared:
B. K. Bachawat for the appellant;
Bhaskar Gupta. Abhijit Chatterjee for the respondent.
Headnote:
CONTRACT - SPECIFIC PERFORMANCE - BUILDING CONTRACT - WHETHER CONCLUDED CONTRACT - WHETHER SATISFACTION OF CONDITIONS UNDER SECTION 14(3)(C) OF SPECIFIC RELIEF ACT, 1963 - WHETHER DELAY AND LACHES DISENTITLE PLAINTIFF TO SPECIFIC PERFORMANCE.
Fact of the Case:
Plaintiff and defendant entered into a Memorandum of Understanding (MoU) on 7th January, 1985, for the development of defendant's property in New Delhi. The MoU was subject to approval by the defendant and execution of a detailed agreement. The defendant denied giving approval and contended that no concluded contract existed. The plaintiff filed a suit for specific performance of the MoU and obtained an ad interim injunction. The trial court dismissed the application for interlocutory injunction, holding that there was no concluded agreement and that the agreement, if any, was uncertain.
Finding of the Court:
The Court held that there was no concluded contract between the parties capable of being specifically performed. The MoU was a commercial proposal and could only be a binding contract if it was approved by the defendant and a detailed agreement was entered into. The defendant did not approve the MoU, and no detailed agreement was executed. The Court also held that the plaintiff failed to satisfy the conditions under Section 14(3)(c) of the Specific Relief Act, 1963, for specific performance of a building contract. The building work was not described in the MoU in terms sufficiently precise to enable the Court to determine the exact nature of the building or work. The plaintiff did not have a substantial interest in the performance of the contract, and compensation in money for non-performance of the contract was an adequate relief. The defendant did not obtain possession of the land on which the building was to be constructed in pursuance of the contract. The Court further held that the plaintiff was not entitled to specific performance due to delay and laches. The plaintiff had an inordinate delay in moving the Court and was not prompt in approaching the Court.
Issues: 1. Whether there was a concluded contract between the parties capable of being specifically performed? 2. Whether the plaintiff satisfied the conditions under Section 14(3)(c) of the Specific Relief Act, 1963, for specific performance of a building contract? 3. Whether the plaintiff was entitled to specific performance due to delay and laches?
Ratio Decidendi: 1. A concluded contract requires mutual assent, consideration, capacity, and legality of object. In this case, there was no mutual assent as the defendant did not approve the MoU and no detailed agreement was executed. 2. The conditions under Section 14(3)(c) of the Specific Relief Act, 1963, for specific performance of a building contract were not satisfied as the building work was not described in the MoU in terms sufficiently precise to enable the Court to determine the exact nature of the building or work, the plaintiff did not have a substantial interest in the performance of the contract, and the defendant did not obtain possession of the land on which the building was to be constructed in pursuance of the contract. 3. The plaintiff was not entitled to specific performance due to delay and laches as the plaintiff had an inordinate delay in moving the Court and was not prompt in approaching the Court.
Final Decision: The appeal was dismissed, and all interim orders were vacated. There was no order as to costs.
Ajit Kumar Sengupta, J.
1. The suit out of which the present appeal arises was filed by the appellant on 21st December, 1987 praying for specific performance of a Memorandum of Understanding dated 7th January, 1985, for mandatory injunction directing the defendant to have the validity of the plans, approvals etc. in relation to the defendant's property at Barakhamba Road, New Delhi extended, for permanent injunction restraining the defendant from dealing with any person other than plaintiff in relation to the said property or acting in any way contrary to the alleged agreement dated 7th January, 1985 or in derogation of the plaintiff thereunder. The Memorandum of Understanding was in relation to construction of a high-rise building on the defendant's property in New Delhi.
2. After tiling of the suit the plaintiff applied for an interlocutory injunction and obtained an ad interim order. On final hearing, the learned Judge dismissed the application for interlocutory injunction by the judgment and order dated 18th January, 1988. This appeal is directed against the said judgment and order. The learned Judge inter alia, held that the parties did not agree to bind themselves by a concluded agreement and that the agreement, if any, was uncertain and in that view of the matter, the learned Judge dismissed the interlocutory application made by the plaintiff appellant for injunction.
3. Before we deal with the contentions raised before us, it is necessary to set out certain facts bearing upon the contentions.
4. By an indenture dated 7th May, 1982 made by and between the Secretary of State for India in Council and the defendant, the defendant was granted perpetual leasehold right of approximately 1.69 acres of land at Block No. 148, Barakhamba Road, New Delhi with effect from 25th August, 1980 on the terms and conditions contained in the said deed of lease. In May, 1980, the defendant submitted plans prepared by Bharadwaj & Bharadwaj Associate to the New Delhi Municipal Committee for the construction of a multi-storied building on the said land for the approval of NDMC and paid all necessary levies and fees for the purpose. The said plans were approved on 29th August, 1980. The approval was to be valid for a period of two years. By a letter dated 4th May, 1982, the aforesaid approval was communicated to the defendant by NDMC i.e., a few months before the approval was due to expire. Thereafter the said plans were submitted for revalidation and were revalidated for a further period of two years. On 18th May, 1984 the plans were revalidated for a further period of one year, but the approval was again not communicated to the company until about 2 months before it was due to expire. On 7th January, 1985, a document, being a commercial proposal by the plaintiff for development of the Delhi property of the defendant was signed on behalf of the plaintiff and the defendant. The said commercial proposal was subject to approval and acceptance by the defendant and on such approval being given, a "detailed agreement" was to be entered into between the parties. By a letter dated 1st February, 1985, the revalidation of the plans on the 18th May, 1984 was communicated to the defendant. The plans were valid till May, 1985 in terms of the aforesaid revalidation the 18th May, 1984. These plans had been prepared by the defendant's the then Architects M/s. Bharadwaj & Bharadwaj Associate and the plaintiff had nothing to do with the same. In February/March, 1985, some premises were shown to the defendant's representatives by the plaintiff in the context of the defendant's requirement that the defendant should be able to continue to publish the New Delhi Edition of the newspaper during the period of construction and for this purpose temporary extensions to a part to the existing building or alternative sites should be made available by the development at his own cost. Thereafter, the:, plaintiff submitted a proposal for financing the construction of th
