Point of Law: Importance of ‘consideration’ cannot be belittled. It is the consideration which puts enforceability in the agreements to make promises legally binding. Even where the ‘promisor’ intends to bind himself by the promise, ‘consideration’ is essential to make the promise binding and enforceable.

JUDGMENT :

ASHA MENON, J.

1. The suit has been filed seeking specific performance of a Collaboration Agreement dated 18th July, 2021 along with prayers for grant of permanent and mandatory injunction against the defendant. In the alternative, damages to the tune of Rs. 2,10,00,000/- have been claimed against the defendant for attempting to cancel the said Collaboration Agreement dated 18th July, 2021.

2. The suit is in respect of property bearing No. D-89, situated at Ashok Vihar, Phase-I, Delhi-110052. The defendant is stated to be having 75% share in the said property and in actual, physical possession of his share, while his brother had 25% share in the said property, which the wife of the plaintiff claims to have purchased through an Agreement to Sell from him for a sum of Rs. 3,23,00,000/- and Rs. 30,00,000/- having been paid towards earnest money.

3. Mr. Kishore M. Gajaria, learned counsel for the plaintiff, submitted that a Collaboration Agreement was entered into between the plaintiff and the defendant for re-development of the property and the same had been duly signed by the defendant. However, subsequently, he issued a Notice dated 31st July, 2021 to the plaintiff stating that the Collaboration Agreement was an invalid document as it lacked in ‘consideration’ and had been forced upon the defendant, taking advantage of his age. The plaintiff responded to the said notice. There were WhatsApp communications and talks on the phone between the parties, but the defendant claimed he was being prevented from acting on the Collaboration Agreement by his son and daughter-in-law. Learned counsel submitted that it was in these circumstances that the suit has been filed and it was fully maintainable.

4. Learned counsel submitted that the cause of action to file the suit was clearly disclosed as the defendant in the telephonic conversations, as recorded and transcribed by the plaintiff and placed on the record as document No. 6 of the E-file, clearly affirms having entered into the Collaboration Agreement. Therefore, there was an agreement in existence, which the defendant could be directed to perform. It was submitted that the adamance of the defendant has made it impossible for the Collaboration Agreement to be executed. The plaintiff had suffered a loss due to the defendant’s non-performance as he had raised huge loans from the market and had purchased building materials worth Rs. 10,00,000/- too. He had also lost an amount that he would have otherwise earned on the deal. These losses he was seeking to recover through the suit.

5. The learned counsel submitted that the Collaboration Agreement contained reciprocal promises. The plaintiff had undertaken to construct the property and the defendant did not have to spend any money. In return, the defendant had to transfer two floors and 25% of the stilt parking to the plaintiff. Thus, the consideration was the amount to be spent on construction. Each party’s promise was the consideration for the reciprocal promise. Since this promise of constructing two floors and handing over the same to the defendant was “valuable” this satisfied the definition of ‘consideration’ under Section 2(d) of the Indian Contract Act, 1872. Relying on the decisions of the Supreme Court in Union of India vs. Chaman Lal Loona and Co. 1957 SCR 1039 and Chidambara Iyer vs. P.S. Renga Iyer and Others, (1966) 1 SCR 168, it was urged that what was “valuable” is determinable also by the court and therefore, this Court may accept that consideration had passed, even if not in money.

6. I have heard learned counsel, perused the Collaboration Agreement and the cited case law.

7. The interpretation placed by the learned counsel for the plaintiff on the decision in Chidambara Iyer (supra) is somewhat misplaced. What the court held was that consideration must have some value and must be real and not illusory. It must also be adequate. It is not for the court to fix a value to what is offered as consideration and conclude that c