VINOD SETH versus DEVINDER BAJAJ AND ANR.

Citation: [2010] 7 S.C.R. 424 · Decided: 05-07-2010 · Supreme Court of India · Bench: R.V. RAVEENDRAN, RAJENDRA MAL LODHA · Disposal: Case Partly allowed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2010] 7 S.C.R. 424 
VINOD SETH 
V. 
DEVINDER BAJAJ AND ANR. 
(Civil Appeal No. 4891 of 2010) 
JULY 05, 2010 
[R.V. RAVEENDRAN AND R.M. LODHA, JJ.] 
Transfer of Property Act, 1882: s.52 - Suit for specific 
performance of oral collaboration agreement for development 
C of residential suit premises - No application by plaintiff for 
interim relief - High Court directing plaintiff to furnish an 
undertaking to pay Rs.25 lakhs to defendants in the event of 
losing case observing that prima facie case not in favour of 
plaintiff and due to heavy dockets in courts early disposal of 
o suit was not possible - Propriety of - Held: There is no 
provision in the Code or any substantive law which enable the 
Court to issue a direction to a plaintiff in a suit to file an 
undertaking that in the event of not succeeding in the suit, he 
would pay damages to the defendant - Such power cannot 
E be traced even in s. 151 - It is an order in terrorem - Order 
punishing a litigant on the ground that the court is not able to 
decide the case expeditiously is unwarranted, and beyond its 
power -
In the facts and circumstances, suit property 
exempted from the operation of s.52 and defendants granted 
F liberty to deal with the property in any manner they may deem 
fit, inspite of the pendency of the suit subject to their furnishing 
security of Rs.3 lakhs - Doctrine of tis pendens - Specific 
Relief Act, 1963 -
s.14(1)(b) and (d) -
Code of Civil 
Procedure, 1908 - ss.35, 35A, 151, Order 25 r.1 - Damages 
G - l!ndertaking - Judgment/Order - Order in terrorem. 
Costs: Absence of effective provisions for costs - Need 
for reform - The provision for costs as envisaged in ss.35, 
35A, 358 have either become infructuous on account of 
inflation or are seldom invoked - Lack of appropriate 
H 
424 
VINOD SETH v. DEVINDER BAJAJ AND ANR. 
425 
provisions relating to costs result in increase in malicious, 
A 
vexatious and frivolous suits - Urgent need for the Legislature 
and the law Commission of India to re-visit the provisions 
relating to costs and compensatory costs contained in ss.35, · 
35A - Code of Civil Procedure, 1908 - ss. 35, 35A, 358 -
Legislation - Suggestion for. 
B 
Doctrines! Principles: Doctrine of /is pendens -
Applicability of. 
The plaintiff-appellant claimed to be a builder-cum-
real estate dealer. The defendants-respondents were the 
C 
owners in possession of the suit premises. According to 
the plaintiff, an oral agreement for commercial 
collaboraUon for development of residential suit premises 
was purportedly entered bbtween him and the 
defendants. In terms of the agreement, defendants were · D 
required to convert the suit premises from leasehold to 
freehold and then hand over vacant physical possession 
to the plaintiff. Thereafter plaintiff was to demolish the 
said property and reconstruct three storeyed building. 
The plaintiff was to keep the ground floor with himself E 
and handover first and second floors to the defendants 
and also pay to them a sum of Rs.3.71 lacs. Pursuant to 
the said terms of the agreement, a sum of Rs.51000 was 
paid by the plaintiff to the first defendant who gave a 
receipt. The plaintiff alleged that the defendants failed to 
F 
comply with the agreement and subsequently he also 
came to know that the property stood in the name of the 
second defendant and not the first defendant. The plaintiff 
issued a notice dated 9.3.2007 calling upon the 
defendants to comply with the legal formalities to facilitate 
G 
the collaboration agreement. Alleging that defendants 
failed to comply, the appellant filed a suit on 30.6.2007 for 
specific performance. The defendants denied the claim 
in toto. When the case came up for framing issues, a 
Single Judge of the High Court passed an interim order 
H 
426 
SUPREME COURT REPORTS 
[2010) 7 S.C.R. 
A that the plaintiff instituted the suit without moving any 
application for interim relief and the suit being in respect 
to an immovable property,. even in the absence of any 
interim order restraining the defendants from dealing with 
the property, would adversely affect the right of 
B defendants owing to tl)e pendency of the said suit. It 
further held that the likelihood of the plaintiff succeeding 
in the suit was remote as such agreements are not 
concluded and enforceable till detailed writing is 
executed. In the circumstances, the Single Judge 
c directed the plaintiff to file an affidavit/undertaking that in 
the event plaintiff did no

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