Case: HARI STEEL AND GENERAL INDUSTRIES LTD Vs. DALJIT SINGH

during trial in the suit. 35. In the judgment in the case of Karam Kapahi & Ors. vs. Lal Chand Public Charitable Trust & Anr. (supra), this Court has interpreted the expression otherwise as used in Order XII Rule 6 of CPC and has held that the scope of the said provision of the Order XII Rule 6 is wider in comparison to provision of Order XII Rule 1 of CPC. It is true that after amendment, scope of the Rule under Order XII Rule 6 is expanded but at the same time the expression otherwise inserted in Order XII Rule 6 is also to be considered within the framework of the Rule but not beyond. In any event, even in a given case, the admissions are categorical and unconditional, whether any inference can be drawn on admissions having regard to documents placed on record, is a matter to be considered having regard to facts of each case. There cannot be any straight jacket formula to extend the benefit of Order XII Rule 6 of CPC. 36. In the judgment in the case of Usha Rectifier Corporation (India) Limited vs. Commissioner of Central Excise, New Delhi (supra) relied on by learned senior counsel Sri Shyam Divan, this Court has held that entries made in the balance sheets filed on behalf of the company are to be treated as admissions and the appellant cannot turn around and take stand, contrary to such admissions but in this case from the beginning it is the case of the appellants that the third respondent is in connivance with the respondents-plaintiffs. 37. In this case it is to be noted that the suit was filed on 1.11.2006 and written statement was filed on 25.01.2007 and the application under Order XII Rule 6 was filed on 9.2.2007. In year 2010 issues and additional issues were framed and trial is also commenced. In that view of the matter, there is no reason to pass the impugned order now for decreeing the suit on claimed admissions, in exercise of power under Order XII rule 6 of CPC at this stage. In view of the serious factual disputes and the defence of the appellants in the suit, it is not permissible for making roving inquiry for disposal of the application filed under Order XII Rule 6 of CPC. When the trial is already commenced, it is desirable to record findings on various contentious issues and disputes in the suit on merits by appreciating evidence but at the same time there is no reason or justification to decree the suit at this stage. For the aforesaid reasons, we are of the view that the impugned judgment of the High Court cannot be sustained and is liable to be set aside on this ground alone. 38. Further it is also to be noted that the suit is for specific performance of the agreement of sale. The relief sought is equitable and discretionary relief. The readiness and willingness on the part of plaintiffs to execute the document is to be pleaded and proved. At first instance in the plaint filed on 1.11.2006 there was no such averment at all. Subsequent to the filing of the written statement, interlocutory application No.3370 of 2007 was filed on 20.3.2007 to incorporate the plea of readiness and willingness on the part of the respondents-plaintiffs in the plaint, which was allowed subsequently. The readiness and willingness on the part of the respondents-plaintiffs cannot be inferred merely on the ground that they have deposited the balance amount after the impugned order is passed. Even in absence of refusal of the application for amendment of written statement, it is obligatory on the part of the plaintiffs to prove that they were willing and ready to perform the contract, to claim the equitable relief of specific performance. In the judgment relied on by Sri P.S. Narsimha, learned senior counsel in the case of Aniglase Yohannan vs. Ramlatha and Ors. (supra), this Court has held that the basic principle behind Section 16(c) read with Explanation (ii) of the Specific Relief Act, is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. In the aforesaid judgment this Court has further held that the court is to grant relief on the basis of the conduct of the person seeking relief. Paras 12 and 13 of the judgment read as under:- 12.The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. The provision imposes a personal bar. The Court is to grant relief on the basis of the conduct of the person seeking relief. If the pleadings manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief. 13. Section 16(c) of the Act mandates the plaintiff to aver in the plaint and establish the fact by evidence aliunde that he has always been ready and willing to perform his part of the contract. On considering almost an identical fact situation it was held by this Court in Surya Narain Upadhyaya v. Ram Roop Pandey 1995 Supp (4) SCC 542 : AIR 1994 SC 542 ] that the plaintiff had substantiated his plea. The said judgment of this Court also supports the plea of the appellants herein. 39. The learned counsels appearing for the appellants, have also contended stating that as per the directions of the High Court remaining balance amount, as per the agreement dated 03.05.2005, is not deposited by the respondents-plaintiffs, and the said amount is deposited by a third party who has no concern in the matter. In view of our findings recorded above on other issues, we are of the opinion that it is not necessary to deal with the said contention.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]27. In the case on hand, at first instance a Memorandum of Understanding was entered into by the appellants with the respondent No.4 i.e. Mr. Praveen Kumar Jolly on 24.05.2003 with respect to half of the suit property. It is the case of the appellants that due to non-compliance of the terms of MOU, by Mr. Praveen Kumar Jolly, the said MOU was terminated in August, 2004 and subsequently an arrangement/contract is entered into with respondent nos.1 and 2 – plaintiffs on 7.4.2005 and subsequent agreement dated 3.5.2005. It is the specific case of the appellants that contractual terms were not crystallized as such there were several blanks in the agreement dated 3.5.2005. While it is the case of the respondents-plaintiffs that an amount of Rs. Five crores was paid, i.e. Rs. Two crores by way of cheque and Rs.Three crores by way of cash, the same is seriously disputed by the appellants-plaintiffs stating that only an amount of Rs. Two Crores was paid and the payment of Rs. Three crores is a fabrication of the agreement to sell dated 3.5.2005 on pages 3 and 4 of the document. Based on the earlier MOU by the appellants with Mr.Praveen Kumar Jolly i.e. 4 th respondent herein, 4 th respondent has filed a suit for specific performance of the agreement in CS(OS) No.1508 of 2005 in which conditional order was passed. It is the case of the respondents-plaintiffs that, when such conditional interim order was notified in the newspaper, they have come to know about the earlier agreement entered into by the appellants with respondent No.4 and they approached the 4 th respondent and handed over the original agreement dated 3.5.2005 and the receipt to the 4 th respondent. It is the specific case of the appellants that when they have come to know about the document dated 3.5.2005 in the suit filed by 4 th respondent herein, they have come to know tampering and fabrication of the document, as such they have filed I.A.No.61 of 2006 in CS(OS) No.1508 of 2005 under Section 340 of Cr.P.C., on 3.1.2006. The present suit in CS(OS) No.2046 is filed by the respondents-plaintiffs, subsequently, on 1.11.2006. In the said suit, the appellants-defendants have filed written statement on 25.1.2007 by raising specific preliminary objection that the agreement dated 3.5.2005 is forged and fabricated, as such, they are liable for prosecution under Section 195(1)(b) of Cr.P.C. In the written statement, apart from other allegations, specific plea is made that suit is barred in view of provisions of Section 16(c) of the Specific Relief Act, 1963, in absence of any plea of readiness and willingness by the respondents-plaintiffs. While admitting the arrangement entered into with the respondents-plaintiffs, it is the case of the appellants that the terms of the agreement were not concretized. As such almost all the necessary columns were left blank in the agreement dated 3.5.2005. It is not necessary to refer in detail the further averments made in the written statement for the disposal of this appeal before us. Subsequent to the filing of the written statement, the respondents-plaintiffs have filed the present application under Order XII rule 6 of CPC on 9.2.2007 for which reply was filed by the appellants on 19.3.2007. In the reply filed on behalf of the appellants and other defendants in I.A.No.1557 of 2006, opposing the relief sought for on the ground that in absence of any categorical and unconditional admissions, relief cannot be granted. The application in I.A.No.1557 of 2007 is filed only on the ground that in the bail petition filed by the appellants, in connection with the criminal case registered, arising out of a complaint filed by the 4 th respondent, the appellants counsel has pleaded his readiness to fulfill the contract entered into on 3.5.2005. Except the said plea of admission there is no other admission, claimed in the application. The learned Single Judge has rightly rejected the application vide order dated 24.7.2017. In the order the learned Single Judge of the High Court has held that in view of the stand of the appellants that the agreement dated 3.5.2005 is a fabricated one and the signatures of the 2 nd appellant are fabricated on pages 3 and 4 of the agreement, such issues can be resolved only after trial. But same is no ground to deliver judgment on claimed admissions.28. On appeal the Division Bench has set aside the order of the learned Single Judge and held that the appellants have admitted execution of the agreement dated 3.5.2005. At this stage, it is to be noticed that all throughout, the case of the appellants is that though they have entered into arrangement/agreement on 7.4.2005 and 3.5.2005 with the respondents-plaintiffs and received Rs. Two crores by way of cheque but such agreement is fabricated by forging signatures on pages 3 and 4 of the agreement. In view of such stand of the appellants, we are of the view that the mere admission of entering into arrangement/agreement dated 3.5.2005 cannot be termed as a categorical and unconditional admission for the purpose of delivering judgment by allowing the application filed under Order XII Rule 6 of CPC. It is to be noticed at this stage that even before filing of the present suit in CS(OS) NO.2046 of 2006, when the document dated 3.5.2005 was produced in the suit filed by the 4 th respondent Mr. Praveen Kumar Jolly, the appellants have filed I.A. No.61 of 2006 in CS(OS) No.1508 of 2005 on 3.1.2006. In the aforesaid I.A., there was a challenge to the genuineness of the agreement dated 3.5.2005 which application was subsequently disposed of on 7.12.2016. The present suit in CS(OS) No.2046 of 2006 was filed subsequently on 1.11.2006. The Division Bench of the High Court has proceeded on the premise that there is no dispute on the agreement to sell dated 3.5.2005. At this stage, it is to be noted that the suit in C.S.(OS) No.1508 of 2005 was filed for specific performance of the agreement by the 4 th respondent and on production of the agreement to sell dated 3.5.2005, they have already filed I.A.No.61 of 2006, alleging that there was a fabrication of the document dated 3.5.2005 and their signatures were forged on pages 3 and 4. In view of such plea of appellants, we are of the considered opinion that such admissions are erroneously treated as categorical and unconditional admissions by the Division Bench of the High Court for the purpose of disposal of the application filed under Order XII Rule 6 of CPC. Further, the Division Bench has relied on balance sheets of the first appellant company for the years 2004-05, 2005-06 and 2006-07 and also the letter alleged to have been addressed by the auditor. On the aforesaid documents, the plea of the appellants is that such documents also are forged and fabricated balance sheets which were submitted before the ROC by their auditor Mr. S.R. Varshney in connivance with Mr. T.R. Arya (respondent No.3 herein), who is a common chartered accountant for the appellants and respondent Nos. 1 and 2. Allegations and counter allegations are made by the parties in respect of balance sheets and other documents relating to the company, the merits of which can be gone into only at the time of trial where the parties will have opportunity of adducing evidence and explain their stand33. By applying the ratio laid down by this Court in the aforesaid judgments, it is to be held that there are no categorical and unconditional admissions, as claimed by the respondents-plaintiffs. In view of the stand of the appellants that, the pages 3 and 4 of the agreement dated 3.5.2005 are tampered and their signatures are fabricated, when specific issue is already framed, it cannot be said that there are categorical and unconditional admissions by the appellants. Mere admission of entering into arrangement/contract on 7.4.2005 and 3.5.2005 itself cannot be considered in isolation, without considering the further objections of the appellants that certain pages in the agreement are fabricated. In case the appellants prove that the agreement is fabricated as claimed, post trial it goes to the root of the case on the claim of the respondents- plaintiffs. Hence, we are of the view that the aforesaid judgments fully support the case of the appellants34. Learned counsel for the respondents-plaintiffs Sri Shyam Divan, relying on the judgment of this Court in the case of Uttam Singh Duggal & Co. Ltd. vs. United Bank of India (supra) has submitted that in view of the balance sheets and resolutions of the company, they are to be considered as admissions otherwise it will amount to narrowing down the scope of the Rule itself.In the aforesaid judgment itself, this Court has held that when a statement of admission is brought before the Court, as long as the party making the statement is given sufficient opportunity to explain such admissions, judgment on admission can be delivered. In the case on hand it is to be noted that the relief claimed under Order XII Rule 6 of CPC by filing a written application claiming admission only based on the statement made by the advocate in the bail application, and there is no other pleaded admissions, in the application filed by the respondents-plaintiffs. It is a trite principle that any amount of evidence is of no help, in absence of pleading and foundation in the application. It is true that when categorical and unconditional admissions are there, judgment on admission can be ordered, without narrowing down the Rule but at the same time the judicious discretion conferred on the court is to be exercised within the framework of the Rule but not beyond. Even on balance sheets of the company and the note of one of the Directors, it is the specific case of the appellants that the third respondent, in connivance with the respondents-plaintiffs, is also working against the appellants. In that view of the matter the claim of the respondents-plaintiffs relying on the documents relating to company is to be considered with reference to the defence of the appellants during trial in the suit35. In the judgment in the case of Karam Kapahi & Ors. vs. Lal Chand Public Charitable Trust & Anr. (supra), this Court has interpreted the expression otherwise as used in Order XII Rule 6 of CPC and has held that the scope of the said provision of the Order XII Rule 6 is wider in comparison to provision of Order XII Rule 1 of CPC. It is true that after amendment, scope of the Rule under Order XII Rule 6 is expanded but at the same time the expression otherwise inserted in Order XII Rule 6 is also to be considered within the framework of the Rule but not beyond. In any event, even in a given case, the admissions are categorical and unconditional, whether any inference can be drawn on admissions having regard to documents placed on record, is a matter to be considered having regard to facts of each case. There cannot be any straight jacket formula to extend the benefit of Order XII Rule 6 of CPC37. In this case it is to be noted that the suit was filed on 1.11.2006 and written statement was filed on 25.01.2007 and the application under Order XII Rule 6 was filed on 9.2.2007. In year 2010 issues and additional issues were framed and trial is also commenced. In that view of the matter, there is no reason to pass the impugned order now for decreeing the suit on claimed admissions, in exercise of power under Order XII rule 6 of CPC at this stage. In view of the serious factual disputes and the defence of the appellants in the suit, it is not permissible for making roving inquiry for disposal of the application filed under Order XII Rule 6 of CPC. When the trial is already commenced, it is desirable to record findings on various contentious issues and disputes in the suit on merits by appreciating evidence but at the same time there is no reason or justification to decree the suit at this stage. For the aforesaid reasons, we are of the view that the impugned judgment of the High Court cannot be sustained and is liable to be set aside on this ground alone38. Further it is also to be noted that the suit is for specific performance of the agreement of sale. The relief sought is equitable and discretionary relief. The readiness and willingness on the part of plaintiffs to execute the document is to be pleaded and proved. At first instance in the plaint filed on 1.11.2006 there was no such averment at all. Subsequent to the filing of the written statement, interlocutory application No.3370 of 2007 was filed on 20.3.2007 to incorporate the plea of readiness and willingness on the part of the respondents-plaintiffs in the plaint, which was allowed subsequently. The readiness and willingness on the part of the respondents-plaintiffs cannot be inferred merely on the ground that they have deposited the balance amount after the impugned order is passed. Even in absence of refusal of the application for amendment of written statement, it is obligatory on the part of the plaintiffs to prove that they were willing and ready to perform the contract, to claim the equitable relief of specific performance. In the judgment relied on by Sri P.S. Narsimha, learned senior counsel in the case of Aniglase Yohannan vs. Ramlatha and Ors. (supra), this Court has held that the basic principle behind Section 16(c) read with Explanation (ii) of the Specific Relief Act, is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. In the aforesaid judgment this Court has further held that the court is to grant relief on the basis of the conduct of the person seeking relief.The said judgment of this Court also supports the plea of the appellants herein39. The learned counsels appearing for the appellants, have also contended stating that as per the directions of the High Court remaining balance amount, as per the agreement dated 03.05.2005, is not deposited by the respondents-plaintiffs, and the said amount is deposited by a third party who has no concern in the matter.In view of our findings recorded above on other issues, we are of the opinion that it is not necessary to deal with the said contention.