NARINDER KUMAR MALIK versus SURINDER KUMAR MALIK

Citation: [2009] 12 S.C.R. 479 · Decided: 04-08-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

~ 
[2009] 12 S.C.R. 479 
NARINDE.R KUMAR MALIK 
v. 
SURINDER KUMAR MALIK 
(Civil Appeal Nos. 5087-5088 of 2009) 
AUGUST 4, 2009. 
[S.B. SINHA AND DEEPAK VERMA, JJ.] 
Contract - Partition suit -:- Settlement between parties -
Execution of MOU - Plaintiff agreeing to sell his share to 
A 
B 
defendant - Date specified for payment of consideration C 
amount - Date was extendable on the consent of both the 
parties - Failure to pay consideration amount within stipulated 
period - Defendant's plea that he was ready and willing to 
perform his part of contract - Enforceability of MOU - Held: 
Since Defendant defaulted the terms and conditions of MOU, 
D 
j,_ 
it cannot be given effect to - Defendant's conduct does not 
show that he was ready and willing to perform his part of 
contract - Mere showing of readiness and willingness would 
not discharge the obligation resting on one of the parties, 
unless it is shown to be real and genuine. 
E 
Appellant filed a suit claiming 1h share in a piece of 
land, allotted to a partnership firm of which appellant and 
his brother (defendant-respondent) were the partners. 
Trial Court passed preliminary decree of partition. 
Respondent filed appeal before High Court. During 
pendency of the appeal, they arrived at a settlement and 
a 'Memorandum of Understanding' (MOU) was executed. 
As per the MOU, appellant had agreed to sell his % share 
F 
to the respondent at the consideration of Rs.3.50 crores. · 
't' 
An advance of Rs. 25 lakhs had been received by the G 
appellant. The balance amount was to be paid within a 
maximum period of 150 days i.e. upto 9.7.2005. This 
period was extendable by another 10 to 20 days with the 
479 
H 
480 
SUPREME COURT REPORTS 
[2009] 12 S.C.R. 
A consent of both the parties. However, the matter did not 
~ 
settle and respondent sent a notice to the appellant 
stating that he was ready with the balance payment and 
despite approaching the appellant, he had not been 
honouring that Appellant replied to the notice denying the 
B allegation. He also stated that in case of default in 
payment of the balance amount by the date stipulated in 
the MOU, the same would stand cancelled. As the 
negotiations failed, High Court directed that the 
consideration amount received as advance to be returned 
c to the respondent. Despite the order, respondent filed 
application seeking direction to the appellant to execute 
transfer documents in terms of the MOU. Even after that, 
attempts of settlement failed. High Court allowed the 
appeal, directing the appellant to deposit the 
0 consideration amount within two weeks. Hence the 
present appeals. 
Allowing the appeals, the Court 
HELD: 1.1. From the facts of the instant case it is as 
E clear that respondent has committed default of the terms 
and conditions of the MOU and had neither been ready 
and willing nor has been so throughout the relevant 
period. Thus, MOU entered into between the parties 
cannot be given effect to. [Para 34] [493-C] 
F 
1.2. The MOU categorically mentions that the 
respondent shall make the payment of the balance 
amount of Rs. 3.25 Crores within a maximum period of 
150 days from the date of execution of the MOU, i.e., upto 
or before 9th July 2005. However, this period of 150 days 
G was extendable by another 10 to 20 days, if need be with 
the consent of both the parties but not more. High Court 
fell into error in construing the said provision in right 
perspective and erred in coming to the conclusion that 
since time was extendable, the time could not have been 
H 
f 
NARINDER KUMAR MALIK v. SURINDER KUMAR 
481 
MALIK 
+ made the essence of the contract. Admittedly, the 
A 
respondent has not honoured his commitment, within the 
extendable period given to him, even though he had no 
right to claim the benefit as of right for the extendable 
period. [Paras 27, 28 and 29] [490-D-E; 490-E; 490-G-H] 
1.3. The respondent sent the photocopies of three 
pay orders two of which were for a sum of Rs. 1 Crore 
each and the third one for a sum of Rs. 1.25 Crore. It was 
B 
-"' 
neither here nor there, as the originals were never 
tendered to the appellant and only photocopies were sent C 
to make a semblance that respondent has been ready 
and willing to perform his part of the contract. When MOU 
had already been arrived at between the parties, then 
mere show of readiness and willingness would not 
' 
discharge the obligation resting on one of the parties 
unless it is shown to be real and genui

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