- Specific Performance
- “20. Discretion as to decreeing specific performance.–
Specific Relief Act, 1963 – Section 20 – Discretion as to decreeing specific performance – Suit for Specific Performance – Guidelines for discretion of granting and refusing relief of specific performance.
# Specific Performance
HIGH COURT OF JUDICATURE AT ALLAHABAD
Hon’ble Pramod Kumar Srivastava, J.
13 May, 2016
SECOND APPEAL No. – 291 of 2016
Appellant :- Rajendra Singh Vs. Respondent :- Chandra Pal
Counsel for Appellant :- Pradeep Kumar Singhal
Counsel for Respondent :- Kshitij Shailendra
1. Heard learned counsel for the parties and perused the records.
2. In Original Suit No. 92/2009, Rajendra Singh v. Chandrapal, the plaint case in brief was that defendant is owner of 1/4th share of property detailed at the foot of the plaint. He had entered into registered agreement for sale of said property in favour of plaintiff on 9.3.2006, by which it was admitted between the parties that defendant will sell that property for consideration of Rs. 80,000/- and he had received Rs. 75,000/- as advance consideration at the time of registration of said agreement to sell. It was agreed between the parties that sale-deed will be executed by defendant within 11 months after receiving remaining amount of Rs. 5,000/-. Plaintiff has been ready and willing to perform his part of contract and had repeatedly requested the defendant, but defendant had not executed sale-deed in spite of plaintiff’s reminder and registered notice served on him. Therefore, plaintiff had filed suit for specific performance.
3. Plaint case was denied by defendant through written-statement, in which he further pleaded that plaintiff is a money lender. When defendant had requirement for some money, so he approached the plaintiff because he could not obtained loan from bank, then plaintiff had agreed to grant him loan on interest, for which he took defendant to Tehsil, where defendant’s photographs were taken and he was asked to put signatures on several documents and received Rs. 60,000/-. After 10 months, defendant was again in need of money, so he received loan of Rs. 1,000/- from plaintiff and had put his thumb impression and signature on several documents after getting his photographs taken. No document was read or explained to defendant. When defendant had returned the loan and asked the plaintiff to return document of loan, then plaintiff had not returned those documents and filed suit on the basis of incorrect facts.
4. In replication, plaintiff reiterated his plaint averments. Thereafter the trial court had framed issues, accepted documentary and oral evidences of the parties and then, after affording opportunity of hearing to them, Civil Judge (Senior Division) Chandausi, Moradabad had passed judgment dated 25.4.2012, by which suit was decreed for alternative relief of return of Rs. 77,000/- of advance sale consideration with 12% interest. In this judgment, trial court had found this plaint averments correct that parties had entered into registered agreement to sell of disputed property of defendant in favour of plaintiff and had received Rs. 77,000/- as advance sale consideration. But trial court had held that plaintiff had failed to prove its readiness and willingness in accordance with terms of contract; and from return of advance consideration the defendant would not be subjected to any loss. Therefore trial court considered it appropriate to grant alternative relief of refund of advance sale consideration.
5. Against the judgment of trial court, Civil Appeal No. 59/2012, Rajendra Singh v. Chandrapal, was preferred by plaintiff of the original suit, which was heard and dismissed by the judgment dated 30.11.2015 of Additional District Judge, Court No.-12, Moradabad. In this judgment, first appellate court had given specific finding that it is proved that plaintiff-appellant has been ready and willing to perform his part of contract and was ready to get the sale-deed executed. The first appellate court had reversed this finding of trial court that plaintiff readiness and willingness should not be accepted, because after first notice of performance of contract, he had given second notice after sufficiently long time. Thus the first appellate court had given every finding in favour of plaintiff-appellant, including on point of his readiness and willingness, which proves that the plaint case has been correct and proved. But lower appellate court had considered the point of hardship of plaintiff and defendant, and cited some ruling of Apex Court, and held that from the time of execution of registered agreement to sell, sufficient time has been passed and value of property has been enhanced; therefore possible hardship to defendant by specific performance of contract cannot be ignored. On these findings, first appellate court had confirmed the judgment of trial court regarding refund of advance consideration of Rs. 77,000/- to plaintiff with interest.
6. Aggrieved by the judgment of trial court as well as first appellate court, present second appeal has been preferred by plaintiff of the original suit.
7. Learned counsel for the plaintiff-appellant contended that trial court had not disputed the hardship of plaintiff-appellant from non-execution of agreement to sell, but had declined the relief of specific performance merely on the ground of readiness and willingness of plaintiff being not proved, but this readiness and willingness was held proved by first appellate court. But the finding of first appellate court regarding alleged hardship to defendant-respondent by specific performance of contract is based on incorrect and hypothetical grounds. He also contended that Section 20 of Specific Relief Act provides guidelines for discretion of granting and refusing relief of specific performance. He submitted that in present case most of the amount of full consideration was already paid by plaintiff-appellant to defendant-respondent, who had not only enjoyed the possession and user of disputed property, but also enjoyed almost full consideration received from money. He further submitted that in this case, in fact, hardship was caused to plaintiff-appellant, who had paid almost full consideration. He further submitted that lower courts had failed to appreciate this fact at the time of granting discretionary relief that after receiving loan, defendant had been telling lie, placing incorrect and false defences and even stated to have returned whole of the money received from plaintiff, which is proof of his mala fide. He contended that defendant-respondent should not be rewarded of his dishonest intention in garb of discretionary relief.
8. Learned counsel for the respondent contended that in this matter interest at the rate of 12% was granted to plaintiff-appellant, which is more than normal interest and this is sufficient to meet any inconvenience caused to him. He submitted that disputed property is only means of livelihood of respondent. He further submits that defendant had sold property in question to third person, which shows that there was no likelihood of any prejudice being caused to him by non performance of contract. Therefore, appeal should be dismissed.
9. Section-20 of Specific Relief Act reads as under:
# “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) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;
(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.
(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.”
10. The Apex Court in
# N.P. Thirugnanam v. R. Jagan Mohan Rao (Dr), (1995) 5 SCC 115
held as under:
“5. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under Section 20 of the Specific Relief Act, 1963 (for short “the Act”). Under Section 20, the court is not bound to grant the relief just because there was a valid agreement of sale. Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract.”
11. In present case the readiness and willingness to perform his part of the contract, as required for the grant of relief of specific performance, is proved fact. Not only the lower courts had given such finding in favour of plaintiff-appellant, but also this fact is explicitly clear and evident from the fact that out of total agreed sale consideration of Rs. 80,000/- the plaintiff-appellant had already paid Rs. 77,000/- which is 96.25 % of the sale consideration. This amount of sale consideration was used and usurped by defendant-respondent who had also been enjoying the possession of disputed property.
12. Thus almost slightly less than total consideration was utilized and enjoyed by the defendant-respondent, who had not only been enjoying the property in question, but had already been acting in bad faith and mala fide manner when he had been taking false defences of alleged loan and refund of amount etc., which were found incorrect and false by the two lower courts. He had been repeatedly telling lie, and misusing process of court by giving false evidences.
13. Section 20 (2) of the Specific Relief Act had provided certain conditions, as quoted above, in which court may properly exercise discretion not to decree specific performance. Considering those conditions in light of present case it is found that
(a) the terms of the contract or the conduct of the parties at the time of entering into the contract was not such could give the plaintiff an unfair advantage over the defendant, because the plaintiff had already received more than 96% of sale consideration, and it would be the defendant whould get unfair advantage over plaintiff-appellant if no relief of specific performance is granted;
(b) in present matter there appeared nothing which the defendant-respondent could not foresee, and instead of defendant it would be the plaintiff-appellant who would suffer hardship by non-performance who had paid almost nearly whole the price of property, and when in present age of boom of property prices would get meager amount of actual price of said land, even if the money is refunded with interest; and
(c) the defendant-respondent, after receiving of almost more than 96% of sale consideration, had not entered into the contract under any circumstances which makes it inequitable to enforce specific performance.
# Satya Jain (D) through LR and others Vs. Anis Ahmed Rushdie (D) through Lrs and others 2013 (31) LCD 558
Apex Court had held as under:
“The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasized that efflux of time and escalation of prince of property by itself cannot be a valid ground to deny the relief of specific performance.”
15. In the case of
# Rathnavathi and another Vs. Kavita Ganashamdas 2015(1) Civil Court Cases 164 (SC)
the Apex Court had held as under:
“In our considered opinion, the High Court being the last Court of appeal on facts/law while hearing first appeal under section 96 of CPC as well within its powers to appreciate the evidence and came to its own conclusion independent to that of the trial court’s decision. One cannot dispute the legal proposition that the grant/refusal of specific performance is a discretionary relief, and, therefore, once it is granted by the appellate court on appreciation of evidence, keeping in view the legal principle applicable for the grant then further appellate court should be slow to interfere in such finding, unless the finding is found to be either against the settled principle of law, or is arbitrary or perverse.”
16. On the basis of above discussion, I am of the considered opinion that during trial or during first appeal court, no evidence was led by defendant-respondent to prove that his livelihood is dependent on disputed property or that prejudice, if any, would caused to him if contract for sale in question is specifically performed. The burden of proving such facts are on defendant-respondent who wants the court to believe it, but he had failed to discharge this burden. It is also proved that respondent had been acting dishonestly, pleading false defences and giving false evidences in Court to prove that he had no intention to execute agreement for sale in question and also that no amount of plaintiff is due against him. In these circumstances, this contention of learned counsel for the appellant is not unacceptable that plaintiff-appellant had totally proved its plaint case and would suffer prejudice if contract for sale in question is not specifically performed, but no prejudice would be caused to defendant-respondent in case of specific performance of contract. This contention is also found acceptable that for acting in dishonest and mala fide way and giving false defences and for telling lie before the Court, the defendant-respondent should not be awarded and given benefit of his greed, nor should he be permitted to benefit of his misuse of process of court.
17. For the reasons discussed above, it is found that plaintiff-appellant had totally proved his case and readiness and willingness to perform his part of contract and also that if said contract is not specifically performed, then he would be subjected to serious prejudices, because he had been waiting for long time after paying more than 96% sale consideration, and had been subjected to long litigation without any sufficient reason. It is also proved that both the lower courts had not properly appreciated the point as to how discretion under Section 20 of Specific Relief Act should be exercised. Therefore they had passed erroneous orders. Such error of lower courts must be rectified in interest of justice. Therefore, this appeal succeeds.
18. In view of the above, this appeal is allowed with cost throughout. Defendant-respondent is directed to receive Rs. 3,000/- of remaining sale consideration from plaintiff and execute sale-deed of disputed property in favour of plaintiff-appellant within two months, failing which plaintiff-respondent would have right to get the said sale-deed executed through process of Court at the cost of defendant-respondent. The judgment dated 30.11.2015 of first appellate court passed in Civil Appeal No. 59/2012 and judgment of trial court dated 25.4.2012 passed in Original Suit No. 92/2009 (Rajendra Singh v. Chandrapal) are accordingly amended.