Karnataka High Court
Sri M Suresh vs Smt Mahadevamma on 23 October, 2020
Equivalent citations: AIRONLINE 2020 KAR 2621, 2021 (2) AKR 329
Author: S.Sujatha
Bench: S.Sujatha
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF OCTOBER, 2020
PRESENT
THE HON'BLE MRS.JUSTICE S.SUJATHA
AND
THE HON'BLE MR. JUSTICE E.S.INDIRESH
R.F.A.No.1560/2011
BETWEEN :
SRI M.SURESH
S/O SRI MAHADEVA,
AGED 33 YEARS, R/O No.487,
SHIVAJYOTHI NILAYA THYAGA MARGA,
SIDDARTHANAGARA,
NAZARBAD MOHALLA, MYSORE-570010 ...APPELLANT
(BY SRI G.B.NANDISH GOWDA, ADV.)
AND :
1. SMT.MAHADEVAMMA
W/O LATE BASAVANNA
AGED ABOUT 60 YEARS
2. SMT.DEVAMANI
D/O LATE BASAVANNA
AGED ABOUT 35 YEARS
3. SRI MAHADEVU
S/O LATE BASAVANNA
AGED ABOUT 32 YEARS
4. SRI DEVARAJ
S/O LATE BASAVANNA
AGED ABOUT 31 YEARS
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5. SMT.SUVARNA
D/O LATE BASAVANNA
AGED ABOUT 24 YEARS
ALL ARE R/O HANCHYA VILLAGE,
KASAB AHOBLI,
MYSORE TALUK & DISTRICT
6. SRI C.RAVIRAJ
S/O SRI CHANNABASAPPA
AGED ABOUT 38 YEARS
R/AT No.27, MIG, CITB,
UDAYAGIRI, MYSORE-570019.
7. SRI GOVINDA
S/O SRI KEMPE GOWDA
AGED ABOUT 27 YEARS
R/O KUNTUR VILLAGE,
HALAGUR HOBLI, MALAVALLI TALUK,
MANDYA DISTRICT.
8. SRI GOVINDARAJU
S/O SRI VENKATACHALAIAH
AGED ABOUT 43 YEARS,
R/AT 'SAPTHAGIRI NILAYA'
3RD CROSS, 5TH BLOCK,
NEAR RAMA MANDIRA,
HOSAHALLI, MANDYA-571401
9. SRI CHANNABASAPPA
S/O LATE KARIBASAPPA
AGED ABOUT 66 YEARS,
R/AT No.27, MIG, CITB,
UDAYAGIRI, MYSORE-570019.
10. SRI D.C.MALLIKARJUNASWAMY
S/O SRI H.CHANNAPPA
AGED ABOUT 35 YEARS,
R/O DINKE VILLAGE & POST
CHINAKURALI HOBLI,
PANAVAPURA TALUK,
MANDYA DISTRICT
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11. SRI BASAVARAJU
S/O LATE NINGAPPA
AGED ABOUT 40 YEARS,
R/O SATAHALLI VILLAGE, KASABA HOBLI,
MYSORE TALUK & DISTRICT.
12. SRI C.SUDHAKARA
S/O SRI CHANNABASAPPA,
AGED ABOUT 40 YEARS,
R/AT No.27, MIG, CITB,
UDAYAGIRI, MYSORE-570019.
13. SRI NAZEER AHMED,
S/O LATE MEHBOOB ALI, MAJOR,
R/AT No.60/1, RAMAJI RAO ROAD,
BASAVANAGUDI, BANGALORE-560004
14. SMT.M.AYESHA BANU
W/O SRI M.MEHEBOOB
AGED ABOUT 35 YEARS,
R/AT No.12, KHB COLONY, KALYANGIRI,
KYATHAMARANAHALLI, MYSORE
15. SRI N.NAGESH
S/O SRI P.NITHYANANDA
AGED ABOUT 28 YEARS,
R/AT No.4612, A-2-13/1A
3RD CROSS, ST.MARKS ROAD,
N.R.MOHALLA, MYSORE.
16. SRI H.S.PANCHAKSHARI
S/O SRI H.N.SIDDARAJU
AGED ABOUT 30 YEARS,
R/O HULLEKERE VILLAGE & POST,
GANDASI HOBLI,
ARASIKERE TALUK,
HASSAN DISTRICT.
17. SRI SHANKARA
S/O LATE PUTTABASAPPA
AGED ABOUT 47 YEARS,
R/O SATAHALLI VILLAGE,
KASABA HOBLI, MYSORE TALUK.
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18. SRI H.S.NANJAPPA
S/O SRI SHANTHAPPA
AGED ABOUT 45 YEARS, R/AT No.151,
GAYATHRIPURAM MAIN ROAD,
MYSORE.
19. SRI K.V.RAMESH
S/O SRI VENKATARAMA
AGED ABOUT 38 YEARS,
R/AT NEXT TO AGRICULTURE DEPARTMENT
AGRAHARA BEEDI,
K.R.PETE TOWN & TALUK,
MYSORE DISTRICT.
20. SRI N.NANDA KUMAR
S/O SRI NAGABHUSHAN
AGED ABOUT 37 YEARS,
R/AT No.260/1A, 1ST MAIN,
1ST STAGE, GAYATHRIPURAM
NAZARABAD MOHALLA,
MYSORE-560010.
(CAUSE TITLE AMENDED VIDE
COURT ORDER DATED 21.10.2014) ...RESPONDENTS
(BY SRI SHANKAR REDDY, ADV. FOR R-1 TO R-5;
SRI N.R.GIRISH, ADV. FOR R-6 TO R-17, R-19 & R-20;
R-18 SERVED BUT UNREPRESENTED.)
THIS R.F.A. IS FILED UNDER SECTION 96 OF CPC,
AGAINST THE JUDGMENT AND DECREE DATED 06.06.2011
PASSED IN O.S.NO.729/2008 ON THE FILE OF THE II
ADDITIONAL SENIOR CIVIL JUDGE, MYSORE, PARTLY
DECREEING THE SUIT. REJECTING THE SUIT FOR SPECIFIC
PERFORMANCE OF CONTRACT. THE APPELLANT HEREIN
PRAYING TO SETTING ASIDE THE ABOVE MENTIONED
JUDGMENT AND DECREE IN O.S.NO.729/2008 AND PRAYING
TO DIRECT THE RESPONDENTS TO EXECUTE THE
REGISTERED SALE DEED IN FAVOUR OF THE APPELLANT WITH
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RESPECT TO THE SCHEDULE PROPERTY AS PER THE SALE
AGREEMENT DATED 15.05.2006.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 30.09.2020, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, S. SUJATHA, J.,
DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is directed against the judgment and decree dated 06.06.2011 passed in O.S.No.729/2008 on the file of the II Additional Senior Civil Judge, Mysore ('Trial Court' for short), whereby the suit of the plaintiff has been decreed in part with costs.
2. The parties are referred to as per their status before the Trial Court for the sake of convenience.
3. The plaintiff instituted O.S.No.729/2008 against the defendants seeking for the relief of specific performance of contract based upon the agreement of sale dated 15.05.2006. The suit property is the dry land bearing Sy.No.254/2, measuring 3 acres out of total -6- extent of 4 acres 26 guntas situated at Hanchya Village, Kasaba Hobli, Mysore Taluk. The plaint averments are that the defendants are the owners of the suit property and the same is their ancestral property. They had offered to sell the same in favour of the plaintiff for a valuable consideration of Rs.9,40,000/- per acre, totally amounting to Rs.28,20,000/-. The plaintiff has agreed to purchase the same. Accordingly, the plaintiff and defendants entered into sale agreement on 15.05.2006 and the defendants had received a sum of 2,50,000/- from the plaintiff through a cheque drawn at Karnataka Bank, Bannur Branch towards advance amount with a covenant that the balance sale consideration amount shall be paid at the time of registration of absolute sale deed before the Sub-Registrar. It was agreed that the defendants shall execute the sale deed within five months from the date of they obtaining clear saleable title viz., No Objection Certificate, Survey Sketch from Taluk Office by fixing boundary stones with all other relevant documents -7- which are necessary for registration. It was contended that subsequent to executing the agreement of sale, the plaintiff had approached the defendants and enquired about the compliance on the part of obtaining necessary documents from the Revenue Authority and demanded to execute the registered sale deed by receiving balance sale consideration of Rs.25,70,000/- as agreed thus expressing his readiness and willingness. However, the defendants failed to execute the registered sale deed. The plaintiff has caused notice expressing his readiness and willingness to perform his part of contract. Despite the same, the defendants did not come forward to execute the sale deed, but caused an evasive reply. Though it was assured by the defendants to execute the sale deed in the panchayath conveyed, but they failed to keep up the promise. On the other hand, the defendants are making efforts to sell the suit property in favour of third parties. Hence, the relief of specific performance of contract was sought by filing the suit. -8-
4. In response to the suit summons, the defendants appeared and filed their written statement contending that the suit property is ancestral property of the defendants and they are the owners of the same, denying the sale price of Rs.9,40,000/- per acre, totally amounting to Rs.28,20,000/-. The execution of the sale agreement dated 15.05.2006 was admitted. It was contended that the plaintiff had requested the defendants, five months time to secure the balance consideration amount but has not come forward to pay the balance amount to get the registered sale deed executed. As on the date of issuance of legal notice by the plaintiff on 20.10.2006, the period of five months had expired, the plaintiff has failed to discharge his part of obligation. As such, the defendants are entitled to forfeit the advance amount. Hence, prayed for dismissal of the suit.
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5. Based on the pleadings, the following issues were framed:-
1) Whether the plaintiff proves that the defendant Nos.1 to 5 being the owners of suit schedule property have agreed to sell suit schedule property for a sum of Rs.28,20,000/- and executed sale agreement on 15.05.2006?
2) Whether the plaintiff proves that he is always ready and willing to perform his part of contract?
3) Whether the plaintiff is entitled for the
relief of Specific Performance of
Contract?
4) What order or decree?
6. The plaintiff got examined himself as PW.1 and one Sri.Channamallappa was examined as PW.2.
19 documents were marked as Exs.P1 to P19. Defendant No.1 got examined herself as DW.1 and one witness as DW.2. Two documents were marked as Exs.D1 and D2. On appreciation of evidence, the Trial Court answered the issues as per the reasons recorded
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in the impugned judgment and decreed the suit in part, rejecting the prayer of the plaintiff for the relief of specific performance of contract, however directed the defendants to repay a sum of Rs.2,50,000/- to the plaintiff with interest at the rate of 12% per annum from 15.05.2006 till the date of realization. The defendants were directed to pay the decreetal amount within four months from the date of the judgment, failing which the plaintiff is at liberty to recover the same by auctioning the suit property in the public auction and to that extent a charge has been created over the suit property.
Being aggrieved, the plaintiff is in appeal.
7. Learned counsel for the appellant/plaintiff submitted that the Trial Court grossly erred in rejecting the relief of specific performance of contract albeit the execution of the sale agreement dated 15.05.2006 admitted by the defendants. The plaintiff was ready and willing to perform the part of his obligation in terms of
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the sale agreement but the Trial Court erred in giving a finding that the plaintiff has failed to prove that he had sufficient amount to pay the balance sale consideration despite producing ample evidence to establish the financial status of the plaintiff. It was argued that the defendants were obligated to furnish all the documents pertaining to the suit property within the time stipulated in terms of the agreement, but they have failed to perform their part of contract. The Trial Court erred in referring to Section 20 of the Specific Relief Act, 1963 ('Act' for short). It was further argued that in view of amendment to the Specific Relief Act by Act No.18 of 2018, readiness and willingness on the part of the purchaser/plaintiff is no more the valid criteria and invoking discretionary power under Section 20 of the Act would not arise. It was contended that the said amendment is applicable to the pending proceedings as well. Even otherwise, the plaintiff being the bonafide purchaser
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proved his readiness and willingness in terms of Exs.P13 to P19. Learned counsel has relied on the judgment of the Hon'ble High Court of Allahabad in the case of Mukesh Singh and Others vs. Saurabh Chaudhary and Others1.
8. Per contra, learned counsel appearing for the respondents/defendants submitted that all the documents as required under the sale agreement dated 15.05.2006 were made available to the plaintiff as on the date of the execution of the sale agreement. As per the recitals of the said agreement, time is the essence of contract. The plaintiff was required to pay the balance amount of Rs.25,70,000/- within the said period to get the registered sale deed executed. The defendants have entered into the agreement of sale to sell their properties for legal necessities mainly to celebrate the marriage of daughter of defendant No.1 and to clear the loans raised. Legal notice issued beyond five months of 1 2019 (135) ALR 884
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the date of agreement of sale indicates that the plaintiff was not ready and willing to perform the part of his contract. The defendants had performed their part of obligation. It was submitted that amendment to the provisions of the Act are not applicable to the pending proceedings. As such, the Trial Court exercising the discretionary power under Section 20 of the Act and denying the relief of specific performance is justifiable.
9. It was further submitted that sites have been developed in the layout formed in the suit property and certain sites are disposed of, to conduct the marriage of daughter of defendant No.1 and to discharge the ancestral debts. Granting of relief at this stage would cause more hardship to the defendants as well as the purchasers of the sites who have developed the properties. The plaintiff has utterly failed to prove his readiness and willingness to make the payment of the balance amount of sale consideration. Indeed he had no
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money to the said extent of Rs.25,70,000/- to get the absolute sale deed registered within five months as agreed between the parties in terms of the agreement of sale.
In support of his arguments, learned counsel has relied upon the following judgments:-
1) K. Narendra vs. Riviera
Apartments (P) Ltd.,2.
2) Sri. V.P. Venkatesh vs. Smt. G.
Padmavathi3.
10. We have carefully considered the arguments advanced by the learned counsel appearing for the parties and perused the material on record.
11. The points that arise for our consideration are:-
i) Whether in the facts and circumstances of the case the appellant/plaintiff is 2 AIR 1999 SC 2309 3 ILR 2015 KAR 2695.
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entitled for specific performance of contract?
ii) Whether amended provisions of the Act by Act No.18/2018 would be applicable to the facts of the present case?
iii) Whether in the facts and circumstances of the case the judgment and decree of the Trial Court is justifiable?
Re.Point No.(i)
12. It is not in dispute that the defendants are the absolute owners of the suit property and they have agreed to sell the same in favour of the plaintiff for a sale consideration as per the sale agreement dated 15.05.2006 (Ex.P1). Though the defendants have disputed the sale price of Rs.9,40,000/- per acre in the written statement having admitted the execution of agreement of sale - Ex.P1 and the receipt of the earnest money amounting to Rs.2,50,000/- vide Cheque bearing No.296285 dated 25.05.2006 drawn at Karnataka Bank, Bannur Main Branch, the same cannot be
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countenanced. No rebuttal evidence is available to dispute the sale consideration. Accordingly, we proceed to analyze the material evidence vis-à-vis the relief of specific performance of contract claimed by the plaintiff. In order to establish the readiness and willingness of the plaintiff, pass book - Ex.P10, Krishi Pass Book - Ex.P12, true copy of F.D.R. - Exs.P13 to P16 and Accounts Extracts - Exs.P17 to P19 are relied upon by the learned counsel for the appellant/plaintiff. Ex.P10 is the passbook of Karnataka Bank Limited pertaining to the Savings Bank Account No.8498 standing in the name of the plaintiff. The said passbook depicts that as on 07.09.2007, the plaintiff had the balance of Rs.24,961/- in his account. Ex.P12 is the Krishi passbook of Lakshmamma, W/o Mahadeva. This exhibit is of no assistance to the plaintiff since the account holder of the said Krishi passbook, Lakshmamma is noway related to the agreement of sale. No efforts are made by the plaintiff to explain the relevancy of Ex.P12.
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Exs.P13 to P16 are the Fixed Deposit Receipts and Exs.P17 to P19 are the Accounts Extracts.
13. Exs.P13 to P19 do not establish that the plaintiff had sufficient money to pay the balance sale consideration of Rs.25,70,000/- during the relevant period. Ex.P13 stands in the name of Sri. B.M. Mahesh who is claimed to be the brother of the plaintiff. It is certain that the plaintiff has entered into an agreement Ex.P1, in his individual capacity not representing joint family. Even if any finances were available with the members of the joint family, the same would not be of any help to the plaintiff, unless it is established that they had agreed to lend or support the plaintiff financially to purchase the suit property. Neither any pleadings or evidence is available to the said effect. In the circumstances, what could be inferred is that the plaintiff has failed to establish to perform his part of the contract. The legal notice at Ex.P3 also indicates that no
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efforts were made to get the registered sale deed executed. The Trial Court has invoked the discretionary power under Section 20 of the Act to reject the relief of specific performance of contract, has directed the defendants to pay the earnest money of Rs.2,50,000/- with interest at the rate of 12% per annum from 15.05.2006 till the date of realization to the plaintiff, within a time frame. It is obvious that the defendants had agreed to sell the suit property for their legal necessities during the relevant period. Though time is not an essence of contract relating to the immovable properties, the discretionary power vested with the Trial Court if exercised based on the material evidence available on record, the same cannot be found fault with unless the Court holds that the amended provisions of the Act are applicable to the present pending proceedings.
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14. We are conscious that the First Appellate court is the final fact finding court and re-appreciation of evidence is necessary.
15. PW1 - the plaintiff, in his cross-examination has admitted that he would have got executed the registered sale deed within a period of five months. However, he volunteers that the defendants were required to produce the documents. It has been stated that there was document to show that the balance sale consideration was redeemed, but the same has not been produced in the suit proceedings. Admittedly, no notice was issued to the defendants calling upon them to execute the registered sale deed within a period of five months. The agreement of sale was executed to clear the loans raised for the daughter's marriage having been admitted, PW.1 has categorically stated that both the vendors and plaintiff have to submit a joint application for the survey sketch to be prepared and no such
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request was made with the defendants to put their signature in any application to get the survey sketch.
16. PW.2 is one Channamallappa, Real Estate Agent, who is one of the witness to the agreement of sale - Ex.P1. He has also admitted that the defendants have no other source other than the suit property, they indeed had agreed to sell the suit property to discharge the loan raised for celebrating the marriage of the daughter and the son of defendant No.1. It is admitted by him that after the documents relating to the suit property were handed over to the plaintiff, agreement of sale was executed. Sketch has to be prepared by both the purchaser and the seller to get the absolute sale deed registered. Plaintiff has requested him to get the sale deed executed assuring that he has the balance sale consideration with him but he has not seen such money owned by the plaintiff.
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17. DW.1 - defendant No.1 has deposed that the agreement of sale was executed to clear the loan raised for the marriage of her daughter.
18. DW.2 - Sri. Shivalingu, witness to the agreement of sale, has admitted the execution of agreement of sale. He has deposed that the plaintiff has postponed the registration of the sale deed for one or the other reason though the defendants were ready. Nothing positive has been elicited in the cross- examination from this witness to support the case of the plaintiff.
19. It is significant to note that the plaintiff has paid only a sum of Rs.2,50,000/- towards the sale consideration of Rs.28,20,000/- which cannot be construed as substantial amount. The burden was on the plaintiff to prove that he had sufficient funds to pay the balance sale consideration and was always ready and willing to perform his part of the contract. On re-
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appreciation of evidence, we are of the considered view that the plaintiff has utterly failed to establish the same. The documents exhibited by the plaintiff do not demonstrate that the plaintiff had sufficient funds to pay the balance sale consideration. While damages and specific performance are both remedies available upon breach of a contract, awarding damages by pecuniary compensation against the equitable discretionary relief of specific performance is well known in common law. In granting specific relief of performance of contract, the readiness and willingness of the plaintiff plays a pivotal role. Hence, no exception can be found with the reasoning of the Trial Court in rejecting the relief of specific performance of contract.
Re.Point No.(ii).
20. The Specific Relief Act, 1963 ('Act' for short) has been amended by the Specific Relief (Amendment) Act, 2018 by Act No.18 of 2018, whereby Section 20 of
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the Act has been substituted inter alia doing away with the wider discretion of the Courts to grant specific performance introducing substituted performance of contract. In terms of the amended Act, the concept of the jurisdiction to decree specific performance, which was discretionary, is no more available to the cases seeking relief for the breach of contracts etc., The old Section 20 of the Act has been substituted by the new amended Section 20 by Act No.18 of 2018 with effect from 01.10.2018 vide SO 4888(E) dated 19.09.2018. The arguments of the learned counsel for the plaintiff that the said amended provisions being applicable to the facts of the present case, the Trial Court denying the relief of specific performance of the contract exercising the discretionary power is wholly erroneous, deserves to be negated for the following reasons.
21. At the outset, it is beneficial to refer to the Statement of the objects and reasons to the Amendment Act, 2018 which reads as under:-
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STATEMENT OF OBJECTS AND REASONS The Specific Relief Act, 1963 was enacted to define and amend the law relating to certain kinds of specific relief. It contains provisions, inter alia, specific performance of contracts, contracts not specifically enforceable, parties who may obtain and against whom specific performance may be obtained, etc. It also confers wide discretionary powers upon the courts to decree specific performance and to refuse injunction, etc. As a result of wide discretionary powers, the courts in majority of cases award damages as a general rule and grant specific performance as actionable negligence exception.
2. The tremendous economic development since the enactment of the Act have brought in enormous commercial activities in India including foreign direct investments, public private partnerships, public utilities infrastructure developments, etc,; which have prompted extensive reforms in the related laws to facilitate enforcement of
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contracts, settlement of disputes in speedy manner. It has been felt that the Act is not in tune with the rapid economic growth happening in our country and the expansion of infrastructure activities that are needed for the overall development of the country.
3. In view of the above, it is proposed to do away with the wider discretion of courts to grant specific performance and to make specific performance of contract a general rule than exception subject to certain limited grounds. Further, it is proposed to provide for substituted performance of contracts, where a contract is broken, the party who suffers would be entitled to get the contract performed by a third party or by his own agency and to recover expenses and costs, including compensation from the party who failed to perform his part of contract. This would be actionable negligence alternative remedy at the option of the party who suffers the broken contract. It is also proposed to enable the courts to engage experts on
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specific issues and to secure their attendance, etc.
4. A new section 20A is proposed for infrastructure project contracts which provides that the court shall not grant injunction in any suit, where it appears to it that granting injunction would cause hindrance or delay in the continuance or completion of the infrastructure project. The Department of Economic Affairs is the nodal agency for specifying various categories of projects and infrastructure sub-sectors, which is provided as Schedule to the Bill and it is proposed that the said Department may amend the Schedule relating to any such category or sub-sectors.
5. Special courts are proposed to be designated to try suits in respect of contracts relating to infrastructure projects and to dispose of such suits within a period of twelve months from the date of service of summons to the defendant and also to extend the said period for another six months in
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aggregate, after recordings reasons thereafter.
The Bill seeks to achieve the above objectives.
New Delhi; RAVI SHANKAR PRASAD.
The 15th December, 2017.
22. Sections 20 and 16 which are relevant for the present case are substituted by the Amendment Act, 2018 [18 of 2018]. The effect of the phrase 'substitution' has been subjected to judicial scrutiny in catena of judgments of the Hon'ble Apex Court and this Court. The same is collated to analyze the effect of the Amendment Act 18 of 2018 by way of substitution with effect from 01.10.2018, in particular to decide whether the amended Act is applicable to the pending matters.
23. The Hon'ble Apex Court in the case of Shamrao V. Parulekar vs. District Magistrate, Thana, Bombay4, dealing with the interpretation of the substitution provision held as under:- 4
AIR 1952 SC 324
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"(7). The construction of an Act which has been amended is now governed by technical rules and we must first be clear regarding the proper canons of construction. The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed(except where that would lead to a repugnancy, inconsistency or absurdity) as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all".
24. The decision of Hon'ble Apex Court in C. Gupta Vs. Glaxo-Smithkline Pharamaceuticals Limited5 would be beneficial to quote which is as under:
" 21. In the present case, we find that for determining the nature of amendment, the question is whether it affects the legal rights of individual workers in the context that if they fall within the definition then they would be entitled to claim several benefits conferred by the Act. The 5 [(2007) 7 SCC 171]
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amendment should be also one which would touch upon their substantive rights. Unless there is a clear provision to the effect that it is retrospective or such retrospectivity can be implied by necessary implication or intendment, it must be held to be prospective. We find no such clear provision or anything to suggest by necessary implication or intendment either in the amending Act or in the amendment itself. The amendment cannot be said to be one which affects procedure. In so far as the amendment substantially changes the scope of the definition of the term "workman" it cannot be said to be merely declaratory or clarificatory. In this regard we find that entirely new category of persons who are doing "operational" work was introduced first time in the definition and the words "skilled"
and "unskilled" were made independent categories unlinked to the word "manual". It can be seen that the Industrial Disputes (Amendment) Act, 1984 was enacted by Parliament on 31.8.1982. However, the amendment itself was not brought into force immediately and in sub- section (1) of Section 1 of the Amending Act, it was provided that it would come into force on such day as the Central Government may be Notification in the official Gazette, appoint.
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Ultimately, by a Notification the said amendment was brought into force on 21.8.1984. Although this Court has held that the amendment would be prospective if it is deemed to have come with effect on a particular day, a provision in the amendment Act to the effect that amendment would become operative in the future, would have similar effect."
25. The observation made by the Hon'ble Apex Court in Shyam Sunder and others vs. Ram Kumar and another6 in para 28 is quoted hereunder:-
"From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation, such legislation does not affect the substantive rights of the parties on the date of the suit or adjudication of the suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in an appeal are determined under the law in force 6 (2001) 8 SCC 24
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on the date of the suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned they remain unaffected by the amendment in the enactment. We are, therefore, of the view that where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act, such legislation is prospective in operation and does not affect substantive or vested rights of the parties unless made retrospective either expressly or by necessary intendment......"
26. In the case of Govardhan M vs. State of Karnataka and Others7, the coordinate bench of this Court while considering the scope of substitution and its effect has held thus:-
"29. It is well-settled rule of construction that every statute or statutory rule is prospective unless it is expressly or by necessary implication made to have retrospective effect. The principle is also well settled that statutes should not be construed so as to create new disabilities or obligations or impose new duties in respect of transactions which were complete at the time the 7 [(2013) 1 Kant LJ 437]
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Amending Act came into force. When the legislature amends an existing provision in a statute by way of substitution, the effect is the substituted provision stands repealed and the amended provision is substituted in the place of earlier provision in the earlier Act, as if the substituted provision is there in the earlier act from the inception. By express provision or by implication if it is not made clear that it is prospective in nature the said amended provision comes into effect from the date of the earlier Act. But it is not an invariable Rule. If such an interpretation is given, if it leads to repugnancy, inconsistency or absurdity, then the said general rule is not followed. In certain situations, the court having regard to the purport and object sought to be achieved by the Legislature may construe the word "substitution" as an "amendment" having a prospective effect. If the amendment Act expressly states that the substituted provision shall come into force from the date the amendment comes into force, the said provision is prospective in nature. Then it is not open to the Court by way of interpretation to give retrospective effect to such provision. Ultimately to decide whether these provisions are prospective or retrospective, it is the intention of (Emphasis supplied)
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the legislature which is the sole guide. If the procedure adopted for amendment is substitution and in the Amended Act it is specifically stated that the substituted provisions come into effect from the date the amended Rules or Act came into force, the intention of the legislature is clear. On the pretext that it is the case of substitution, the effect cannot be given to that substituted provision from the date of the earlier statute. It has to be necessarily from the date the amended rules came into force."
27. In Adhunik Steels Ltd., vs. Orissa Manganese and Minerals (P) Ltd.,8 the Hon'ble Apex Court has held thus:-
"16. Injunction is a form of specific relief. It is an order of a court requiring a party either to do a specific act or acts or to refrain from doing a specific act or acts either for a limited period or without limit of time. In relation to a breach of contract, the proper remedy against a defendant who acts in breach of his obligations under a contract, is either damages or specific relief. The two 8 (2007) 7 SCC 125
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principal varieties of specific relief are, decree of specific performance and the injunction (See David Bean on Injunctions). The Specific Relief Act, 1963 was intended to be "an Act to define and amend the law relating to certain kinds of specific reliefs". Specific relief is relief in specie. It is a remedy which aims at the exact fulfillment of an obligation. According to Dr. Banerjee in his Tagore Law Lectures on Specific Relief, the remedy for the non-performance of a duty are (1) compensatory, (2) specific. In the former, the court awards damages for breach of the obligation. In the latter, it directs the party in default to do or forbear from doing the very thing, which he is bound to do or forbear from doing. The law of specific relief is said to be, in its essence, a part of the law of procedure, for, specific relief is a form of judicial redress."
28. The Hon'ble High Court of Allahabad in Mukesh Singh supra, has held that the unamended provisions of Section 20 of the Act are not available for
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decision in the context of the judgment and decree (therein) passed on 27.07.2018 in the first appeal filed on 28.08.2018 since the Amending Act does not provide for saving of the repealed provision, as such Section 6 of the General Clauses Act, 1897 are not applicable.
29. In Ferrodous Estates (Pvt.) Ltd., vs. P. Gopirathnam (dead) and others9, the Hon'ble Apex Court has observed that Section 20 makes it clear that the jurisdiction to decree specific performance is discretionary; but that this discretion is not arbitrary but has to be exercised soundly and reasonably, guided by judicial principles, and capable of correction by a court of appeal - Section 20(2) speaks of cases in which the court may properly exercise discretion not to decree specific performance. Significantly, under clause (a) of sub-section (2), what is to be seen is the terms of the contract or the conduct of the parties at the time of entering into the contract. Even "other circumstances 9 Civil Appeal No.13516/2015 (D.D. 12.10.2020)
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under which the contract was entered into" refers only to circumstances that prevailed at the time of entering into the contract. In para Nos.42 and 43 it is held thus:-
"42.Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to a larger Bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani [(1993) 1 SCC 519] and other cases. Be that as it may.
43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam [(1997) 3 SCC 1]:
(i) The courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored.
(ii) The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.
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(iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement. The courts will also "frown" upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three-year period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part-performance, where equity shifts in favour of the purchaser."
30. In the case of Girdhar Das Anandji and another vs. Jivaraj Madhavji Patel and others10, the Hon'ble Patna High Court referring to the Full Bench decision of Calcutta High Court in the case of Moulvi Hossain Mian vs. Raj Kumar Haldar11 wherein it is stated; "Moreover the Specific Relief Act embodies what in essence is adjective law and the substantive law must be looked for elsewhere", observed thus: 10
1970 SCC ONLINE PAT 10 11 (AIR 1943 CALCUTTA 417)
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"19. It may be that the Specific Relief Act, by and large, may be said to deal with procedural aspect of the law of specific performance; but that in itself does not mean that none of the provisions of the Act deal with or confer rights on the parties. The Code of Civil in its essence a law of procedure. Nevertheless the right of appeal, provided for in the Code, has been consistently hold to be a provision conferring substantive rights on the parties. It is not the general nature of the Act as a whole which is really relevant for our purpose. What is of real importance is to see whether the provisions with which we are directly concerned is substantive law or is adjective law or is an amalgam of both. I may state that in the Full Bench decision of this Court in the case of (2) Tika Sao v. Harilal (A.I.R. 1940 Patna 385) Fazal Ali, J. referring to Section 27A Specific Relief Act of 1877 stated that the section "confers an active title on the lessee provided that the contract of lease was entered into after first April, 1930."
It would thus be seen that at least in respect of one of the provisions of the Act it has been
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held that it deals with substantive rights. I have already dealt with the scope and true nature of Section 15 of the Act 1877 and it appears to me that the section is exclusively neither the one nore the other but a combination of both the substantive law and the procedural law. Similar is the position with respect to Section 12 of the Specific Relief Act of 1963 which embodies Sections 14 to 17 of the Act 1877 with certain amendments and alterations. It would be noticed that Sub-section 3 of Section 12 with which we are vitally concerned, brings about a change in a very vital aspect as compared to the Act of 1877. Whereas in the earlier Act the party seeking specific performance under the corresponding provisions of Section 15 had to pay the entire amount of consideration stipulated in the agreement even where he was seeking enforcement of a part of the contract, under the present Act he has to pay only a part of the consideration after abatement in the amount of consideration, as mentioned in the section. This change on a vital aspect is not really a change in respect
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of procedural aspect but on the other hand it fixes and specifies the mutual rights of the parties which may properly be classified under the head substantive law. It may be stated that the observation that the "substantive law may be looked for elsewhere" made in (1) Hossain Mian's case was made with reference to Section 27(b) of the Act of 1877, as will be apparent from the lines that follow which are:
"In our judgment the substantive law, the foundation for specific relief provided for in Section 27(b) Specific Relief Act, is to be found in para 2 of Section 40, T.P. Act."
31. The Constitution Bench of the Hon'ble Apex Court in State of Punjab vs. Mohar Singh12, has held thus:-
"...Whenever there is a repeal of an enactment, the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a 12 [(1955) 1 SCR 893]
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simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot therefore subscribe to the broad proposition that Section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material. It is in the light of these principles that we now proceed to examine the facts of the present case."
(Emphasis supplied)
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32. The judgments cited by the respondents speaks about the discretion of the Court relating to specific performance and the readiness and willingness as contemplated under the Act with reference to the expedition.
33. In the light of the aforesaid judgments, it is clear that ordinarily, the effect of amendment by 'substitution' is that, the substituted provision stands repealed and the amended provision is substituted in the place of earlier provision from the date of inception of the enactment, but it is not absolutely applicable in all circumstances. If the amendment Act expressly specifies that the substituted provision shall come into force from a particular date subsequent to the date of amendment/the date the amendment come into force, the said amendment is prospective in nature notwithstanding such amendment is by way of 'substitution'. The intention of the legislature being
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clear, no retrospective effect could be given from the date of inception of the statute. There may not be any cavil on this legal proposition relating to substantial law. It is well settled that the interpretation of provisions must depend on the text and context. The real intention of the legislature has to be gathered from the text and context. The amendment Act contemplates that the said amendment by way of 'substitution' would come into force on such day the Central Government may, by Notification in the Official Gazette, appoint and different dates may be appointed for different provisions of the Act, 1st October 2018 is the date appointed for the amended provisions to come into effect. As such, amendment to each provision whether it is procedural or substantial has to be examined dehorse the Act in general is construed to be procedural.
34. As observed by the Hon'ble Patna High Court, supra, though the Code of Civil Procedure in essence a law of procedure, nevertheless the right of
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appeal, provided for in the Code, being considered to be a provision conferring substantive rights on the parties, by necessary implication the sea change brought by amendment to Section 20, would be substantive in nature. Though the remedy of specific performance was not available to the party as a matter of right under the unamended provisions that was dependant on the discretion of the Court, the same was indeed a right or privilege enjoyed by the defendants.
35. It is well settled that if a right has crystallized before the repealing Act comes into force, by reason of repeal of the earlier statute, the right crystallized cannot be taken away. The real test for the applicability of Section 6 of the General Clauses Act, 1897 relating to an amendment by substitution would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them as held by the Hon'ble Apex Court in State of Punjab supra. The intention of the legislature could be gathered
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from the Statements of Objects and reasons which suggest that the Amendment Act is remedial in nature on the other hand, do not indicate any intention to destroy the substantive right or privilege acquired or accrued under the unamended Act. Accordingly, we are of the view that Section 6 of the General Clauses Act, 1897 would apply to the case on hand. As discussed earlier, the right or privilege accrued to the defendant/s under the unamended Act is a substantive right. Indisputably, such rights/privileges vested with the defendants at the time of breach of contract alleged, while filing the suit. Appeal is continuation of original suit. Thus, in our considered opinion, amendment to Section 20 being prospective in nature enforceable with effect from 01.10.2018, the same is not applicable to the pending proceedings governed and continued under the unamended provisions. Hence, with great respect, we are unable to subscribe to the views expressed by the Hon'ble Allahabad High Court, supra.
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36. Even without dwelling upon the issue of the applicability of the unamended provisions to the case on hand, in the light of the recent judgment of the Hon'ble Apex Court in Ferrodous Estates (Pvt.) Ltd., supra, the appeal fails as the conduct of the parties at the time of execution of agreement is important. Admittedly, the agreement to sell was entered into between the parties on 15.05.2006, wherein, five months time frame was fixed to execute the registered sale deed. Undisputedly, after five months, the plaintiff has issued the notice dated 22.10.2006 (Ex.P3). The defendants have issued reply notice dated 02.11.2006 (Ex.P9). However, the suit in O.S.No.729/2008 was instituted on 26.09.2008 seeking for the relief of specific performance of the contract. The reasons explained for the delay in instituting the suit are not satisfactory. Readiness and willingness contemplated under the Act being to be understood with expedition, Court would 'frown' upon suits which are not filed immediately after
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breach/refusal. The failure of the plaintiff to prove his readiness and willingness to perform his part of the contract is being established, no exception can be found with the findings of the Trial Court inasmuch as the denial of remedy of specific performance.
37. The significant hardship that would be caused with a decree for specific performance if granted against the defendants at this passage of time would be relevant. Comparative hardship pleaded by the defendants assumes significance. Added to that, the defence set out by the defendants that the suit property is the only property owned by the defendants also remains unrebutted.
38. In the circumstances, the Trial Court is justified in directing the defendants to repay a sum of Rs.2,50,000/- to the plaintiff with interest at the rate of 12% per annum from 15.05.2006 till the date of realization of the amount denying the relief of specific
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performance. Viewed from any angle, appreciation of evidence by the Trial Court is not perverse or vitiated.
For the reasons and discussions stated above, appeal stands dismissed.
No order as to costs.
All pending I.As stand disposed of.
Sd/-
JUDGE Sd/-
JUDGE PMR