VINOD SETH v. DEVINDER BAJAJ & Anr.

1.3. The property stood in the name of second defendant, but she did not sign the receipt. There was E nothing to show that the second defendant participated in the alleged negotiations or authorized her husband the first defendant to enter into any collaboration agreement in respect of the suit property. The receipt was not signed by the first defendant as Attorney Holder or as the authorized representative of the owner of the F property. From the plaint averments it is evident that plaintiff did not even know who the owner was, at the time of the alleged negotiations and erroneously assumed that first defendant was the owner. The execution of a receipt for Rs.51,000/- by the first G defendant even if proved, may at best make out a tentative token payment pending negotiations and finalization of the terms of an agreement for development of the property. The agreement is alleged to have been entered on 10.6.2004. But the plaintiff issued the first H notice calling upon defendants to perform, only on VINOD SETH v. DEVINDER BAJAJ AND ANR. 429

9.3.2007 and filed the suit on 30.6.2007. There was no A correspondence or demand for performance, in writing, prior to 9.3.2007, even though the alleged agreement was a commercial transaction. [Paras 8.3, 8.4) (448-D-H]

#2. Having regard to the doctrine of /is pendens 8 embodied in section 52 of the Transfer of Property Act, 1882, the pendency of the suit by the plaintiff would affect the valuable right of the second defendant to deal with the property in the manner she deemed fit, and restricted her freedom to sell the property and secure a fair market C price from a buyer of her choice. When a suit for specific performance is filed alleging an oral agreement without seeking any interim relief, the defendant, would not even have an opportunity to seek a prima facie finding on the validity of the claim. Filing such a suit is an ingenious way of creating a cloud over the title to the suit property. D Such a suit is likely to be pending for a decade or more. Even if a "defendant-owner asserts that his property is not subject to any agreement and the said assertion is ultimately found to be true, his freedom to deal with the property as he likes or to realize its true market value by E sale or transfer is adversely affected during the pendency of the suit. The ground reality is that no third party would deal with a property in regard to which a suit for specific performance is pending. This enables an unscrupulous plaintiff to cajole and persuade a defendant to sell/give F the property on plaintiff's terms, or force the defendant to agree for some kind of settlement. It was these circumstances which persuaded the High Court to find some way to do justice, leading to the impugned direction. {Para 9) (449-A-F] G

#3. Order XXV Rule 1 CPC provides that at any stage of a suit, the court may either on its own motion or on the application of defendant, order the plaintiff for reasons to b~ recorded, to give security for the payment of all H 430 SUPREME COURT REPORTS [20101 7 S.C.R. A costs incurred or likely to be incurred by the defendant. But the Code, nowhere authorizes or empowers the court to issue a direction to a plaintiff to file an undertaking to pay damages to the defendant in the event of being unsuccessful in the suit. The Code also does not contain B any provision to assess the damages payable by a plaintiff to defendant, when the plaintiff's suit is still pending, without any application by defendant, and without a finding of any breach or wrongful act and without an inquiry into the quantum of damages. There c is also no contract between the parties whfch requires the appellant to furnish such undertaking. None of the provisions of either TP Act or Specific Relief Act or any other substantive law enables the court to issue such an interim direction to-a plaintiff to furnish an undertaking to pay damages. In the absence of an enabling provision in the contract or in the Code or in any substantive laws, a court trying a civil suit, has no power or jurisdiction to direct the plaintiff, to file an affidavit undertaking to pay any specified sum to the defendant, by way of damages, if the plaintiff does not succeed in the suit. [Paras 11.2, 12) [451-C-H; 452-A] E 0

4.1. As the provisions of the Code are not exhaustive, section 151 is intended to apply where the Code does not cover any particular procedural aspect, and interests F of justice require the exercise of power to cover a particular situation. Section 151 is not a provision of law conferring power to grant any kind of substantive relief. It is a procedural provision saving the inherent power of the court to make such orders as may be necessary for G the ends of justice and to prevent abuse of the process of the court. It cannot be invoked with reference to a matt1~r which is covered by a specific provision in the Code. It cannot be exercised in conflict with the general scheme and intent of the Code. It cannot be used either H to create or recognize rights, or to create liabilities and VINOD SETH v. DEVINDER BAJAJ AND ANR. 431 obligations not contemplated by any law. [Para 13) [452- A B-E]