VINOD SETH versus DEVINDER BAJAJ AND ANR.

VINOD SETH versus DEVINDER BAJAJ AND ANR.

Courts have no jurisdiction or power under the Code of Civil Procedure or any substantive law to require a plaintiff to file an undertaking to pay damages to the defendant in the event of failure in the suit. Such orders, as made by the High Court, are not warranted and amount to judicial overreach. Instead, where suit property is subject to lis pendens without interim orders, the correct approach is to permit the defendants to deal with the property upon furnishing adequate security, not to give speculative relief to deter the plaintiff.

Parties
Appellant/plaintiff: Vinod Seth; Respondent/defendant: Devinder Bajaj; Respondent/defendant: Second Defendant (unnamed)
Jurisdiction
India
Judgment Date
05 July 2010
Procedural Posture
Civil Appeal / Appeal From Decision of High Court; Supreme Court Judgment
Outcome
Appeal partly allowed
Legal Topics
Specific Performance, Doctrine of Lis Pendens, Undertaking as to Damages, Costs in Civil Litigation, Abuse of Process
Civil Law Property Law Procedure Specific Performance Doctrine of Lis Pendens Undertaking as to Damages Costs in Civil Litigation Abuse of Process

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Parties

Vinod Seth

Appellant/plaintiff

Devinder Bajaj

Respondent/defendant

Second Defendant (unnamed)

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From Decision of High Court; Supreme Court Judgment

Legal Issues

  1. 1 Whether the High Court was justified in directing the plaintiff to furnish an undertaking to pay Rs. 25 lakhs to the defendants in the event of losing the suit for specific performance of an oral collaboration agreement.
  2. 2 Whether such an undertaking could be directed in the absence of a specific enabling provision under the Code of Civil Procedure or substantive law.
  3. 3 Application of doctrine of lis pendens to the facts.

Ratio Decidendi

Courts have no jurisdiction or power under the Code of Civil Procedure or any substantive law to require a plaintiff to file an undertaking to pay damages to the defendant in the event of failure in the suit. Such orders, as made by the High Court, are not warranted and amount to judicial overreach. Instead, where suit property is subject to lis pendens without interim orders, the correct approach is to permit the defendants to deal with the property upon furnishing adequate security, not to give speculative relief to deter the plaintiff.

Court Disposition

Appeal partly allowed

Orders

  • Order of the High Court directing plaintiff to furnish undertaking to pay Rs. 25 lakhs set aside.
  • Defendants permitted to deal with the suit property in spite of pendency of suit, subject to furnishing security of Rs. 3 lakhs to the satisfaction of the learned Single Judge.