//
you're reading...
legal issues

Specific performance of an agreement of sale sec.16 and sec.20 – agreement of sale proved – trial court decreed the suit – High court reversed by using it’s discretions not judicially – Apex court held that The High Court has taken a very peculiar view that the plaintiff-appellant and also consider the default clause in the agreement itself shows the non willingness of the defendant in executing the agreement of sale and found that the plaintiff filed the suit which was premature and simple because properties value was raised pending suit, no suit be dismissed conditions may be imposed and as such Apex court directed to pay 25 lakhs for obtaining specific performance of decree =CIVIL APPEAL NO.9047 OF 2014 (Arising out of Special Leave Petition (Civil) No.2271 of 2012) K. Prakash …Appellant (s) Versus B.R. Sampath Kumar …Respondent(s) = 2014 – Sept. Month -http://judis.nic.in/supremecourt/imgst.aspx?filename=41947

Specific performance of an agreement of sale sec.16 and sec.20 – agreement of sale proved – trial court decreed the suit – High court reversed by using it’s discretions not judicially – Apex court held that The High Court has taken a very peculiar view that  the  plaintiff-appellant and also consider the default clause in the agreement itself shows the non willingness of the defendant in executing the agreement of sale  and found that the plaintiff filed the suit which was premature and simple because properties value was raised pending suit, no suit be dismissed conditions may be imposed and as such Apex court directed to pay 25 lakhs for obtaining specific performance of decree =

 

The trial court, therefore, came to the conclusion that  there  is  a  valid

agreement to sell the suit property executed by the defendant in  favour  of

the plaintiff on receipt of the advance consideration.

The High Court has taken a very peculiar view that  the  plaintiff-appellant

filed the suit which was premature.  For better appreciation,  the  relevant

portion of para 8 of the judgment passed by  the  High  Court  is  extracted

hereinbelow:-

“It is not in dispute that the agreement is dated 15.12.2003.   Under  the

agreement, both the parties  have  agreed  that  the  sale  deed  should  be

executed within one year from that day, that is on  or  before   15.12.2004.

But the suit is filed on 9.7.2004, that is within about 7  months  from  the

date of the agreement.  Absolutely, no reasons are  forthcoming  as  to  why

the suit was filed prematurely.

 

The High Court further held that in the agreement (Exhibit P-1) the  parties

have agreed that if the sale deed could not be executed  by  the  defendant,

he will repay a sum of Rs,. 10,90,000/-, According to the  High  Court,  the

recital in the agreement shows  that it was not executed  by  the  defendant

with free mind and volition rather he was  under  pressure  while  executing

those documents.

We have given our thoughtful consideration in the  matter  and  perused  the

pleading and evidence.  We are of the view  that  the  High  Court  has  not

approached the issue in its right  perspective  and  has  committed  serious

error of law in holding that the agreement was  executed  by  the  defendant

without free mind and volition and under some pressure.  The  agreement  was

executed on  15.12.2003  wherein  it  has  been  mentioned  that  the  total

consideration amount was 16,10,000/- and out of that part  consideration  of

sum of Rs. 5,45,000/- was paid.  The said agreement was followed by  another

letter dated 21.1.2004, executed by the  respondent,

 

Section 20 of the Act specifically provides that the  court’s

jurisdiction to grant decree of specific performance  is  discretionary  but

not arbitrary.  Discretion must be exercised in accordance  with  the  sound

and reasonable judicial principles.

 

The King’s Bench in Rookey’s Case [77 ER 209;  (1597)  5  Co.Rep.99]  it  is

said :

“Discretion is a science, not to act arbitrarily  according  to  men’s  will

and private affection: so the discretion which is exercised here, is  to  be

governed by rules of law and equity, which are to oppose, but each,  in  its

turn, to be subservient to  the  other.   This  discretion,  in  some  cases

follows the law implicitly, in others or allays the rigour of it, but in  no

case does it contradict or overturn the grounds or  principles  thereof,  as

has  been  sometimes  ignorantly  imputed  to  this  Court.    That   is   a

discretionary power, which neither this nor any other Court,  not  even  the

highest, acting in a judicial capacity  is  by  the  constitution  entrusted

with”

      The Court of Chancery in Attorney General  vs. Wheat  [(1759)  1  Eden

177; 28 ER 652] followed the Rooke’s case and observed :

“the law is clear and courts of equity ought to  follow  it  in  their

judgments  concerning  titles  to   equitable   estates;   otherwise   great

uncertainty and confusion would ensue.  And  though  proceedings  in  equity

are said to be secundum discretionem boni vin, yet when  it  is  asked,  vir

bonus est quis? The answer is, qui consulta partum, qui leges juraq  servat.

And as it is said in Rooke’s case, 5  Rep.  99  b,  that  discretion  is  a

science  not  to  act  arbitrarily  according  to  men’s  will  and  private

affection: so the discretion which is exercised here, is to be  governed  by

rules of law and equity, which are to oppose, but each, in its turn,  to  be

subservient to the other.  This discretion, in some cases  follows  the  law

implicitly, in others or allays the rigour of it, but in  no  case  does  it

contradict or overturn the  grounds  or  principles  thereof,  as  has  been

sometimes ignorantly imputed to this Court.  That is a discretionary  power,

which neither this nor any other Court, not even the highest,  acting  in  a

judicial capacity is by the constitution entrusted with.   This  description

is full and judicious, and what ought to be imprinted on the mind  of  every

judge.”

   However, the court may take notice of the fact that  there  has  been  an

increase in the price of the property and considering the  other  facts  and

circumstances of the case, this Court while  granting  decree  for  specific

performance can impose such condition which may to  some  extent  compensate

the  defendant-owner  of  the  property

     As discussed above the agreement was entered into between  the  parties

in 2003 for sale of the property for a total consideration of Rs.16,10,000/-

.  Ten years have passed by and now the price of the property in  that  area

where it  situates has increased by not less than five  times.   Keeping  in

mind the factual position we are of the view that the appellant  should  pay

a total  consideration  of  Rs.25  lakhs,  being  the  price  for  the  said

property.

 

   We, therefore, allow this appeal and set aside  the  judgment  and  order

passed by the High Court and restore the judgment and decree  of  the  trial

court with the modification that on payment of  Rs.25  lakhs,  less  already

paid by the plaintiff, the defendant-owner shall execute a  registered  sale

deed within a period of three months from today.

2014 – Sept. Month -http://judis.nic.in/supremecourt/imgst.aspx?filename=41947

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9047 OF 2014

(Arising out of Special Leave Petition (Civil) No.2271 of 2012)

  1. Prakash …Appellant (s)

Versus

B.R. Sampath Kumar                      …Respondent(s)

JUDGMENT

M.Y. Eqbal, J.:

Leave granted.

  1. This appeal by special leave is directed  against  the  judgment  and

order dated 23.8.2011 passed by the High Court of Karnataka whereby  Regular

First Appeal No.396 of 2007 of the respondent  was  allowed,  reversing  the

judgment  of  the  trial  court  and  dismissing  the  suit   for   specific

performance of the agreement filed by the plaintiff-appellant.

The facts of the case lie in a narrow compass.

All disputes pertain to a self  acquired  property  of  the  father  of  the

respondent.  The respondent’s father had four sons and three daughters.   On

31.7.1988, transfer of Khata was executed by all  brothers  and  sisters  in

the name of the respondent.  After the demise of  their  parents,  partition

seems to have taken place on 14.12.2000 among brothers and sisters  and  the

property in question is said to have fallen to the share of  defendant,  who

was required to pay a sum of Rs.1,25,000/-  to  each  of  the  brothers  and

sisters in lieu of their shares in the suit house.  The plaintiff  had  paid

Rs.1,25,000/- to all his brothers and sisters except brother Selva Pillai.

The respondent herein executed an Agreement  for  Sale  in  favour  of  the

appellant on 15.12.2003 agreeing to sell the schedule property for  a  total

sale consideration of Rs.16,10,000/-.  The schedule property is  located  at

Bangalore, admeasuring 30 x 45 feet with  built  up  area  of  1700  sq.ft.,

consisting of ground floor and first floor including out house.  The  ground

floor is occupied by the respondent and the first floor is occupied  by  the

appellant. as a mortgagee.  The out-house is occupied by the brother of  the

defendant-respondent namely Sheshadri (as mortgagee).   It  is  relevant  to

note that an amount of Rs.3,75,000/-  was  paid  by  the  appellant  to  the

respondent as requested by the respondent and Sheshadri,  who  is  occupying

the  out-house portion, has paid Rs.1,65,000/- as a  mortgage  consideration

to the respondent while occupying  the  house.   Agreement  further  reveals

that the aforesaid amounts shall be treated as advance  amount  received  by

the respondent under the agreement of sale.  The understanding  between  the

parties is that the  mortgage  consideration  need  not  be  repaid  by  the

respondent  to  the  mortgagees  including  Sheshadri   and   his   mortgage

consideration will be repaid by the prospective vendee i.e.  the  appellant.

However, on the  date  of  execution  of  sale  agreement,  only  a  sum  of

Rs.5,000/- was paid by the appellant to the respondent.  Thus, in all a  sum

of Rs.5,45,000/- is said to have been paid by the appellant.  The  plaintiff

could raise loan of Rs.3 lakh  by  securing  property.  The  remaining  sale

consideration of Rs.7,65,000/- was payable  to  the  respondent  within  one

year from the date of the agreement, and in case respondent fails to  comply

with any of the conditions in the  agreement,  he  would  repay  double  the

amount i.e. Rs.10,90,000/- to the appellant.

Although prescribed time was one year,  litigation  seems  to  have  started

between the parties within three months.  Repeated complaints were filed  by

the appellant against the respondent before  the  police  authorities.    At

last, appellant-plaintiff moved a suit on 9.7.2004 praying for a  decree  of

specific performance on the ground that the respondent-defendant has  denied

the execution of the sale deed.  The sum and  substance  of  the  appellant-

plaintiff’s case is that the defendant-respondent has failed to perform  his

part of the contract though the appellant-plaintiff was  ready  and  willing

to perform his part of the contract.

The defendant-respondent denying Agreement  Ex.P1  pleaded  in  his  written

statement that there being difference of opinion  between  himself  and  his

brothers, he was in highly disturbed state of mind and  when  he  approached

the appellant for suggestion and help, appellant took his signature  on  the

alleged agreement of sale and he signed it since he had  implicit  faith  in

the appellant.  The appellant-plaintiff had assured that  B.R.  Sheshadri  –

brother of the respondent-defendant, who was living in the out-house,  would

be made to vacate the premises in the guise of  interest  being  created  in

favour of appellant in the property.  It has also been  contended  that  the

respondent had no intention to execute the agreement of sale or to sell  the

property and the  agreement  was  entered  into  only  for  the  purpose  of

securing the loan and the property was  mortgaged  as  a  security  for  the

loan.

After hearing argument on both sides, the trial court decreed  the  suit  in

favour of  the  plaintiff-appellant  with  a  direction  to  the  defendant-

respondent to execute the absolute sale deed in  favour  of  the  plaintiff,

free  from  all  claims  and  encumbrances,   by   receiving   the   balance

consideration of Rs.10,65,000/- and to hand over  the  vacant  and  peaceful

possession of the suit Schedule Property to  the  plaintiff.   Aggrieved  by

the decision, the defendant-respondent preferred an appeal before  the  High

Court, which passed the impugned order  setting  aside  the  decree  of  the

trial court and dismissing the suit for specific performance.   Hence,  this

appeal by special leave by the plaintiff.

Mr. Sanjay Parikh, learned counsel appearing  on  behalf  of  the  appellant

contended that instead of adverting to and re-appreciating the  evidence  on

record,  the  High  Court  erred  in  arriving  at  the  findings  based  on

conjectures and surmises.  The appellant-plaintiff  has  complied  with  the

provisions of Section 16(c) of the Specific Relief Act by  establishing  his

willingness to perform his part of  the  contract  whereas  the  respondent-

defendant failed to do so.  It is further contended that the respondent  has

admitted  by  way  of  affidavit  dated  10.10.2006  that  he  executed  the

Agreement of sale dated  15.12.2003  and  also  by  letter  dated  21.1.2004

further admitted that  he  has  executed  aforesaid  agreement  and  he  had

already received a sum of Rs.5,45,000/- as part payment of  the  total  sale

consideration.  At the instance of appellant, on  16.2.2004  Syndicate  Bank

issued two cheques one  for  Rs.10,65,000/-  in  favour  of  the  respondent

towards balance amount of sale consideration and another  for  Rs.1,19,840/-

in favour of  Sub-Registrar,  Rajajinagar,  Bangalore  for  payment  of  the

registration charges of the said sale deed.  As  contended,  on  failure  of

the respondent to reply legal notice of the appellant and execute  the  sale

deed in favour of the appellant, the  appellant  had  to  move  a  suit  for

relief of specific performance  directing  the  respondent  to  receive  the

balance sale consideration to execute an absolute sale  deed  in  favour  of

the appellant.  Learned counsel drew our attention to the exhibits  and  the

evidence of the defendant-respondent and submitted that the appellate  court

has committed serious illegality in ignoring these  materials  and  reversed

the finding of the trial court.

Per contra, Mr. Vishwanath  Shetty,  learned  senior  counsel  appearing  on

behalf of respondent, submitted that taking advantage  of  financial  crises

and disturbed state of mind of the respondent, the appellant  suggested  him

to execute an agreement of sale and without revealing its contents took  his

signature on the agreement, which was made only for nominal purpose  and  he

had no intention to sell the property.  It is  further  contended  that  the

appellant had concocted and fabricated the agreement. It is alleged  by  the

respondent that since appellant did not perform his part  of  the  contract,

the entire alleged agreement stood cancelled.  Prevailing circumstances  had

forced  respondent  to  write  aforesaid  letter  dated  21.1.2004   calling

appellant to pay the entire  amount.   Alleged  agreement  and  letter  were

created by the appellant under suspicious circumstances and mental  pressure

of the defendant-respondent, and as such, they are not  legally  enforceable

for a decree under Section 16(c)  read  with  Section  20  of  the  Specific

Relief Act, 1963.  The High Court has held that there was  payment  of  only

Rs.5000/- to the defendant as against the claim of  the  plaintiff  that  he

has paid a sum of Rs.5,45,000/- under Ex.P1 and P2.   It  has  been  further

contended on behalf of the respondent that the market value of the  property

in the year 2003 in Bangalore was much  more  to  the  consideration  amount

contained in Ex. P1 and P2.  The whole transaction was  nothing  but  farce.

Respondent contends that  taking  into  consideration  all  aspects  of  the

matter, the High Court is right in  reversing  the  judgment  of  the  trial

court, which had ignored the material evidence on record with regard to  the

conduct of the plaintiff-appellant.

While deciding the issue as to whether the agreement  dated  15.12.2003  was

executed by the defendant in favour of the  plaintiff-appellant,  the  trial

court has gone through the pleading and evidence and  discussed  the  matter

in detail. The trial court found that after the agreement  executed  between

the parties on  15.12.2003  the  defendant-respondent  issued  letter  dated

21.1.2004 calling upon the plaintiff to get ready with  the  entire  balance

amount on or before 15.4.2004  and  also  mentioned  that  in  default,  the

agreement  dated  15.12.2003 will stand cancelled  and  the  advance  amount

shall be forfeited. The trial court further found  that  the  plaintiff  had

paid an amount of Rs. 3,75,000/-  to  the  defendant  for  the  property  in

occupation of the plaintiff taken  on  lease  and  the  defendant  in  cross

examination had admitted that the plaintiff  occupied  the  first  floor  as

mortgagee and that the plaintiff has paid  the  amount  of   Rs.  3,75,000/-

(exhibit P-3).  The  trial  court  further  found  that  the  defendant  was

examined as DW-1 and he admitted the signature  of  himself,  his  wife  and

signature of plaintiff.  He further admitted in cross  examination  that  he

had read the papers and signed the same.   The defendant  also  handed  over

copies of the title deeds and the encumbrance certificate to  the  plaintiff

on lease basis and also Exhibit P-1 and P-2, the trial  court  came  to  the

conclusion that the defendant entered into an agreement  of  sale  with  the

plaintiff for a consideration of Rs. 16,10,000/- and that the amount of  Rs.

5,45,000/- was paid as an advance towards the sale  of  the  said  property.

Further the defendant (DW-1) admitted the receipt of the legal notice  dated

12.3.2004 (exhibit P-3) but he did not reply the said notice.

The trial court also discussed the defence taken  by  the  defendant  during

cross examination that the  suit property has fallen to  the  share  of  the

defendant and that all his brothers and  sisters  are  residing  separately.

The trial court, therefore, came to the conclusion that  there  is  a  valid

agreement to sell the suit property executed by the defendant in  favour  of

the plaintiff on receipt of the advance consideration.

The High Court has taken a very peculiar view that  the  plaintiff-appellant

filed the suit which was premature.  For better appreciation,  the  relevant

portion of para 8 of the judgment passed by  the  High  Court  is  extracted

hereinbelow:-

“It is not in dispute that the agreement is dated 15.12.2003.   Under  the

agreement, both the parties  have  agreed  that  the  sale  deed  should  be

executed within one year from that day, that is on  or  before   15.12.2004.

But the suit is filed on 9.7.2004, that is within about 7  months  from  the

date of the agreement.  Absolutely, no reasons are  forthcoming  as  to  why

the suit was filed prematurely.  In the meanwhile, the plaintiff  approached

the Police for enforcement  of the contract.   The  same  is  clear  in  the

matter on record Ex.P.11 dated 08.2.2004 is  the  complaint  lodged  by  the

plaintiff before the Deputy Police  Commissioner.  In  the  said  complaint,

he has clearly stated that though  the  defendant  agreed  for  selling  his

property on  15.12.2003, the plaintiff has not come forward to  execute  the

sale deed and that the plaintiff has been delaying  the  execution  of  sale

deed since four days prior to the filing of the  complaint.   The  plaintiff

requested the Deputy Police Commissioner to call the defendant and  to  take

action by directing him to execute the sale deed as agreed.  He also  sought

for protection by filing the said complaint.

Ex.P.12 is the complaint dated 3.3.2004 filed by the plaintiff  before

the Police Commissioner, Bangalore city.  In the said  complaint  also,  the

plaintiff has alleged that defendant is refusing to execute  the  sale  deed

in his favour and that therefore, the Commissioner should  intervene in  the

manner for getting the sale deed executed in favour of the plaintiff.

Ex.P.13 is the  complaint  dated  11.4.2004  filed  by  the  plaintiff

before the  Police  Inspector,  Subramanyanagar  Police  Station,  Bangalore

(subsequently police station).  In the said complaint, he  has  stated  that

defendant and his family members have threatened to kill the  plaintiff  and

his family members and  therefore,  action  should  be  taken  against  the4

defendant.  However, Inspector  of  Police  has  issued  an  endorsement  on

11.3.2004, as per Ex.P.14 to the effect that dispute between the parties  is

of civil nature and the complainant  was  directed  to  get  his  grievances

redressed  before  the  jurisdictional  Civil  Court.   Ex.P.15  is  another

complaint of similar nature.   Ex.P.16  is  an  endorsement  issued  by  the

Police officer to the wife  of  the  complainant  intimating  her  that  the

complaint lodged by her on 12.3.2004, is received  and  for  any  grievance,

she can approach the Subramanyanagar Police Station.  Further,  in  Ex.P.17,

the Inspector of Police has intimated the plaintiff that the  defendant  has

denied the agreement of sale and that  he  had  signed  the  sale  agreement

under mental pressure.  Again by issuing such an endorsement, the  Inspector

has directed the plaintiff to get his grievances redressed before the  Civil

Court.  Cr.P.C.107  proceedings  were  initiated   before   the   Tehsildar,

Bangalore, against the parties as is  clear  from  Ex.P.18.   based  on  the

complaints, two charge sheets were  lodged  against  the  defendant  as  per

Ex.P.19 and 21; the same  are  pending  consideration  before  the  Criminal

Court.  These facts clearly go to show that  the  plaintiff  has  approached

the police repeatedly by making  one  or  the  other  allegations  that  too

within the span of 2 to 4 months of the agreement.  He  has  approached  the

Commissioner of Police  and Deputy  Commissioner  of  police  seeking  their

interference in the matter  for  getting  the  sale  deed  executed  in  his

favour.”

The High Court further held that in the agreement (Exhibit P-1) the  parties

have agreed that if the sale deed could not be executed  by  the  defendant,

he will repay a sum of Rs,. 10,90,000/-, According to the  High  Court,  the

recital in the agreement shows  that it was not executed  by  the  defendant

with free mind and volition rather he was  under  pressure  while  executing

those documents.

We have given our thoughtful consideration in the  matter  and  perused  the

pleading and evidence.  We are of the view  that  the  High  Court  has  not

approached the issue in its right  perspective  and  has  committed  serious

error of law in holding that the agreement was  executed  by  the  defendant

without free mind and volition and under some pressure.  The  agreement  was

executed on  15.12.2003  wherein  it  has  been  mentioned  that  the  total

consideration amount was 16,10,000/- and out of that part  consideration  of

sum of Rs. 5,45,000/- was paid.  The said agreement was followed by  another

letter dated 21.1.2004, executed by the  respondent,  the  contents  whereof

are reproduced herein-below:-

“21.01.2004

“That on this 22nd day of January, 2004, I have executed  the  agreement  of

sale in favour of Sri K.Prakash, in respect of the  House  bearing  No.2558,

11th Main Road, Subramanyanagara, Bangalore-560 010, to sell the same for  a

total  sale  consideration  of  Rs.16,10,000/-  (Rupees  Sixteen  Lakhs  Ten

thousand only). In all I have received a sum of Rs.5,45,000/-  (Rupees  Five

Lakhs Forty Five Thousand  only)  from  K.  Prakash  and  the  balance  sale

consideration to be paid on or before 15.04.2004  evening,  failing  to  pay

the balance sale consideration as per the agreement dated 15.12.2004.   This

Agreement stands cancel. I agree for the same.

Sd/-                                    Sd/-

(Sampath Kumar)

Vendor                            (K.Prakash)

(Purchaser)

Sd/-

(Kanthamani)

WITNESSES:                   WITNESSES

Sd/-                                  1) Sd/-

Sd/-                                  2)  Sd/-

Sd/-                                  3)   Sd/-”

Indisputably, remedy for specific performance is an equitable  remedy.   The

Court while granting relief for specific performance exercise  discretionary

jurisdiction.  Section 20 of the Act specifically provides that the  court’s

jurisdiction to grant decree of specific performance  is  discretionary  but

not arbitrary.  Discretion must be exercised in accordance  with  the  sound

and reasonable judicial principles.

 

The King’s Bench in Rookey’s Case [77 ER 209;  (1597)  5  Co.Rep.99]  it  is

said :

“Discretion is a science, not to act arbitrarily  according  to  men’s  will

and private affection: so the discretion which is exercised here, is  to  be

governed by rules of law and equity, which are to oppose, but each,  in  its

turn, to be subservient to  the  other.   This  discretion,  in  some  cases

follows the law implicitly, in others or allays the rigour of it, but in  no

case does it contradict or overturn the grounds or  principles  thereof,  as

has  been  sometimes  ignorantly  imputed  to  this  Court.    That   is   a

discretionary power, which neither this nor any other Court,  not  even  the

highest, acting in a judicial capacity  is  by  the  constitution  entrusted

with”

The Court of Chancery in Attorney General  vs. Wheat  [(1759)  1  Eden

177; 28 ER 652] followed the Rooke’s case and observed :

“the law is clear and courts of equity ought to  follow  it  in  their

judgments  concerning  titles  to   equitable   estates;   otherwise   great

uncertainty and confusion would ensue.  And  though  proceedings  in  equity

are said to be secundum discretionem boni vin, yet when  it  is  asked,  vir

bonus est quis? The answer is, qui consulta partum, qui leges juraq  servat.

And as it is said in Rooke’s case, 5  Rep.  99  b,  that  discretion  is  a

science  not  to  act  arbitrarily  according  to  men’s  will  and  private

affection: so the discretion which is exercised here, is to be  governed  by

rules of law and equity, which are to oppose, but each, in its turn,  to  be

subservient to the other.  This discretion, in some cases  follows  the  law

implicitly, in others or allays the rigour of it, but in  no  case  does  it

contradict or overturn the  grounds  or  principles  thereof,  as  has  been

sometimes ignorantly imputed to this Court.  That is a discretionary  power,

which neither this nor any other Court, not even the highest,  acting  in  a

judicial capacity is by the constitution entrusted with.   This  description

is full and judicious, and what ought to be imprinted on the mind  of  every

judge.”

  1. The principles which can be enunciated is that  where  the  plaintiff

brings a suit for  specific  performance  of  contract  for  sale,  the  law

insists  a  condition  precedent  to  the  grant  of  decree  for   specific

performance that  the  plaintiff  must  show  his  continued  readiness  and

willingness to perform his part of  the  contract  in  accordance  with  its

terms from the date of contract to the date of hearing.  Normally, when  the

trial court exercises its discretion in one way or other after  appreciation

of entire evidence and materials on record, the appellate court  should  not

interfere unless it is established that the discretion  has  been  exercised

perversely, arbitrarily  or  against  judicial  principles.   The  appellate

court should also not exercise its discretion against the grant of  specific

performance on extraneous considerations or sympathetic considerations.   It

is true, as contemplated under Section 20 of the Specific Relief  Act,  that

a party is not entitled to get a  decree  for  specific  performance  merely

because it is lawful to do so.  Nevertheless once an agreement  to  sell  is

legal and validly proved and further requirements for getting such a  decree

is established then the Court has to exercise its discretion  in  favour  of

granting relief for specific performance.

Mr.  Shetty,  lastly  submitted  that   grant  of  decree  for  specific

performance in favour of the appellant will cause a great hardship  for  the

reason not only because of the lesser price shown in the agreement but  also

because of the rise in price which have been increased ten times  the  price

agreed between the parties.

Subsequent rise in price will not be  treated  as  a  hardship  entailing

refusal of the decree for specific performance. Rise in price  is  a  normal

change of  circumstances  and,  therefore,  on  that  ground  a  decree  for

specific performance cannot be reversed.

   However, the court may take notice of the fact that  there  has  been  an

increase in the price of the property and considering the  other  facts  and

circumstances of the case, this Court while  granting  decree  for  specific

performance can impose such condition which may to  some  extent  compensate

the  defendant-owner  of  the  property.   This  aspect  of  the  matter  is

considered by a three Judge Bench  of  this  Court  in  Nirmala  Anand   vs.

Advent Corporation (P) Ltd. and Others,  (2002) 8 SCC 146, where this  Court

held :-

“6. It is true that grant of decree of  specific  performance  lies  in  the

discretion of the court and it is also well settled that it  is  not  always

necessary to grant specific performance simply for the  reason  that  it  is

legal to do so. It is further well settled that the court in its  discretion

can impose any reasonable  condition  including  payment  of  an  additional

amount by one party to the  other  while  granting  or  refusing  decree  of

specific performance. Whether the purchaser shall  be  directed  to  pay  an

additional amount to the seller or converse would depend upon the facts  and

circumstances of a case. Ordinarily, the plaintiff is not to be  denied  the

relief of specific performance only on account of  the  phenomenal  increase

of price during the pendency of litigation. That may be, in  a  given  case,

one  of  the  considerations  besides  many  others   to   be   taken   into

consideration for refusing the decree of specific performance. As a  general

rule, it cannot be held that ordinarily the plaintiff cannot be  allowed  to

have, for her alone, the entire benefit of phenomenal increase of the  value

of the property during the pendency of the litigation. While  balancing  the

equities, one of the considerations to be kept in view is as to who  is  the

defaulting party. It is also to be borne in mind whether a party  is  trying

to take undue advantage over the other as also  the  hardship  that  may  be

caused to the defendant by directing  specific  performance.  There  may  be

other circumstances on which parties may not have any control. The  totality

of the circumstances is required to be seen.”

     As discussed above the agreement was entered into between  the  parties

in 2003 for sale of the property for a total consideration of Rs.16,10,000/-

.  Ten years have passed by and now the price of the property in  that  area

where it  situates has increased by not less than five  times.   Keeping  in

mind the factual position we are of the view that the appellant  should  pay

a total  consideration  of  Rs.25  lakhs,  being  the  price  for  the  said

property.

 

   We, therefore, allow this appeal and set aside  the  judgment  and  order

passed by the High Court and restore the judgment and decree  of  the  trial

court with the modification that on payment of  Rs.25  lakhs,  less  already

paid by the plaintiff, the defendant-owner shall execute a  registered  sale

deed within a period of three months from today.

………………………….J.

[ M.Y. Eqbal ]

…………………………….J

[Pinaki Chandra Ghose]

New Delhi

September 22, 2014

Advertisements

About advocatemmmohan

ADVOCATE

Discussion

Comments are closed.

Blog Stats

  • 1,698,922 hits

ADVOCATE MMMOHAN

archieves

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,851 other followers

Follow advocatemmmohan on WordPress.com