Law Web: When plaintiff has failed to prove readiness and willingness to perform his part of contract in suit for specific performance of contract?

The other question to be looked into is, whether the
plaintiff has proved its readiness and willingness to perform its
obligation as per the agreements between the parties. The
arguments of the plaintiff in this respect show that the plaintiff insists
for considering that readiness and willingness only in terms of
unregistered agreement at Exhibit-156. The schedule of payment with
respect to which the readiness and willingness could have been
examined in law is Annexure-B with registered agreements at Exhibit
nos. 136 to 141. How the unregistered document has attempted to
introduce a material alteration therein has been mentioned supra.
Thus, after paying the land owners about 10% amount, the payment
of balance amount has been indefinitely postponed by device of an
unregistered agreement. The defendants correctly point out that the
plaintiff could not & did not complete the payment as per the

registered agreement while the plaintiff relies upon Exhibit-156. In
the light of above discussion and the express provisions contained in
Section 50 of the Registration Act, it is clear, that the terms and
conditions appearing in Exhibit nos. 136 to 141 prevail over Ex.156
and must be implemented. The readiness and willingness of the
plaintiff cannot be examined qua time schedule substituted by
Exhibit-156. Exhibit-156 is reached between the parties just 14
months after registered agreements dated 09.08.2002. The plaintiffs
claim that the defendants have accepted the payment in terms of the
conditions mentioned in Exhibit-156. They pointed out that amount
of Rs.1,15,000/- has been paid by the plaintiff to the respective land
owners on 04.10.2003. However, the plaintiff has not sought specific
performance mainly only in view of Exhibit-156. The purpose or object
of development stipulated in registered agreements has not undergone
any change but is reaffirmed by the Exhibit-156. We have already
noted that the agreements between the parties cannot be enforced in
absence of effective and legal representation of defendant no.6
Society in the matter. All the arguments of the plaintiff proceed upon
the subsequent developments. The plaintiff has attempted to urge
that the law enables the land owners to develop the subject lands
for earmarked purpose i.e. as Park also. It has taken support from
communication (Exhibit-263) dated 04.01.2010 which is the
proceeding of a meeting with Hon’ble Minister. In the meeting held on
04.01.2010, the fact, that the land owners can develop the subject

land for the purpose for which it is earmarked in development plan,
has been taken into consideration. We find that the purpose of
agreement at Exhibit nos. 136 to 141 is to develop the subject land
into an ideal township. Township will not mean only Park or a
zoological or botanical garden, it will necessarily consist of a
residential colony. Even otherwise, the plaintiff has not taken any
steps for developing the subject land for earmarked purpose. On the
contrary, it has filed a Writ Petition No.1629 of 2011, seeking
declaration that the reservation has lapsed. We, therefore, do not find
anything wrong with the conclusion of the trial Court that the plaintiff
has failed to prove its readiness and willingness to develop the land for
agreed purpose. Admittedly, the plaintiff does not complete the
payments as per Annex. B with Exhs. 136 to 141 & wants to comply
with modified schedule as per Exh. 156. Legally, this effort can not be
countenanced & negates the stance of readiness & willingness.
(2006) 12 SCC 146 – Faquir Chand vs. Sudesh
Kumari is also pressed into service by Adv. Dangre to show that the
readiness & willingness is apparent from plaintiffs steps like continuous
correspondence with the State Government or NIT, filing of writ
petitions, institution of a suit for specific performance or obtaining
three sale deeds from the willing defendants 2 & 3. Even the deposit of
money during pendency of this first appeal is cited as an indication
thereof. Defendants 2 & 3 executed the sales during pendency of suit
for specific performance in the process of compromise. Other

defendants did not agree to the compromise & hence, the suit
continued. In that suit the effort of plaintiff is to force the unregistered
agreement at Ex. 156 on unwilling defendants 1,4 & 5. Plaintiff did not
abide by agreements at Ex. 136 to 141. We have already found that
Ex. 156 is not enforceable against these defendants. The discussion
reveals that the plaintiff was never ready & willing to follow

agreements at Ex. 136 to 141.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH
FIRST APPEAL NO. 1010 OF 2012
AND
CROSS OBJECTION NO. 63 OF 2013
FIRST APPEAL NO. 1010 OF 2012
M/s. GOLD TOUCH REAL ESTATE
PRIVATE LIMITED,
V
Shri Suresh s/o Manoharlal Suri,

CORAM : B.P. DHARMADHIKARI &
P.N. DESHMUKH, JJ.

DATED: NOVEMBER 21, 2015.
Citation: 2016(6) ALLMR 806

This First appeal by plaintiff assailing the dismissal
of its suit for specific performance came to be admitted on 03.04.2013
and at that stage while passing orders on Civil Application No. 2507 of
2012, the appellant was directed to deposit an amount of Rs.15 crore
with the registry of this Court by 31.05.2013. Subject to such deposit
interim direction to maintain status quo was continued. The said
direction was questioned before the Hon'ble Apex Court and the
Hon'ble Apex Court has on 07.07.2014 directed expeditious disposal of
appeal. The deposit of Rs.4 crore made by the appellant with the
Registry of the Hon'ble Apex Court was directed to the transferred to
this Court. The amount of Rs.15 crore was thus substituted by the
amount of Rs.4 crore. In the meanwhile, on 13.12.2013, Cross
Objection filed by Respondent Nos. 1, 4 & 5 also came to be admitted

for final hearing.
2. As per orders of the Hon'ble Apex Court dated
07.07.2014, the Appeal and Cross Objection have been taken up for
final hearing. The original plaintiff questions dismissal of his Special
Civil Suit No. 82 of 2006. Said suit for specific performance, for
possession, declaration and for permanent injunction is dismissed vide
judgment dated 17.09.2012 delivered by the 5th Joint Civil Judge,
Senior Division, Nagpur. While dismissing that suit, defendant Nos. 1,
4 & 5 were directed to repay sums paid to them by the plaintiff with
10% interest from the date of receipt of that amount till its repayment.
This direction is questioned in Cross Objection by defendant Nos. 1, 4
& 5.
3. We have heard Shri Dangre, learned counsel for the
appellant/ plaintiff, Shri Anilkumar, learned counsel for defendant/
respondent Nos. 1, 4 & 5, Shri Chauhan, Advocate for defendant/
respondent No. 3 and Shri Dhore, learned counsel for defendant/
respondent No. 6 – Co-operative Society, in First Appeal. We prefer to
refer to the parties as per their mention in impugned judgment.
4. The description of suit properties is not in dispute.
The title of defendant Nos. 1 to 5 to their respective lands is also not in
dispute. During the pendency of said suit defendant Nos. 2 & 3 entered

into compromise with the plaintiff and have sold their respective
portions to it. These sale deeds are also not in dispute. The plaintiff
approached Civil Court with a story stating that defendant Nos. 1 to 5,
who are members of same family, executed an agreement to sell (Art.
A) in favour of defendant No. 6 – Society, on 26.06.2000. On
09.08.2002 they executed six separate agreements at Exs. 136 to 141
in favour of plaintiff and defendant No. 6 consented to it. On
04.10.2003, defendant Nos. 1 to 5 executed a supplementary
agreement Ex. 156 in favour of the plaintiff and it was confirmed by
defendant No. 6.
5. The plaintiff is a company which deals in Real
Estate development and construction. Defendant No. 6 is a
cooperative housing society duly registered under & governed by the
Maharashtra Cooperative Societies Act, It had agreed to pay rate of
10 lakh per acre i.e. total consideration of Rs.6,87,50,000/- to
defendant Nos. 1 to 5 and had paid earnest money of Rs. One lakh. It
had also agreed to obtain all certificates, no objections and other
documents required for execution of sale deed. Defendant Nos. 1 to 5
agreed to entrust the work of development of suit property to a
Developer of choice of defendant No. 6 – society and to execute
necessary document for said purpose. Defendants pointed out to the
plaintiff that their property was brought under town planning
reservation in the Development Plan and hence agreement dated

26.06.2000 could not have been implemented. After discussion, on
09.08.2000, six different agreements were entered into by defendant
Nos. 1 to 5 while defendant No.6–society consented to it. The sale
consideration was agreed at Rs.17,07,000/- per acre. The total
consideration thus worked out to Rs.11,73,56,250/-. The obligation to
fulfill agreements entered into by defendant No. 6 with various persons
was placed upon the plaintiff and the plaintiff was authorized to receive
balance consideration from them. After payment of 50% or more
amount out of total sale consideration to defendant Nos. 1 to 5,
plaintiff was given right to execute the sale deed or mortgaged deed
etc. Defendant Nos. 1 to 5 on 09.08.2002 executed an irrevocable
power of attorney at Ex. 100 in favour of Shri Nandkumar Khatumal
Harchandani, a nominee of the plaintiff, which was duly registered.
6. The plaintiff alleges that these agreements were
mutually modified and parties agreed to reduce consideration amount
payable per acre by Rs.1,25,000/-. A supplementary agreement at Ex.
156 for this purpose was entered into on 04.10.2003. The total sale
consideration thus worked out to Rs.10,87,62,500/-. The plaintiff paid
Rs.4,17,20,952/- out of it. An amount of Rs.10,70,00,702/-
(10,70,702?) only was credited towards consideration after deducting
interest as also brokerage charges payable to Zaver Company &
Aspee Bapuna. Defendants also accepted receipt of consideration of
Rs.4,06,00,250/-. Accordingly, the plaintiff states that it had taken

requisite steps to get suit lands de-reserved. On 04.07.2005,
defendant Nos. 1 to 5 forwarded notice containing false allegations,
terminating registered agreements, irrevocable power of attorney
dated 09.08.2002 when the agreement dated 09.08.2002 does not
contain any such stipulation. Because of pains taken by the plaintiff, on
04.01.2010 during joint meeting of Principal Secretary, UDD,
Government of Maharashtra, the plaintiff as also the Chairman and the
Superintending Engineer of Planning Authority-Nagpur Improvement
Trust, an option to permit land owners to develop suit properties was
considered.
7. After receipt of notice dated 04.07.2005, the
plaintiff presented Special Civil Suit No. 82 of 2006 on 24.01.2006.
Certain events have taken place during the pendency of suit and we
find it convenient to refer to the same a little later in the body of this
judgment. However, briefly stated, according to the plaintiff,
defendant Nos. 2 & 3 executed sale deeds of their respective portions
in its favour. Similarly, Planning Authority principally agreed to allow
land owners to develop the reserved properties in 2010 i.e. after
institution of suit. Plaintiff filed a suit & due to interim orders passed
therein, the plaintiff could take appropriate steps resulting in this
permission to develop. These developments, according to the plaintiff,
show its readiness and willingness to perform the contract at all
material times.

8. Defendant Nos. 1, 4 & 5, who are respondent Nos.
1, 4 & 5 in First Appeal, filed their written statement at Exh. 73 in the
Trial Court. Defendant No. 6 – society filed consent written statement
at Exh. 71 praying for a decree in favour of the plaintiff. Defendant
Nos. 2 & 3 filed appearance but did not file any written statement. The
contesting defendants filed application at Exh. 45 on 29.07.2006 for a
direction to the plaintiff to deposit the entire balance amount of sale
consideration. They contended that as that amount was not deposited
at any point of time, hollowness in the claim of the plaintiff that it was
always ready and willing, became apparent. On 02.09.2006, they filed
one more application seeking direction of the trial Court to the plaintiff
to deposit an amount of Rs.6,68,99,750/- which, according to the
plaintiff's case itself, was payable to the defendants. This application
was opposed by the plaintiff. The defendants pointed out that they
attempted to amicably settle the matter after institution of suit but
plaintiff offered only an amount of Rs.50 lakh towards damages and
interest to all of them. The amount was too meager and the plaintiff
had failed to maintain the schedule of payment. No notice under
Section 164 of the Maharashtra Co-operative Societies Act, 1960, was
served upon defendant No. 6 – society and, therefore, suit was not
maintainable. These defendants pointed out that at the behest of
plaintiff, an antedated agreement came to be executed with
defendant No. 6 – society. Date 26.06.2000 was put upon it and
defendants never received the amount of Rs. One lakh as stated in

that agreement. They also denied supplementary agreement dated
04.10.2003 and alleged that it was the outcome of fraud and
misrepresentation. That agreement was never registered as required
by law and hence it cannot supersede six agreements executed by
them in favour of the plaintiff on 09.08.2002. The Power of Attorney is
rightly revoked by legal notice as there could not have been any
irrevocable power of attorney. They point out that on 09.08.2002, they
were in dire need of money as their industrial unit was about to be
auctioned by State Bank of India after obtaining orders from Debts
Recovery Tribunal in O.A. No. 459 of 2002, as such, they executed the
agreements. In those agreements it was stipulated that if the plaintiff
failed to get the land de-reserved, the agreement would come to an
end and the defendants would refund the amount received by them.
Nagpur Improvement Trust, the Planning Authority pointed out that
suit lands were to be utilized only for development of a park by it and
also took steps to acquire it. As such, the agreements could not have
been specifically enforced, thereafter. Therefore, a legal notice was
issued on 04.07.2005. Again there are certain other defences but the
same can be more conveniently looked into at appropriate place in this
judgment.
9. In the backdrop of these pleadings, the trial Court
has framed following issues and answered the same as below :

Sr.No. Issues Findings
1. Whether the plaintiff
proves that defendant
nos. 1 to 5 had
executed an agreement
for sale in favour of
defendant no. 6 on
26.6.2000 ?
Not
proved.
2. Whether the plaintiff
proves that defendant
no. 6 has paid Rs.
1,00,000/- to the
defendant nos. 1 to 5
towards earnest
money ?
Not
proved.
3. Whether the plaintiff
proves that defendant
no.6 was to obtain all
necessary certificates,
no objection certificate
and documents
required for execution
of sale deed ?
Not
proved.
4. Whether the plaintiff
proves that defendant
nos. 1 to 5 had agreed
to entrust work of
development in respect
of suit property to the
developers of its
choice ?
Not
proved.
5. Whether the plaintiff
proves that it was their
liabilities to fulfill
various arrangements
entered into by
defendant no. 6 with
various persons in
respect of suit
property ?
Proved.
6
Whether the plaintiff
proves that plaintiff was
at liberty to enter into
an agreement to sell, to
construct the space or
part of suit property, as
it think fit on making
payment of 50%
amount ?
Proved.
7. Whether the plaintiff
proves that defendant
nos. 1 to 5 have
executed power of
attorney to execute
Agreements to Sale and
Sale Deeds in favour of
person nominated by
the plaintiff ?
Not
proved.
8. Whether the plaintiff
proves that on
4.10.2003 defendant
executed
Supplementary
Agreement in favour of
plaintiff confirmed by
the defendant No. 6.
Proved
to the
extent
of Rs.
4,16,70,
952/-
only.
9. Whether the plaintiff
proves that it has paid
amount of Rs.
4,17,20,952/- to
defendant nos. 1 to 5
as part consideration ?
Proved.
10. Whether the plaintiff
proves that Rs.
10,70,702/- is credited
as the payment of
consideration was paid
by the plaintiff for and
on behalf of defendants
to Zaver and Company
and Mr. Aspee Bapuna
for financial
assistance ?
Proved.

11. Whether the suit is hit
by Section 164 of the
Maharashtra Cooperative
Societies Act,
1960 ?
Yes.
12. Whether the plaintiff
proves that it was and
is ready and willing to
perform its part of
contract ?
Not
proved.
13. Whether the plaintiff is
entitled for reliefs as
sought ?
No.
14. What order and
decree ?
As per
final
order
and
Decree.
Issues 1 to 4 supra revolve round the document at Art.
A. Issues 5 to 10 are regarding Exs. 136 to 141, Ex. 156 & Ex. 100. It
is in this background that we have heard the respective counsel.
10. Shri Dangre, learned counsel submits that the
material on record clearly shows that the agreement dated 26.06.2000
entered into between defendant Nos. 1, 4 & 5 as also defendant No. 6
is properly proved and omission of trial Court to mark it as exhibit & its
act of only mentioning article No. “A” upon it, is unsustainable. He
contends that no specific defence denying its due execution or
contents was raised by the defendants. He further points out that as
per terms and conditions of this document, sale could have been
executed till March 2002 or even during extended period. There was

to be deemed extension till defendant No.6– society obtained
necessary no objection certificates and permissions. The parties were
to make joint efforts for the said purpose and clause 4 authorizes
defendant No. 6- society to entrust the work of development to any
developer of its choice. The defendants had agreed to execute
necessary documents in favour of such developer. In terms of this
basic document and power, on 09.08.2002, these agreements i.e.
Exhs. 136 to 141 were entered into between the parties. The
agreements are for development and executed by all the defendants
in favour of the plaintiff. Defendant No. 6 – society has signed these
agreements as consenting party. Even these later documents did not
make time an essence of contract. The plaintiff was given necessary
power to get the land de-reserved and make it available for
development. Accordingly, the land owners agreed to execute a power
of attorney in its favour. Clause 11 of this agreement envisaged
situation which would arise only if its de-reservation could not take
place & owners could not have developed it. Total sale consideration of
Rs.11,73,56,250/- was to be paid as per these agreements. The
power of attorney at Exh. 100 came into existence because of these
six agreements. The said power of attorney authorized the nominee of
the plaintiff to start work also. Learned counsel submits that
circumstances then necessitated third agreement i.e. Exh. 156 dated
04.10.2003. It is executed by defendant Nos. 1 to 5 in favour of the
plaintiff and defendant No. 6 – society has signed it as a consenting

party. The reduction in per acre rate as stipulated therein was
accepted and acted upon. The new rate worked out to Rs.
10,87,62,500/-. He then points out the correspondence done by
power of attorney on behalf of defendant Nos. 1 to 5 with State
Government and Planning Authority (Nagpur Improvement Trust i.e.
NIT for short) on various dates after these agreements. He submits
that the Government Resolution dated 07.04.1994 at Exh. 132 allows
land owners to develop the land for reserved/ earmarked purpose.
After the land was shown as reserved on 15.03.2000, land owners
objected to draft plan vide Exh. 229 and thereafter entered into an
agreement at Art. A dated 26.06.2000 with defendant No. 6 – society.
The learned counsel submits that after later agreements dated
09.08.2002, the plaintiff started acting and issued notice under Section
49 of the Maharashtra Regional Town Planning Act, on 05.04.2003.
These notices at Exhs. 114/ 115 were found technically deficient and
hence, after reply from the Nagpur Municipal Corporation, fresh notice
was issued on 30.07.2003 vide Exh. 118. On 05.08.2003, Nagpur
Improvement Trust (NIT) published an advertisement in the
Newspaper vide Exh. 198 inviting interested developers to submit their
willingness to develop the land for earmarked purpose of park,
botanical and zoological garden, bird sanctuary, amusement park,
forestry/nursery. He then points out further developments with
reference to various annexures on record and a communication dated
24.01.2005 (Exh. 201) sent by the Superintending Engineer of NIT to

the office of the Collector for initiating land acquisition proceedings.
On 03.05.2005, vide Exh. 127, the plaintiff placed its protest and
objected to acquisition. The plaintiff offered to develop the entire
specified area as a park as earmarked in Development Plan and offered
to pay compensation for balance land needed to be acquired to
facilitate the said purpose. Shri Dangre, learned counsel submits that
it is after this stage that defendants parted their ways with the plaintiff
and issued legal notice dated 04.07.2005.
11. Inviting attention to events which took place after
service of legal notice and during the pendency of suit, the learned
counsel submits that ultimately on 04.01.2010, in a joint meeting, it
was noted that total 52.63 H. of land was earmarked as park in Town
Planning Scheme. Agent of defendants used the power of attorney and
served a purchase notice covering 27.43 H. of land out of it. This
constituted more than 50% of total land earmarked for the
development. The reservation could have been developed by NIT after
acquiring entire land or then through private developers in consonance
with the purpose of reservation by suitable method. The land owners
could have been permitted to develop the land as park. The further
course of action which was chalked out in that meeting expected
Nagpur Improvement Trust to find out whether it was interested in
acquiring and developing the land itself or then through a private
developer. The meeting also noted that the land owners could have

been permitted to develop the entire land on participatory all inclusive
basis. He has argued that there was no need & scope for acquiring the
land as land owners could develop it.
12. To point out the benefit gained by defendant Nos. 1
to 5 or their families, he has invited attention to documents at Exhs.
233 to 239. He submits that industrial unit of defendants was being
proceeded against by secured creditors like State Bank of India,
SICOM and MSFC etc. The said loan liability was met with through
funds provided to defendants by plaintiff, therefore, the defendants
have consented to and executed all documents including document at
Exh. 156. Oral evidence led on behalf of the plaintiff is also read over
to point out how the agreement dated 26.06.2000 at article “A” has
been duly proved on record. He states that though PW-1 –
Nandkumar Khatumal Harchandani has given necessary details about
these agreements and also proved payments, there is no serious
challenge to his deposition by the defendants. The Cross Objection
does not bring on record any dispute either about article “A” or Exh.
156, on the contrary the agreements at Exhs. 136 to 141 have been
accepted by the defendants during cross examination. He submits that
the fact of decision at State Government level in 2010 in favour of land
owners is also not in dispute. Defendant Nos. 1 to 5 unnecessarily
issued a legal notice on 04.07.2005 and thereby created obstacles in
the steps taken by the plaintiff. Filing of suit by plaintiff, steps taken

by its nominee for getting the lands de-reserved, 2010 decision of
State , filing of a writ petition by plaintiff in this Court in 2011, all show
readiness and willingness. Most of the amount was already paid to the
defendants and the amount in deposit with the Registry of this Court is
more than sufficient to meet the outstanding liability. Shri Dangre
submits that the Trial Court has erroneously observed that the plaintiff
was not ready and willing to perform its part of contract.
13. Inviting attention to evidence of PW-2 – Sunil
Dhole, the plaintiff states that three sale deeds executed by defendant
Nos. 2 & 3 are duly proved through this witness. Thus, sale deeds and
its execution by two defendants show that the other defendants were
deliberately refusing to co-operate with the plaintiff. He submits that
without raising any express challenge to those sale deeds, other
defence attempted to impugn the same on trivial grounds. Counsel for
plaintiff relies upon those sale deeds at Exhs. 151 to 153 to buttress
his submissions.
14. The evidence of PW-3 – Vedprakash is also pressed
into service by him to show that said witness proves supplementary
agreement dated 04.10.2003 at Exh. 156. He further contends that
his cross examination fails to bring on record any material sufficient to
discard it.

15. Inviting attention to evidence of witness examined
by the defendants, the learned counsel states that DW-1 has been
examined only to cast a shadow on Exhs. 161 to 163. DW-2 –
Nandkumar Suke, Land Acquisition Officer was examined only to bring
on record the report in respect of acquisition prepared on 15.03.2010.
That report is at Exh. 188. He points out that said L.A.O. in cross
examination accepted that though NIT deposited only Rs.5,03,00,000/-
& though was asked to deposit further amount of Rs.11,38,00,000/-,
did not deposit it. As NIT did not deposit the entire amount,
notification under Section 4 of Land Acquisition Act could not be
issued. He points out that this witness accepts that though the land
was under reservation, its acquisition had not started.
16. DW-3 – Siddharth Mankar working with NIT was
examined to prove documents at Sr. Nos. 1 to 12 filed with Exh. 170.
Those documents were exhibited as Exhs. 195 to 206, however, this
witness was not aware of contents of those documents and he was not
aware of developments after 23.06.2009.
17. Shri Dangre, learned counsel points out that
defendant No. 1 has been examined as DW-4. This witness has
accepted his signature on all documents and stated that he signed the
same acting in good faith. This witness denied any discussion held on
04.10.2003 when Exh. 156 was executed though he stated that the

plaintiff got it executed. This witness also pointed out financial
difficulties and claimed that he was not knowing Vedprakash
Wadhwani. This witness also came up with stand that after NIT
refused proposal of the plaintiff to develop park on 31.03.2008 vide
Exh. 130, the question of de-reservation came to an end. According
to him, the entire examination-in-chief of this witness shows readiness
and willingness on the part of the plaintiff.
18. His cross examination is heavily relied upon to show
that this witness understands English and he signed all the documents
after reading contents thereof after understanding it. He also accepted
correctness of portion marked “A” in his written statement at Exh. 73.
This witness also accepted that the amount of Rs.50,00,000/- offered
by the plaintiff was not acceptable to them and they were asking for
more amount. They were asking plaintiff to better (improve) its
proposal. He also gave issuance & service of purchase notice on their
behalf as one of the reasons for cancellation of agreements.
19. Shri Dangre, learned counsel submits that all this
material clearly shows that the trial Court was wrong in not accepting
the agreement at Exh. 156, in not exhibiting article “A” and in holding
that notice under Section 164 of the Maharashtra Co-operative
Societies Act, ought to have been served upon defendant No. 6. The
plaintiff was ready and willing to complete its part of agreement, had

paid amount as per modified schedule in Exh. 156 and, therefore, its
suit could not have been dismissed. He further contends that
frustration of contract was not the issue framed by the trial Court. He
has relied upon the provisions of Section 17(1)(c) read with Section 49
of the Registration Act to demonstrate admissibility of Ex. 156.
20. On readiness and willingness, Shri Dangre, learned
counsel, invites attention to the explanation at end of Section 16(c) of
Specific Relief Act, and points out that the trial Court had never
ordered the plaintiff to deposit the balance amount. Hence, mere filing
of Exhs. 47 or 45 by the defendants was not sufficient to infer that the
plaintiff was not ready and willing to deposit the balance amount. He
contends that the material on record clearly shows that the plaintiff
was always ready and willing even during the pendency of the suit to
perform its part of agreement. He further submits that clause 11 in
the agreements at Exhs. 136 to 141 only speak of procedure to be
followed for refunding the advance paid to defendants, and it does not
derogate from other substantive portions and arrangements in the
agreements. The Development Regulations (D.C.) particularly
Regulation No. 28 of D.C. Rules which enable the land owner to
develop, have been overlooked. Here, as de-reservation took place,
the owners and, therefore, the plaintiff is free to develop the land. He
further points out that Writ Petition No. 1629 of 2011 filed by the
plaintiff is admitted by this Court for final hearing on 12.04.2013 and

in it a declaration of de-reservation has been sought.
21. Inviting attention to provisions of Section 29 of the
Contract Act, he submits that the agreement which has been acted
upon cannot be labeled as uncertain. The defendants have not led any
evidence of any price rise or any prejudice or hardship caused to them.
The time was never the essence, land was otherwise not available for
sale and the plaintiff converted it into a commercial asset. In the
process the plaintiff invested huge amounts and also helped
defendants in time of their need. Because of wrong acts of
defendants, the plaintiff has been made to face litigation
unnecessarily. The suit, therefore, ought to have been decreed. He
has relied upon certain judgments and we find it proper to refer to the
same at appropriate place. However, at the end, he made a statement,
upon instructions, that the plaintiff is ready and willing to pay amount
of Rs. One crore more over the sum agreed upon & in deposit to put
an end to litigation.
22. Shri Chauhan, learned counsel appearing for
respondent No. 3 supported the arguments of Shri Dangre, learned
counsel and accepted that defendant No. 3 has executed a sale deed in
favour of the plaintiff.
23. Shri Dhore, learned counsel for defendant No. 6 –

Cooperative Society also supported the arguments of Shri Dangre,
learned counsel.
24. Shri Anilkumar, learned counsel, appearing on
behalf of the contesting respondent (defendants) Nos. 1, 4 & 5 submits
that the arguments about demand for more amount over and above
the agreed amount by the defendants is not supported by any pleading
and there was no such plea taken while filing the suit. After State
Government accepted purchase notice and NIT moved for acquisition,
there was no scope left for de-reservation. Section 127 of the M.R.T.P.
Act, was not available as period of 10 years was then to expire. He
points out that Exh. 156 is to be acted upon, stage to demand specific
performance has not come even today. He further points out that it is
plaintiff who came up with a case that as de-reservation was under
progress, the contract could not have been seen as frustrated. Under
power of attorney, the plaintiff which has got means and methods to
get the work done, was given necessary powers and hence defendants
were not expected to take any steps. The plaintiff never called upon
them to sign or execute any document and never complained that any
particular step or work could not be accomplished as the defendants
refused to co-operate. He invites attention to prayer clauses (1) & (2)
in the plaint to submit that the plaintiff wants specific performance in
the light of all documents and more particularly last document at Exh.
156. The purpose of entering into agreement with the plaintiff was to

develop the lands of defendants into a township and not as a park or
garden. When the fact that NIT was ready and willing to develop it as
park or garden and there was no scope for locating a township on it
became clear, the agreement between the parties did not survive.
Even otherwise time was essence and as the plaintiff did not stick to
time schedule or pay the amount as specified therein, denial of specific
performance is just and proper. The steps taken by the plaintiff and
its offer to develop suit lands as park or garden is not in consonance
with the purpose with which the agreement was entered into between
the parties. Filing of suit, obtaining orders of status quo therein and
not depositing the balance amount though its attention was specifically
invited towards the same, are stated to be the indications of
unreadiness or unwillingness on the part of the plaintiff. Exh. 45 and
Exh. 47 filed before the trial Court and pendency of Exh. 47 for a
period of over six years are relied upon by Shri Anilkumar to state that
the plaintiff was not ready and willing to deposit even the balance
amount. It was given liberty to deposit the undisputed amount ie as
found due and payable by it, but that amount was also not deposited.
25. Events during the pendency of suit have got no
bearing on readiness and willingness of the plaintiff. The defendants
wanted fruits in return of their property immediately and hence after
waiting for three years and after finding that no township can be
developed on their land, they put the arrangement to an end. The

plaintiff unnecessarily filed suit and protracted the matter. As NIT
moved for acquisition within the stipulated time of one year, dereservation
issue lapsed on 14.01.2005. Hence, the offers made by
the plaintiff through its nominee to develop suit land as a park or
garden are not the steps taken in pursuance of agreements between
the parties. The said nominee while acting as Power of Attorney could
not have agreed to undertake such development. If the defendants
had time of several years and could have waited, they would not have
asked the plaintiff to intervene. It is pointed out that 10.10.2002 was
the last date for payment and plaintiff failed to keep it.
26. He submits that the person examined as PW-1 by
the plaintiff is not signatory to any document and none of the
witnesses had any personal knowledge about the situation in which
signatures of defendants were obtained on Article “A” or other
agreements. The defendants specifically pleaded that they had not
received the amount of Rs. One Lakh while signing article “A” and this
has not been disproved by examining any officer of Co-operative
Society or by producing any receipt. He further states that though the
signatures on Exh. 156 are not in dispute, its contents and purpose is
very much disputed. The said document has no existence in the eyes
of law. He adds that in reply notice sent on 27.07.2005, the plaintiff
did not assert any readiness or willingness. In written statement,
defendants had agreed to refund the amount as per clause 11 of Exhs.

136 to 141 to the plaintiff.
27. In the alternative and without prejudice, Shri
Anilkumar, learned counsel submits that even if de-reservation is
presumed, the plaintiff did not offer to pay as per schedule contained
in Exh. 156. The learned counsel submits that not only land of the
defendants but lands of others are also to be developed as park and
the plaintiff is not owner of the all those lands. The plaintiff has not
taken any steps to obtain consent of others and it cannot expect the
defendants to wait indefinitely to enjoy the fruits of their own property.
28. Inviting attention to deposition of PW-1, it is
pointed out that PW-1 has no personal knowledge of any document or
of any transaction. It is pointed out that the plaintiff itself had no
funds and, therefore, borrowed money and paid it to the defendants.
However, interest on such borrowed amount was paid through the
amount payable to the defendants. It is stated that even today the
land continues to be reserved for park. Shri Anilkumar submits that
the plaintiff deliberately chose to produce as witnesses persons who
had no knowledge on material aspects of the transaction. He further
submits that the demand for better proposal by the defendants is after
filing of suit i.e. after putting an end to earlier agreements. He has
also invited our attention to various exhibits on record to point out the
loan facility availed by the defendants from the State Bank of India,

one time settlement with it, action under Section 29 of State Financial
Corporation Act by Maharashtra State Financial Corporation, adverse
order of Debts Recovery Tribunal, etc. The document at Exh. 126 is
also pressed into service to show interest paid through pocket of
defendants by the plaintiff to M/s. Zaver and Aspee Bapuna on sum
paid to defendants 1 to 5.
29. Shri Anilkumar, learned counsel submits that all this
material is rightly looked into by the trial Court. The contents or truth
of contents of the document at article “A” is not proved by the plaintiff.
Similarly, assertion that it is antedated has remained unchallenged as
nobody on behalf of defendant No.6–society entered the witness box.
By consenting to Exhs. 136 to 141, defendant No.6 – society
transferred & cast its obligations upon the plaintiff. Defendant No. 6
being a registered Co-operative Society, its actions needed to be
viewed in the light of its object, business and management. Therefore,
notice under Section 164 in the Maharashtra Co-operative Societies Act
(MCS Act) to the District Deputy Registrar was essential. As that
notice has not been issued, no suit could have been filed against
defendant No. 6 and the Court could not have looked into either Article
“A” or other documents to which defendant No. 6 consented. He
further states that agreement at Exh. 156 is nothing but novation of
contract in terms of Section 61 of the Contract Act. The rate of land
was altered and time schedule for payment was also substituted.

Thus, rights of parties were redefined, curtailed and limited, as such
the document needed registration under Section 17. Sections 49 and
50 do not save that document. The purpose for which it is sought to
be used by the plaintiff cannot be seen collateral purpose. Exh. 156,
therefore, has been rightly discarded by the trial Court. As Exh. 156 is
legally not available, the other documents at Exhs. 136 to 141 are also
legally not enforceable and the plaintiff is not entitled to any relief.
Shri Anilkumar, therefore, states that the defendants are not at fault
and when they have shown readiness and willingness to refund the
amount received in terms of clause 11 of Exhs. 136 to 141, a direction
to refund that amount with 10% interest is unsustainable. He states
that as and when the defendants receive the amount of compensation,
they are duty bound to refund the amount received by them through it
to the plaintiff.
30. Shri Dangre, learned counsel, in his reply,
submitted that nature of suit land as prevailing on the date of
institution of the suit and stand of NIT in relation thereto as in 2010
remain & continue to be the same even today. The readiness and
willingness which was prevailing on the date of institution of suit and
evidenced through conduct of plaintiff thereafter, lasts throughout
during the pendency of the suit. The act of plaintiff in filing present
appeal and in prosecuting it by depositing amount of Rs. Four crore,
brings on record that readiness and willingness only. He submits that

the provisions of Section 62 of the Contract Act are not relevant as
Exh. 156 does not create any new right and is only diluting mutually,
the condition in registered agreements i.e. Exhs. 136 to 141.
Therefore, Exh. 156 does not require registration. In any case, it can
be looked into for collateral purposes as per proviso to Section 49 of
the Registration Act. He further states that development of suit land
as a park is in consonance with the object of providing a township on
it. A park may consist of not only residential colony but also provide
other facilities. He, therefore, prays for decree in terms of prayer
clauses in the suit.
31. The following points, therefore, arise for
determination before us :-
1] Whether the appellant/plaintiff is entitled to
relief of specific performance as prayed for?
2] What is the effect of not serving upon the
Deputy Registrar, Co-operative Societies, a notice
under Section 164 of the Maharashtra Co-operative
Societies Act, 1960?
3] Whether the plaintiff has proved its readiness
and willingness to perform the contracts?
4] Whether the contracts between the plaintiff
and the defendants survive after the Nagpur
Improvement Trust decided to acquire the land?
5] Is plaintiff appellant entitled to any relief?

6] Are the defendants liable to refund amount
received by them to the plaintiff with interest?
7] Whether the judgment and decree of trial
Court calls for any interference?
As to point no. 1:---
32. Perusal of prayer clause (i) reveals that the effort of
the plaintiff is to obtain a decree of declaration that agreement to sell
dated 26.06.2000 (Article-A), registered agreements, six in numbers,
and all dated 09.08.2002 (Exhibit nos. 136 to 141), registered Power
of Attorney dated 09.08.2002 at Exhibit-100 and supplementary
agreement dated 10.04.2003 at Exhibit-156 are all subsisting and
enforceable with further relief that the acts and omissions disclosed by
defendant nos. 1 to 5 in their legal notice dated 04.07.2005 at
Exhibit-101 and cancellation of irrevocable Power of Attorney (Ex.100)
is bad in law. By prayer clause (ii), all above mentioned agreements
are sought to be specifically enforced.
33. The trial Court has not exhibited agreement to sell
dated 26.06.2000 and it has been given an article number. That
document i.e. Article-A is entered into between defendant nos. 1 to 5
on one hand, and defendant no.6/ Co-operative Society, on the other
hand. The defendants have alleged that it is antedated and they did
not receive any consideration as mentioned therein. The consideration

reflected therein is of Rs. 1 lakh.
34. Nandkumar Khattumal Harchandani has been
examined by the plaintiff as its witness no.1. In relation to this
document, Nandkumar has deposed that it bears signatures of
Suresh, Jagmohan, Shantidevi, Smt. Shashi and Smt. Kamlesh i.e.
defendant nos. 1 to 5. He has further stated that all of them have put
signatures in his presence. He also states that this agreement bears
signature of his deceased brother Jagdish Harchandani which he has
identified. He then states that the contents of agreement are correct
and then it has been given article number. Cross examination of
Nandkumar by defendants nos. 1, 4 and 5 shows that the defendants
did not cross examine him in relation to his assertions about Article-A.
The said witness only points out the making of signature in his
presence. He does not speak of any agreement between defendant
nos. 1 to 5 on one hand, and defendant no.6, on the other hand. He
also does not state that an amount of Rs. 1 lakh was paid or was
agreed as received in his presence.
35. The defendants, on the other hand, examined one
of them i.e. Shri Suresh Suri as witness. This Suresh is defendant no.
1 and he has deposed that agreement dated 26.06.2000 (Article-A)
was never executed in favour of defendant no.6. He alleges that the
plaintiff made mis-representation to the effect that it would help the

plaintiff in getting the land released from the Urban Land Ceiling
proceedings and to get it regularized under the Gunthewari Act. He
has further deposed that the plaintiff informed that the cut-off date
for regularization was 01.01.2001 and therefore there was need for
antedating the agreement. The plaintiff agreed to abide by
subsequent agreements dated 09.08.2002. He has deposed that the
land was never demarcated and there was no layout on it. He also
deposed that defendant no.6 is sister concern/associate of family
members and friends of the plaintiff and he or any other defendants
never received any consideration on 26.06.2000. This witness has
been cross examined by the plaintiff at length. However, there is no
cross examination on Article-A or the alleged disclosure by the plaintiff
of reason to antedate it or about non-receipt of consideration by the
defendants.
36. Above evidence, therefore, shows that the plaintiff
only proved the signatures of the defendants on Article-A. The
defendants did not dispute their signatures but came up with a
specific plea that they never received the consideration as mentioned
in that document. Defendant no.6 Society could have produced the
audited books of accounts to show that an amount of Rs. 1 lakh was
paid by it to the defendants before 26.06.2000. The suit is filed by
the plaintiff through its Director/Anilkumar Harchandani. This Director
has not entered the witness box. The plaintiff also did not make any

efforts to bring on record the payment of consideration of Rs. 1 lakh to
defendants in lieu of Article-A. The details of bookings done by
defendant no. 6 between 26.6.2000 to 9.8.2002 are also not furnished
to rebut the antedating theory. The best possible & unimpeachable
evidence to throw more light was & must be with the defendant no. 6.
In present matter, due to relationship between the plaintiff & the
defendant no. 6, omission to get in record warrants drawing of an
adverse inference against the said defendant as also against the
plaintiffs. It is, therefore, obvious that the trial Court is justified in
not accepting that document.
37. This brings us to the consideration of later
agreements between the parties vide Exhibit nos. 136 to 141. These
documents are dated 09.08.2002. Agreement to sell at Article-A is
signed on behalf of defendant no.6 by its President Jagdishkumar s/o
Khattumal Harchandani. it is notarized and the Notary has
mentioned that one advocate identified the parties before him.
38. Later agreements at Exhibit nos. 136 to 141 are
signed by respective owner defendant, Shri Anilkumar Harchandani
on behalf of the plaintiff and one Nandkishore Adhau on behalf of
defendant no.6. Agreement at Exhibit-136 is signed by Smt. Shashi
Sahani and Smt. Kamlesh Choudhary and it is in relation to their lands
ad measuring total 17.74 acres. It records that there is a schedule of

payments appended to it. This schedule specifies dates 05.08.2002,
March 2003, December 2003, October 2003 and July 2005 as the
dates of the payment. Two separate schedules are appended showing
the amounts to be paid to Smt. Shashi and Smt. Kamlesh each. This
document is registered with Sub-Registrar on 09.08.2002 itself.
39. The other documents at Exhibit nos. 137 to 141 are
almost identical but refer to other defendants/ land owners and their
respective lands. Similar schedules showing the amounts to be paid
on dates or in months mentioned supra are also annexed with these
exhibits. These agreements show that Anilkumar s/o Nandkumar
Harchandani i.e. the son of PW-1 is the Director of plaintiff Company.
All these documents are signed by defendant no.6 Cooperative Society
through its Secretary Nandkishore Tikaram Adhau & society has been
referred to as confirming party.
40. These agreements stipulate that there is an
agreement for sale between the land owners and the confirming party
i.e. applicant/ defendant no.6. Conspicuously, the date of said
agreement is not mentioned in it. It adds that in furtherance of that
agreement party no.3/Co-operative Society has entered into an
arrangement with various persons and also accepted the booking
amount from them. It also incurred various expenses but later on the
property was brought under reservation and hence defendant no.6

Society found itself not capable of getting over it. The land owners
and party no.3 Society record that they made all possible efforts to
perform the agreement but because of difficulties and lack of
necessary infrastructure, they found it proper to enter into an
agreement with party no.(ii) developer i.e. the plaintiff. It is also
mentioned that the parties desire that the subject property should be
developed in an ideal township to cater to the needy persons at
reasonable cost in the interest of all of them and the purpose for
which party no.3/ Co-operative Society was formed. Accordingly, by
the said agreement at Exhibit nos. 136 to 141, the plaintiff has been
appointed and nominated as developer. This agreement mentions
rate of Rs. 17,7000/- per acre as also the total consideration to be paid
to the respective owners. It also records that the list of persons with
whom defendant no.6/Co-operative Housing Society has entered into
various arrangements, has been separately provided to the
plaintiff/developer. It also mentions that the Society has received the
booking amount from them. The plaintiff/developer has accepted the
liability to fulfill and honour all such commitments of defendant no.6
society towards them. The plaintiff has been authorized to receive the
balance consideration from them. The plaintiff/developer agreed to
pay an amount of Rs. 1/- per square feet of constructed space and/ or
plotable area to defendant no.6 Society.
41. Thus, these agreements at Exhibit nos. 136 to 141

do not speak of any earlier consideration paid by defendant no.6 to the
plaintiff. It does not mention any members or then, name the
members of defendant no.6 Society to whom the plots were allotted
or agreed to be allotted in the proposed township. Defendant no.6
being the Co-operative Society was duty bound to issue shares to its
members and to issue them the allotment letter indicating the plot
number etc. All those details are conspicuously missing in these
agreements.
42. We have already noted supra that defendant no.6
has given its no objection to decree the suit as filed. However, the
facts show that the agreements at Exhibit nos. 136 to 141 cannot
stand independent of Article-A. Article-A is the foundation of Exhibit
nos. 136 to 141. When Article-A itself has not been satisfactorily
proved on record, it is clear that these agreements also cannot be
relied upon.
43. Exhibit-100 on record is the irrevocable Power of
Attorney jointly executed by all the defendants in favour of PW-1
Nandkumar s/o Khattumal Harchandani. This document records that
he has been nominated by the plaintiff Company for the said purpose.
Ex.100, in its preamble refers to the agreement between the land
owners and defendant no.6/ Co-operative Society and thereafter to
subsequent agreements at Exhibit nos. 136 to 141. The Power of

Attorney, therefore, cannot be used independently. The purpose for
which the Power of Attorney has been entered into is to develop an
ideal township on the lands forming suit property.
44. The last document which needs to be looked into is
Exhibit-156. This document neither registered nor notarized. It is
executed by defendant nos. 1 to 5 and the plaintiff as also defendant
no.6 are the parties to it. The narration therein commences from
agreement dated 09.08.2002 and the rates stipulated therein. It then
mentions that after execution of said document the Nagpur
Improvement Trust has regularized 1900 unauthorized lay outs and
the Gunthewari Law also came into existence, with the result ample
space became available and the rates came down. The
plaintiff/developer, therefore, was likely to face problems as it had
already invested huge amount over the project. The parties,
therefore, had a joint meeting and the land owners agreed to reduce
the land rate mentioned in registered agreement dated 09.08.2002. It
mentions that till then the developer had paid an amount of Rs.
2,61,00,250/- to the defendants. The rate per acre was reduced of Rs.
1,25,000/- and new rate agreed was Rs. 15,82,000/- per acre. It also
mentions that after said reduction, the developer/plaintiff paid an
amount of Rs. 1,15,00,000/- to the defendants. The time bound
schedule of payments with registered agreements dated 09.08.2002
was re-framed and as per re-framed schedule, the amount due and

payable in March, 2003 as per the old/original schedule is agreed to
be paid within six months from the date of clearance of Park
reservation. Second installment is agreed to be paid ten months after
such payment and third or last installment was agreed to be paid
nine months after the second payment. This agreement described to
be supplementary agreement executed on 04.10.2003 expressly
mentions that except the changes mentioned supra, all other
conditions of registered agreement dated 09.08.2002 would remain
unchanged and supplementary agreement would form part and
parcel of registered agreement dated 09.08.2002.
45. There is factual dispute about the execution of this
supplementary agreement. According to the defendants, their
signatures were obtained by misleading them under the pretext that it
would facilitate obtaining the orders of de-reservation or clearance.
This document is not registered and the trial Court has refused to read
it into evidence. Considering the legal challenges to this document,
we are not inclined to delve into niceties of factual aspects. Witness
on behalf of land owners namely Suresh (DW-1) has accepted that he
understands English and he did all signatures after reading and
understanding the document.
46. Exhibit-156 mentions name of Nandkishore T.
Adhau as confirming party. Shri Adhau appears to have placed his

signature on behalf of defendant no.6/Co-operative Society. Insofar as
registered documents dated 09.08.2002 at Exhibit nos. 136 to 141
are concerned, those documents carry photograph and signature of
Shri N.T. Adhau. That signature is different even to a naked eye from
both the signatures of this person which appear on last page of
Exhibit-156.
47. Section 17(1)(b) of the Registration Act, 1908,
stipulates that such non-testamentary instrument which purports to
limit or extinguish any right, title or interest, whether vested or
contingent, of the value of one hundred rupees and upwards, to or in
immovable property must be compulsorily registered. Exhibit-156
limits the right of land owners to claim consideration at Rs. 17,7000/-
per acre. It brings down or reduces that rate by Rs. 1,25,000/- per
acre and new selling rate as agreed therein is Rs. 15,82,000/- only
per acre. Thus, the entitlement of the land owners to receive the
larger amount of sale consideration has been curtailed or brought
down substantially. Not only this but as per the registered
agreements dated 09.08.2002, all the payments were also to be
completed by July, 2005. Exhibit-156 shows that payment due to
the land owners in March, 2003 as per Exhibit nos. 136 to 141 itself
was not released till date of its purported execution i.e. till
04-10-2003. As per Exhibit nos. 136 to 141, the next payment was
due in December, 2003, thereafter in October, 2004 and lastly in July,

2005. Vide Exhibit-156 the amount which should have been received
by defendant nos. 1 to 5 in March 2003 is made payable within six
months after clearance from Park reservation granted by the
Competent Authority. Thus, till the event of de-reservation or deletion
of reservation, this period of six months could not have & can not
begun to run. The next installment was made payable 10 months after
the expiry of above mentioned period of six months. Third installment
was to be paid after nine months from the second installment. Thus,
specific time on which the defendants were guaranteed payment in
Exhibit nos. 136 to 141 was deleted. The quantum of installments
was varied, payment thereof was rescheduled & also made contingent
upon the event of clearance from Park reservation. This event or
clearance from Park reservation could not have been controlled by any
of the parties or even by any Government agency. The plaintiff has
pointed out that Writ Petition No.1629 of 2011 filed by it for seeking
declaration of de-reservation has been admitted by this Court on
12-04-2013 for final hearing and it is still pending.
48. This discussion on effect of Exhibit-156 shows that
it is a document which required compulsory registration under
Section 17 (1)(b) of the Registration Act.
49. The plaintiff has relied upon the proviso to Section
49 of the Registration Act, to urge that Ex. 156 can be taken into

consideration for collateral purposes. In this suit, when the plaintiff
seeks specific enforcement of Exhibit-156, it is apparent, that the said
contention is misconceived. The defendants/land owners have invited
our attention to the provisions of Section 50 of the Registration Act, to
urge that in such situation, registered documents like Exhibit nos.
136 to 141 only take effect and must be given primacy as against
unregistered document at Exhibit-156. We do not find it necessary, to
delve on that aspect while considering this issue. The impact of
Section 50 of the Registration Act is being considered while resolving
point no.4, mentioned supra. However, the original time schedule as
envisaged in paragraph no.2 of registered agreement dated
09-08-2002 revealed that the payment at Annexure-B thereto was
not contingent upon any such de-reservation or clearance by the
Planning Authority. It obliged the plaintiff to strictly abide by the
time schedule. If the plaintiff delayed the payment by more than
three months, it had to pay interest at 15% on that amount. In case
of habitual defaults, the land owners were given liberty to terminate
their respective agreements with three months prior notice. Ex. 156
eclipses this scheme in registered documents totally.
50. This, therefore, shows that the land owners who
were to receive the last payment in July, 2005 had not received even
second installment as per Annexure-B and, as per case of plaintiff, that
second installment payable in March, 2003 is indefinitely postponed.

The future payments were also postponed and everything was made
contingent upon a contingent event of securing such de-reservation
or clearance from Park reservation. Thus, Exhibit-156, in fact,
materially substitutes the essential terms and conditions of registered
agreements at Exhibit nos. 136 to 141. Perusal of Annexure-B with
registered agreements show that a small amount was received by the
land owners at the time of registration or before registration. The
major amount was to be received or recovered by them thereafter
only. This portion to be recovered is about 10 times more than the
amount already received by them. The change brought about by
Exhibit-156, therefore, shows that it has material impact on rights of
the parties and on modalities. This discussion, therefore, leaves no
manner of doubt that Exhibit-156 is not sought to be used for any
colateral purpose & the plaintiff company is praying for its specific
performance. It ought to have been therefore duly registered.
51. At one stage, Advocate Shri Anilkumar attempted
to demonstrate before us that it constituted novation of contract. He
also pointed out the provisions of Section 62 of the Indian Contract
Act, 1872, for said purpose. According to Advocate Shri Dangre, said
section has no application in the present matter. Again, we do not find
it necessary to examine this aspect due to the prayers as made by
the plaintiff. The plaintiff seeks specific performance of agreement
to sell at Article-A, of six registered agreements at Exhibit nos. 136 to

141 as also of Exhibit-156. The plaintiff has not prayed for ignoring
Article-A or then unregistered agreement at Exhibit-156. The plaintiff
seeks enforcement of a contract/s between parties as surfacing
through all these documents including an unregistered agreement at
Ex.156 also. Looking to the contract between the parties, the
participation of a Co-operative Society therein is essential. Exhibit
nos. 136 to 141, therefore, cannot be viewed independent of Article-A
and the plaintiff does not want these registered agreements to be
enforced independent of Exhibit-156. Plaintiff nowhere pleads or
agrees to enforce contacts contained only in Exs. 136 to 141 by not
taking note of or by not recognizing the modifications therein vide Ex.
156. Hence, even if we presume that Art. A is a duly proved
document, this discussion does not entitle the plaintiff to a decree for
specific performance. Our findings on other points below also lead us
to the same result.
52. As the plaintiff has not filed the suit on the basis of oral
agreement or any unregistered agreement but on all agreements
together, we find that the judgment of learned Single Judge of this
Court reported at 2012 (3) Mah.L.J. 370 Nirav Dipak Modi vs.
Najoo Behram delivered at interlocutory stage can not assist the
plaintiffs. Admission of their signatures by the defendants on Art. A
does results in proving the correctness or truth of its contents is the
proposition advanced by citing the judgment delivered by the Hon.

Apex Court in Narbada Devi Gupta vs. Birendar Kumar Jaiswal &
another – (2003) 8 SCC 745. This ruling shows that their as against
plea of tenancy based upon the undisputed signed rent receipts issued
by the plaintiff landlord, landlord claimed that he gave a blank signed
paper to the defendant to conduct litigation. After specific averment of
the tenant, plaint was not amended & no plea of fraud was raised. The
document was admitted & given exhibit number. The plaintiff could not
explain how the rent receipts having thumb impression & signatures
went in custody of tenant. Here the defendants specifically urge that
the defendant 6 cooperative housing society is the sister concern of
plaintiff, an antedated document was entered into & they did not
receive any amount. Defendant no. 6 cooperative housing society
could not have paid the advance to the defendants in cash or without
accounting for it. Hence, the above ruling can not govern the present
controversy. Division Bench of this Court in Imagedas vs. Bajaj
Leathers reported at 2011 (4) Mh.L.J. 926, in paragraph 9 found
that having encashed the cheque received with undisputed covering
letter mentioning the agreement & balance payment towards final
consideration, effort to urge the agreement as sham & bogus in written
statement & attempt to lead oral evidence on it but inconsistent with
the documents, could not have been countenanced. Again the view is
reached in peculiar facts which supported the case of that plaintiff.
Here, as discussed supra, the emerging position is otherwise &
discredits the appellant plaintiffs.

As to point no. 2 :---
53. At this stage, it would be proper to understand the
impact of absence of notice under Section 164 of the Maharashtra Cooperative
Societies Act. The notice is necessary if the suit is filed
against a Co-operative Society in connection with its business or
management. The legislature has not prescribed service of notice
upon a Co-operative Society but notice is required to be served upon
an officer of the State Government namely the Registrar (District
Deputy Registrar) of Co-operative Societies. This officer has been
given power to supervise and monitor the working of a Co-operative
Society to see that it functions democratically in accordance with the
parent Act and its bye-laws. Notice, therefore, is not meant or issued
for the benefit of Co-operative Society. The purpose of the provisions
is to enable said officer of the State Government to maintain proper
vigil on administration, business and management of such society.
Contention that such notice can be waived by defendant no. 6 is,
therefore, erroneous.
54. The defendant no.6 Society, in the present matter,
is duly registered under the Maharashtra Co-operative Societies Act.
The agreement to sell dated 26.06.2000 (Article-A) was entered into
by it through its President Jagdishkumar who appears to be real
brother of PW-1 and uncle of the Director of the plaintiff company.
While entering into registered agreements dated 09.08.2002

defendant no.6 Society states that it has entered into various
agreements with persons and received the booking amount from
them. List of such persons is claimed to be handed over to the
plaintiff/developer. The developer has agreed to shoulder the liability
to fulfill and honour the commitment of the Society towards these
persons. The plaintiff/developer is also authorized to receive the
consideration from such persons. Thus, the nature of this
arrangement between defendant no.6 Society and the so-called
persons from whom it has received the booking sums is important.
Such persons ought to be the members of defendant no.6/ Cooperative
Society. If the Society has to abdicate its function in favour
of the developer, there has to be proper resolution passed by its
General Body authorizing this course of action. The agreement to sell
at Article-A does not show any such resolution while entering into
contract with defendant nos. 1 to 5. The registered agreements at
Exhibit nos. 136 to 141 also do not mention such resolution to support
transferring liability of these customers of defendant no.6 to the
plaintiff. We cannot and need not go into the validity of all these acts
of defendant no.6. We have seen some difference in signature of Shri
Adhau who has signed registered agreements on behalf of the Society
and who is also shown to have signed Exhibit-156. The responsible
officer of the State Government like the District Deputy Registrar
could have seen through all this and arrived at proper conclusion to
safeguard the interest of the members of defendant no.6 Society. He

could have also summoned from defendant 6 the books of accounts,
membership records & verified the exact nature of transaction. The
purpose of serving suit notice upon that authority is to facilitate such
enquiry. As the plaintiff did not issue that notice, this scrutiny is
avoided. We, therefore, find that the trial Court has rightly concluded
that the service of notice under Section 164 of the Maharashtra Cooperative
Societies Act upon defendant no.6 Society was must. The
defendant no.6 Society has in the present matter merely acted as a
puppet in the hands of the plaintiff. We can not forget that the
defendant no.1 has specifically deposed that the said Co-operative
Society is the sister concern of the plaintiff. This statement is
supported by the relationship between the parties who have come
together against landowners.
55. There is no proof of its any other activity though the
defendants 1 to 5 urge that it is a sister concern of the plaintiff. The
circumstances here cast doubt on role of a registered cooperative
housing society & lend credence to the stand of defendants. Precisely
this may be one of the mischiefs sought to be remedied by the State
Legislature through section 164. The District Deputy Registrar may
have called for records to find out propriety, legality etc. of the steps
taken by the Society. 2007 (2) All MR 306 – Pimpri Refugee
Industrial Cooperative Society vs. Parmanand Bhimandas
Talreja is the view of learned Single Judge of this Court in a writ

petition filed by the defendant seeking return of plaint under O.VII R.
11 after its disposal. Observations in paragraph 5 of the judgment
show that requirement of serving notice not upon the defendant
cooperative society but upon the Registrar ie officer of the State
Government was not brought to the notice of this court at all. The said
judgment therefore is not an authority for the proposition that a
cooperative society can dispense with or defeat the mandate of S. 164
of the MCS Act.
As to point no. 3:---
56. The other question to be looked into is, whether the
plaintiff has proved its readiness and willingness to perform its
obligation as per the agreements between the parties. The
arguments of the plaintiff in this respect show that the plaintiff insists
for considering that readiness and willingness only in terms of
unregistered agreement at Exhibit-156. The schedule of payment with
respect to which the readiness and willingness could have been
examined in law is Annexure-B with registered agreements at Exhibit
nos. 136 to 141. How the unregistered document has attempted to
introduce a material alteration therein has been mentioned supra.
Thus, after paying the land owners about 10% amount, the payment
of balance amount has been indefinitely postponed by device of an
unregistered agreement. The defendants correctly point out that the
plaintiff could not & did not complete the payment as per the

defendants did not agree to the compromise & hence, the suit
continued. In that suit the effort of plaintiff is to force the unregistered
agreement at Ex. 156 on unwilling defendants 1,4 & 5. Plaintiff did not
abide by agreements at Ex. 136 to 141. We have already found that
Ex. 156 is not enforceable against these defendants. The discussion
reveals that the plaintiff was never ready & willing to follow
agreements at Ex. 136 to 141.
Plaintiff has placed reliance upon the judgment of
Hon. Apex Court reported at (2004) 6 SCC 649- P.D'ouza vs.
Shondrilo Naidu to buttress the stand that when at a later date, the
landowners accept payment without protest, the time can not be
construed as an essence of contract. Hon. Apex Court also holds that
escalation in price of property can not be the ground to deny relief of
specific performance. Here, the plaintiff itself has not accepted theory
of novation of contract or has not relied upon any oral agreement. The
landowners no doubt accepted amount of Rs. 50 Lac but it is during
pendency of suit while parties were attempting a compromise. Plaintiff
itself argues that the defendants 1,4 & 5 were asking him to better the
terms. In present case, Art. A which constitutes very foundation of
everything is not duly proved. Later agreements to develop at Exs. 136
to 141 are found not surviving after application by NIT for acquisition
on 14.1.2005. This ruling therefore has no bearing. Division Bench
judgment of this Court in 2008 (6) Mh.L.J. 308-- Jeetmal vs.
Neelkanth, Single judge view in 2009 (1) Mh.L.J. 471- Ambadas

vs. Shaikh Razaq & 2011(6) Mh.L.J. 84- Preetam Kaur vs.
Prakash Jaiswal which follow the same line need no consideration.
Also there can not be any debate about the proposition laid down in
2010 (3) Mh.L.J. 175 – Shrikrishna vs. Vitthal that unless there
are strong equities against the plaintiff, ordinarily specific relief needs
to be decreed. However, here our findings are otherwise & answer to
various points framed constrain us to sustain the judgment & decree of
the trial court.
Similarly the division bench judgment Nilkantha
Dhondiba Chavan vs. Unabai w/o Anant Desai -(2005) 2
Mah.L.J. 8 which lays down that an inference of unreadiness or
unwillingness can be drawn against the plaintiff only if fails to deposit
after the express court order to do so in terms of S. 16(c) of the
Specific Relief Act may show that reliance upon long pendency of Ex.
45 or 47 before the trial court can not be viewed adversely and used
against the plaintiff. But then if such a purchaser deposits the balance
amount voluntarily, in appropriate case, it can be viewed a positive
material in its favour. Learned Single Judge of this Court in
Chandraprabha vs. Maruti – 2008 (6) Mah.L.J. 546 again taken
the similar view with further observation that readiness & willingness
can be ascertained from material on record. (2012) 5 SCC 712 –
Narinderjit Singh vs. North Star Estate Promoters Limited relied
upon by the plaintiff/appellant itself shows that the readiness &
willingness is required to be decided with reference to conduct of the

parties. Though the trial court has not properly appreciated the
significance in law of the positive direction in terms of S.16(c), that by
itself does not entitle the plaintiff to a decree in present matter.
As to point no. 4:---
57. The point, whether the contract between the
parties survived after the Nagpur Improvement Trust decided to
acquire the land now needs consideration. The fact that the land
owners objected vide Exhibit-229 on 15.03.2000 to propose
reservation in draft development plan is not in dispute. Article-A dated
26-06-2000 appears to be born thereafter. The registered
agreements at Exhibit nos. 136 to 141 are dated 09.08.2002. The
unregistered agreement at Exhibit-156 is dated 03.10.2003. In terms
of registered agreements dated 09.08.2002 the defendants executed
a Power of Attorney in favour of PW-1/Nandkumar. PW-1 issued notice
at Exhibits-114 and 115 on 05.04.2003 & moved for clearing the land
of reservation. The Nagpur Municipal Corporation (other body) replied
to this notice on 06.06.2003 and pointed out the defects therein. This
Power of Attorney, thereafter, has issued fresh notice under Section 49
of the Maharashtra Regional & Town Planning Act vide Exhibit-118.
Section 49 obliges the Planning Authority to acquire the land, if the
procedure therein is complied with. Under said section, the
unsatisfied land owners who are not in a position to beneficially use
their lands or to sell it at a competitive price, are allowed to serve a

purchase notice. The defendant nos. 1 to 5, accordingly, served the
purchase notice through the plaintiff and that purchase notice is
confirmed by the State Government vide Exhibit-121 on 23.03.2004.
The acquiring agency namely the Nagpur Improvement Trust had
already issued earlier a public advertisement for development of a
Park on subject land on 05.08.2003 vide Exhibit-198. The Nagpur
Improvement Trust applied for acquisition on 14-01-2005. Under the
scheme of Section 49, if within one year from the date of confirmation
of the purchase notice, there is failure to make an application to
acquire the reserved land, reservation is deemed to have lapsed.
Here, that application has been moved well within time and the NIT
also deposited an amount of Rs. 5,31,00,000/- for its acquisition on
26.09.2006. It is, therefore, apparent that the purchase notice issued
by the land owners through the plaintiff became redundant after
14.01.2005.
58. Various events after 14.01.2005 pointed out to this
Court are the efforts made by the Power of Attorney or the plaintiff
thereafter to get the land de-reserved or then to seek authorization in
favour of the land owners to develop it for the purpose for which it is
earmarked in Development Plan. The lengthy correspondence in this
respect shows that lastly, vide Exhibit-263, on 04.01.2010 the
meeting took place in this respect. Perusal of this document shows
that it is the proceedings of said meeting conducted in the chamber of

the Chief Secretary of the State of Maharashtra on 04.01.2010. The
meeting is attended by PW-1/Nandkumar, Chairman of the Nagpur
Improvement Trust and its Executive Engineer. It brings on record
fact that the total reservation in development plan for park is fastened
on 52.62 Hectares. PW-1 had Power of Attorney regarding only about
50% of that land while remaining land was / is owned by four to five
other persons. These other owners have no contract with plaintiff & are
strangers to this litigation. The purchase notice served by PW-1 was
only in relation to 27.43 Hectares of land. It is also noticed that the
Nagpur Improvement Trust has implemented the development
proposal and has deposited 2/3rd amount of compensation payable to
the land owners. The meeting concludes by observing that the
Nagpur Improvement Trust can acquire the entire land and then
develop it itself or, then get it developed through private developers.
In alternate, it is also noted that the land owners can also participate
as stake holders in work of Park development. At the end, the
requirement of a minor modification in terms of Section 37 of the
Maharashtra Regional & Town Planning Act has been taken note of.
The proceedings also mention that if the Park reservation was to be
developed on participatory basis, the necessary modification will be
required to be undertaken and hence the NIT was advised to submit
the requisite proposal. The matter has not progressed thereafter and
Writ Petition 1629 of 2011 filed by the plaintiff is still pending.

59. In the light of arguments and the contents of
Exhibit nos. 136 to 141, it is seen, that the subject land cannot be
developed as a ideal township after the Nagpur Improvement Trust
moved the application on 14.01.2005. Not only Ex. 198 but also Ex.
200 dated 6.1.2005 show the reservation as “Park” with allied
permissible user as amusement park, forestry / nursery, botanical or
zoological garden or the bird sanctuary. This reservation is on lands
which fall in “green belt control scheme”. Thus, the submission of
plaintiff's that it can develop it as a residential scheme is
unsustainable. In so far as the legal contracts it & contesting
defendants are concerned, their design to establish an ideal town failed
after NIT filed application to start the acquisition proceedings as per
law. The sequence of events shows that after the plaintiff and the
Power of Attorney made attempts to seek permission to develop the
subject land as a Park in favour of the land owners by opposing
acquisition and filed application at Exhibit-127 on 03.05.2005, the land
owners distanced themselves and chose to serve the legal notice on
04.07.2005 upon the plaintiff.
60. We, therefore, find that the trial Court is justified in
observing that the contract between the parties was frustrated on
account of these developments. Advocate Shri Dangre has urged that
the trial Court was not called upon to look into the aspect of
frustration. However, in paragraph no.19 of the plaint the plaintiff has

urged that as the process of de-reservation is in progress the subject
contracts are not yet frustrated as contemplated under Clause-11 of
the agreement dated 09.08.2002. We find that the contracts, whether
at Exhibit nos. 136 to 141 or then at Exhibit-156 got frustrated on
14.01.2005. As such, there is no question of plaintiff being ready and
willing to perform its part of agreement after said date. It can not force
the defendant to participate in developing the park reservation on the
subject lands.
61. In view of this finding, we need not delve in detail
upon impact of application at Exhibit-47 moved by the land owners in
the pending suit calling upon the plaintiff to deposit the balance
amount of sale consideration. The application was opposed by the
plaintiff and it remained pending for more than six years and was
ultimately not pressed by the land owners. There was no order
passed by the trial Court calling upon the plaintiff to deposit any
amount. Hence, in the light of express provision in Section 16(c) of
the Specific Relief Act, in absence of such order the non deposit of
balance amount by the plaintiff cannot be taken as an indication of its
unreadiness or unwillingness. However, these events have occurred
after the Nagpur Improvement Trust moved for acquisition on
14.01.2005 and therefore, are not determinative. The contention that
the plaintiff paid an amount of Rs. 50 lakhs during the pendency of
suit or defendants accepted it, is also irrelevant for very same

reasons. The argument that the defendants wanted to extort more
amount from the plaintiff and therefore they avoided the compromise
during the pendency of the suit is hardly relevant. The fact that the
defendant nos. 2 and 3 have during the pendency of suit, executed
sale-deeds of their respective portions in favour of the plaintiff by
accepting such compromise, is again not decisive. The contracts
between the parties came to an end and the subsequent sale by these
defendants therefore do not improve the case or cause of the
plaintiff against defendant nos. 1, 4 and 5. The plaintiffs have also
pointed out that the Nagpur Improvement Trust did not deposit the
requisite amount of Rs. 11.38 Crores for paying compensation to the
land owners. This failure on part of the Nagpur Improvement Trust
cannot revive the contracts between the parties which have lapsed on
14.01.2005. Similar arguments on helping hand provided by the
plaintiff to the defendants to repay their loans to the State Bank of
India, SICOM, Maharashtra State Finance Corporation, etc. are not
relevant.
As to point no. 5:---
62. We briefly refer here to the other judgments cited by Adv.
Dangre. (2015) 1 SCC 597 – K. Prakash vs. B.R. Sampathkumar
is the judgment where primacy of discretion exercised by trial court in
decreeing the suit & limited scope available to the appellate court to
interfere with it has been pointed out by the Hon. Apex Court. It also

found that mere escalation in prices could not have been the reason to
unsettle that decree & substituted sale consideration of Rs. 25 Lac in
place of Rs. 16 Lac. Niwas Builders vs. Chanchalaben Gandhi –
2003 (3) Mah.L.J. 312 is the division bench judgment of this Court
which upholds rejection of a decree for specific performance. The
material on record there has been considered & we need not dwell
more upon the law in this respect. (2007) 3 Mah.L.J. 402 – Chheda
Housing vs. Bibijan Shaikh Farid considers challenge at an
interlocutory stage. Rajesh vs. Murlidhar – (2008) 1 Mah.L.J. 798,
Dashrath vs. Shyam – 2008 (4) Mah.L.J. 116 are the division
bench judgment which essentially evaluate the conduct of parties. We
have already appreciated said conduct & the law governing it supra.
The cumulative effect of the discussion & the findings reached by us is
that on account of each of such findings, the plaintiff can not be given
any relief & its suit can not be decreed. Adv. Anil Kumar has also
tendered a compilation of the precedents. Most of them figure in the
impugned judgment of the Trial Court. As we are inclined to sustain &
uphold that judgment to the extent it dismisses the prayer for specific
performance, we do not find it necessary to evaluate those judgments.
As to point no. 6:---
63. Defendant nos.1, 4 and 5 have filed a cross
objection. They rely upon Clause-11 in the registered agreements
dated 09.08.2002 to urge that they have to refund the amount of

Rs. 4,16,70,952/- (ie Rs. Four Crore Sixteen Lakh Seventy Thousand
Nine Hundread & Fifty Two only) to the plaintiff only after receipt of
compensation from the Nagpur Improvement Trust and that too
without any interest. The trial Court, therefore, could not have called
upon them to pay that amount with 10% interest. We find that said
amount is determined by the Trial Court in paragraph 53 of its
judgment & the defendants do not assail it as incorrect. The
agreements dated 09.08.2002 at Exhibit nos. 136 to 141 envisaged
the refund, if the efforts to get the lands derserved failed. Only then
the land owners have to refund the amount of plaintiffs through the
compensation received by them from the NIT and Clause-11 also does
not stipulate any interest upon it. This Clause or the fact that does
not undergo any change due to Ex. 156, is accepted by the plaintiffs.
In this situation, it is apparent, that the plaintiff is entitled to be
reimbursed but only through the amount of compensation paid to the
land owners by the Nagpur Improvement Trust & that too, without any
interest.
As to point no. 7 :--
64. The judgment and decree of trial Court, therefore,
calls for limited interference & needs modification. It is necessary to
delete the decree & direction to the defendants 1,4 & 5 to refund the
amount received by them from plaintiff with 10% interest. Instead the
defendants 1,4 & 5 are directed to refund that amount of Rs.

4,16,70,952/- (ie Rs. Four Crore Sixteen Lakh Seventy Thousand Nine
Hundred & Fifty Two only) after receipt of the compensation for the
subject lands from the acquiring agency i.e. NIT. If the defendants do
not repay said amount within four weeks of receipt of compensation
from the NIT/State Government, they shall pay simple interest at 10%
on it for the period beyond such four weeks. If the plaintiffs do not
get the refund of Rs. 4,16,70,952/- within four weeks mentioned
above, it will be open to them to recover that money with accrued
interest by filing an execution or by taking recourse to other coercive
measures as per law. It is also open to the plaintiff's to withdraw the
amount of Rs. Four Crore in deposit with the registry of this Court with
interest accrued upon it. However, parties shall bear the costs as
incurred. A decree be drawn accordingly to that effect.
65. Appeal filed by the plaintiff is dismissed. Cross
objection of the defendants 1,4 & 5 is allowed by modifying the decree
against them to the extent stipulated above. Special Civil Suit No. 82
of 2006 filed by the appellant or plaintiff shall stand decreed partly but
without any costs.
66. At this stage, learned Advocate Shri Dangre for the
appellant, seeks continuation of interim arrangement for a period of
ten weeks’ more. Learned Advocate Shri Anilkumar for respondent
nos. 1, 4 and 5 submits that instead of this Court issuing this direction,

the respondent nos. 1, 4 and 5 shall maintain the situation as it is for a
period of 10 weeks’. In view of the undertaking which we take on
record, no orders are necessary.

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Tuesday, 31 January 2017

When plaintiff has failed to prove readiness and willingness to perform his part of contract in suit for specific performance of contract?

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