RAMESH CHAND DEAD THROUGH LRS. Vs. ASRUDDIN(DEAD) THR LRS. & ANR.

Supreme Court of India

Appeal (Civil), 8427 of 2014, Judgment Date: Oct 06, 2015

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURSIDCITION

                        CIVIL APPEAL NO. 8427 OF 2014


Ramesh Chand (Dead)
through L.Rs.                                                   … Appellant

                                   Versus

Asruddin (Dead)
through LRs and another                                        …Respondents









                               J U D G M E N T


Prafulla C. Pant, J.


      This appeal is directed against judgment and order  dated  22.01.2014,
passed by the High Court of Punjab and Haryana in Regular Second Appeal  No.
1344 of 2011  (O&M)  whereby  said  court  has  dismissed  the  appeal,  and
affirmed the decree passed by the first appellate court  regarding  specific
performance of contract, in a suit filed by the plaintiff/respondent No.1.

We have heard learned counsel for the parties  and  perused  the  papers  on
record.


Brief facts  of  the  case  are  that  plaintiff/respondent  No.1  Asaruddin
entered into an agreement with defendant No. 1/ appellant  Ramesh  Chand  on
21.06.2004, whereby the appellant agreed  to  sell  his  land  measuring  12
kanals, 16 marlas, situated  in  Village  Mohammed  Nagar,  Tehsil  Ferozpur
Jhirka, District Gurgaon, to the respondent No. 1 for an  amount  of  rupees
six lacs.  An agreement for sale was executed between the parties after  the
appellant accepted rupees four lacs as a  part  of  consideration.   It  was
further agreed between the parties that the land  in  suit,  mortgaged  with
defendant No. 2/respondent No. 2  Gurgaon  Gramin  Bank,  Nagina,  would  be
redeemed by the appellant before execution of the sale deed.  It is  pleaded
by the plaintiff/respondent No. 1 that  he  was  and  is  always  ready  and
willing to perform his part of  contract.  The  plaintiff/respondent  No.  1
gave notice to the appellant to execute the sale  deed  on  30.11.2004,  and
remained present with the balance amount of consideration in the  Office  of
Sub Registrar, Nagina, and got  his  presence  marked.   But  the  appellant
failed to turn up to execute the sale deed, as agreed between  him  and  the
respondent No. 1.  Hence the suit for specific performance of contract.


The appellant-defendant No.1  contested  the  suit  and  filed  the  written
statement before the trial court.  He denied the execution of the  agreement
dated 21.06.2004 to sell his land. It is pleaded  by  the  appellant  before
the trial court that he had already executed agreement dated  07.05.2004  to
sell the land in favour of one  Pravin  Kumar,  resident  of  Tauru  for  an
amount of Rs.7,62,200/- after receiving Rs.1,20,000/- as earnest money.   In
the circumstances, there was no occasion to enter into  agreement  with  the
respondent No.1 to sell the same land.  It is  further  pleaded  that  since
the answering defendant was in the need of  money,  he  had  taken  loan  of
Rs.1,50,000/- from the plaintiff on 21.06.2004, on interest at the  rate  of
1.5% per month.  The appellant specifically denied  having  received  rupees
four lacs, as alleged by the plaintiff.  It is  further  pleaded  that  when
respondent No. 1 made demand for repayment of Rs.1,50,000/-  with  interest,
and created pressure, the answering defendant asked  Pravin  Kumar  to  make
payment of Rs.1,80,000/- to the  plaintiff.   It  is  further  alleged  that
after said payment was made to the plaintiff on 10.11.2005 by Pravin  Kumar,
the alleged agreement dated 21.06.2004, which was a kind of security,  stood
cancelled.  And respondent No. 1 should have returned the  document  to  the
plaintiff.


On the basis  of  the  pleadings  of  the  parties,  the  Civil  Judge  (Jr.
Division), Ferozpur Jhirka, framed as many  as  ten  issues  on  06.09.2005.
After recording oral testimony of witnesses of the parties, and  considering
the documentary evidence on record, the trial court came to  the  conclusion
that it is not  a  fit  case  for  specific  performance  of  contract,  and
disposed of the suit with a finding that the agreement executed between  the
plaintiff and defendant No. 1 was in substance an agreement of security  for
repayment of loan and directed the defendant  No.  1  to  pay  back  earnest
money of rupees four lacs with 8% interest per annum  from  21.06.2004  till
payment is made to the plaintiff.




Aggrieved by the decree passed by the trial  court,  plaintiff  filed  Civil
Appeal No. 51 of 2010 before the first appellate court.  After  hearing  the
parties, the appellate court (Additional District Judge, Nuh) vide  judgment
and order dated 14.02.2011, allowed the appeal, and  decreed  the  suit  for
specific performance of contract, directing the defendant No. 1  to  execute
the sale deed in terms of the agreement dated  21.06.2004,  after  accepting
balance rupees two lacs from the  plaintiff.   This  made  defendant  No.  1
Ramesh Chand to file Regular Second Appeal No. 1344 of 2011 before the  High
Court.  During the Second Appeal, defendant No. 1 appears to have died,  and
his legal heirs prosecuted the appeal.  After hearing the parties, the  High
Court  dismissed  the  appeal  upholding  the  order  passed  by  the  first
appellate court.  Hence this appeal before us through special leave.  During
this appeal the plaintiff/respondent No.1 also expired, and his legal  heirs
got substituted.




Learned counsel for the appellant argued before us that the first  appellate
court and the High Court have erred in law in not considering the fact  that
the appellant had already executed an agreement of  sale  on  07.05.2004  in
favour of one Pravin Kumar,  and  the  decree  of  specific  performance  of
contract in the subsequent agreement, if any, in favour of  respondent  No.1
was not at all desirable.  On the other hand, on behalf of  respondent  No.1
it is contended that he cannot be denied the fruits of  decree  of  specific
performance after the findings recorded by the first appellant  court  which
stood affirmed by the High Court.




Section 20 of 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.   However,  the
discretion of the court is not arbitrary but sound  and  reasonable,  guided
by judicial principles.  Sub-section (2) of Section 20 of the  Act  provides
the three situations in which the  court  may  exercise  discretion  not  to
decree specific performance.  One of such situation is contained  in  clause
(a) of sub-section (2) of the Section which provides that  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 or such that  the  contract  though  not  voidable,  gives  the
plaintiff an unfair advantage over the defendant,  the  decree  of  specific
performance need not be passed. It is pertinent to mention here that in  the
present case, though execution of agreement  dated  21.06.2004  between  the
parties is proved, but it is no where pleaded or  proved  by  the  plaintiff
that he got redeemed the mortgaged land in favour  of  defendant  No.  2  in
terms of the agreement, nor is it specifically pleaded  that  he  was  ready
and willing to get the property redeemed from the mortgage.


In the above facts and circumstances of the case and the judicial  principle
discussed above, we are of the opinion that it is a fit case  where  instead
of  granting  decree  of  specific  performance,  the   plaintiff   can   be
compensated by directing the appellant to pay a  reasonable  and  sufficient
amount to him.  We are of the view that mere  refund  of  rupees  four  lacs
with interest at the rate of 8% per annum, as directed by the  trial  court,
would be highly insufficient.  In our considered opinion, it would  be  just
and appropriate to direct the appellants (Legal Representatives of  original
defendant No.1, since died) to repay rupees four lacs  along  with  interest
at the rate of 18% per annum from 21.06.2004 till date within  a  period  of
three months from today to the L.Rs. of respondent No. 1 (mentioned in  I.A.
No. ___ of 2015 dated 07.09.2015).  If they do so, the  decree  of  specific
performance shall stand set aside.  We clarify that if  the  amount  is  not
paid or deposited  before  the  trial  court  in  favour  of  the  L.Rs.  of
respondent No.1 within a period of three  months,  as  directed  above,  the
decree of specific performance shall stand affirmed. We order accordingly.


The appeal stands disposed of.  Pending I.A(s) also stand disposed  of.   No
order as to costs.


                                                           ..…………………..…………J.
                                                               [Dipak Misra]



                                                            …………………..……………J.
                                                          [Prafulla C. Pant]
New Delhi;
October 06, 2015.