2002 (1) TMI 1316 - SC - Indian Laws

Summary

Issues Involved:
1. Maintainability of the suit.
2. Readiness and willingness to perform the contract.
3. Whether the contract became inoperative and unenforceable.
4. Discretionary relief of specific performance.
5. Clean hands doctrine.
6. Financial soundness of the respondent.

Summary:

1. Maintainability of the Suit:
The High Court noted that the appellants contended the suit was not maintainable as the pleadings did not conform to Forms 47 and 48 of Appendix A of the Code of Civil Procedure. However, the High Court found no specific plea in the written statement regarding this issue, thus framing an issue on this point was unnecessary.

2. Readiness and Willingness to Perform the Contract:
The High Court observed that there was no specific issue framed by the Trial Court regarding the plaintiff-respondent's readiness and willingness to perform the contract. Despite this, the High Court felt the need to frame an additional issue on this point and remanded the case for further trial. The Supreme Court, however, noted that the parties and the Trial Court were aware of this issue and had adjudicated upon it, making the High Court's remand unnecessary.

3. Whether the Contract Became Inoperative and Unenforceable:
The High Court concluded that time was not the essence of the contract, thus the failure to obtain clearance under the ULCRA within the appointed time did not render the agreement inoperative and unenforceable. The Supreme Court pointed out that the High Court failed to consider the Constitution Bench decision in Chand Rani's case, which should have been applied.

4. Discretionary Relief of Specific Performance:
The High Court did not specifically address this issue in its remand order. The Supreme Court emphasized that the High Court should have examined whether the Trial Court's findings on this issue were sustainable based on the available material.

5. Clean Hands Doctrine:
The High Court did not explicitly address this issue in its remand order. The Supreme Court implied that this issue should have been considered based on the evidence already on record.

6. Financial Soundness of the Respondent:
The High Court did not specifically address this issue in its remand order. The Supreme Court noted that the respondent's financial condition, including its status as a sick company under BIFR, was a subsequent event that could be considered by the High Court without necessitating a remand.

Conclusion:
The Supreme Court found the High Court's approach unsustainable in law and set aside the order of remand. The case was restored to the High Court for fresh decision, with the High Court directed to consider the subsequent events and the existing evidence without requiring a retrial. The Supreme Court emphasized that no opinion on the merits of the issues was expressed, and the High Court retained the power to require additional documents or witness examination if necessary.