JUDGEMENT

R.V.RAVEENDRAN, J.

Leave granted. Heard. The validity of a novel and innovative direction by the High Court, purportedly issued to discourage frivolous and speculative litigation is under challenge in this appeal. To understand the issue, it is necessary to set out the facts and also extract relevant portions of the plaint and the impugned orders of the High Court.

2. The appellant claims to be a builder-cum-real estate dealer. He filed a suit for specific performance of an oral agreement for “commercial collaboration for business benefits” allegedly entered by the respondents as the owners in possession of premises No.A-1/365, Paschim Vihar, New Delhi, with him. He alleged in the plaint, that the following terms and conditions were orally agreed between the parties:

“a) The defendants will apply to the DDA for conversion of the above property from leasehold to freehold and within 2-3 months the defendants will handover vacant physical possession of the above property to the plaintiff.

b) The plaintiff will reconstruct the above property from his own money/funds with three storeys i.e. ground floor, first floor and second floor.

c) Out of the said reconstructed three storeyed building, the plaintiff shall be entitled to own and possess the ground floor; and the first and second floors will be owned and possessed by the defendants.

d) Besides bearing the expenses of construction and furnishing etc. of the proposed three storeyed building, the plaintiff shall also pay a sum of Rs. 3,71,000/- to the defendants at the time of handing over possession of the above house for reconstruction.

e) Out of the agreed consideration of Rs.3,71,000/-, a sum of Rs.51,000/- was paid to the defendants in cash and the remaining consideration of Rs.3,20,000/- was to be paid to the defendants at the time of handing over possession of the above house for reconstruction. In token of the same a Receipt for Rs.51,000/- was duly executed by defendant No.1.

f) On getting conversion of the above property from leasehold to freehold, the above agreement/proposed collaboration of the property bearing No. A-1/365, Paschim Vihar, New Delhi and the above terms and conditions were to be reduced into writing vide an appropriate Memorandum Of Understanding to be duly executed by the parties i.e. the builder and the owners of the above property.”

3. The appellant further alleged that in pursuance of the above, he paid a sum of Rs.51,000/- to first respondent in the presence of second respondent and two witnesses (Sanjay Kumar Puri and M.R.Arora) and that the first respondent executed the following receipt acknowledging the payment:

“RECEIPT/PART PAYMENT

Received a sum of Rs.51,000/- (Fifty one thousand only)

By Cash/Cheque Cash

From Sh. Vinod Seth S/o Sh. Sohan Seth R/o M-231 First Floor,

Guru Harikishan Nagar

Against Collaboration of Property No. A-1/365 Paschim Vihar

Signature (Devinder Bajaj)/10-6-04”

4. The appellant alleged that the respondents failed to comply with the agreement and lingered over the matter on one pretext or the other; that the appellant came to know subsequently that the property stood in the name of the second respondent and not the first respondent; and that the appellant therefore issued a notice dated 9.3.2007 calling upon the respondents to comply with the legal formalities to facilitate the collaboration agreement. Alleging that respondents failed to comply, the appellant filed a suit on 30.6.2007 for specific performance. We extract below the relevant portion of the prayer:

“......to pass a decree of specific performance of Collaboration Agreement entered in between the parties on 10-6-2004, as per its terms and conditions in favour of plaintiff and against defendants specifying that :

a) the defendants to apply immediately with the DDA for conversion of the above property from leasehold to freehold and immediately after such conversion, the defendants will handover vacant physical