Sitac Private Ltd. v. Statesman Ltd. — 1993 DIGILAW 218 (CAL)

Judgment Ajit Kumar Sengupta, J. 1. The suit out of which the present appeal arises was filed by the appellant on 21st December, 1987 praying for specific performance of a Memorandum of Understanding dated 7th January, 1985, for mandatory injunction directing the defendant to have the validity of the plans, approvals etc. in relation to the defendant's property at Barakhamba Road, New Delhi extended, for permanent injunction restraining the defendant from dealing with any person other than plaintiff in relation to the said property or acting in any way contrary to the alleged agreement dated 7th January, 1985 or in derogation of the plaintiff thereunder. The Memorandum of Understanding was in relation to construction of a high-rise building on the defendant's property in New Delhi. 2. After tiling of the suit the plaintiff applied for an interlocutory injunction and obtained an ad interim order. On final hearing, the learned Judge dismissed the application for interlocutory injunction by the judgment and order dated 18th January, 1988. This appeal is directed against the said judgment and order. The learned Judge inter alia, held that the parties did not agree to bind themselves by a concluded agreement and that the agreement, if any, was uncertain and in that view of the matter, the learned Judge dismissed the interlocutory application made by the plaintiff appellant for injunction. 3. Before we deal with the contentions raised before us, it is necessary to set out certain facts bearing upon the contentions. 4. By an indenture dated 7th May, 1982 made by and between the Secretary of State for India in Council and the defendant, the defendant was granted perpetual leasehold right of approximately 1.69 acres of land at Block No. 148, Barakhamba Road, New Delhi with effect from 25th August, 1980 on the terms and conditions contained in the said deed of lease. In May, 1980, the defendant submitted plans prepared by Bharadwaj & Bharadwaj Associate to the New Delhi Municipal Committee for the construction of a multi-storied building on the said land for the approval of NDMC and paid all necessary levies and fees for the purpose. The said plans were approved on 29th August, 1980. The approval was to be valid for a period of two years. The said plans were approved on 29th August, 1980. The approval was to be valid for a period of two years. By a letter dated 4th May, 1982, the aforesaid approval was communicated to the defendant by NDMC i.e., a few months before the approval was due to expire. Thereafter the said plans were submitted for revalidation and were revalidated for a further period of two years. On 18th May, 1984 the plans were revalidated for a further period of one year, but the approval was again not communicated to the company until about 2 months before it was due to expire. On 7th January, 1985, a document, being a commercial proposal by the plaintiff for development of the Delhi property of the defendant was signed on behalf of the plaintiff and the defendant. The said commercial proposal was subject to approval and acceptance by the defendant and on such approval being given, a "detailed agreement" was to be entered into between the parties. By a letter dated 1st February, 1985, the revalidation of the plans on the 18th May, 1984 was communicated to the defendant. The plans were valid till May, 1985 in terms of the aforesaid revalidation the 18th May, 1984. These plans had been prepared by the defendant's the then Architects M/s. Bharadwaj & Bharadwaj Associate and the plaintiff had nothing to do with the same. In February/March, 1985, some premises were shown to the defendant's representatives by the plaintiff in the context of the defendant's requirement that the defendant should be able to continue to publish the New Delhi Edition of the newspaper during the period of construction and for this purpose temporary extensions to a part to the existing building or alternative sites should be made available by the development at his own cost. Thereafter, the:, plaintiff submitted a proposal for financing the construction of the multi-storied building, in the event a contract was concluded between the parties. The proposal to finance the project submitted by the plaintiff was not approved by the defendant's bankers M/s. Hongkong and Shanghai Banking Corporation and the proposal was never accepted by the defendant, As a part of its proposal, the plaintiff submitted to the defendant a model (not to scale) and an Artist's impression of the proposed building. The proposal to finance the project submitted by the plaintiff was not approved by the defendant's bankers M/s. Hongkong and Shanghai Banking Corporation and the proposal was never accepted by the defendant, As a part of its proposal, the plaintiff submitted to the defendant a model (not to scale) and an Artist's impression of the proposed building. On 3rd May, 1985, the model and the Artist's impression which was submitted by the plaintiff to the defendant as a part of the proposal to finance the project were returned to Mr. Valvinder Singh, a Director of the plaintiff at his own request. A draft of agreement which was also sent to the defendant by the plaintiff as a part of the aforesaid proposal was also returned to the plaintiff and the defendant has retained no copy of the same. 5. On 3rd May, 1985, the plaintiff came to the office of the defendant at Calcutta and delivered a letter of the same date to the Secretary of the Managing Director. In the said letter, no complaint was made of any breach of contract by the defendant, even though the plaintiff was aware that the defendant was about to enter into an agreement with Grindlay's Bank for development of the property. 6. On 6th May, 1985 Mr. Valvinder Singh, a Director of the plaintiff met Mr. C.R. Irani in his office when Mr. Irani once again made it clear that the plaintiff's offer was not acceptable. It was also confirmed to him that the defendant was about to enter into an agreement with Grindlays Bank p.l.c. for developing the project under which the building was to be constructed by a contractor chosen by the Grindlays Bank. Mr. Singh wanted to know if he could be a contractor under Grindlays when Mr. Irani made it clear to him that this was a matter entirely for Grindlays to decide. At Mr. Singh's request the defendant introduced him to Dhruba Chowdhury, General Manager, Special Projects of Grindlays Bank at Bombay. 7. On 4th June, 1985 an agreement was signed between the defendant and the Grindlays Bank p.1.c. Under the said agreement, Grindlays Bank advanced to the defendant a total sum of Rs. 405.75 lakh8. The defendant in turn furnished to Grindlays Bank Guarantees for similar amount. 8. 7. On 4th June, 1985 an agreement was signed between the defendant and the Grindlays Bank p.1.c. Under the said agreement, Grindlays Bank advanced to the defendant a total sum of Rs. 405.75 lakh8. The defendant in turn furnished to Grindlays Bank Guarantees for similar amount. 8. By June, 1985, an unofficial ban was imposed on the construction of high-rise buildings in the areas under the Delhi Development Authority and NDMC which included the area in which the defendant's property is situate. 9. On 27th September, 1985, a telex message was sent by Barun Das, the Secretary of the defendant to Shri Ranjajit Ganguly of the plaintiff which is alleged by the plaintiff to be the acceptance by the defendant of the Memorandum of Understanding dated 7th January, 1985. 10. By an office order dated 17th October, 1985, the unofficial ban imposed in June, 1985 on the construction of high-rise buildings in the areas under the Delhi Development Authority and NDMC was formalised. Later by an office order issued by the Ministry of Urban Development on 18th July, 1986, the ban on the construction of high-rise building was removed in respect of the Connaught Place area. The defendant found that due to lapse of time by reason of imposition of ban on the construction of high-rise buildings in New Delhi and the changing requirements of modern printing technology, the original plans as sanctioned by NDCM were no longer suitable for the defendant's purposes. 11. By a letter dated 29th August, 1986 the Chief Architect, New Delhi Municipal Committee informed Mr. C.R. Irani that it was advisable for the defendant to submit revised plans contemplated by the defendant and get the approval of the local authorities therefor so that the defendant could build the project which is most uptodate from all angles. On the advice of the Chief Architect of NDMC, the defendant revised the plans by its new architects, M/s. Gherzi Eastern Limited, Bombay. The defendant submitted such revised plans on 29th December, 1986 for necessary sanction. 12. In July, 1987, Grindlays Bank, p.1.c. tried to enforce the bank guarantee furnished in favour of the said Bank at the instance of the defendant under the agreement dated 4th June, 1985 after certain disagreements developed between the defendant and the Grindlays Bank, p.1.c. with regard to the working out of the said agreement. 12. In July, 1987, Grindlays Bank, p.1.c. tried to enforce the bank guarantee furnished in favour of the said Bank at the instance of the defendant under the agreement dated 4th June, 1985 after certain disagreements developed between the defendant and the Grindlays Bank, p.1.c. with regard to the working out of the said agreement. The Grindlays Bank, p.l.c. tried to enforce the bank guarantees without terminating the agreement which they were required to do in terms of the aforesaid guarantees. 13. On 1st August, 1987, the defendant filed a suit before the Court for restraining the Grindlays Bank from invoking the said Bank guarantees. An application was also made in the said suit for interim injunction which was granted by this Court. 14. On 26th August, 1987, the said suit and the interim application were disposed of by a consent order passed by this Court whereunder both the parties were released from the said agreement dated 4th June, 1983 between the defendant and the Grindlays Bank p.l.c. 15. On 7th September, 1987, by a letter written by Mr. Valvinder Singh on behalf of the plaintiff made an attempt to revive the Memorandum of Understanding dated 7th January, 1985. 16. The sanction of these plans, however, was kept pending for a long time and ultimately on or about 29th October, 1987 the defendant moved the Delhi High Court for a direction upon the concerned Delhi authorities to grant the sanction to the revised plan submitted by the defendant. On 17th December, 1987 an order was made by the Delhi High Court on the said petition. The fact of passing of such order was reported in the Delhi Edition of the Statesman dated 18th December, 1987. 17. On 21st December 1987 the present suit was instituted by the appellant. The interlocutory application was disposed of by the judgment dated 18 January, 1988. The present appeal was filed on 29 January 1988. It 'is also necessary to set out the subsequent event to complete the narration of facts. 18. On March 7, 1988, a Division Bench of this Court gave directions to the respondent to make it clear in further offers to the public in respect of the said property that the said property is the subject matter of proceedings pending in this Court and that any further dealing or disposition of the property would abide by the result of these proceedings. The respondent was also directed to issue a public advertisement in appropriate papers through Ansal Properties and Industries Pvt. Ltd. and Arora & Associates bringing to the notice of the interested parties the proceedings before this Court. The respondent accordingly published advertisements in the Indian Express and Hindustan Times as directed by this Court. 19. On 17th August 1988 an application praying, inter alia, for restraining the respondent from carrying out construction and demolition work was moved before the Division Bench whereupon the respondent was directed to produce before the Court the agreement entered into between the respondent and Ansals and also to produce agreements, if any, entered into between Ansals and third parties on 5th September 1988. 20. On 5th September 1988 the Counsel for the respondent produced the agreement entered into between the respondent and Ansals as also agreements between Ansals and third parties before this Court when the respondent was directed to retain the same with the respondent for the time being. 21. On 24th April 1989 the Delhi High Court disposed of the writ petition filed by the respondent directing the New Delhi Municipal Committee to grant approval to the plans of the respondent concerning the Barakhamba Road Property. 22. On 5th May 1989 the New Delhi Municipal Committee filed a Special Leave Petition in the Supreme Court against the said order of the New Delhi High Court dated 24th April] 989. 23. On 24th October 1989 the Supreme Court directed the respondent to make rectification of its plan within 3 weeks and also directed the New Delhi Municipal Committee to sanction such plan within a further period of 3 weeks without insisting on fresh clearance from the Delhi Urban Arts Commission or the Chief Fire Officer. The respondent was granted liberty to make the construction upto a height of 15 metres. 24. On 13th December 1989, the New Delhi Municipal Committee sanctioned the plans of the respondent for the entire proposed construction at the Barakhamba Road Property. 25. In the context and setting of facts as narrated, the principal question which calls for determination is whether there was any concluded agreement capable of being specifically performed. The Memorandum of Understanding dated 7th January, 1985, inter alia, provides as follows: "2. Messrs. 25. In the context and setting of facts as narrated, the principal question which calls for determination is whether there was any concluded agreement capable of being specifically performed. The Memorandum of Understanding dated 7th January, 1985, inter alia, provides as follows: "2. Messrs. Sitac (P) Ltd., a registered company, having its office at 3 Esplanade East, Calcutta have made a commercial proposal for development of the above property for the acceptance of The Statesman. It is agreed that, subject to the approval of The Statesman Limited, Sitac (P) Ltd., will develop the property of The Statesman at Barakhamba Road, New Delhi, on the following terms and conditions:(a) The approval shall be obtained prior to 31st January, 1985 whereafter a detailed agreement will be entered into between the two parties based on these terms and conditions. 26. It would appear that the said Memorandum of Understanding was a commercial proposal and could be a binding contract only if (i) it was approved by the defendant and (ii) a detailed agreement was entered into. The contention of the defendant respondent is that no approval was in fact given by the defendant. The plaintiff alleged that meeting of some of the Directors was held and approval by them was communicated by the Secretary (Barun Das) to the plaintiff on 12th January, 1985. But in the affidavit-in-opposition, Mr. C.R. Irani specifically denies that any such meeting was held or approval accorded. It has been stated in the said affidavit as follows: "The plaintiff submitted a proposal for financing the construction of the multi-storied building, in the event a contract was concluded between the parties. The proposal, however, was never accepted by the defendant. The allegation that the Memorandum of Understanding was approved by the defendant at a meeting of the Chairman and two Directors of the Company (including myself) is untrue and the same is denied. No such meeting as alleged was in fact held and no approval was given as alleged or at all. It is also untrue to allege that Mr. Barun Das, the Secretary of the Defendant communicated any approval to the plaintiff and the allegations to that effect are specifically and emphatically denied. In this connection I rely upon an affidavit sworn by Mr. Barun Das in these proceedings on 2nd January, 1988....." 27. It is also untrue to allege that Mr. Barun Das, the Secretary of the Defendant communicated any approval to the plaintiff and the allegations to that effect are specifically and emphatically denied. In this connection I rely upon an affidavit sworn by Mr. Barun Das in these proceedings on 2nd January, 1988....." 27. Barun Das, who is alleged to have communicated the alleged approval also denies in his affidavit that he has communicated any approval to the plaintiff. He said as follows: "With particular reference to paragraph 6 of the petition, I emphatically deny that the Memorandum of Understanding dated 7th January, 1985 was approved by the defendant at a meeting of the Chairman and some of the Directors of the Company as alleged or at all. I further emphatically deny that I intimated to the plaintiff any alleged approval on or about 12th February, 1985 as alleged or at all. No such approval was given by the defendant and the question of my communicating any alleged approval does not arise." 28. Thus the first condition that the Memorandum of Understanding should be approved by the defendant, was not satisfied. 29. The next question is whether there was any agreement on the principal terms of the bargain dated 7th January, 1985 in the light of the surrounding circumstances. 30. It appears firstly that the, said document does not indicate the height, nature or specification of the building or even as to the number of floors the building should consist of. The document merely reflects the total square feet area to be retained by the defendant without anything more. It has not been specified in the said document which side or portion of which floors would belong to the defendant. 31. Secondly, there is an intrinsic evidence that the then existing plans were not to be the final plans. This fact would be evident from clauses (j) and (k) of the document dated 7th January, 1984 which are set out hereunder "(j) SIT AC will assist The Statesman in setting with the previous architects and is not bound to use the same architects nor responsible for any monies being payable to them. (k) SITAC has the right, at their cost, to amend the design, plans and use of floor spaces or prepare and submit fresh plans for approval. (k) SITAC has the right, at their cost, to amend the design, plans and use of floor spaces or prepare and submit fresh plans for approval. The Statesman shall not restrict SITAC for these alterations, modifications, SITAC undertakes to keep The Statesman absolved from all costs for doing this, and to handle all problems in this respect. Penalties, if any, for making excess construction shall be payable by SITAC." 32. Thirdly, the property admittedly belongs to the defendant. The proposed building is to be called "The Statesman House". There could be no concluded contract unless the plans for the building, the specifications and the areas to be occupied by the respective parties were clearly defined, known and agreed upon. 33. Thus there was no agreement on the principle terms of the bargam. 34. The contention of the learned counsel for the plaintiff-appellant is that the plaintiff had taken several steps in pursuance of or in furtherance of the said agreement dated 7th January, 1985. According to the plaintiff, it engaged reputed firm of Architects to prepare plans. This fact has no bearing on the main question. When the defendant, the owner of the property is proposing to enter into an agreement with a developer of a property, who is not only to build but bring in finance also, the developer must satisfy the defendant that it will be capable of discharging its obligations and for that, as a part of his proposal he has to take various steps. If he has engaged any Architect, it was for him to do so and it was not with the consent or approval of the defendant. Mr. Jasbir' Sachdev was appointed Architect who was admittedly plaintiff's own man. In paragraph 8(b) of the affidavit-in-opposition, it has been stated as follows: "At the time when the Memorandum of Understanding dated 7th January. 1985 was signed, the plaintiff gave to the defendant a brochure containing some information about the plaintiff. Page 56 of the Brochure gives a list of the Management and Technical Staffs of the plaintiff. One of the names mentioned under this column is that of Mr. Jasbir Sachdev, Architect & Town Planner. He is also said to be a partner of Sachdev Eggleston Associates. At page 59 of the said Brochure M/s. Sachdev Eggleston Associates has been listed as one of the Associates of the plaintiff. The allegation about appointment of Mr. One of the names mentioned under this column is that of Mr. Jasbir Sachdev, Architect & Town Planner. He is also said to be a partner of Sachdev Eggleston Associates. At page 59 of the said Brochure M/s. Sachdev Eggleston Associates has been listed as one of the Associates of the plaintiff. The allegation about appointment of Mr. Jasbir Sachdev as an Architect without disclosing that he is a member of the staff of the plaintiff itself was intended to mislead this Hon'ble Court." 35. In paragraph 6 of the affidavit-in-reply, the plaintiff has annexed an affidavit of Jasbir Sachdev. Plaintiff denied that Mr. Jasbir Sachdev is a member of the staffs of the plaintiff. The plaintiff treats Mr. Sachdev as one of its associates since the plaintiff has regular business dealing with Mr. Sachdev 'in relation to the construction work of the plaintiff. It is denied that the defendant had no knowledge of the appointment of Mr. Sachdev since the plans, designs etc. prepared by Mr. Sachdev were given by the plaintiff to the defendant. Because the original plans approved by the New Delhi Municipal Council had been prepared by the defendant's architects before the plaintiff came into the picture, the defendant gave the plaintiff a right to alter the same under the agreement. It was stated that there was no requirement of approval of the financing by the plaintiff's bankers as sought to be alleged and the question of their approval or rejection of any proposal to finance the Project does not and cannot arise. All that the affidavit by Jasbir Sachdev says is that at 'the instance of Mr. Valvinder Singh (Director of the plaintiff) Mr. Jasbir Sachdev produced a set of "concept plans, model and artists' perspective of the proposed building" and nothing more. He also says that these were taken away by Mr. Valvinder Singh and then given back "for further work." Shortly thereafter, Mr. Valvinder Singh again took these away. It appears from this affidavit that nothing further was done. The impression given in the plaint that plans, drawings etc., were made ready at considerable expenses, is clearly contradicted by the affidavit of Jasbir Sachdev. There is no mention of any expense in Mr. Jasbir Sachdev's affidavit. 36. The next fact relied upon by the plaintiff is that it has submitted a finandal proposal for financing the construction of the multi-storied building. There is no mention of any expense in Mr. Jasbir Sachdev's affidavit. 36. The next fact relied upon by the plaintiff is that it has submitted a finandal proposal for financing the construction of the multi-storied building. According to the defendant, this was merely a proposal as to how the plaintiff proposes to finance the project, which is an essential element to be agreed upon before the contract can be said to have been concluded. It is not the case of the plaintiff that the proposal was agreed upon. Engaging the builder does not mean surrendering all the rights of the owner of the builder. The owner must be satisfied that the builder has the financial capacity to execute the project of this size and complexity. In paragraph 7(a) of the affidavit of Mr. C.R. Irani, Managing Director of the defendant, it was specially stated that the financial proposal for financing the construction was never accepted by the defendant. 37. The next fact relied upon is that the plaintiff has submitted plans, drawings, designs and model of the building proposed to be constructed as The Statesman House and submitted the same to the defendant. This 'is quite incorrect. No plans or designs were submitted by the plaintiff. The plaintiff merely submitted a model (not to scale) and an artist's impression of the building and these were returned to the plaintiff. In this connection, reference may be made to the relevant paragraphs of the Affidavits of Mr. CR. Irani, Mr. Barun Das and Mr. Jasbir Sachdev which are extracted below. 38. In paragraph 8(e) of the Affidavit-in-Opposition, Mr. C.R. Irani has stated as follows:- "As a part of its proposal, the plaintiff submitted to the defendant a model (not to scale) and an artist's impression of the proposed building. It was explained to the plaintiff that this was not acceptable to the defendant because a shopping complex was shown in the atrium of the building, to which the defendant had a fundamental objection. The defendant was never provided with any floor space plans or structural drawings or detailed drawings, by the plaintiff as wrongly alleged. The artist's impression and model were both returned to Mr. Valvinder Singh on or about 3rd May. 1985 as these were redundant and he wanted to have them back." 39. Mr. The defendant was never provided with any floor space plans or structural drawings or detailed drawings, by the plaintiff as wrongly alleged. The artist's impression and model were both returned to Mr. Valvinder Singh on or about 3rd May. 1985 as these were redundant and he wanted to have them back." 39. Mr. Barun Das, Secretary of the defendant, in his affidavit in paragraph 4 stated as follows : "I say that Mr. Valvinder Singh came to the defendant's office on the 3rd May, 1985 and he met me along with two other officers of the defendant, Mr. S. C. Bhattacharyya Manager. Administration & Personnel, and Mr. J. F. Dostoor, Finance Manager. I once again made it clear to Mr. Valvinder Singh that the proposal submitted by the plaintiff was not acceptable to the defendant and there was no question of concluding any contract with the plaintiff on the terms and conditions as proposed. Mr. Valvinder 'Singh had also sent to the defendant an artist's impression and a model of the proposed building. These were returned by me to Mr. Valvinder Singh at his desire on the 3rd May, 1985 when he visited our office." 40. Mr. Jasbir Sachdev, in his affidavit, said as follows During the next 4 weeks myself and my firm worked at full speed and prepared a set of concept Plans, Models and Artists perspectives of the proposed building. To the best of my knowledge, I know that Mr. Valvinder Singh made a presentation of the Model and the plans in the middle of February, 1985 to some members of the Statesman. Mr. Valvinder Singh returned and stated that the plans were greatly appreciated by the Statesman. There were one or two very minor observations and I could proceed at full speed to prepare further plans. The Models and Plans were returned to me for further work. Shortly thereafter, Mr. Valvinder Singh approached me and asked for the Model and Plans as Statesman people wanted to have them in Calcutta to show somebody." 41. It has been next contended that the plaintiff agreed to increase its share capital from Rs. I lac. to Rs. 50 lacs. According to the plaintiff, it never did this. Mr. C.R. Irani in his Affidavit-'in-Opposition in para 9(c) stated that searches in the office of the Registrar of Companies have revealed that the plaintiff increased its share capital from Rs. I lac. to Rs. 50 lacs. According to the plaintiff, it never did this. Mr. C.R. Irani in his Affidavit-'in-Opposition in para 9(c) stated that searches in the office of the Registrar of Companies have revealed that the plaintiff increased its share capital from Rs. 1 lac to Rs. 10 lacs in November, 1985 and then to Rs. 20 lacs in December, 1986. 42. Next it has been contended that the plaintiff showed the defendant's representative in Delhi various sites for relocation of the office and staff quarters. This again was necessarily a part of the plaintiff's proposal as to how he proposes to execute the project. The sites shown were not agreed upon by the defendant. 43. The next fact relied upon by the plaintiff is that the plaintiff prepared a draft of a detailed agreement and sent the same to the defendant. This is what has been stated by the plaintiff in para 9 of the interlocutory application. "In the meanwhile, discussions and negotiations continued between the parties for the preparation of the formal agreement and the plaintiff duly submitted a draft prepared on the basis of such discussions. Suddenly around the end of 1985 the construction of multistoried buildings was stopped in Delhi as a matter of policy by the Central Government. For the purpose aforesaid, the plaintiff had, however, already incurred substantial expenses and put to great deal of harassment and trouble." 44. In paragraph 10 of the Affidavit-in-Opposition, Mr. C. R. Irani dealing with the averments made in paragraph 9 of the petition stated as follows : "With reference to paragraph 9 of the petition, I say that in addition to the artists impression and a model of the proposed new building (not to scale) as hereinabove referred to, a draft of an agreement was also sent to the defendant by the plaintiff. This draft was also returned to the plaintiff on the 3rd May, 1985. The defendant has retained no copy of the same. By June, 1985 an unofficial ban has been imposed on highrise buildings in areas under the Delhi Development Authority and NDMC (which included the area in which the defendant's property was situate). This unofficial ban was formalised in October, 1985 by issue of an office order for an indefinite period. The defendant has retained no copy of the same. By June, 1985 an unofficial ban has been imposed on highrise buildings in areas under the Delhi Development Authority and NDMC (which included the area in which the defendant's property was situate). This unofficial ban was formalised in October, 1985 by issue of an office order for an indefinite period. The ban for the Connaught Place area was removed by an office order dated 18th July, 1986, issued by the Ministry of Urban Development. Copies of the paid office orders are annexed hereto and collectively marked 'B'. 45. Thus, the draft was never approved by the defendant and the same was returned to the plaintiff on 3rd May, 1985. 46. It has also been contended that the letters written and telex sent by the plaintiff annexed to the petition would demonstrate that there was a concluded contract by and between the plaintiff and the defendant. On a careful reading of the letters and telex, it appears to us that the same do not indicate that there was any concluded contract, but were attempts to enter into a contract. In this connection, our attention was drawn to the letter of the plaintiff dated 3rd May, 1985 written to Mr. C. R. Irani in which the plaintiff 'beseeched' Mr. C. R. Irani to finalise our agreement. There could be no question of finalishing the agreement if there was already a concluded contract on 7th January, 1985 as contended by the plaintiff. This letter of the plaintiff of 3rd May, 1985 shows that even on the date of the letter the plaintiff was exploring for conclusion of a contract. 47. There is another aspect of the matter No payments as contemplated by the memorandum were, in fact, made by the plaintiff. On a consideration of the facts and the circumstances of this case, we have not been able to pursuade ourselves to hold that there was any concluded contract by and between the plaintiff and the defendant which could be specifically performed. 48. Having regard to the facts and circumstances of the case, we are of the view that neither there was any agreement which could be specifically performed nor did the plaintiff/appellant act on the basis of any such agreement. 48. Having regard to the facts and circumstances of the case, we are of the view that neither there was any agreement which could be specifically performed nor did the plaintiff/appellant act on the basis of any such agreement. The course of conduct and dealings of the parties and the correspondence passed by and between them as referred to hereinbefore do not spell out any concluded contract capable of being performed specifically. 49. It takes us to the next question, even if there was any concluded contract whether in the circumstances of this case the plaintiff/appellant is entitled to a decree for specific performance. Ordinarily, the Court, as a general rule, will not enforce specific performance of a building contract, the prosecution of which the Court cannot superintend; not only on the ground that damages are generally in such cases an adequate remedy, but also on the ground of the inability of the Court to see that work is carried out. But to this general rule, there is an recognised exception., A plaintiff can bring himself within that exception if he can show three things. Firstly, the building work, the performance of which he seeks to enforce is defined by the contract; that is to say, the particulars of the work are sufficiently defined and ascertained to enable the Court to know exactly what the work to be done really is Secondly, the plaintiff must have a substantial interest in having the contract performed, and that the interest is of such a nature that damages will not be an adequate compensation for the non-performance of the contract. Thirdly, the defendant has obtained from the plaintiff by means of the contract the possession of the land on which the work is to be done. 50. Thirdly, the defendant has obtained from the plaintiff by means of the contract the possession of the land on which the work is to be done. 50. This exception is recognised in s. 14(3)(c) of the Specific Relief Act, 1963 which provides as follows:- The Court may enforce Specific Performance: "(c) Where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land ; Provided that the following conditions are fulfilled namely:- (i) the building or other work is described in the contract in terms sufficiently precise to enable the Court to determine the exact nature of the building or work; (ii) the plaintiff has a substantial interest in the performance of the contract and the 'interest is of ; such a nature that compensation in money for non-performance of the contract is not an adequate relief and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed." Hudson on Building Contracts (9th Edn.) at page 268 has said thus: "There are very few instances of the remedy being granted to a party in a situation similar to a building or engineering contract. This is because the court does not normally grant decrees of specific performance in the case of contracts that involve personal services, trust, or skill, or in cases where it would not be able adequately to supervise performance, if it should order it. Now, it is settled that as a general rule the court will not compel the building of houses. (Wilkinson vs. Clements (1872) L.R. 8 Ch. 96). Nor will the court compel the building of ships." (Merchants' Trading Co. vs. Banner (1871) L.R. 12 Eg. 18. One of the illustrations given by Hudson is as follows:- "The directors of a railway company entered into a written agreement to give the plaintiff a contract for the construction of the line for the sum of £ 55,000, subject to a specification of the works on the line included in the said sum, to be agreed upon between the plaintiff and the engineer of the company in case of dispute the matter to be referred to an arbitrator. On the faith of this the plaintiff entered into subsidiary contracts for the supply of materials etc. The company, however, delayed the commencement of their works and then gave the contract to J. The plaintiff sued for specific performance of the company's agreement to employ him as contractor. Held, on demurrer, that the agreement was of such a nature that specific performance of it' could not be decreed: Green-hill vs. Isle of Wight Rv., (1871) 23 L.T. 885." 51. Our attention has been drawn to a decision of the Chancery Division in Wood vs. Silcock, reported in 50 Law Times 251. This was an action for the specific performance of a memorandum of agreement by which the defendant agreed to grant a building lease to the plaintiff, and for damages for the breach of such agreement. The agreement was as follows: "Memorandum of Agreement made the ninth day of June, 1982, between Willian F. Silcock, hereinafter called the landlord, of the one part, and Willian R. Wood, hereinafter called the tenant, of the other part, witnesseth that the said landlord hereby agrees to let to the said tenant, who hereby agrees to rent six plots of building land, four of which are situate in Merton-road, Wimbledon, and numbered 13,14,21 and 22, and two are situate fronting Griffith-road, Wimbledon, and numbered 73 and 72 on the estate plan of the Church of England and General Freehold Land Allotment Society, for the term of ninety-nine years to be computed from the 24th day of June next, at a peppercorn rent for the first year, and at an annual rent of nine pounds per plot for each plot facing Mertonroad, and at an annual rent of eight pounds for the plots facing Griffith-road. And the said landlord hereby agrees to advance to the said tenant seventy-five pounds per cent. Upon the actual cost of each house, upon the certificate of the londlord's surveyor as soon as the houses are roofed in ; and the said tenant hereby agrees to build the whole of the said houses and fit for habitation on or before the 24th day of June, 1883, of the best work and materials and it is specially further agreed that the said landlord will let to the said tenant all other lots in the same block he may hereafter acquire on the same terms as mentioned herein. This agreement shall be binding on the executors, administrators and assigns of both parties hereto, as witness the hands, & c. There Bacon, V.C. observed as follows : "By what power can this court make the defendant perform that agreement specifically? What power has the court to prescribe to the plaintiff what sort of houses he shall build? The agreement to build houses is much too vague in itself to be specifically performed : and if I laid out of consideration that which the plaintiff in great frankness has stated in the box. it is quite clear that this was, as the defendant states it to be in his answer, a preliminary agreement not definitive, not conclusive, the height, the shape and width, and other parts of the particulars of the houses nowhere specified. Row can I contemplate any breach of this agreement which the court would remedy? Suppose the plaintiff built houses which the defendant was not satisfied with, and a quarrel arose between them on that subject, what guide does this agreement furnish to the court to determine between the parties anything about that dispute? It is, upon the face of it, a preliminary agreement which cannot be read as an agreement with a view to its entire completion until the particulars of the houses to be built have been determined upon, specified, and agreed between the parties. If people will enter 'into such agreements it is not surprising that they cannot get any assistance from the law to enforce the performance of them. I can find nothing in this agreement of which I can safely decree the specific performance. " 52. In our view, the plaintiff has failed to bring itself within the exception as none of the conditions are satisfied in this case. The building or work is not described in the agreement in terms sufficiently precise to enable the court to determine the exact nature of the building or work, nor the plaintiff has a substantial interest in the performance of the contract, or that the compensation in money for non-performance of the contract is not an adequate relief; nor the defendant has in pursuance of the contract obtained possession of the land on which the building is to be constructed. The plaintiff, therefore, is not entitled to succeed. 53. The plaintiff, therefore, is not entitled to succeed. 53. It has been then contended that the plaintiff is not entitled to a decree for Specific Performance because of delay. It is now well settled that when considering a prayer for specific performance court considers the balance of convenience and in considering this, it should take into account the length of the delay in bringing the action, the nature of the acts done during the interval which affect such questions, prejudice on the defendant etc. Our attention has been drawn to a decision of a Division Bench of this Court in Gostho Behari Sadhukhan vs. Omiyo Prosad Mullick, reported in AIR 1960 Cal 361 . In that case, a contention was raised how far delay and laches would disentitle the plaintiff to specific performance, There the learned Chief Justice speaking for the Division Bench held as follows : "On consideration of the authorities it seems to me reasonable to hold that it would be too much to say that mere delay, merely because of its length, would preclude a plaintiff from obtaining specific performance. I am unable to agree, however, that unless it is positively shown that the plaintiff has abandoned his right or there has been such a change of circumstance that the grant of specific performance would prejudice the defendants, the Court is bound to exercise its discretion in favour of the plaintiff. In my opinion Sir Barnes Peacock in saying that lapse of time and delay are most material 'where it would be practical1y unjust to give a remedy either because the party has, by his conduct done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct or neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted mentioned such cases only as illustrations and did not intend to give an exhaustive list. The principle that was being laid down by Sir Barnes Peacock appears to me clearly this that in deciding whether delay bars the grant of specific performance, the Court should consider the balance of justice and in considering this should take into account the length of the delay and the nature of the acts done during the interval which may affect such questions. In my opinion even if the circumstances do not show a waiver but it appears that the plaintiff has come to the Court not merely with the motive of obtaining specific performance but with an ulterior motive of taking advantage of money spent by a transferee, it will be proper for the Court to take into consideration such conduct of the plaintiff in deciding whether discretion should be exercised in his favour or not." 54. In that case the Division Bench finally found that the plaintiffs came to the court only to take advantage of the substantial progress made by the defendants in the construction. In the light of that fact the learned Chief Justice observed: "I am of opinion that the plaintiffs were not serious about bringing the suit until the Bariks started their investigation and the plaintiffs found that such progress had been made in the construction of the building by the Boses that it might be worthwhile to start the risk of litigation. It is, in my opinion, unjust to give a party, who is coming to Court with such unclean motives, the benefit of equitable relief. The Plaintiff's prayer for specific performance should, therefore, be refused." 55. Bose, J. concurring with the views expressed by the learned Chief Justice observed as follows: "It appears to me to be not unreasonable to presume that the continued inaction for a period of about ten months on the part of the plaintiffs led the defendants to suppose that the plaintiffs did not wish to proceed further in the matter. The learned Trial Judge has found that the plaintiffs have not been able to explain the delay for a few months and the evidence that they gave for explaining the delay is untrustworthy and unacceptable. The learned Trial Judge has found that the plaintiffs have not been able to explain the delay for a few months and the evidence that they gave for explaining the delay is untrustworthy and unacceptable. Although there is no specific pleading of the expression 'abandonment' or 'waiver', the plea of delay and acquiescence has been taken in the Written Statement of the Bose defendants and the facts showing investment of money and alteration of position have been also pleaded in this Written Statement. A definite issue was raised as to this delay and acquiescence but the learned Trial Judge does not appear to have laid much stress on this Issue, and he has dealt with it summarily. In my view, the grant of a decree for specific performance when there has been a charge of status quo since the contract, which has been contributed to a large extent by the dilatory conduct of the plaintiffs, will be inequitable, and the delay and laches on the part of the plaintiffs in the facts and circumstances of this case disentitle them to obtain a decree for specific performance (See the case of 36 CWN 285 at p. 289-291 ; (AIR 1932 Cal 493 at p. 496 per Suhrawardy J. and Graham J.)" 56. Our attention has also been drawn to a decision of the Supreme Court in Mademsetty Satyanarayana vs. G. Yelloji Rao and Others, reported in AIR 1965 Supreme Court 1405. There the Supreme Court observed as follows : "The result of the aforesaid discussion of the case law may be briefly stated thus: While in England mere delay or laches may be a ground for refusing to give a relief of specific performance, in India mere delay without such conduct on the part of the plaintiff as would cause prejudice to the defendant does not empower a Court to refuse such a relief. But as in England so in India, proof of abandonment or waiver of a right is not a pre-condition necessary to disentitle the plaintiff to the said relief for if abandonment or waiver is established, no question of discretion, on the part of the Court would arise. But as in England so in India, proof of abandonment or waiver of a right is not a pre-condition necessary to disentitle the plaintiff to the said relief for if abandonment or waiver is established, no question of discretion, on the part of the Court would arise. We have used the expression 'waiver' in its legally accepted sense, namely 'waiver is contractual, and may constitute a cause of action: it is an agreement to release or not to assert a right: see Dawson's Bank Ltd. vs. Nippon Menkwa Kabushiki Kaisha, 62nd App 100 at p. 108; (AIR 1935 PC 79 at p. 82). It is not possible or desirable to lay down the circumstances under which a Court can exercise its discretion against the plaintiff. But they must be such that the representation by or the conduct or neglect of the plaintiff is directly responsible in inducing the defendant to charge his position to his prejudice of such as to bring about a situation when it would be inequitable to give him such a relief." 57. In our view from the narration of facts, it will be evident that there has been an inordinate delay by the plaintiff in moving the Court. The plaintiff was not prompt in approaching the Court. Accordingly the plaintiff should be refused relief. 58. The same consideration will apply even at the interim stage. What is more the Court has to be more circumspect about the comparative convenience or inconvenience. 59. Kerr on the Law and Practice of Injunction (6th Edition) has laid down the tests as follows ; "If there is a clear, undisputed contract, the Court will not permit the vendor to transfer the legal estate to a third person, although such third person would be affected by the registration of a lis pendens affecting the land. But if the validity of the contract is open to doubt the question whether the vendor shall be permitted to transfer the legal estate to a third person, pending a suit for specific performance, becomes a question of comparative convenience or inconvenience." 60. FRY on Treatise on the Specific Performance of Contract (6tbi Edition) observed 'in the same strain emphasising the need of a valid contract whereunder the interlocutory relief is sought for. FRY on Treatise on the Specific Performance of Contract (6tbi Edition) observed 'in the same strain emphasising the need of a valid contract whereunder the interlocutory relief is sought for. "If there is a clear valid contract for sale, the Court will not permit the vendor afterwards to transfer the legal estate to a third person, although such third, person would be affected by lis pendens. If, however, on interlocutory application for an injunction, it appears that the case is one in which it would be wrong to grant specific performance at the trial, it fol1ows that it would be wrong to grant the injunction." 61. In our view in considering whether or not it is fair and reasonable to grant an interlocutory injunction for preserving the status quo or otherwise regulating the rights of the parties regard must be had to the balance of convenience and the extent to which any damages to the plaintiff can be cured by payment of damages rather than by granting of an injunction. Having regard to the hardship and convenience and inconvenience as between the parties the extent to which the plaintiff may mitigate his position, especially by obtaining damages, it is fair and reasonable that no interlocutory relief should be granted to the plaintiff. More so when there is found to be no concluded contract in existence. 62. In determining the question of balance of convenience and inconvenience, we have to take into account the undisputed facts of this case. As indicated, the original sanctioned plans, which were in existence when the Memorandum of Understanding dated 7th January, 1985 was signed are no longer valid. Entirely new set of plans by new Architects have been prepared. When these plans were not being sanctioned by the appropriate authorities in Delhi the defendant moved the Delhi High Court. It succeeded in the Delhi High Court. An appeal was preferred to the Supreme Court. Pursuant to the directions of the Supreme Court, the Delhi authorities considered the plans and sanctioned the same. The work has commenced and is continuing in accordance with these plans. 63. The Memorandum of Understanding was executed on the 7th of January, 1985. Since then prices of land, cost of building, etc. have undergone sea-change. It is no longer feasible to give effect to the Memorandum. 64. The work has commenced and is continuing in accordance with these plans. 63. The Memorandum of Understanding was executed on the 7th of January, 1985. Since then prices of land, cost of building, etc. have undergone sea-change. It is no longer feasible to give effect to the Memorandum. 64. The Plaintiff was fully aware that the defendant had given the development work to Grindlays Bank in June, 1985 and the Bank were to choose their own builders. 65. The plaintiff came to the office of the defendant at Calcutta and delivered a letter dated 3rd May, 1985 to the Secretary of the Managing Director. No complaint was made in the letter of any breach of contract by the defendant, even though the plaintiff was aware that the defendant was about to enter into an agreement with Grindlays' Bank for: development of the property. Mr. Valvinder Singh, a Director of the plaintiff also sought an appointment with the Managing Director of the defendant Mr. C.R. Irani who was away in Delhi and came back in the night of this date. 66. Mr. Valvinder Singh, a Director of the plaintiff met Mr. C.R. Irani in the latter's office. At this meeting, Mr. Irani once again made it clear to Mr. Valvinder Singh that the plaintiff's offer was not acceptable. It was also confirmed to him that the defendant was about to enter into an agreement with Grindlays Bank p.l.c. for developing the project under which the building was to be constructed by a Contractor chosen by Grindlays Bank. Mr. Valvinder Singh wanted to know if he could be a contractor under Grindlays. Mr. Irani made it clear to Mr. Singh that this was a matter entirely for Grindlays to decide. At Mr. Valvinder Singh's request, the defendant used its good offices to 'introduce him to Mr. Dhruba Chowdhury, General Manager, Special Projects of Grindlays Bank at Bombay. 67. An agreement was signed between the defendant and Grindlays Bank p.l.c. advanced to the defendant a total sum of Rs. 405.75 lakhs. The defendant in turn furnished to Grindlays Bank guaranteed for a similar amount. 68. The plaintiff never complained of breach at that point of time. In fact, in its letter of 3rd of May, 1985, the plaintiff 'beseeched' Mr. C.R. Irani to finalise the agreement. 405.75 lakhs. The defendant in turn furnished to Grindlays Bank guaranteed for a similar amount. 68. The plaintiff never complained of breach at that point of time. In fact, in its letter of 3rd of May, 1985, the plaintiff 'beseeched' Mr. C.R. Irani to finalise the agreement. There could be no question of finalising the agreement if there was already a concluded contract with the signing of the Memorandum of Understanding on the 7th of January, 1985. The plaintiff kept quiet for almost three years before filing the suit with this knowledge. This shows that even the plaintiff did not think that the Memorandum of Understanding was or could be a concluded contract between the parties. 69. The interest of the plaintiff in the project was of a purely commercial nature. If he succeeds in the suit, he can be compensated in terms of money. The plaintiff has acquired no interest in the property. The plaintiff never got possession of the property. 70. Lord Langdale stated in Wedgwood vs. A dams (1843), 6 Beav, 600 at p. 605, as follows:- "The court, therefore, must always have regard to the circumstances of each case, and see whether it is reasonable that it should, by its extraordinary jurisdiction interfere and order a specific performance, knowing at the time that if it abstains from so doing, a measure of damages may be found and awarded in another court. Though you cannot define what may be considered unreasonable, by way of general rule, you may very well, in a particular case come to a balance of inconvenience, and determine the propriety of leaving the plaintiff to his legal remedy by recovery of damages." 71. On a balancing of all the material circumstances, it appears to us that the extent of inconvenience or injury, if suffered by the plaintiff would be relatively small, if any interlocutory injunction is refused. If however the interlocutory injunction is allowed to continue the consequence to the defendant having regard to the circumstances mentioned hereinbefore, would be extremely harsh and, therefore, it would be most just to confine the plaintiff to his right to damages. 72. In the result, the appeal fails and is dismissed and all interim orders are vacated. 73. There will be no order as to costs. 74. All parties to act on a signed copy of the operative part of the judgment and order. 72. In the result, the appeal fails and is dismissed and all interim orders are vacated. 73. There will be no order as to costs. 74. All parties to act on a signed copy of the operative part of the judgment and order. Shyamal Kumar Sen, J. I agree. Appeal disclosed.