Leeladhar (D) through LRS. Vs. Vijay Kumar (D) through LRS-26/09/2019

Specific performance of the contract-The agreement was an agreement to sell and after entering into the agreement to sell, Appellant received the full sale consideration and handed over the possession to Respondent, the question of exercising any discretionary favour to the appellant does not arise.

CAUSE: The respondents filed a suit in the Court of Civil Judge, praying for specific performance of the contract and also prayed that if any part of the disputed land is not found in their possession, then possession be given to them. In the alternative, they prayed for refund of Rs.40,000/along with interest.

ACT: Section 20(2) (c) of the Specific Relief Act, 1963

SUPREME COURT OF INDIA

Leeladhar (D) through LRS. Vs. Vijay Kumar (D) through LRS. & Ors.

[Civil Appeal No. 7282 of 2009]

DEEPAK GUPTA, J.

One Leeladhar, the original appellant herein, entered into an agreement to sell 18 bighas of land for a sum of Rs.40,000/with Deshraj, father of the plaintiffs respondents herein on 15.02.1985. Admittedly, an amount of Rs.35,000/was paid in advance. This agreement to sell was registered on 18.02.1985. On 26.03.1985 another document (Exhibit P14) was entered into between the parties. Leeladhar was paid balance Rs.5,000/and the subsequent agreement notes that he gave possession of the land to Deshraj. On 20.01.1988, Deshraj issued a legal notice to Leeladhar asking him to get the sale deed executed. According to the plaintiffs, they and their father went to the office of the Sub-Registrar on 15.02.1988 for this purpose. But Leeladhar did not turn up. Deshraj expired on 16.05.1988 and, thereafter, the respondents herein filed a suit in the Court of Civil Judge, Nainital praying for specific performance of the contract and also prayed that if any part of the disputed land is not found in their possession, then possession be given to them. In the alternative, they prayed for refund of Rs.40,000/along with interest.

2. In the written statement, Leeladhar took the plea that the agreement in question was a sham document. Deshraj was a moneylender but did not have a licence to do money lending. Therefore, he used to get such documents executed to secure the loans advanced by him. It was also pleaded that Leeladhar had returned the entire amount along with interest to Deshraj on 03.03.1987. This suit was decreed by the trial court. Leeladhar filed an appeal, which was partly allowed by the first appellate court holding that the plaintiffs were not entitled to the discretionary relief of specific performance. This judgment was challenged before the High Court. The second appeal was allowed and the matter was remanded to the first appellate court to decide the case afresh in light of the provisions of Section 20(2) (c) of the Specific Relief Act, 1963. After remand, the Additional District Judge dismissed the appeal of Leeladhar and upheld the order of the trial court. The second appeal filed by Leeladhar before the High Court was dismissed and, hence, this appeal.

3. The main ground raised by Shri Vikas Singh, learned senior counsel appearing for the appellants is that in terms of Section 20(2)(c), the decree of specific performance could not have been granted in favour of the plaintiffs respondents herein. It is submitted that the document was a sham document. It was further urged that possession is not with the plaintiffs and the fact that Deshraj had executed various documents but had not filed suit for specific performance with regard to those contracts indicated that this document (Exhibit P13) was also executed only to secure the repayment of the loan. It is also prayed that in the peculiar facts and circumstances of the case, discretion should be exercised in favour of appellants. On the other hand, Shri P.K. Jain, learned counsel appearing for the respondents submits that all the courts below have given a concurrent finding of fact that the document executed was an agreement to sell and Leeladhar had received the full amount, transferred possession and, therefore, is not entitled to urge that the decree of specific performance should not be granted.

4. We may note a few salient facts. The agreement to sell (Exhibit P13) is registered on 18.02.1985. Rs.35,000/out of Rs.40,000/was paid. The balance Rs.5,000/was paid when the document (Exhibit P14) was executed on 26.03.1985. As far as delay is concerned, we are of the considered view that there is no delay in filing the suit. The suit is within limitation. Further, in this case, even as per the appellants, the possession of the land was with the plaintiff respondent. Therefore, they were in no hurry to get the sale deed executed and this does not disentitle them from getting the relief of specific performance.

5. As far as the issue of Deshraj being a moneylender and having got this document executed only to secure repayment of amount is concerned, all the courts below have found as a fact that this is not the case. The finding is that an agreement to sell was executed. Shri Singh has made reference to the order passed by the first appellate court in the first round. That order having been set aside by the High Court, cannot help the appellants. After remand, the first appellate court clearly held that the documents in question relied upon by Leeladhar could not be used by him because they were only copies and if actually, he had repaid those loans then he would have got originals back from Deshraj. Though various judgments have been cited before us, we do not feel it necessary to refer to the same because once we come to the conclusion that the agreement was an agreement to sell and after entering into the agreement to sell, Leeladhar received the full sale consideration and handed over the possession to Deshraj, the question of exercising any discretionary favour to the appellant does not arise.

6. Section 20(2)(c) of the Specific Relief Act reads as follows:

“20. Discretion as to decreeing specific performance. –

(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.

(2) The following are cases in which the court may properly exercise discretion not to decree specific performance:-

(a) xxx xxx xxx

(b) xxx xxx xxx

(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

Explanation 1.-Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b).

Explanation 2.- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.”

7. To take benefit of clause (c) of subsection (2) of Section 20 of the Specific Relief Act, the defendant in a suit for specific performance must show that he entered into the contract under the circumstances which though rendering the contract voidable, make it inequitable. In the present case, once we hold that the document entered was an agreement to sell and not a sham transaction, the appellants can take no benefit of this provision.

8. In view of the above, we find no merit in the appeal which is accordingly dismissed. Pending application(s), if any, stand(s) disposed of

J. (Deepak Gupta)

J. (Aniruddha Bose)

New Delhi

September 26, 2019


 

SUPREME COURT`S VIEW ON DISCRETIONARY REMEDY

Remedy of specific performance is an equitable remedy. In Order to obtain such discretionary relief, plaintiff has to come to the Court with clean hands. Entire facts of the case have to be pleaded. There should be no attempt on the part of the plaintiff to conceal the facts.

 Since the remedy of specific performance is a discretionary remedy and equitable in nature, plaintiff has to produce materials with respect to his/her readiness and willingness at all point of time. The conduct of the plaintiff assumes significance in a case like this. Court was expected to weigh the materials produced by the plaintiff to come to a definite conclusion pertaining to the readiness and willingness to perform the contractual obligation voluntarily undertaken by the plaintiff. Any action on the part of the plaintiff to take undue advantage of the situation would give negative results and he/she would be denied the equitable remedy. The conduct of the plaintiff throughout should be taken note of to decide the issue regarding exercise of discretionary jurisdiction. In short, in a matter relating to sale of property, Court is not bound to grant specific performance for a mere asking.

In Gobind Ram v. Gian Chand , (2000) 7 SCC 548, the discretionary jurisdiction of specific performance was indicated by the Supreme Court thus :-

“7.It is the settled position of law that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience. As stated in P.V. Joseph?s Son Mathew the court should meticulously consider all facts and circumstances of the case and motive behind the litigation should also be considered.”Continue Reading

Kalavakurti Venkata Subbaiah Vs Bala Gurappagari Guruvi Reddy [ALL SC 1999 AUGUST]

KEYWORDS:- SPECIFIC PERFORMANCE OF CONTRACT

AIR 1999 SC 2958 : (1999) 1 Suppl. SCR 75 : (1999) 7 SCC 114 : JT 1999 (5) SC 389 : (1999) 4 SCALE 466

(SUPREME COURT OF INDIA)

Kalavakurti Venkata Subbaiah Appellant
Versus
Bala Gurappagari Guruvi Reddy Respondent

(Before : S. Rajendra Babu And Ajay Prakash Misra, JJ.)

Civil Appeal No. 2194 of 1989, Decided on : 05-08-1999.

Registation Act, 1908—Section 77—Comprehensive suit for specific performance of contract and seeking directions to register the sale deed—Specific performance of contract in terms of sale deed could be allowed—Availability of statutory remedy of registration of sale deed no bar to suit for specific performance.

Suit for specific performance of contract by way of registration of sale deed is maintainable notwithstanding alternative remedy under Section 77 of the Registration Act to obtain registration of executed document. The analysis of the provisions of Section 77 of the Registration Act would indicate that it would apply only if a matter is pertaining to registration of a document and not for a comprehensive suit as in the instant case where the relief prayed for is directing the defendant to register the sale deed in favour of the plaintiff in respect of the plaint schedule property and if he so fails to get a registration in favour of the plaintiff for permanent injunction or in the alternative for delivery of possession of the plaint schedule mentioned property. The document has not been presented by the respondent to the sub-Registrar at all for registration although the sale deed is stated to have been executed by the appellant as he refuses to co-operate with him in that regard. Therefore, various stages contemplated under Section 77 of the Act have not arisen at all. In such a case when the vendor declines to appear before the sub-Registrar, the situation contemplated under Section 77 of the Act would arise. Under Section 49 of the Act the sale deed could be received in evidence to prove the agreement between the parties though it may not itself constitute a contract to transfer the property. It was a comprehensive suit including a relief for specific performance of contract contained in sale deed executed, document, but not registered and, therefore, relief for specific performance could be granted.

Specific Relief Act, 1963—Section 10—Comprehensive suit for specific performance of contract and seeking directions to register the sale deed—Specific performance of contract in terms of sale deed could be allowed—Availability of statutory remedy of registration of sale deed no bar to suit for specific performance.

Suit for specific performance of contract by way of registration of sale deed is maintainable notwithstanding alternative remedy under Section 77 of the Registration Act to obtain registration of executed document. The analysis of the provisions of Section 77 of the Registration Act would indicate that it would apply only if a matter is pertaining to registration of a document and not for a comprehensive suit as in the instant case where the relief prayed for is directing the defendant to register the sale deed in favour of the plaintiff in respect of the plaint schedule property and if he so fails to get a registration in favour of the plaintiff for permanent injunction or in the alternative for delivery of possession of the plaint schedule mentioned property. The document has not been presented by the respondent to the sub-Registrar at all for registration although the sale deed is stated to have been executed by the appellant as he refuses to co-operate with him in that regard. Therefore, various stages contemplated under Section 77 of the Act have not arisen at all. In such a case when the vendor declines to appear before the sub-Registrar, the situation contemplated under Section 77 of the Act would arise. Under Section 49 of the Act the sale deed could be received in evidence to prove the agreement between the parties though it may not itself constitute a contract to transfer the property. It was a comprehensive suit including a relief for specific performance of contract contained in sale deed executed, document, but not registered and, therefore, relief for specific performance could be granted.

Counsel for the Parties:

R. Sundravardanam, Sr. Advocate, Ms. Santhi Narayanan, K. Ram Kumar, Advocates with him for Appellant

K. Subba Rao, Advocate, for A. Subba Rao, Advocate, for Respondent.

Judgement

Rajendra Babu, J—The respondent filed a suit for specific performance seeking a direction to register the sale deed dated July 2, 1979 (Exhibit A-6) and for injunction or possession of the immovable property referred to therein. His case is that the appellant had duly executed the sale deed in his favour in respect of the suit premises for a sale consideration of ` 3,200/- but the appellant did not get the document registered thereafter. The case set up by the appellant is that he signed sale deed dated July 2, 1979 as a result of fraud and misrepresentation by the respondent taking advantage of the fact that he was an illiterate person. The trial Court dismissed the suit of the respondent on the ground that the respondent had to avail of the remedy under S. 77 of the Registration Act, 1908 (hereinafter referred to as ‘the Act’) and not bring a suit for specific performance. The matter was carried in appeal. The First Appellate Court allowed the appeal and decreed the suit on the basis that the relief insofar as the decree for specific performance of the later half of the document could be granted and that Section 77 of the Act will not come in the way. A second appeal was preferred against the judgment and decree of the First Appellate Court and the High Court held that the view taken by the First Appellate Court was correct and dismissed the second appeal. Thereafter review petition was also preferred on the ground that the High Court had proceeded on the view that the judgments of the courts below were concurrent and the matter involves only pure findings of fact. The said review petition was dismissed by the High Court. Thereafter the matter is brought up before this Court under Article 136 of the Constitution and this Court, having granted leave, is now registered it as an appeal.

2. On the facts admitted the execution of the deed could not be doubted. However, the trial Court had taken the view that it could not place reliance on the evidence of PWs. 2 and 3. The First Appellate Court critically examined the same and held that the direct testimony of PWs 2 and 3 were free from blame and they admittedly witnessed execution of the deed and the payment of purchase money recited in the deed by the plaintiff to the defendant at the time of the execution of the document was clearly proved by the reliable and direct testimony of PWs 2 and 3. The oral assertion of the defendant to sell the suit land to the plaintiff for valuable consideration of ` 16,000/- was to vary or contradict the term of the instrument and, therefore, was not permissible in view of S. 92 of the Evidence Act. The First Appellate Court did not, therefore, agree with the conclusion of the Trial Court and came to the conclusion that the value of the land was received under Exhibit A-6 and the plaintiff was not disentitled to the registration of the said document.

3. In this appeal the question raised is whether the reliefs sought for by the respondent to enforce the registration of the document particularly when the appellant’s contention was that document (Ex. A-6) is a deed of sale and, being unregistered, a decree for specific performance based on the same could not be granted.

4. On this question, there is sharp cleavage of opinion between various High Courts. Instead of setting a catalogues of cases, we will summarise the views expressed therein. A survey of these decisions would show that a plaintiff has a complete remedy under the Act, and not having chosen to follow it, has only himself to blame himself; that document has no efficacy in law as the same is not registered; that a party to an agreement has no right to seek specific performance of the agreement once the document has been executed in pursuance of the agreement, but the document is not registered and that the party to an agreement is not entitled to compel the other party who has duly executed a document in pursuance of the agreement to go on executing fresh documents, by resorting to a suit for specific performance so long as no document has been registered.

5. Another line of authority is the decision of the Division Bench of the Madras High Court in Manicka Gounder v. Elumalai Gounder (1956) 2 Mad LJ 536, observed as follows:

“It is true that the purchaser can resort to proceedings under the Registration Act and the special statutory remedy under S. 77 of that Act to obtain registration of executed document. But, if for any reason it becomes impossible to obtain registration after resort to such proceedings or because of other circumstances which prevent any resort to such proceedings under the Act then undoubtedly the vendee is entitled to bring a suit for specific performance of the agreement to sell in his favour. This does not, however, mean that every such suit should be decreed.”

6. It is also viewed that a court cannot direct registration of a document after expiry of the period mentioned in the Act as such direction will be contrary to law.

7. The respondent referred to the decision of Madras High Court in Ramachandra Naidu v. Ramayya Naidu, AIR 1969 Mad 418. In that case, a conclusion was drawn to the effect that in enforcement of the promise made by the defendant to sign and execute all deeds and writings for better securing the estate, the plaintiff is entitled to have a proper deed of conveyance executed by the defendant at the plaintiff’s costs and registered and that there are two parts in such a document, one is merely an agreement to sell and, therefore, there is no objection to a suit for specific performance being based on it and second, that even if it should be deemed to be a sale deed which it is not, it would be admissible in evidence and that the earlier part could be separated from the later part, in which the defendants have agreed to execute a formal deed of conveyance and the agreement to execute a formal deed of conveyance could be specifically enforced.

8. In Veeran Ambalam v. Vellaiammal, AIR 1960 Mad 244, it was held the lesser remedy provided under Section 77 of the Act cannot take away the larger remedy provided for under the Specific Relief Act and that the Act does not touch or affect the equitable jurisdiction possessed by the Civil Courts to pass a decree, for specific performance where circumstances exist entitling the plaintiff to pass a decree, and that if the remedy under Section 77 of the Act is not available and even if available, is not effective and it is futile to initiate proceedings, under the Act, the vendee may have his remedy for specific performance. This view was reiterated by the Madras High Court in Ellammal v. Rangaswamy Koundar (1982) 95 Mad LW 546. It may be noticed that in Mathai v. Joseph, AIR 1970 Ker 261, the Kerala High Court agreed with the view expressed in Veerappa Naidu v. Venkaiah, AIR 1961 Andh Pra 534, to hold that a person seeking relief other than bare registration can approach the court by filing a suit and his right to file a suit in civil court is not fettered by Section 77 of the Act. The view taken is that Section 77 of the Act is only a facility available to the aggrieved party and not a fetter on the court’s power and whether the plaintiff has already set in motion the machinery for enforcing registration or not is immaterial and cannot inhibit a suit de hors Section 77 of the Act. Now the pendulum appears to have swung from one extreme to another towards the view that a suit for specific performance by way of registration of a document is maintainable notwithstanding the alternative remedy provided under Section 77 of the Act.

9. We may advert to Section 77 of the Act. Several steps have to be taken before a suit under Section 77 of the Act would be filed and they are:

a) document has to be presented for registration within the time prescribed by Sections 23-26 of the Act;

b) document has to be presented by a person authorised to do so under Section 32 of the Act;

c) the Sub-Registrar has refused to register the document presented to him for registration;

d) appeal or application against such refusal has been made under Section 72 or 73 of the Act within 30 days of the order of the Sub-Registrar;

e) the Sub-Registrar has refused to register under Section 76 of the Act; and

f) suit is filed within 30 days of the order of the Sub-Registrar.

10. The difference of opinion amongst the various High Courts on this aspect of the matter is that Section 77 of the Act is a complete code in itself providing for the enforcement of a right to get a document registered by filing a civil suit which but for the special provision of that Section could not be maintainable. Several difficulties have been considered in these decisions, such as, when the time has expired since the date of the execution of the document whether there could be a decree to direct the Sub-Registrar to register the document. On the other hand, it has also been noticed that an agreement for transfer of property implies a contract not only to execute the deed of transfer but also to appear before the registering officer and to admit execution thereby facilitating the registration of the document wherever it is compulsory. The provisions of the Specific Relief Act and the Registration Act may to a certain extent cover the same field but so that one will not supersede the other. Where the stage indicated in Section 77 of the Act has reached and no other relief except a direction for registration of the document is really asked for, Section 77 of the Act may be an exclusive remedy. However, in other cases it has no application, inasmuch as a suit for specific performance is of wider amplitude and is primarily one for enforcement of a contract and other consequential or further relief. If a party is seeking not merely the registration of a sale deed, but also recovery of possession and mesne profits or damages, a suit under Section 77 of the Act is not adequate remedy.

11. The analysis of the provisions of S. 77 of the Act made by us above would indicate that it would apply only if a matter is pertaining to registration of a document and not for a comprehensive suit as in the present case where the relief prayed for is directing the defendant to register the sale deed dated July 2, 1979 in favour of the plaintiff in respect of the plaint schedule property and if he so fails to get a registration in favour of the plaintiff for permanent injunction or in the alternative for delivery of possession of the plaint schedule mentioned property. The document has not been presented by the respondent to the Sub-Registrar at all for registration although the sale deed is stated to have been executed by the appellant as he refuses to cooperate with him in that regard. Therefore, various stages contemplated under Section 77 of the Act have not arisen in the present case at all. We do not think in such a case when the vendor declines to appear before the Sub-Registrar, the situation contemplated under Section 77 of the Act would arise. It is only on presentation of a document the other circumstances would arise. The First Appellate Court rightly took the view that under Section 49 of the Act the sale deed could be received in evidence to prove the agreement between the parties though it may not itself constitute a contract to transfer the property. The said Court noticed that there was an agreement to transfer the immovable property in the suit by the defendant to the plaintiff on the terms stated in the sale deed. Such an agreement to sell the immovable property in suit could be specifically enforced under the provisions of the Specific Relief Act. Therefore, the First Appellate Court was of the opinion that the plaintiff was alternatively entitled to base his claim of specific performance on the pleaded oral agreement to sell and, inasmuch as there are further reliefs sought for, it was a comprehensive suit including a relief for specific performance of a contract contained in the sale deed executed, but not registered and, therefore, held that such relief for specific performance could be granted.

12. In the circumstances, we are of the opinion that the First Appellate Court and the High Court were justified in upholding the claim of the plaintiff. Thus we find no merit in the appeal and the same, therefore, stands dismissed with costs throughout.

Sardar Singh Vs Smt. Krishna Devi and another[ ALL SC 1994 APRIL]

KEYWORDS:-family arrangements-partial enforcement of contract instead of refusal of specific performance in its entirety-

c

” the award did not create any right, title or interest in the appellant for the first time, but it declared the pre-existing factum, namely the appellant and Kartar Lal purchased the property jointly and that Kartar Lal was the benamidar and that both of the brothers had half share in the house with a right to enjoyment of the property in equal moiety. Thus the award is not compulsorily registrable”.

DATE:-26-04-1994.

AIR 1995 SC 491 : (1994) 4 SCC 18 : JT 1994 (3) SC 465 : (1994) 2 SCALE 719

(SUPREME COURT OF INDIA)

Sardar Singh Appellant
Versus
Smt. Krishna Devi and another Respondent

(Before: K. Ramaswamy And N. Venkatachala, JJ.)

Civil Appeal No. 2637 of 1994 (arising out of S.L.P. (C) No. 1875 of 1991), Decided on: 26-04-1994.

Registation Act, 1908—Sections 17(1)(b) and 49—Non-testamentary instrument—Registration—Necessity of—Award of Arbitrator creating rights in immovable property—Its registration is compulsory—Award only declaring the pre-existing factum of purchase and not creating any new right does not compulsorily require registration.

Specific Relief Act, 1963—Section 20(1)—Specific performance of contract—Exercise of discretion—Considerations for—The discretion should be exercised on sound judicial principles—Agreement to sell not binding on co-owner who was not party to the agreement—Partial specific performance in respect of the share of property under the occupation of other co-owner, granted.

Judgment

K. Ramaswamy, J—Leave granted.

2. While the appellant was in Govt. service, Kartar Lal (first defendant in the suit), his brother had purchased on April 7, 1959 the house bearing Municipal No. 313, with land admeasuring 222 sq. yards in Karol Bagh from the Ministry of Rehabilitation. On January 22, 1963 the sale certificate was issued in favour of Kartar Lal. Finding it exclusively in the name of Kartar Lal, the appellant raised a dispute which was referred to named private arbitrators for resolution. The two arbitrators by their award dated October 16, 1963 declared that:

“We award that Shri Sardar Singh is the owner of half house bearing Municipal 313, Ward No. XVI situate at Gali No. 10, Faiz Road, Karol Bagh, New Delhi, from the date of purchase of the said house, i.e. from 7-4-1959 as he paid ` 18,100/- to Shri Kartar Lal in the shape of claim bonds valued at Rupees 11,560.00 and ` 6,540.00 in cash towards the purchase price of the said house and Shri Kartar Lal paid half of the price of the said house in the shape of claim bond and cash. The price of the said house was contributed half and half by both of them. Though, the sale deed was taken by Shri Kartar Lal in his name benami but actually Shri Kartar Lal and Shri Sardar Singh, are the owners of the said house in equal share from the date of its purchases, i.e. from 7-4-1959 and Shri Sardar Singh, is also entitled to half the amount of rent of the said house from the date of its purchase after deducting property taxes paid by Shri Kartar Lal.”

On an application made under S, 14 of the Arbitration Act, 1940 by the appellant, the arbitrators produced the award in Suit No. 299/63 in the Court of the Judge, First Class, Delhi which was made rule of the court under S. 17 thereof by decree dated December 28, 1963. The appellant laid proceedings before the Rent Controller for eviction of their tenants for personal occupation on the ground that he being a Government servant was entitled to possession under special procedure prescribed under that Act and accordingly had possession. Kartar Lal entered into a contract of sale of the entire property with Joginder Nath, husband of the first respondent on January 15, 1973 for Rupees 90,000/- and had received part consideration. The time to execute the sale deed was extended from time to time up to December 31, 1979 by which date Joginder Nath died and the first respondent had entered into fresh contract with Kartar Lal and laid the suit in O.S. No. 2/83 against Kartar Lal. The appellant, becoming aware of the contract of sale and pending suit, got himself impleaded in that suit as second defendant. The trial court by decree dated May 5, 1986 decreed the suit. On appeal the High Court of Delhi in R.F.A. No. 206 of 1986 by judgment and decree dated November 21, 1990 confirmed the decree.

3. The courts below found that the appellant’s title is founded upon the award to acquire title to or to divest the title or Kartar Lal; it is compulsorily registrable under S. 17 of the Registration Act, 1908 and being an unregistered award the same was inadmissible in evidence as source of title under S. 49 thereof. The appellant’s claim as owner of the half share in the property was thus negatived. The question, therefore, is whether the award, on the facts and in the circumstances, is compulsorily registrable under S. 17 of the Registration Act which reads thus:

“17. Documents of which registration is compulsory:-

(1) The following documents shall be registered, if the property to which they relate is situated in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864 or the Indian Registration Act, 1866 (20 of 1866) or the Indian Registration Act, 1877 (3 of 1877) or this Act came or comes into force, namely:

(a) **********

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property.”

4. Section 49 declares the effect of non-registration that no document required under S. 17 …..to be registered shall have an effect in any immoveable property comprised therein……or be received as evidence of any transaction affecting such property……unless it has been registered. A conjoint reading of sub-sec. 17(1)(b) and Sec. 49 of the Registration Act establishes that a non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish in present or future, any right, title or interest, whether vested or contingent to or in any immoveable property of the value of ` 100/- and above, shall compulsorily be registered, otherwise the instrument does not affect any immoveable property comprised therein or shall not be received as evidence of any transaction affecting such immoveable property. This court in Lachhman Dass v. Ram Lal, (1989) 2 SCR 250 at 259 C and D , held the purpose of registration that:

“…..In other words, it is necessary to examine not so much what it intends to do but what it purports to do.

The real purpose of registration is to secure that every person dealing with the property, where such document requires registration, may rely with confidence upon statements contained in the register as a full and complete account of all transactions by which title may be affected. Section 17 of the said Act being a disabling section, must be construed strictly. Therefore, unless a document is clearly brought within the provisions of the section, its non-registration would be no bar to its being admitted in evidence.”

5. The award made by a private arbitrator is non-testamentary instrument under Section 17(1)(b), though the counsel for the appellant contended contra and we need not dilate on this aspect. In Satish Kumar v. Surinder Kumar. (1969) 2 SCR 244 an arbitrator was appointed by the parties without reference to the court to partition their immoveable properties. An award in that behalf was made and on an application under S. 14 of the Arbitration Act, the award was made a rule of the court. The question arose whether such award was admissible in evidence as affecting partition of the immovable property. This Court held that the award required registration under Sec. 17(1)(b). therefore, the award is a non testamentary instrument.

6. The question, therefore, is whether the award in favour of the appellant creates any right, title and interest in half share of the house is his favour or extinguishes the right, title and interest therein of Kartar Lal. It is, therefore, necessary to examine the award not so much to find what the award intended to do, but what it purports to do and the consequences that would flow therefrom. In this behalf we cannot accept the contention of Sri. M. C. Bhandare, learned senior counsel, that award does not require registration as it merged in the decree of the civil court making it as a rule of the court. As seen in Satish Kumar’s case (supra), this court found that in case the award, if it creates for the first time a right in the immovable property of the value of ` 100/- or above, in the absence of its registration, the awardee would not get title on the award and the title would remain with the party against whom the award was made. The same view was reiterated in Ratan Lal Sharma v. Purshottam Harit, (1974) 3 SCR 109 and in Lachhman Dass’s case (supra). In all these cases this court found that the title was founded on the award.

7. But as said earlier, the crucial question is what the award purports to do? As seen, the arbitrators in the award dated October 19, 1963 declared that Kartar Lal is benamidar, the appellant had contributed half the consideration of the sale price and is the owner of half the house with effect from the date of the purchase, namely April 4(7), 1959 and both the brothers, each as owner, are entitled to half the rent.

8. The contention of the counsel for the respondents that the award creates therein right, title and interest in favour of the appellant and extinguishes that of Kartar Lal who had sale certificate in accordance with the law; his title gets divested only when the award was registered; its non-registration renders it inadmissible as evidence of title; since the foundation of title, therefore, of the appellant, is based on the award, it cannot be looked into, nor can it be considered, are devoid of force. In Uttam Singh Duggal and Co. v. Union of India (C.A. No. 162 of 1962 dated October 11, 1962), the facts therein were that pending civil suit the Union of India called upon the arbitrator to adjudicate the dispute between the appellant and the Union. The award was made after deciding the dispute. It was contended for the appellant that since the award was earlier made and became final, but was not registered, there cannot be a second reference on the same dispute. The High Court held that the first award did not create any bar against the competence of the second reference. On appeal, relying on Ss. 33 and 17 of the Arbitration Act this Court held that “all claims which are the subject matter of the reference to arbitration merged in the award which is pronounced in the proceeding before the arbitrator and that after the award has been pronounced the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said award,” and thereafter no action can be started on the original claim which had been the subject matter of the reference. An award between the parties is entitled to that respect which is due to the judgment of a Court of law to serve. Therefore, it was held that the second reference was incompetent. In Kashinathsa Yamosa Kabadi v. Narsingsa Bhaskarsa Kabadi, (1961) 3 SCR 792 at 806, on a question whether an award made in arbitration out of Court and accepted by the parties, in the absence or registration, could be pleaded in defence as a binding decision between the parties, this Court held at page No. 806 (of SCR): thus:

“It may be sufficient to observe that where an award made in arbitration out of Court is accepted by the parties and it is acted upon voluntarily and a suit is thereafter sought to be filed by one of the parties ignoring the acts done in pursuance of the acceptance of the award, the defence that the suit is not maintainable is not founded on the plea that there is an award which bars the suit but that the parties have by mutual agreement settled the dispute, and that the agreement and the subsequent actings of the parties are binding. By setting up a defence in the present case that there has been a division of the property and the parties have entered into possession of the properties allotted, defendant No. 1 is not seeking to obtain a decision upon the existence, effect or validity of an award. He is merely seeking to set up a plea that the property was divided by consent of parties. Such a plea is in our judgment not precluded by anything contained in the Arbitration Act.”

It is, therefore, clear that though the award was not registered, it could be relied on as a defence to show that parties had agreed to refer the dispute to private arbitration, the award made thereon was accepted by the parties and acted upon it.

In Champalal v. Mst. Samarath Bai, (1960) 2 SCR 810 at 816 , this Court held that:

“the filing of an unregistered award under S. 49 of the Registration Act is not prohibited; what is prohibited is that it cannot be taken into evidence so as to affect immoveable property falling under S. 17 of that Act.”

In Addanki Narayanappa v. Bhaskara Krishtappa, (1966) 3 SCR 400 at 410 and 411 , this Court held that a document of dissolution only records the fact that the partnership had come to an end. It cannot be said to convey any immovable property by a partner to another expressly or by necessary implication, not is there any implication. It was held that such a deed was not compulsorily registrable under S. 17(1)(b) of the Registration Act. In Commr. of Income-tax, West Bengal, Calcutta v. Juggilal Kamalapat, (1967) 1 SCR 784 at 790 , the deed of relinquishment was accepted by one partner in favour of the other partners in the partnership firm including immovable property. This Court held that the deed of relinquishment was in respect of individual interest of a partner in the assets of the partnership firm including immovable property was valid without registration. All the assets of the partnership firm vested in the new partners of the firm. This Court approved the Full Bench judgment of the Lahore High Court in Ajudhia Pershad Ram Pershad v. Sham Sunder, ILR (1947) Lahore 417, wherein the Full Bench held that assignment of the interest of partnership of a partner is to be regarded as movable property, notwithstanding the fact that at that time when it was charged or sold, the partnership assets included immovable property. In Lachman Dass’s case (supra), this Court noted the distinction between the declaration of an existing right as a full owner of the property in question and creation of a right in immovable property in praesenti. In that case since a new right was created under the award in favour of the respondents, it was held that the award required registration and non-registration rendered the award inadmissible in evidence under S. 49.

9. In Kale v. Dy. Director of Consolidation, (1976) 3 SCR 202 , this Court held that a family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour. Family arrangements are governed by principles which are not applicable to dealings between the strangers. The Court when deciding the rights of parties under family arrangements, consider what is the broadest view of the matter, having regard to considerations which, in dealing with transactions between persons not members of the same family, would not be taken into account. If the terms of the family arrangement made under the document as a mere memorandum, itself does not create or extinguish any right in immovable property and, therefore, does not fall within the mischief of S. 17(1)(b) of the Registration Act and is, therefore, not compulsorily registrable.

10. It is, thus, well settled law that the unregistered award per se is not inadmissible in evidence. It is a valid award and not a mere waste paper. It creates rights and obligations between the parties thereto and in conclusive between the parties. It can be set up as a defence as evidence of resolving the disputes and acceptance of it by the parties. If it is a foundation, creating right, title and interest in praesenti or future or extinguishes the right, title or interest in immovable property of the value of ` 100 or above it is compulsorily registrable and non-registration render it inadmissible in evidence. If it contains a mere declaration of a pre-existing right, it is not creating a right, title and interest in praesenti, in which event it is not a compulsorily registrable instrument. It can be looked into as evidence of the conduct of the parties of accepting the award, acting upon it that they have pre-existing right, title or interest in the immovable property .

11. In the light of above conclusion and of the contents of the award referred to hereinbefore, the necessary conclusion is that the award did not create any right, title or interest in the appellant for the first time, but it declared the pre-existing factum, namely the appellant and Kartar Lal purchased the property jointly and that Kartar Lal was the benamidar and that both of the brothers had half share in the house with a right to enjoyment of the property in equal moiety. Thus the award is not compulsorily registrable. The contention of the counsel for the respondent is that if the unregistered award is accepted as a foundation and received in evidence effecting interest in immovable property, there is possibility of avoiding registration and by indirect process title gets conferred, defeating the mandate of S. 17 and S. 49 of the Registration Act. Each case must be considered from its own facts and circumstances; the pre-existing relationship of the parties; the rights inter vivos and the interest or rights they claimed and decided in the award and the legal consequences. On the facts of this case we hold that the appellant and Kartar Lal being tenants in common, migrants from Pakistan after partition, the appellant being Govt. servant, obviously, his brother Kartar Lal purchased the property for their benefit as coparceners or co-owners. In that view it must be held that the award does not have the effect of creating any right in praesenti, nor is it an attempt to avoid law. The award was made rule of the Court a decade earlier to the date of the initial agreement of sale.

12. The next question is whether the Courts below were justified in decreeing the suit for specific performance. Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief, merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in S. 20 are only illustrative and exhaustive. The Court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.

13. Section 12 provides for specific performance of part of contract. Sub-section (1) thereof postulates that except as otherwise hereinafter provided in the section, the Court shall not direct the specific performance of a part of a contract. Sub-section (4) thereto envisages that when a part of the contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part. Section 10(b) provides that “except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced -(b) when the act agreed to be done is such that compensation in money for its non-per-formance would not afford adequate relief. it is contended for the appellant, that the first respondent prayed for refund of the earnest money; since the agreement was in respect of the entire property including the half share of the appellant, the Courts below, instead of decreeing specific performance of the contract, ought to have awarded refund of the earnest money. The decree for specific performance in the circumstances is illegal. Spry in his “Equitable Remedies, 4th Edn., 1990” stated at page No. 59 that “in the absence of special circumstances rendering equitable relief appropriate – the Courts will not grant specific performance, if damages would leave the plaintiff in as favorable a position in all material respects, it is now necessary to reassess earlier decisions in which damages have been held to be an adequate remedy.” At page No. 60 it is stated that, “A special difficulty arises where even if the agreement in question is performed in specie, the right that the purchaser will obtain will probably not amount to more than a right to receive payments of money, such as when the land in question will probably be compulsorily acquired pursuant to statutory authority, but the better view is that damages are not an adequate remedy even in cases of this kind.” At page No. 106 it was further stated that, “although it was said in a number of early cases that Courts of equity will not order specific performance of part only of a contract, this limitation has no basis in principle, and it is now accepted that in a number of diverse circumstances partial enforcement in specie is appropriate.” At page No. 135 it is stated that, “it is well established that generally a plaintiff will not succeed in obtaining an order of specific performance unless he is able to show sufficiently and clearly the existence of a contract that is valid and enforceable at law at the time when the order is sought.” At page No. 158 it is stated that, “whenever there is an active misrepresentation, whether it is innocent or fraudulent, or a non-disclosure in circumstances where there is a duty of disclosure, and according to the appropriate legal and equitable rules, the defendant against whom proceedings for specific performance are brought has a right to rescind, it follows as a matter of course that specific enforcement will not be ordered against him.” At page No. 199 it is stated that the Court may take account of the fact that there are “third persons so connected with the defendant that, by reason of some legal or moral duty which he owes them, it would be highly unreasonable for the Court actively to prevent the defendant from discharging his duty.” At page No. 312 it is stated that, “it has been held by Courts of equity that specific performance will not be granted to a vendor if, although he has established a good title on the balance of probabilities, that title is sufficiently uncertain to be regarded as a doubtful title in the sense in which that term is understood in the material authorities; for otherwise it might appear in subsequent proceedings that a title that the purchaser has obtained a deficient, and there might be no way in which he could be properly compensated.”

14. The contention of the respondent that the appellant and Kartar Lal colluded to bring the award into existence to defeat the rights of the first respondent is devoid of substance. The award was made the rule of the Court 10 years prior to the contract of sale. Kartar Lal even in this Court stood by his contract in favour of the respondent which would belie the plea of collusion.

15. In view of the finding that the appellant had half share in the property contracted to be sold by Kartar Lal, his brother, the agreement of sale does not bind the appellant. The decree for specific performance as against Kartar Lal became final. Admittedly the respondent and her husband are neighbours. The appellant and his brother being co-parceners or co-owners and the appellant after getting the tenant ejected both the brothers started living in the house. As a prudent purchaser Joginder Nath ought to have made enquiries whether Kartar Lal had exclusive title to the property. Evidence of mutation of names in the Municipal Register establishes that the property was mutated in the joint names of the appellant and Kartar Lal and was in joint possession and enjoyment. The Courts below, therefore, have, committed manifest error of law in exercising their discretion directing specific performance of the contract for the entire property. The house being divisible and the appellant being not a consenting party to the contract, equity and justice demand partial enforcement of the contract, instead of refusing specific performance in its entirety, which would meet the ends of justice. Accordingly we hold that Joginder Nath having contracted to purchase the property, it must be referable only in respect of half the right, title and interest held by Kartar Lal, his vendor. The The first respondent being successor in interest, becomes entitled to the enforcement of the contract of the half share by specific performance. The decree of the trial Court is confirmed only to the extend of half share in the aforestated property. The appeal is accordingly allowed and the decree of the High Court is set aside and that of the trial Court is modified to the above extent. The parties are directed to bear their own costs throughout.

Urmila Devi and Others Vs. The Deity, Mandir Shree Chamunda Devi, through Temple Commissioner and Others [SC 2018 January]

KEYWORDS:- Specific performance-Scope of Section 21 of the Specific Relief Act-

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DATE :- JANUARY 10, 2018.

  • When the contract has become impossible with no fault of the plaintiff, Section 21 enables the Court to award compensation in lieu of the specific performance.

ACTS:- Section 21 of the Specific Relief Act-

SUPREME COURT OF INDIA

Urmila Devi and Others Vs. The Deity, Mandir Shree Chamunda Devi, through Temple Commissioner and Others

[Civil Appeal No. 462 of 2018 arising out of SLP(C) No.25771 of 2013]

ASHOK BHUSHAN, J.

1. Leave granted.

2. This appeal has been filed by the plaintiff through legal heirs questioning the judgment of the High Court of Himachal Pradesh in Regular Second Appeal No.117 of 2002 which appeal was filed by respondent No.1 (defendant No.6 in the suit). The High Court by the impugned judgment has modified the decree of specific performance of contract granted by two courts below into a decree ordering respondent Nos.2 to 6 to pay a sum of Rs.90,000/with interest @ 9% per annum from the date of filing of the suit.

3. The brief facts of the case which are necessary to notice for deciding the appeal are: Respondent Nos.2 to executed an agreement to sell dated 19.04.1989 in favour of of Krishan Lal, the predecessorininterest of the appellants for sale of their 5/16th share in Khasra Nos.430 and 431 equal to 02257 hectares for consideration of Rs.90,000/. Respondent Nos.2 to 6 received full consideration of Rs.90,000/and handed over possession to the plaintiff. The plaintiff after getting possession constructed three shops in the suit land. Respondent Nos.2 to 6 executed a gift deed in favour of respondent No.1 of the suit land on 08.07.1991. When in spite of respondents having received the entire sale consideration the sale deed was not executed and with mala fide intention the gift deed was executed in favour of respondent No.1.

Civil Suit No.148 of 1991 was filed by Krishan Lal. Written statements were filed by defendant Nos.1 to 5 jointly and separate written statement was filed by defendant No.6 who is respondent No.1 in the present appeal. It was admitted to all defendants that the suit land has been gifted in favour of defendant No.6 by gift deed dated 08.07.1991. The execution of agreement to sell was not disputed and the receipt of total sale consideration was also not denied. The trial court decreed the suit vide its judgment and order dated 31.03.1999. The trial court declared that gift deed executed by defendant Nos.1 to 5 in favour of defendant No.6 is null and void to the extent they relate to the doner’s 5/16th share in the suit land that was agreed to be sold by them to the plaintiff, decree of specific performance was granted in favour of the plaintiff against defendant Nos.1 to 5.

The appeal was filed by defendant No.6 only against the judgment of the trial court which was also dismissed by the First Appellate Court vide its judgment dated 17.12.2001. Defendant No.6 filed Regular Second Appeal in the High Court being RSA No.117 of 2002. During pendency of the second appeal in 4 the High Court notification under Section 4 of the Land Acquisition Act dated 22.12.2005 was issued for acquisition of suit land. An award dated 10.06.2008 was also given for the land as well as three shops which were constructed in the suit land. The name of defendant No.6 being recorded in the Revenue records compensation was awarded in favour of defendant No.6.

4. Before the High Court a submission was raised on behalf of defendant No.6 that the land has been acquired during the pendency of Regular Second Appeal, the decree of the specific performance cannot be maintained. The High Court agreeing with the submission of defendant No.6 modified the decree by ordering respondent Nos.2 to 6 to pay a sum of Rs.90,000/to the plaintiff with interest @ 9% per annum from the date of filing of the suit. The plaintiff through legal heirs aggrieved by the said judgment has come up in this appeal.

5. Learned counsel for the appellants in support of the appeal contends that the High Court erred in law in ordering the refund of Rs.90,000/in favour of plaintiff whereas the plaintiff(appellants) was entitled to receive the amount of compensation of land which was received by defendant No.6 consequent to the acquisition of land. Defendant No.6 had no right in the land in dispute as the gift deed had been declared null and void. It was the plaintiff (appellants) who was entitled to receive the compensation. The High Court having not interfered with the finding of the courts below that gift deed was void as well as plaintiff was entitled for decree of specific performance of the contract, it was plaintiff (appellants) who was entitled to receive compensation consequent to the acquisition of the suit land.

6. Learned counsel appearing for respondent Nos.2 to 6 supports the judgment and decree of the High Court and he, however, does not dispute that judgment and decree of the Courts below declaring the gift deed dated 08.07.1991 as void having not been interfered with, the defendant No.6 has no right in the suit land. Learned counsel for respondent Nos.2 to 6, however, 6 submits that compensation determined consequent to the land acquisition be appropriated equally between the plaintiff as well as defendant Nos.1 to 5.

7. No one has appeared on behalf of respondent No.1 (defendant No.6).

8. We have considered the submissions of the parties and perused the records.

9. From the facts and material on record, it is undisputed that agreement to sell was executed by defendant Nos.1 t 5 in favour of the plaintiff and entire sale consideration of Rs.90,000/was received and possession was delivered in the year 1989 itself. Plaintiff constructed three shops on the suit land. Plaintiff’s case that to defeat the rights of the plaintiff a gift deed dated 08.07.1991 was executed by defendant Nos.1 to 5 in favour of defendant No.6 has been accepted by courts below which have declared the gift deed as null and void.

The decree for specific performance was granted by the trial court, it was confirmed by the First Appellate Court. The suit land was acquired and compensation was determined in favour of defendant No.6 whose name was recorded in the Revenue records. No objection can be taken to the view of the High Court that consequent of the acquisition of suit land under the land acquisition proceedings decree of specific performance granted in favour of plaintiff could not have been maintained.

10. The limited question which needs to be answered in the present appeal is as to what relief the (plaintiff) appellants were entitled in the event the decree of specific performance was required to be modified by an alternate decree.

11. Section 21 of the Specific Relief Act empowers the Court to award compensation in certain cases. Section 21 of the Specific Relief Act is as follows:

“21. Power to award compensation in certain cases.-

(1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.

(2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.

(3) If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.

(4) In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in section 73 of the Indian Contract Act, 1872 (9 of 1872).

(5) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint:

Provided that where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation.

Explanation.- The circumstances that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section.”

12. This Court had occasion to consider Section 21 of the Specific Relief Act in context of a case which arose almost on similar facts in Jagdish Singh vs. Nathu Singh, 1992 (1) SCC 647. In the above case also suit was filed for specific performance on the basis of a contract to sell dated July 3, 1973, the suit was dismissed by the trial court as well as First Appellate Court. However, the High Court in second appeal reversed the finding of the courts below and held that plaintiff was ready and willing to perform the contract and was entitled for decree.

In the above case also during the pendency of the second appeal before the High Court, proceedings for compulsory acquisition of the land was initiated and the land was acquired. Question arose as to whether plaintiff was entitled for the amount of compensation received in the land acquisition proceedings or was entitled only to the refund of the earnest money. The High Court in the above case has modified the decree of the specific performance of the contract with decree for a realisation of compensation payable in lieu of acquisition. In paragraph 13 of the judgment the directions of the High Court were extracted which is 10 to the following effect:

“13. The High Court issued these consequential directions: “If the decree for specific performance of contract in question is found incapable of being executed due to acquisition of subject land, the decree shall stand suitably substituted by a decree for realisation of compensation payable in lieu thereof as may be or have been determined under the relevant Act and the plaintiff shall have a right to recover such compensation together with solatium and interest due thereon. The plaintiff shall have a right to recover it from the defendant if the defendant has already realised these amounts and in that event the defendant shall be further liable to pay interest at the rate of per cent from the date of realisation by him to the date of payment on the entire amount realised in respect of the disputed land.”

13. In the above context, this Court proceeded to examine the ambit and scope of Section 21 of the Specific Relief Act. This Court came to the opinion that when the contract has become impossible with no fault of the plaintiff, Section 21 enables the Court to award compensation in lieu of the specific performance. Paragraphs 24, 29 and 30 are extracted below:

“24. When the plaintiff by his option has made specific performance impossible, Section 21 does not entitle him to seek damages. That position is common to both Section 2 of Lord Cairn’s Act, 1858 and Section 21 of the Specific Relief Act, 1963. But in Indian law where the contract, for no fault of the plaintiff, becomes impossible of performance Section 21 enables award of compensation in lieu and substitution of specific performance.

29. In the present case there is no difficulty in assessing the quantum of the compensation. That is ascertainable with reference to the determination of the market value in the land acquisition proceedings. The compensation awarded may safely be taken to be the measure of damages subject, of course, to the deduction therefrom of money value of the services, time and energy expended by the appellant in pursuing the claims of compensation and the expenditure incurred by him in the litigation culminating in the award.

30. We accordingly confirm the finding of the High Court that respondent was willing and ready to perform the contract and that it was the appellant who was in breach. However, in substitution of the decree for specific performance, we make a decree for compensation, equivalent to the amount of the land acquisition compensation awarded for the suit lands together with solatium and accrued interest, less a sum of Rs 1,50,000 (one lakh fifty thousand only) which, by a rough and ready estimate, we quantify as the amount to be paid to the appellant in respect of his services, time and money expended in pursuing the legal claims for compensation.”

14. This Court in Kanshi Ram vs. Om Prakash Jawal and others, 1996 (4) SCC 593, has again in context of suit for specific performance of the contract held that granting decree for specific performance of contract is one of the discretion to be exercised on sound principles. When the court gets into equity jurisdiction, it would be guided by justice, equity, good conscience and fairness to both the parties.

15. From materials brought on record, it does appear compensation was determined in favour of defendant No.6 to the extent of amount of Rs.10,03,743/. It also appears that compensation towards shops was also determined. The name of defendant No.6 being recorded in the Revenue records, compensation was determined in its favour. In view of the judgment and decree of courts below whereby the gift deed dated 08.07.1991 has been declared void, defendant No.6 is left with no right in the suit land and is clearly not entitled to receive any amount consequent to the acquisition of the suit land. It has not come on the record as to whether compensation consequent to the acquisition of the suit land has been received by defendant No.6(respondent No.1 to the appeal) or not.

16. Taking into consideration overall facts of the present case, we are of the view that ends of justice be served in awarding compensation of Rs.10 lakh in favour of the plaintiff appellants out of the compensation received consequent to the acquisition of the suit land. The rest of the compensation, if any, received towards land and shops in question has to be paid to the land owner that is defendant Nos.1 to 5 (respondent Nos.2 to 6 to this appeal) after deducting an amount of Rs.10 lakh out of the said compensation.

We further direct in event compensation has not yet been disbursed, the compensation be disbursed to the appellants (legal heirs of the plaintiff) and respondent Nos.2 to 6 in the above manner and in the event the compensation has been received by defendant No.6 (respondent No.1), respondent No.1 shall return the compensation to the extent of Rs.10 lakh to the appellants and the rest of the amount to defendant Nos.1 to 5 (respondent Nos.2 to 6). The judgment and decree of the High Court dated 02.11.2012is modified to the above extent.

17. The appeal is allowed accordingly.

 (A.K. SIKRI)

 (ASHOK BHUSHAN)

NEW DELHI,

JANUARY 10, 2018.

Firm Sriniwas Ram Kumar versus Mahabir Prasad and others[SC 1951]

Keywords:  suit for specific performance of a contract to sell a house

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AIR 1951 SC 177 : (1951) SCR 277

(SUPREME COURT OF INDIA)

Firm Sriniwas Ram Kumar Appellant
Versus
Mahabir Prasad and others Respondent

(Before : M. Patanjali Sastri, Mehr Chand Mahajan And B. K. Mukherjea, JJ.)

Civil Appeal No. 82 at 1949, Decided on : 09-02-1951.

Civil Procedure Code, 1908—Section 112—Interference with concurrent finding of fact—Considerations for—Unless there are exceptional circumstances, the Supreme Court should not interfere with concurrent finding of fact—The interference could be justified where there is violation of any rule of law, procedure by the court below which materially affected finding of fact.

Civil Procedure Code, 1908—Order 6, Rule 2—Inconsistent pleas—Permissibility—A party is entitled to take alternative pleas in support of its case—Where the alternative pleas arose from the admitted position of the defendant, such plea is not impermissible merely because it is inconsistent with other pleas—The court may grant relief on the basis of such alternative plea even if the defendant was not granted an opportunity to meet such plea because it was the stand of defendant himself.

Appeal—Interference with concurrent finding of fact—Considerations for—Unless there are exceptional circumstances, the Supreme Court should not interfere with concurrent finding of fact—The interference could be justified where there is violation of any rule of law, procedure by the court below which materially affected finding of fact.

Pleadings—Inconsistent pleas—Permissibility—A party is entitled to take alternative pleas in support of its case—Where the alternative pleas arose from the admitted position of the defendant, such plea is not impermissible merely because it is inconsistent with other plea—Court may grant relief on the basis of such alternative plea even if the defendant was not granted an opportunity to meet such plea because it was the stand of defendant himself.

It is true that the plaintiff’s case as made in the plaint that the sum of ` 80,000 was advanced by way of loan to the defts, second party. But it was certainly open to the plaintiff to make an alternative cases to that effect and make an alternative case to that effect and make a prayer in the alternative for a decree for money even if the allegations of the money being paid in pursuance of a contract of sale could not be established by evidence. The fact that such a prayer would have been inconsistent with the other prayer is not really material. A plaintiff may rely upon different rights alternatively and there is nothing in the Civil P.C. to prevent a party from making two or more inconsistent sets of allegations and claiming relief thereunder in the alternative.

The Court cannot grant relief to the plaintiff on a case for which there was no foundation in the pleadings and which the other side was not called upon or had an opportunity to meet. But when the alternative case, which the plaintiff could have made, was not only admitted by the defendant in his written statement but was expressly put forward as an answer to the claim which the plaintiff made in the suit, there would be nothing improper in giving the plaintiff a decree upon the case which the defendant himself makes. A demand of the plaintiff based on the defendant’s own plea cannot possibly be regarded with surprise by the latter and no question of adducing evidence on these facts would arise when they were expressly admitted by the defendant in his pleadings. In such circumstances, when no injustice can possibly result to the defendant, it may not be proper to drive the plaintiff, to a separate suit.

Counsel for the Parties:

Shri S. P. Sinha, Sr. Advocate (Shri C. R. Pattabhi Raman and Shri B. K. Saran, Advocates, with him) instructed by Shri R. C. Prasad, Advocate for Appellant. Shri Udai Bhan Chaudhary, Advocate – for Resps. (Nos 1 and 3;

Shri Harish Chand, Sr. Advocate, (Shri N. C. Sen, Advocate, with him) instructed by Shri Tarchand Brijmohan Lal, Advocate for Respondents (Nos. 3 to 7).

JUDGMENT

Mukherjea, J—This appeal is on behalf of the pltf. and it arises out of a suit for specific performance of a contract to sell a house in the town of Gaya, belonging to the defts. second party who, it is alleged, agreed to sell the house to the pltf. but subsequently resiled from the agreement and sold the same to the defts. first party who purchased it with notice of the contract.

2. The pltf’s case, in substance, is that in September 1941 the defts. second party, who owned a house at Gaya, entered into negotiations for sale of the same, with one Jadu Ram, and the title deeds of the property were actually handed over to the latter. These negotiations failed and the second party defts. thereupon approached the pltf. firm and a contract was entered into by and between them some time towards the end of October 1945, under which the former agreed to sell to the latter their house at Gaya for a consideration of ` 34,000. Out of this consideration, a sum of ` 30,000 was paid by the pltf. firm on behalf of the vendors to a creditor of the latter on 28-10-1941. The vendors in their turn put the pltf. in possession of the house agreed to be sold in part performance of the contract and promised to execute a convenience as soon as the title deeds were returned to them by Jadu Ram and the balance of consideration money amounting to ` 4,000 was paid by the pltf. The second party defts. however, went back on their promise and did not execute the conveyance in favour of the pltf. even after they get back their title deeds from Jadu Ram and on the other hand, they sold the house to the defts. first party on 13-8-1943. The pltf, was thus obliged to bring this suit, claiming specific performance of the contract of sale.

3. The suit was contested by both sets of defts. The second party defts. contended interalia that they never agreed to sell their house at Gaya to the pltf. and the story of a contract of sale as set up by the pltf. was entirely false. They admitted that they were in need of money and hence approached the pltf. for a loan and the pltf. did advance to them a sum of ` 30,000 carrying interest at 6% per annum. It was entirely for facilitating payment of interest due on this loan and not in part performance of the contract of sale that the pltf. was put in possession of the same.

4. This defence was reiterated by the first party defts. who further pleaded that they were bona fide purchasers for value having no notice of any contract of sale with the pltf.

5. The learned Subordinate Judge, who heard the suit came to the conclusion, on the evidence adduced by the parties that the story of a contract of sale, as alleged by the pltf. was not established and it was not in pursuance of any such contract that the pltf. was put in possession of the house. It was held that the defts story was true and that the pltf. did advance a sum of ` 30,000 to the defts. second party, but this was by way of a loan and not a part payment of the consideration money. So far as the first party defts. were concerned, it was held that they were bona fide purchasers for value without notice. In view of these findings, the Subordinate Judge dismissed the pltf’s claim for specific performance but as the second party defts. admitted that they had taken an advance of ` 30,000 from the piff., a money decree was given in the pltf. for this sum aganist these defts with interest at 6% per annum from the date of the suit till realisation.

6. Against this decision, the pltf. took an appeal in the H. C. at Patna, and the second party defts. also filed cross-objections challenging the propriety of the money decree that was passed against them. The appeal was heard by a Division Bench of the Patna H. C. who, by their judgment dated 29-8-1941 dismissed the appeal of the pltf. and allowed the cross-objections preferred by the second part defts. The learned Judges held, concurring with the trial Ct., that no case of concluded contract between the parties was established by the evidence adduced in the case, and the fact of the pltf. being put in possession of the house could not be regarded as an act of part performance of any such contract. The H. C. agreed with the trial Judge in holding that the sum of ` 30,000 was advanced as a loan by the pltf. to the second party defts., though the evidence was not very clear regarding payment of interest upon it, and that the first party defts. were purchasers for value without notice. The H. C. held further that even if there was a contract, its terms were vague and indefinite, and as one of the vendors was a minor, no relief in equity by way of specific performance of the contract should be given in this case as it would substantially prejudice the interests of the minor. In the opinion of the H. C., the money decree granted against the second party defts. was not warranted in law as no case of a loan was made by the pltf. in the plaint and no relief was claimed on that basis. The result was that the suit was dismissed in its entirety and the decree for recovery of money that was made in favour of the pltf. by the trial Ct. was set aside. It is against this judgment that the pltf. has come up on appeal to this Ct.

7. The learned counsel for the applt. contends before us that the findings upon which the Cts. below disbelieved the story of the pltf. and dismissed the claim for specific performance are not proper findings of fact which could be legitimately inferred from the evidence adduced in this case. In the alternative it is argued that the H. C. was wrong in setting aside the decree for money which was given aganist the second party defts, by the trial Judge.

8. The first contention put forward by the learned counsel appears to us to be plainly unsustainable. When the Cls. below have given concurrent findings on pure questions of fact, this Ct. would not ordinarily interfere with these findings and review the evidence for the third time unless there are exceptional circumstances justifying departure from this normal practice. The position may undoubtedly be different if the inference is one of law from facts admitted and proved or where the finding ,of fact is materially affected by violation of any rule of law or procedure. The practice adopted by this Ct. is similar to what has always been acted upon by the Judicial Committee. To quote the words of Lord Thankerton in Bibhabati v. Rammendra Narayan, 51 C. W. N. 98 “it is not by any means a cast iron practice”; there may occur cases of unusual nature which might constrain us in interfere with the concurrent findings of fact in avoid miscarriage of justice. The case before us, however, has nothing unusual in it and involves a pure question of fact. There is no document in writing in proof of the agreements upon which the pltf’s case, (supra) is based and the decision hinges primarily upon appreciation of the oral evidence that has been adduced by the parties. The trial Judge, who had the witnesses before him, was the best person to weigh and appraise their credibility and the conclusion, which he arrived at, have been affirmed in their entirety by the H. C. on appeal. In these circumstances, we see no reason whatsoever to go beyond the facts which have been found against the applt. by both the Cts. below.

9. As regards the other point, however, we are of the opinion that the decision of the trial Ct. was right and that the H. C. took an undoubtedly rigid and technical view in reversing this part of the decree at the Subordinate Judge. It is true that it was no part of the pltf’s case, (supra) as made in the plaint that the sum of ` 30,000 was advanced by way of loan to the defts. second party. But it was certainly open to the pltf. to make an alternative case to that effect and make a prayer in the alternative for a decree for money even if the allegations of the money being paid in pursusance of a contract of sale could not be established by evidence. The fact that such a prayer would have been inconsistent with the other prayer is not really material. A pltf. may rely upon different rights alternatively and there is nothing in the Civil P. C. to prevent a party from making two or more inconsistent sets of allegations and claiming relief thereunder in the alternative. The question, however, arises whether, in the absence of any such alternative case in the plaint it is open to the Ct. to give him relief on that basis. The rule undoubtedly is that the Ct. cannot grant relief to the pltf. on a case for which there was no foundation in the pleading and which the other side was not called upon or had an opportunity to meet. But when the alternative case, which the pltf. could have made, was not only admitted by the deft. in his written statement but was expressly put forward as an answer to the claim which the pltf. made in the suit, there would be nothing improper in giving the pltf. a decree upon the case which the deft. himself makes. A demand of the pltf. based on the deft’s own plea cannot possibly be regarded with surprise by the latter and no question of adducing evidence on these facts would arise when they were expressly admitted by the deft. in his pleadings. In such circumstances when no injustice can possibly result to the deft., it may not be proper to drive the pltf, to file a separate suit. As an illustration of this principle, reference may be made to the pronouncement of the Judicial Committee in Mohan Manucha v. Manzoor Ahmad, 70 I. A. 1. This appeal arose out of a suit commenced by the pltf applt. to enforce a mtge. security. The plea of the deft. was that the mtge. was void. This plea was given effect to by both the lower Ct. as well as by the P. C. But the P. C. held that it was open in such circumstances to the pltf to repudiate the transaction altogether and claim a relief outside it in the form of restitution under S. 65, Contract Art. Although no such alternative claim was made in the plaint, the P. C. allowed it to be advanced and gave a decree on the ground that the resp. could not be prejudiced by such a claim at all and the matter ought not to be left to a separate suit. It may be noted that this relief was allowed to the applt. even though the appeal was heard ex parte in the absence of the resp.

10. Mr. Harish Chandra, appearing for the second party defts., raised the question of interest in connection with the pltf’s. claim for a money decree. His contention is that the pltf. could not claim any interest so long as he was in possession of the house and he could not also claim any interest after that, as his clients made a tender of the sum of ` 30,000 by sending a hundi for that amount to the pltf. by registered post on 12-7-1943 which the pltf. refused to accept. The first part of the contention is undoubtedly correct and is not disputed on behalf of the pltf. We feel difficulty, however, in accepting the second part of the contention raised by Mr. Harish Chandra. The receipt of this hundi was totally denied by the pltf. both in the plaint as well as in the evidence and it is doubtful whether even if the story was true, it could constitute a valid tender in law. The defts. undoubtedly had the use of this money all this time and in our opinion the pltf. is entitled to some interest. The learned counsel appearing for both the parties, at the close of their argumenns, left this question of interest to be determined by us and we think that it would be quite fair if we allow interest on the sum of ` 30,000 at the rate of 4% per annum from the beginning of September 1943. It is admitted that the pltf’s possession of the house ceased by the end of August 1943.

11. The result is that we allow the appeal in part; the decree made by the H. C is affirmed in so far as it dismissed the claim for specific performance. The pltf., however, will be entitled to a money decree for the sum of ` 30,000 against the defts. second party with interest at 4% per annum from 1- 9-1943 to the date of realisation. Each party to this appeal will bear his own costs.