Allahabad High Court
Arjun Prasad And Others vs Ganesh Prasad And Others on 5 July, 2023
Author: Jaspreet Singh
Bench: Jaspreet Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Neutral Citation No. - 2023:AHC-LKO:43190 A.F.R. RESERVED Court No. - 19 Case :- SECOND APPEAL No. - 131 of 1993 Appellant :- Arjun Prasad And Others Respondent :- Ganesh Prasad And Others Counsel for Appellant :- S.N.Saxena,Adnan Ahmad,Arvind Kr. Sinha,K.P.Singh Counsel for Respondent :- G.S.Nigam,Arvind Kumar Jauhari,D.P.Gupta,Madan Gopal Misra,O.P. Tiwari,P.L.Mishra,Shafat Ullah Khan,T.C.Gupta Hon'ble Jaspreet Singh,J.
1. The instant second appeal has been preferred by the defendants-appellants emanating from a suit for specific performance of contract filed by the plaintiffs-respondents, wherein the trial Court by means of the judgment and decree dated 07.04.1992 refused the decree of specific performance which was assailed before the lower Appellate Court and the lower Appellate Court by means of its judgment and decree dated 02.12.1992 has set aside the decree of trial Court and has decreed the suit for specific performance, prompting the defendants-appellants to knock the doors of this Court under Section 100 CPC.
2. The instant second appeal was admitted by the Court on 24.03.1993 on the substantial question of law as formulated in the memo of appeal, Clause A, which reads as under:-
A. Whether the learned court below have misread and misinterpreted documents on record which renders their findings, perverse, incorrect, illegal?
3. In order to appreciate the controversy involved in the second appeal, certain relevant facts relating to the suit are being noticed hereinafter.
4. Ganesh Prasad and Satish Kumar, both minors sons of Kanhaiya Lal, through their father and natural guardian, had instituted a suit for specific performance of contract dated 12.08.1983 in terms whereof the original vendor, namely, Sarju Prasad had agreed to sell the property in dispute bearing No.367 (New No.346), situate in Jawahar Nagar, District Unnao. In terms of the said agreement executed by Sarju Prasad, it was agreed that for a total sale consideration of Rs.12,500/-, Sarju Prasad would sell the property in dispute to the minor sons of Kanhaiya Lal for which a sum of Rs.500/- was paid by the plaintiffs to Sarju Prasad as earnest money and the remaining consideration was to be paid at the time of execution of the sale-deed. The agreement also contemplated that the sale-deed would be executed within a period of one month and the possession will be transferred to the plaintiffs at the time of execution of the sale-deed.
5. It was also pleaded that before the sale-deed could be executed, Sarju Prasad expired and he was survived by his wife and three children, who were impleaded as the defendants. It was aslo recorded in the plaint that the plaintiffs were ready and willing to perform their part of contract and they had requisite means of paying the remaining consideration. However, the defendants were evading to perform their obligation, as a result, the plaintiffs had sent a notice dated 12.08.1983 and despite the same, the defendants did not comply with their obligations which led the plaintiffs to institute the suit for specific performance before the Court of Civil Judge, Unnao which was registered as Regular Suit No.52/1986.
6. The said suit was contested by the defendants, who were the legal heirs of the original executant of the agreement Sarju Prasad and while denying the execution of the agreement, it was specifically stated that Sarju Prasad prior to his death was suffering from a respiratory disease due to which he had become very weak and was also not mentally alert. It was further pleaded that neither Sarju Prasad executed the agreement nor he had the authority to do so. Sarju Prasad did not even have the need to sell the property and as such it appears that the plaintiffs in order to usurp the property got the agreement executed through impersonation as Sarju Prasad had died on 23.09.1982 and as such the agreement which is dated 10.08.1983 could not have been executed by him. For the aforesaid reasons, it was pleaded that the suit for specific performance could not be decreed and was liable to be dismissed.
7. Upon exchange of the pleadings, the trial Court framed five issues. However, the important issues upon which the suit was contested were (i) Whether the plaintiffs are entitled to seek specific performance of the agreement dated 10.08.1983? (ii) Whether late Sarju Prasad had any right to execute the said agreement to sell and if, yes, its effect? (iii) Whether the defendants were in possession of the disputed property prior to the agreement and if so, its effect? (iv) Whether Sarju Prasad expired on 23.09.1982 as stated by the defendants?
8. After the parties led their evidence, the trial Court recorded a finding that Sarju Prasad did not die on 23.09.1982 as the defendants failed to prove the aforesaid fact and it further found that Sarju Prasad had executed the agreement to sell dated 10.08.1983. It also returned a finding that the property belonged to Sarju Prasad and prior to his death, there was no occasion for grant of any rights to his wife and children as alleged and thus it cannot be said that Sarju Prasad did not have rights to execute the agreement to sell. Lastly, the trial Court noticed that apparently the value of the house, the subject matter of the agreement, was around Rs.60,000/- and the agreement indicated the sale consideration to be Rs.12,500/- against which only Rs.500/- had been paid as earnest money. Consequently, the trial Court did not find it appropriate to grant a decree of specific performance, however, by means of its judgment and decree dated 17.04.1992, it refused the decree of specific performance but directed the defendants to refund the sum of Rs.500/- along with interest @ 12% per annum from the date of the agreement till the date of its payment.
9. The defendants being aggrieved against the judgment and decree passed by the trial Court filed a regular civil appeal bearing No.37/1992 under Section 96 CPC. The plaintiffs had also filed their cross-objection as the decree of specific performance had been refused by the trial Court and, therefore, after hearing the parties, the lower Appellate Court granted a decree of specific performance after allowing the appeal by means of the judgment and decree dated 02.12.1992. It is this judgment and decree of reversal which is under challenge before this Court in the instant second appeal.
10. Shri Adnan Ahmad, learned counsel for the appellants has advanced the following submissions:-
(i) It is submitted that in a suit for specific performance of contract, it was necessary for the plaintiffs not only to have stated in the plaint that they were ready and willing to perform their part of the contract, but this readiness and willingness is to be established by evidence to be present throughout the suit uptill the passing of the decree. It is submitted that the trial Court did not give any finding regarding the readiness and willingness and even the lower Appellate Court did not dwell into this aspect of the matter appropriately while decreeing the suit.
11. It is submitted that as per the alleged agreement, the sale-deed was to be executed within a period of one month. The agreement is dated 10.08.1983 and the time as prescribed in the agreement was uptill September, 1983. The notice given by the plaintiffs for seeking specific performance is dated 04.08.1984 and the suit came to be filed on 21.01.1986. In context of the timelines, it would be seen that the plaintiff had got the notice issued much after the prescribed time for execution of the sale-deed had expired and even thereafter, the suit came to be filed almost year and a half which indicates and points to the fact that the plaintiffs were not serious regarding their continuous readiness and willingness to perform their part of the contract.
(ii) It is further urged that in the given facts of the case where admittedly the prices of the property had escalated since the execution of the agreement and it was brought on record during trial that the value of the house was about Rs.60,000/- and the sale consideration as indicated in the agreement was only Rs.12,500/-, this fact reflected that the agreement was inequitable and there was a clear inadequacy of the consideration. Thus, it would be seen that against the alleged agreed amount of Rs.12,500/- a paltry sum of Rs.500/- had been paid as earnest money. Hence, requiring the appellants to execute the sale-deed for a meager sum of Rs.12,000/- was unconscionable rather in the circumstances, the trial Court had properly exercised its jurisdiction by directing the return of Rs.500/- along with interest @ 12% per annum which did complete justice between the parties whereas the lower Appellate Court did not appropriately consider the findings nor gave cogent reasons as to why the discretion which was exercised by the trial Court had been reversed by the lower Appellate Court which has resulted in sheer miscarriage of justice. Moreover, the appellants would be deprived of a roof from over their heads and that too at a most inequitable price and especially with passage of time, as the prices of the immovable properties have hugely escalated, it would result in an unfair advantage to the plaintiffs-respondents. In these circumstances, it is submitted that the decree passed by the trial Court deserved to be affirmed and the instant second appeal be allowed.
12. Learned counsel for the appellants in support of his submissions has relied upon the decisions of the Apex Court in K.S. Vidyanadam and others v. Vairavan (1997) 3 SCC 1; C.S. Venkatesh v. A.S.C. Murthy and others, (2020) 3 SCC 280 and Shenbagam and others v. K.K. Rathinavel, 2022 SCC OnLine SC 71.
13. Shri Arvind Kumar Jauhari, learned counsel for the respondents while refuting the aforesaid submissions has submitted that the defendants themselves were responsible for the debacle by raising a false defence before the trial Court. Sarju Prasad had executed the agreement to sell dated 10.08.1983, however, falsely the defendants raised a defence that Sarju Prasad expired on 23.09.1982. It was also falsely averred that Sarju Prasad was physically and mentally weak and did not know the factum regarding execution of the agreement to sale. It is further urged that the plaintiffs had agreed to purchase the property for a sum of Rs.12,500/- and a sum of Rs.500/- was also paid as earnest money. The agreement to sell is a registered document which carries a presumption of its execution. It is only on account of death of Sarju Prasad that the sale-deed could not be executed within the time. The plaintiffs were always ready and willing to perform their part of contract and even called upon the defendants, who were the legal heirs of Sarju Prasad, to execute the sale-deed but they kept delaying the manner and thereafter the plaintiffs had to give a notice on 04.08.1984 which was not complied with by the defendants which led the plaintiffs to institute the suit for specific performance of contract.
14. It is further urged that the trial Court recorded a finding that the defendants were unable to prove that Sarju Prasad had died prior to execution of the agreement to sell. It also returned a finding that the agreement to sell in question was executed by Sarju Prasad and this necessarily expressed the falsity of the defence. It is also submitted that the trial Court ought not to have refused the relief of specific performance since, the plaintiffs were always ready and willing to perform their part of contract which was specifically pleaded in the plaint and not specifically denied by the defendants. Moreover, there was no material brought on record to prove that the plaintiffs did not have the financial capacity to pay the consideration and purchase the property in dispute. The entire evidence which was led by the defendants was only to buttress their false defense that Sarju Prasad did not have right to execute the agreement and once all these findings were returned in favour of the plaintiffs, there was no justiciable reason for the trial Court to have refused the decree of specific performance. It is in the aforesaid backdrop that the lower Appellate Court considered the material as well as evidence in its correct perspective and reversed the findings of the trial Court while granting a decree of specific performance in favour of the plaintiffs-respondents.
15. It is also urged that the rise in prices of the property is a natural phenomenon and in any case there was no material on record to indicate that the amount of Rs.60,000/- which was referred to by the trial Court had any basis. Merely by extracting the figure from the deposition, in isolation, may not be the correct manner of reading the evidence and it is for the aforesaid reason that the trial Court erred in considering the value of the property being Rs.60,000/- against which it was sought to be sold for a sum of Rs.12,500/- as per the agreement. It is thus urged that it is a case where the trial Court has misread the evidence and the same has been corrected by the lower Appellate Court, who has recorded clear findings and as such the judgment and decree passed by the lower Appellate Court does not suffer from any palpable error which may persuade this Court to interfere with the findings of fact in exercise of powers under Section 100 CPC, consequently, the appeal deserves to be dismissed.
16. Learned counsel for the respondents in support of his submissions has relied upon the decisions of the Apex Court in Nirmala Anand v. Advent Corporation (P) Ltd. and others, 2002 (5) SCC; P. D'souza v. Shondrilo Naidu, (2004) 6 SCC 649; K. Prakash v. B.R. Sampath Kumar, (2015) 1 SCC 597.
17. This Court has given its anxious consideration to the submissions of the learned counsel for the respective parties and also perused the material on record keeping in mind the substantial question of law involved.
18. This Court finds that the answer lies in the issue, as to, whether the lower appellate Court was justified in decreeing the suit for specific performance of contract or the trial Court was justified in invoking its discretion in terms of Section 20 of the Specific Relief Act, 1963 while refusing to grant a decree of specific performance and ordering the return of the earnest money along with interest.
19. Before adverting to the aforesaid aspect of the matter, it will be first necessary to notice what are the essential ingredients which enables a Court to grant a decree of specific performance and what may be the conditions when the Court may exercise its discretion in terms of Section 20 of the Specific Relief Act, 1963 to refuse a decree of specific performance of contract.
20. This can be outlined by first noticing the relevant provisions of the Specific Relief Act, 1963 and then by taking the aid of the decisions of the Apex Court on the subject. Notably, Section 10 and 20 of the Specific Relief Act, 1963 was amended in the year 2018 vide Amending Act of 2018 which received the Presidential assent on 01.08.2018 and came into effect in the statute books from 01.10.2018.
21. Sections 10 and 20 of the Specific Relief Act, 1963 shall be noticed, both, as it stood prior to and after amendment in the year 2018.
(i) Prior to Amendment of 2018, Section 10 read as under:-
"10. Cases in which specific performance of contract enforceable.--Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the court, be enforced--
(a) when there exists no standard for ascertaining actual damage caused by the non-performance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief. Explanation.--Unless and until the contrary is proved, the court shall presume--
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases:--
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff.
(ii) Section 10 as amended by the Specific Relief (Amendment) Act, 2018, reads as under:-
"10. Specific performance in respect of contracts.-The specific performance of a contract shall be enforced by the court subject to the provisions contained in sub-section (2) of section 11, section 14 and section 16."
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22. Section 14 of the Specific Relief Act relates to certain contracts which are not specifically enforceable and reads as under:-
Section 14 Contracts not specifically enforceable.--(1) The following contracts cannot be specifically enforced, namely:--
(a) a contract for the non-performance of which compensation in money is an adequate relief;
(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms;
(c) a contract which is in its nature determinable;
(d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.
(2) Save as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than an arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.
(3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases:--
(a) where the suit is for the enforcement of a contract,--
(i) to execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once: Provided that where only a part of the loan has been advanced the lendor is willing to advance the remaining part of the loan in terms of the contract; or
(ii) to take up and pay for any debentures of a company;
(b) where the suit is for,--
(i) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or
(ii) the purchase of a share of a partner in a firm;
(c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land: Provided that the following conditions are fulfilled, namely:--
(i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work;
(ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and
(iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed."
23. Section 15 of the Act of 1963 deals with who may obtain specific performance and it reads as under:-
"Section 15 Who may obtain specific performance.--Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by--
(a) any party thereto;
(b) the representative in interest or the principal, of any party thereto: Provided that where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest or his principal shall not be entitled to specific performance of the contract, unless such party has already performed his part of the contract, or the performance thereof by his representative in interest, or his principal, has been accepted by the other party;
(c) where the contract is a settlement on marriage, or a compromise of doubtful rights between members of the same family, any person beneficially entitled thereunder;
(d) where the contract has been entered into by a tenant for life in due exercise of a power, the reminderman;
(e) a reversioner in possession, where the agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant;
(f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is entitled to the benefit thereof and will sustain material injury by reason of its breach;
(g) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;
(h) when the promoters of a company have, before its incorporation, entered into a contract for the purposes of the company, and such contract is warranted by the terms of the incorporation, the company: Provided that the company has accepted the contract and has communicated such acceptance to the other party to the contract."
24. Importantly, Section 16 contains personal bars which can be invoked to refuse a decree of specific performance and it reads as under:-
"Section 16 Personal bars to relief.--Specific performance of a contract cannot be enforced in favour of a person--
(a) who would not be entitled to recover compensation for its breach; or
(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
(c) who fails to aver and prove that he has 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 terms the performance of which has been prevented or waived by the defendant. Explanation.--For the purposes of clause (c),--
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction."
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25. Another key section is Section 19 of the Specific Relief Act which speaks of the relief to the parties and it also takes within its ambit the instances of a subsequent purchaser for valuable consideration without notice, and it reads as under:-
"Section 19 Relief against parties and persons claiming under them by subsequent title.--Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against--
(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;
(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant;
(d) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;
(e) when the promoters of a company have, before its incorporation, entered into a contract for the purpose of the company and such contract is warranted by the terms of the incorporation, the company: Provided that the company has accepted the contract and communicated such acceptance to the other party to the contract."
26. Having noticed the aforesaid provisions, it would reveal that in a suit for specific performance of contract relating to an immovable property, it is per-se essential for the plaintiff to prove the due execution of the agreement to sell and that it is capable of enforcement. It is also required to not only plead but also amply demonstrate by evidence that the plaintiff is and has been always ready and willing to perform his part of the contract from the time of the execution of the agreement and throughout the proceedings in the Court till it is concluded. The plaintiff is also required to indicate that it is the defendant who is responsible for non-implementation of the agreement and the defendant has failed to perform his legal obligation as per the terms of the agreement.
27. In light of the aforesaid legal provisions and propositions, it will now be worthwhile to notice certain leading decisions of the Apex Court which illuminates the scope and intent of the provisions as noticed hereinabove and its nuances.
28. Whether time is the essence of contract relating to an immovable property was considered by the Apex Court in Chand Rani v. Kamla Rani, (1993) 1 SCC 519, wherein it was held as under:-
"It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language."
29. The plea of readiness and willingness is an important and essential ingredient in relation to Section 16(c) of the Specific Relief Act, 1963 and it has been held that it is not a straight jacket formula. In R.C. Chandiok v. Chuni Lal Sabharwal (1970) 3 SCC 140, the Hon'ble Apex Court observed as under:-
"readiness and willingness cannot be treated as a straitjacket formula and the issue has to be decided keeping in view the facts and circumstances relevant to the intention and conduct of the party concerned"
30. In Narinderjit Singh v. North Star Estate Promoters Limited, (2012) 5 SCC 712, in para 21 to 23 held as under:-
"20. In our view, the concurrent findings recorded by the trial court and the lower appellate court on the issues of execution of the agreement by the appellant's father and the respondent's readiness and willingness to perform its part of the agreement were based on correct evaluation of the pleadings and evidence of the parties and the learned Single Judge of the High Court did not commit any error by refusing to upset those findings. The argument of the learned Senior Counsel for the appellant that in the absence of specific pleading about continued readiness and willingness of the respondent to perform its part of the agreement and availability of funds necessary for payment of the sale consideration, the High Court should have set aside the concurrent finding recorded by the courts below sounds attractive but on a careful scrutiny of the record we do not find any valid ground to entertain the same.
21. In R.C. Chandiok v. Chuni Lal Sabharwal [(1970) 3 SCC 140] this Court observed that "readiness and willingness cannot be treated as a straitjacket formula and the issue has to be decided keeping in view the facts and circumstances relevant to the intention and conduct of the party concerned". The same view was reiterated in P. D'Souza v. Shondrilo Naidu [(2004) 6 SCC 649].
22. In N.P. Thirugnanam v. R. Jagan Mohan Rao [(1995) 5 SCC 115] the Court found that the appellant was dabbling in real estate transaction without means to purchase the property and observed: (SCC pp. 117-18, para 5) "5. ... Section 16(c) of the Act envisages that the 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."
23. In J.P. Builders v. A. Ramadas Rao [(2011) 1 SCC 429 : (2011) 1 SCC (Civ) 227] the Court has merely reiterated the principles already laid down and no new proposition has been laid down which may help the cause of the appellant."
31. Recently, this Court considered the issue of readiness and willingness with the aid of decided cases of the Apex Court in Ramzan Ali and another v. Altafur Rahman, 2023:AHC-LKO-30146 and in paras 27 to 30 reads as under:-
"27. In the Corpus Juris Secundum, vol. 81 pp.950-951, the readiness and willingness has been interpreted to mean, a general principle of law that a person seeking specific performance must show that he has performed or offered to perform or is ready, able and willing to perform, all the essential acts required by the contract and he must not remain quiet or hold himself aloof so as to enforce or abandon the contract as events may prove advantageous. The plaintiff is entitled to specific performance where he alleges and proves that he has complied substantially with the conditions of the contract or is able, ready and willing to perform the contract. (See also Satya Jain v Anis Ahmed Rushdie AIR 2013 SC 434).
28. In the case of Bijai Bahadur v. Shri Shiv Kumar AIR 1985 All 223, this Court held that so far as the question of readiness and willingness is concerned while 'willingness' is merely a mental process, 'readiness' is something to do with translating that will into action and is preceded by a necessary preparation for being in a position to be ready. As to the averments about this continuous readiness and willingness the law never insists on any particular form and the necessary averment may be made in any language the plaintiff may choose to employ. The language is not important. The crucial thing is that the totality of the averments made in the plaint must indicate the readiness and willingness of the plaintiff, even though by necessary inference.
29. This Court also notices the decision of the Apex Court in His Holiness Acharya Swami Ganesh Dassji Vs. Sitaram Thapar; 1996 (4) SCC 526 wherein the concept of readiness and willingness has been noticed and has been held as under:-
"2. There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to perform his part of the contract, the conduct has to be properly scrutinised. There is no documentary proof that the plaintiff had ever funds to pay the balance of consideration. Assuming that he had the funds, he has to prove his willingness to perform his part of the contract. According to the terms of the agreement, the plaintiff was to supply the draft sale deed to the defendant within 7 days of the execution of the agreement, i.e., by 27-2-1975. The draft sale deed was not returned after being duly approved by the petitioner. The factum of readiness and willingness to perform plaintiff's 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. The facts of this case would amply demonstrate that the petitioner/plaintiff was not ready nor had the capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bide for the time which disentitles him as time is of the essence of the contract."
30. Similarly, In J.P. Builders and Another Vs. A. Ramadas Rao and Another; 2011 (1) SCC 429 wherein the Apex Court in paragraph nos. 22 to 27 has observed as under:-
"22. The words "ready" and "willing" imply that the person was prepared to carry out the terms of the contract. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness.
23. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao [(1995) 5 SCC 115] at SCC para 5, this Court held: (SCC pp. 117-18) "5. ... Section 16(c) of the Act envisages that the 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."
24. In P. D'Souza v. Shondrilo Naidu [(2004) 6 SCC 649] this Court observed: (SCC p. 654, paras 19 and 21) "19. It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstances of each case. No straitjacket formula can be laid down in this behalf.
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21. ... The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale."
25. Section 16(c) of the Specific Relief Act, 1963 mandates "readiness and willingness" on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous "readiness and willingness" to perform the contract on his part from the date of the contract. The onus is on the plaintiff.
26. It has been rightly considered by this Court in R.C. Chandiok v. Chuni Lal Sabharwal [(1970) 3 SCC 140] that "readiness and willingness" cannot be treated as a straitjacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned.
27. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that the plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is non-compliance with this statutory mandate, the court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. "Readiness and willingness" to perform the part of the contract has to be determined/ascertained from the conduct of the parties.""
32. Another aspect which does merit consideration is where in a suit for specific performance, the vendor executes a sale-deed in favour of a subsequent purchaser then in such circumstances, who all are to be made parties to a suit and what relief is to be claimed and whether the subsequent sale-deed is required to be cancelled is also a crucial issue of importance.
33. The effect of an agreement over a subsequent purchaser for valuable consideration without notice emerges from Section 19 of the Specific Relief Act, 1963 and it would reveal that a sale of immovable property is immune from specific performance of prior contract for sale only if transferee has acquired title for valuable consideration in good faith and without notice of prior contract of sale.
34. Initially, the classic view of the Courts was that subsequent purchaser did not have the right to challenge the agreement or raise the plea of readiness and willingness which was only available with the original vendor and not to the subsequent purchaser who could only contest on his plea of proving that he was a bonafide purchaser in good faith for valuable consideration without notice and this was noticed in Jugraj Singh and another v. Labh Singh and others (1995) 2 SCC 31.
35. Later, there was a change in this legal position and made by the Apex Court while dealing with the aforesaid issue in Ram Awadh and others v. Achhairbar Dubey and another, (2000) 2 SCC 428 and it permitted all the pleas including the plea of readiness and willingness being available to the subsequent purchaser and while doing so the Apex Court also overruled the decision of Jugraj Singh (supra). The view taken in Ram Awadh (supra) was followed and approved lately by a Larger Bench of the Apex Court in Kadupugotla Varalakshmi v. Vudagiri Venkata Rao and others 2021 SCC OnLine SC 365.
36. Now, it has been settled that in a suit for specific performance of contract where the vendor executes the sale-deed in favour of a subsequent purchaser then an appropriate remedy is to seek a decree of specific performance wherein the plaintiff apart from impleading the vendor as a defendant would also implead the subsequent purchaser and there is no requirement to seek cancellation or declaration of the subsequent sale-deed to be bad or null and void. The Courts can grant a decree of specific performance and a direction can be issued to the subsequent purchaser to join hands with the vendor to execute the deed in favour of the plaintiff succeeding in a suit for specific performance.
37. This issue was first considered by the Apex Court in Durga Prasad v. Deep Chand, AIR 1954 SC 75 wherein their Lordships were pleased to approve a decision of the Calcutta High Court in Kafiladdin v. Samiraddin, [AIR 1931 Cal 67]. The relevant portion of the judgment of the Apex Court in Durga Prasad (supra) reads as under:-
"42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin v. Samiraddin [Kafiladdin v. Samiraddin, AIR 1931 Cal 67] , and appears to be the English practice. (See Fry on Specific Performance, 6th Edn., p. 90, para 207 and also Potter v. Sanders [(1846) 6 Hare 1 : 67 ER 1057] .) We direct accordingly."
38. This proposition was also noticed and followed in R.C. Chandiok v. Chuni Lal Sabharwal (1970) 3 SCC 140 and it held as under:-
"9. It is common ground that the plot in dispute has been transferred by the respondents and therefore the proper form of the decree would be the same as indicated at SCR p. 369 in Durga Prasad v. Deep Chand [AIR 1954 SC 75 : 1954 SCR 360] viz.
'to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff'. (AIR p. 81, para 42) We order accordingly. The decree of the courts below is hereby set aside and the appeal is allowed with costs in this Court and the High Court."
39. This aspect was also considered by the Apex Court in Thomson Press (India) Ltd. v. Nanak Builders and Investors Private Limited and others, (2013) 5 SCC 397, wherein the Apex Court held as under:-
"39. As discussed above, a decree for specific performance of a contract may be enforced against a person who claimed under the plaintiff (sic defendant), and title acquired subsequent to the contract. There is no dispute that such transfer made in favour of the subsequent purchaser is subject to the rider provided under Section 52 of the Transfer of Property Act and the restraint order passed by the Court.
40. The aforesaid question was considered by the Calcutta High Court in Kafiladdin v. Samiraddin [Kafiladdin v. Samiraddin, AIR 1931 Cal 67] , where Their Lordships referred to the English law on this point and quoted one of the passages of the book authored by Dart, on 'Vendors and Purchasers', 8th Edn., Vol. 2, which reads as under : (Kafiladdin case [Kafiladdin v. Samiraddin, AIR 1931 Cal 67] , AIR p. 68) "'Equity will enforce specific performance of the contract for sale against the vendor himself and against all persons claiming under him by a title arising subsequently to the contract except purchasers for valuable consideration who have paid their money and taken a conveyance without notice to the original contract.'"
Discussing elaborately, the Court finally observed : (Kafiladdin case [Kafiladdin v. Samiraddin, AIR 1931 Cal 67] , AIR p. 68) "This statement of the law is exactly what is meant by the first two clauses of Section 27 of the Specific Relief Act. It is not necessary to refer to the English cases in which decrees have been passed against both the contracting party and the subsequent purchaser. It is enough to mention some of them : Daniels v. Davison [(1809) 16 Ves Jun 249 : (1803-13) All ER Rep 432 : 33 ER 978], Potter v. Sanders [(1846) 6 Hare 1 : 67 ER 1057] and Lightfoot v. Heron [(1839) 3 Y&C Ex 586 : 160 ER 835] . The question did not pertinently arise in any reported case in India; but decrees in cases of specific performance of contract have been passed in several cases in different forms. In Chunder Kant Roy v. Krishna Sunder Roy [ILR (1884) 10 Cal 710] the decree passed against the contracting party only was upheld. So it was in Kannan v. Krishnan [ILR (1890) 13 Mad 324] . In Himatlal Motilal v. Vasudev Ganesh Mhaskar [ILR (1912) 36 Bom 446] the decree passed against the contracting defendant and the subsequent purchaser was approved. In Faki Ibrahim v. Faki Gulam Mohidin [AIR 1921 Bom 459] the decree passed against the subsequent purchaser only was adopted. In Gangaram v. Laxman Ganoba Shet Chaudole [ILR (1916) 40 Bom 498] the suit was by the subsequent purchaser and the decree was that he should convey the property to the person holding the prior agreement to sale. It would appear that the procedure adopted in passing decrees in such cases is not uniform. But it is proper that English procedure supported by the Specific Relief Act should be adopted. The apparent reasoning is that unless both the contracting party and the subsequent purchaser join in the conveyance it is possible that subsequently difficulties may arise with regard to the plaintiff's title."
41. The Supreme Court in Durga Prasad v. Deep Chand [AIR 1954 SC 75 : 1954 SCR 360] referred to the aforementioned decision of the Calcutta High Court in Kafiladdin case [Kafiladdin v. Samiraddin, AIR 1931 Cal 67] and finally held : (Durga Prasad case [AIR 1954 SC 75 : 1954 SCR 360] , AIR p. 81, para 42) "42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin v. Samiraddin [Kafiladdin v. Samiraddin, AIR 1931 Cal 67] , and appears to be the English practice. (See Fry on Specific Performance, 6th Edn., p. 90, para 207 and also Potter v. Sanders [(1846) 6 Hare 1 : 67 ER 1057] .) We direct accordingly."
42. Again in R.C. Chandiok v. Chuni Lal Sabharwal [(1970) 3 SCC 140 : AIR 1971 SC 1238] this Court referred to their earlier decision and observed : (SCC p. 146, para 9) "9. It is common ground that the plot in dispute has been transferred by the respondents and therefore the proper form of the decree would be the same as indicated at SCR p. 369 in Durga Prasad v. Deep Chand [AIR 1954 SC 75 : 1954 SCR 360] viz.
'to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff'. (AIR p. 81, para 42) We order accordingly. The decree of the courts below is hereby set aside and the appeal is allowed with costs in this Court and the High Court."
43. This Court again in Dwarka Prasad Singh v. Harikant Prasad Singh [(1973) 1 SCC 179 : AIR 1973 SC 655] subscribed to its earlier view and held that in a suit for specific performance against a person with notice of a prior agreement of sale is a necessary party."
40. This proposition was approved and reiterated in Rathnavathi v. Kavita Ganashamdas, (2015) 5 SCC 223. Even, this Court in Smt. Rajeshwari and others v. Smt. Meharunnishan and others in Second Appeal No.375 of 2001, decided on 24.02.2021 had followed the proposition as laid down in Durga Prasad (supra) and held as under:-
"... It is also equally true that in case of the sale-deed having been executed by the vendor in favour of the subsequent purchaser, the plaintiff is not required to seek the cancellation or declaration of the sale-deed in favour of the third party. If the suit of the specific performance is decreed then the original vendor and the third party purchaser/subsequent purchaser is required to join and execute the sale-deed in favour of the plaintiffs to convey the full title.
This Court is fortified in its view based on the decision of the Apex Court in the case of Lala Durga Prasad and another vs. Lala Deep Chand and others, AIR 1954 SC 75, wherein in Para 40 to 42, it has been held as under:-
"40. First, we reach the position that the title to the property has validly passed from the vendor and resides in the subsequent transferee. The sale to him is not void but only voidable at the option of the earlier "contractor". As the title no longer rests in the vendor it would be illogical from a conveyancing point of view to compel him to convey to the plaintiff unless steps are taken to re-vest the title in him either by cancellation of the subsequent sale or by reconveyance from the subsequent purchaser to him. We do not know of any case in which a reconveyance to the vendor was ordered but Sulaiman, C.J. adopted the other course in Kali Charan v. Janak Deo [AIR 1932 All 694] . He directed cancellation of the subsequent sale and conveyance to the plaintiff by the vendor in accordance with the contract of sale of which the plaintiff sought specific performance. But though this sounds logical the objection to it is that it might bring in its train complications between the vendor and the subsequent purchaser. There may be covenants in the deed between them which it would be inequitable to disturb by cancellation of their deed. Accordingly, we do not think that is a desirable solution.
41. We are not enamoured of the next alternative either, namely, conveyance by the subsequent purchaser alone to the plaintiff. It is true that would have the effect of vesting the title to the property in the plaintiff but it might be inequitable to compel the subsequent transferee to enter into terms and covenants in the vendor's agreement with the plaintiff to which he would never have agreed had he been a free agent; and if the original contract is varied by altering or omitting such terms the court will be remaking the contract, a thing it has no power to do; and in any case it will no longer be specifically enforcing the original contract but another and different one.
42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin v.Samiraddin [AIR 1931 Cal 67] and appears to be the English practice. See Fry on Specific Performance, 6th Edn., p. 90, para 207; also Potter v. Sanders [67 ER 1057]. We direct accordingly."
41. This issue was was recently considered, followed and approved by the Apex Court in P. Ramasubbamma v. V. Vijayalakshmi and others, (2022) 7 SCC 384 and in paragraphs 16 and 17, it noticed as under:-
"16. In light of the aforesaid factual aspects and the findings recorded by the learned trial court, the decision of this Court in Durga Prasad [Durga Parsad v. Deep Chand, 1954 SCR 360 : AIR 1954 SC 75] is required to be referred to. In para 42, it is observed and held as under: (AIR p. 81)
"42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin v. Samiraddin [Kafiladdin v. Samiraddin, 1930 SCC OnLine Cal 46 : AIR 1931 Cal 67] and appears to be the English practice. See Fry on Specific Performance, 6th Edn., p. 90, Para 207; also Potter v. Sanders [Potter v. Sanders, (1846) 6 Hare 1 : 67 ER 1057] . We direct accordingly."
The aforesaid decision has been subsequently referred to and followed by this Court in the subsequent decision in Rathnavathi [Rathnavathi v. Kavita Ganashamdas, (2015) 5 SCC 223 : (2015) 2 SCC (Civ) 736].
17. From the impugned judgment and order passed by the High Court, it appears that the High Court has heavily relied upon Section 34 of the Specific Relief Act. However, considering the fact that specific issues were framed with respect to sale deeds dated 3-5-2010 executed by original Defendant 2 in favour of Defendants 3 and 4 and the parties led the evidence also on the aforesaid issues and thereafter, when the learned trial court had given findings on the said issues and thereafter, had granted the declaration that the sale deeds executed by original Defendant 2 in favour of Defendants 3 and 4 are not binding on Defendant 1 and the plaintiff and those sale deeds are nominal sale deeds and that Defendants 2 to 4 have failed to prove that agreement to sell dated 12-4-2005 is a created document and by virtue of the same no consideration has been paid, Section 34 of the Specific Relief Act, upon which reliance has been placed by the High Court will have no application."
42. Now the stage is set and once the plaintiff proves the agreement, its enforceability, his readiness and willingness to perform its part of the contract during trial then, ordinarily, the plaintiff is entitled to a decree of specific performance. However, as the decree of specific performance is discretionary in nature, hence, only in certain cases the Court may be justified in refusing the grant of specific performance even though it may lawful to do so. This discretion which is vested in the Court must be exercised in accordance with law and should not be arbitrary or whimsical.
43. Now, in order to better appreciate this aspect of the matter, it will also be necessary to notice the source of this discretion which is embodied in Section 20 of the Specific Relief Act, 1963. This Section 20 too has undergone a legislative change in 2018. However, Section 20 of the Specific Relief Act, 1963 prior to its amendment was read as under:-
"Section 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; or
(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 party."
44. However, the legislative changes made in the Specific Relief Act vide Amendment Act of 2018 and Section 20 of the Specific Relief Act, 1963 in particular has done away with the discretion and the relief of specific performance of contract relating to immovable property is now no more discretionary. The amended Section 20 reads as under:-
"20. Substituted performance of contract.-- (1) Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.
(2) No substituted performance of contract under sub-section (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency:
Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency.
(3) Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach.
(4) Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach."
45. Though, the said amendment is not retrospective and would not apply to the transactions prior to the date of enforcement of the amendment i.e. 01.10.2018 and this question was answered by the Apex Court, lately in Katta Sujatha Reddy and another v. Siddamsetty Infra Projects Private Limited and others, (2023) 1 SCC 355 wherein in Para 58 and 59, it was held as under:-
"58. In the case at hand, the Amendment Act contemplates that the said substituted provisions would come into force on such date as the Central Government may appoint, by notification in the Official Gazette, or different dates may be appointed for different provisions of the Act. It may be noted that 1-10-2018 was the appointed date on which the amended provisions would come into effect.
59. In view of the above discussion, we do not have any hesitation in holding that the 2018 Amendment to the Specific Relief Act is prospective and cannot apply to those transactions that took place prior to its coming into force."
46. Since, in the case at hand, transaction is prior to 01.10.2018, hence Section 20 prior to its amendment shall apply. It would thus be seen that in any given circumstances where the Court comes to the conclusion that though the plaintiff is entitled to a decree of specific performance, but in case if such decree is executed then it may give rise to certain unconscionable consequences or the Court finds that the terms of the agreement in itself are unconscionable or there are certain accentuating circumstances revealing that in case the contract is specifically enforced then it may give an unfair advantage to one party and it will not be equitable to do so, then in such cases, the Court may be justified in refusing to grant a decree of specific performance and in lieu thereof may pass such orders including refund of earnest money in order to do complete and substantial justice between the parties.
47. It is also to be observed that a decree of specific performance is purely equitable in nature, accordingly, it is required that the plaintiff must come to the Court with clean hands and his conduct must not be blameworthy and while weighing the circumstances for exercising the discretion, the Court is also obliged to ascertain that the defendants may not be benefited or rewarded for any of his own fault or his conduct and that the defendant must also be free from blame.
48. How the discretion is to be exercised can be ascertained with the help of the leading decisions of the Apex Court on the aforesaid point. In K. Narendra v. Riviera Apartments (P) Ltd., (1999) 5 SCC 77, it was held as under:-
"29. Section 20 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; 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. Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SCC 589 : AIR 1996 SC 2814] by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court."
49. Again, in G. Jayashree and others v. Bhagwandas S. Patel and others (2009) 3 SCC 141, it was has held as under:-
"32. The civil courts, in the matter of enforcement of an agreement to sell, exercise a discretionary jurisdiction. Discretionary jurisdiction albeit must be exercised judiciously and not arbitrarily or capriciously. A plaintiff is expected to approach the court with clean hands. His conduct plays an important role in the matter of exercise of discretionary jurisdiction by a court of law. In Mohammadia Coop. Building Society Ltd. v. Lakshmi Srinivasa Coop. Building Society Ltd. [(2008) 7 SCC 310] this Court held: (SCC p. 327, para 71) "71. Grant of a decree for specific performance of contract is a discretionary relief. There cannot be any doubt whatsoever that the discretion has to be exercised judiciously and not arbitrarily. But for the said purpose, the conduct of the plaintiff plays an important role. The courts ordinarily would not grant any relief in favour of the person who approaches the court with a pair of dirty hands."
33. In Sanjana M. Wig v. Hindustan Petroleum Corpn. Ltd. [(2005) 8 SCC 242] in regard to exercise of the discretionary jurisdiction, this Court held that the same depends upon the facts and circumstances of each case wherefor no hard-and-fast rule can be laid down.
34. We may notice that B.P. Jeevan Reddy, J. in K.S. Vidyanadam v. Vairavan [(1997) 3 SCC 1] held that a new look is required to be given and the rigour of the rule is required to be relaxed by the courts as regards the principle that time is not of the essence of the contract in case of immovable properties as when the said principle was evolved the prices and values were stable and inflation was unknown, stating: (SCC pp. 9-10, para 11) "11. ... The learned counsel for the plaintiff says that when the parties entered into the contract, they knew that prices are rising; hence, he says, rise in prices cannot be a ground for denying specific performance. May be, the parties knew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said time-limit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such time-limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as non-existent? All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribes certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties)."
This Court therein noticed the decision rendered in Mademsetty Satyanarayana v. G. Yelloji Rao [AIR 1965 SC 1405 : (1965) 2 SCR 221] where Subba Rao, J. (as His Lordship then was) made a distinction between Indian law and the English law on the subject to hold that some delay may not be a bar in granting a relief of specific performance as the limitation for filing such suit is prescribed under the Limitation Act, 1963, stating: (K.S. Vidyanadam case [(1997) 3 SCC 1] , SCC p. 10, para 13) "13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2½ years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices--according to the defendants, three times--between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff.""
50. The Apex Court again in Ramesh Chandra v Asruddin, (2016) 1 SCC 653, held as under:-
"8. Section 20 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. 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 such situation is contained in clause (a) of sub-section (2) of Section 20 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 are 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 the agreement dated 21-6-2004 between the parties is proved, but it is nowhere pleaded or proved by the plaintiff that he got redeemed the mortgaged land in favour of Defendant 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."
51. The Apex Court again in K. Nanjappa v. R.A. Hameed, (2016) 1 SCC 762 considered the scope of Section 20 and in Paras 23 to 28 held as under:-
"23. In a suit for specific performance of a contract, the court has to keep in mind Section 20 of the Specific Relief Act, 1963. This Section preserves judicial discretion to grant decree for specific performance. However, the court is not bound to grant specific performance merely because it is lawful to do so. The court should meticulously consider all facts and circumstances of the case and to see that it is not used as an instrument of oppression to have an unfair advantage not only to the plaintiff but also to the defendant.
24. In Surya Narain Upadhyaya v. Ram Roop Pandey [1995 Supp (4) SCC 542] , this Court while considering Section 20 of the Specific Relief Act held as under: (SCC pp. 543-44, para 4) "4. Though the decree for specific performance is a discretionary power, yet the court is not bound to grant such a 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 of law and capable of correction by a court of appeal. Therefore, the discretion should be properly exercised keeping in view the settled principles of law as envisaged in Section 20 of the Act. This case demonstrates that the High Court [Ram Roop Pandey v. Surya Narain Upadhyaye, Second Appeal No. 2385 of 1974, decided on 26-9-1979 (All) (unreported)] took irrelevant consideration into account to refuse to grant the decree for specific performance. It also committed manifest illegality in reversing the concurrent finding of facts recorded by the trial court as well as the first appellate court, namely, the appellant has always been ready and willing to perform his part of the contract."
25. It is equally well settled that relief of specific performance is discretionary but not arbitrary, hence, discretion must be exercised in accordance with sound and reasonably judicial principles. The cases providing for a guide to courts to exercise discretion one way or the other are only illustrative, they are not intended to be exhaustive. In England, the relief of specific performance pertains to the domain of equity, but in India the exercise of discretion is governed by the statutory provisions.
26. In Mayawanti v. Kaushalya Devi [(1990) 3 SCC 1] , this Court observed as under: (SCC pp. 5-6, para 8) "8. In a case of specific performance it is settled law, and indeed it cannot be doubted, that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. The Law of Contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts. Where a valid and enforceable contract has not been made, the court will not make a contract for them. Specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable. The discretion of the court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract. It is, therefore, necessary first to see whether there has been a valid and enforceable contract and then to see the nature and obligation arising out of it. The contract being the foundation of the obligation the order of specific performance is to enforce that obligation."
27. In K. Prakash v. B.R. Sampath Kumar [(2015) 1 SCC 597 : (2015) 1 SCC (Civ) 600] , this Court held: (SCC pp. 604-05, paras 13-16) "13. Indisputably, remedy for specific performance is an equitable remedy. The court while granting relief for specific performance exercises discretionary jurisdiction. Section 20 of the Act specifically provides that the court's jurisdiction to grant decree of specific performance is discretionary but not arbitrary. Discretion must be exercised in accordance with the sound and reasonable judicial principles.
14. The King's Bench in Rooke's case [(1598) 5 Co Rep 99b : 77 ER 209] said:
'Discretion is a science, not to act arbitrarily according to men's will and private affection: so the discretion which is exercised here, is to be governed by rules of law and equity, which are not to oppose, but each, in its turn, to be subservient to the other. This discretion, in some cases follows the law implicitly, in others, allays the rigour of it, but in no case does it contradict or overturn the grounds or principles thereof, as has been sometimes ignorantly imputed to this Court. That is a discretionary power, which neither this nor any other court, not even the highest, acting in a judicial capacity is by the Constitution entrusted with.'
15. The Court of Chancery in Attorney General v. Wheate [(1759) 1 Eden 177 : 28 ER 652] followed Rooke's case [(1598) 5 Co Rep 99b : 77 ER 209] and observed: (ER p. 666) '... the law is clear, and courts of equity ought to follow it in their judgments concerning titles to equitable estates; otherwise great uncertainty and confusion would ensue. And though proceedings in equity are said to be secundum discretionem boni viri, yet, when it is asked, vir bonus est quis? The answer is, qui consulta patrum, qui leges juraque servat. And as it is said in Rooke's case [(1598) 5 Co Rep 99b : 77 ER 209] , that discretion is a science not to act arbitrarily according to men's wills and private affections; so the discretion which is to be executed here, is to be governed by the rules of law and equity, which are not to oppose, but each in its turn to be subservient to the other. This discretion, in some cases follows the law implicitly; in others assists it, and advances the remedy; in others, again, it relieves against the abuse, or allays the rigour of it; but in no case does it contradict or overturn the grounds or principles thereof, as has been sometimes ignorantly imputed to this Court. That is a discretionary power, which neither this, nor any other court, not even the highest, acting in a judicial capacity, is by the Constitution entrusted with. This description is full and judicious, and what ought to be imprinted on the mind of every Judge.'
16. The principle which can be enunciated is that where the plaintiff brings a suit for specific performance of contract for sale, the law insists upon a condition precedent to the grant of decree for specific performance: that the plaintiff must show his continued readiness and willingness to perform his part of the contract in accordance with its terms from the date of contract to the date of hearing. Normally, when the trial court exercises its discretion in one way or the other after appreciation of entire evidence and materials on record, the appellate court should not interfere unless it is established that the discretion has been exercised perversely, arbitrarily or against judicial principles. The appellate court should also not exercise its discretion against the grant of specific performance on extraneous considerations or sympathetic considerations. It is true, as contemplated under Section 20 of the Specific Relief Act, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree are established then the court has to exercise its discretion in favour of granting relief for specific performance."
28. Reference may also be made by this Court in Zarina Siddiqui v. A. Ramalingam [(2015) 1 SCC 705 : (2015) 1 SCC (Civ) 660] wherein this Court observed as under: (SCC p. 718, para 33) "33. The equitable discretion to grant or not to grant a relief for specific performance also depends upon the conduct of the parties. The necessary ingredient has to be proved and established by the plaintiff so that discretion would be exercised judiciously in favour of the plaintiff. At the same time, if the defendant does not come with clean hands and suppresses material facts and evidence and misleads the court then such discretion should not be exercised by refusing to grant specific performance."
52. Yet another important aspect which is to be considered is whether mere rise in prices of the property during the pendency of the proceedings can be considered as an accentuating circumstances to enable the Court to exercise its discretion and refuse to grant of relief of specific performance.
53. This issue was considered by the Apex Court in Jayakantham and others v. Abaykumar, (2017) 5 SCC 178 and it held as under:-
"7. While evaluating whether specific performance ought to have been decreed in the present case, it would be necessary to bear in mind the fundamental principles of law. The court is not bound to grant the relief of specific performance merely because it is lawful to do so. Section 20(1) of the Specific Relief Act, 1963 indicates that the jurisdiction to decree specific performance is discretionary. Yet, the discretion of the court is not arbitrary but is "sound and reasonable", to be "guided by judicial principles". The exercise of discretion is capable of being corrected by a court of appeal in the hierarchy of appellate courts. Sub-section (2) of Section 20 contains a stipulation of those cases where the court may exercise its discretion not to grant specific performance. Sub-section (2) of Section 20 is in the following terms:
"20. (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."
8. However, Explanation 1 stipulates that the mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, will not constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Moreover, Explanation 2 requires that the issue as to whether the performance of a contract involves hardship on the defendant has to be determined with reference to the circumstances existing at the time of the contract, except where the hardship has been caused from an act of the plaintiff subsequent to the contract.
9. The precedent on the subject is elucidated below:
9.1. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son [Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son, 1987 Supp SCC 340 : AIR 1987 SC 2328] , this Court held that : (SCC p. 345, para 14) "14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff."
9.2. A similar view was adopted by this Court in Sardar Singh v. Krishna Devi [Sardar Singh v. Krishna Devi, (1994) 4 SCC 18] : (SCC p. 26, para 14) "14. ... 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 Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract."
9.3. Reiterating the position in K. Narendra v. Riviera Apartments (P) Ltd. [K. Narendra v. Riviera Apartments (P) Ltd., (1999) 5 SCC 77] , this Court held thus : (SCC p. 91, para 29) "29. ... Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognised in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy [Lourdu Mari David v. Louis Chinnaya Arogiaswamy, (1996) 5 SCC 589] by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court."
9.4. These principles were followed by this Court in A.C. Arulappan v. Ahalya Naik [A.C. Arulappan v. Ahalya Naik, (2001) 6 SCC 600] , with the following observations : (SCC pp. 604 & 606, paras 7 & 15) "7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff.
***
15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court. ..."
9.5. A Bench of three Judges of this Court considered the position in Nirmala Anand v. Advent Corpn. (P) Ltd. [Nirmala Anand v. Advent Corpn. (P) Ltd., (2002) 8 SCC 146] , and held thus : (SCC p. 150, para 6) "6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.""
54. This aspect regarding escalation of prices and its impact on the discretion of the Court was taken up by the Apex Court, who made an arduous exercise to trace and renew all the relevant cases on the said point and elucidated the position in Ferrodous Estate (P) Ltd. v. P. Gopirathnam (Dead) and others, 2020 SCC OnLine SC 825. Though large number of decisions have been reviewed by the Apex Court, however, this Court is noticing few of the paras of the said judgment to clearly understand the proposition with the help of Paras 40, 42, 43, 45, 50 to 53 which reads as under:-
"40. Section 20, as it then stood, 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 - see section 20(1). 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 under which the contract was entered into" refers only to circumstances that prevailed at the time of entering into the contract. It is only then that this exception kicks in - and this is when the plaintiff gets an unfair advantage over the defendant. Equally, under clause (b) of subsection (2), the hardship involved is again at the time of entering into the contract which is clear from the expression "which he did not foresee". This is made clear beyond doubt by Explanation II of section 20 which states that the only exception to the hardship principle contained in clause (b) of sub-section (2) is where hardship results from an act of the plaintiff subsequent to the contract. In this case also, the act cannot be an act of a third party or of the court - the act must only be the act of the plaintiff. Clause (c) of sub-section (2) again refers to the defendant entering into the contract under circumstances which makes it inequitable to enforce specific performance. Here again, the point of time at which this is to be judged is the time of entering into the contract.
xxx xxx xxx
42. In P.D'Souza v. Shondrilo Naidu, (2004) 6 SCC 649, this Court held:
"39. It is not a case where the defendant did not foresee the hardship. It is furthermore not a case that non-performance of the agreement would not cause any hardship to the plaintiff. The defendant was the landlord of the plaintiff. He had accepted part-payments from the plaintiff from time to time without any demur whatsoever. He redeemed the mortgage only upon receipt of requisite payment from the plaintiff. Even in August 1981 i.e. just two months prior to the institution of suit, he had accepted Rs. 20,000 from the plaintiff. It is, therefore, too late for the appellant now to suggest that having regard to the escalation in price, the respondent should be denied the benefit of the decree passed in his favour. Explanation I appended to Section 20 clearly stipulates that merely inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature would not constitute an unfair advantage within the meaning of sub-section (2) of Section 20.
40. The decision of this Court in Nirmala Anand [(2002) 5 SCC 481] may be considered in the aforementioned context.
41. Raju, J. in the facts and circumstances of the matter obtaining therein held that it would not only be unreasonable but too inequitable for courts to make the appellant the sole beneficiary of the escalation of real estate prices and the enhanced value of the flat in question, preserved all along by Respondents 1 and 2 by keeping alive the issues pending with the authorities of the Government and the municipal body. It was in the facts and circumstances of the case held : (SCC p. 501, para 23) "23. ... Specific performance being an equitable relief, balance of equities have also to be struck taking into account all these relevant aspects of the matter, including the lapses which occurred and parties respectively responsible therefor. Before decreeing specific performance, it is obligatory for courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant, the extent of hardship that may be caused to the defendant and if it would render such enforcement inequitable, besides taking into (sic consideration) the totality of circumstances of each case."
43. Bhan, J., however, while expressing his dissension in part observed : (SCC pp. 506 & 507, paras 38 & 40) "38. It is well settled that in cases of contract for sale of immovable property the grant of relief of specific performance is a rule and its refusal an exception based on valid and cogent grounds. Further, the defendant cannot take advantage of his own wrong and then plead that decree for specific performance would be an unfair advantage to the plaintiff.
***
40. Escalation of price during the period may be a relevant consideration under certain circumstances for either refusing to grant the decree of specific performance or for decreeing the specific performance with a direction to the plaintiff to pay an additional amount to the defendant and compensate him. It would depend on the facts and circumstances of each case."
44. The learned Judge further observed that delay in performance of the contract due to pendency of proceedings in court cannot by itself be a ground to refuse relief of specific performance in absence of any compelling circumstances to take a contrary view. ......
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45. The said decision cannot be said to constitute a binding precedent to the effect that in all cases where there had been an escalation of prices, the court should either refuse to pass a decree on specific performance of contract or direct the plaintiff to pay a higher sum. No law in absolute terms to that effect has been laid down by this Court nor is discernible from the aforementioned decision."
43. In P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi, (2007) 10 SCC 231, this Court held:
"19. Submission of Mr. Chandrashekhar to the effect that having regard to the rise in price of an immovable property in Bangalore, the Court ought not to have exercised its discretionary jurisdiction under Section 20 of the Specific Relief Act is stated to be rejected. We have noticed hereinbefore that the appellant had entered into an agreement for sale with others also. He had, even after 11-5-1979, received a sum of Rs. 5000 from the respondent. He with a view to defeat the lawful claim of Respondent 1 had raised a plea of having executed a prior agreement for sale in respect of self-same property in favour of his son-in-law who had never claimed any right thereunder or filed a suit for specific performance of contract. The courts below have categorically arrived at a finding that the said contention of the appellant was not acceptable. Rise in the price of an immovable property by itself is not a ground for refusal to enforce a lawful agreement of sale. (See P. D'Souza [(2004) 6 SCC 649] and Jai Narain Parasrampuria [(2006) 7 SCC 756].)"
xxx xxx xxx
45. In Satya Jain v. Anis Ahmed Rushdie, (2013) 8 SCC 131, this Court held:
"40. 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 the 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 emphasised that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. Such a view has been consistently adopted by this Court. By way of illustration opinions rendered in P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi [(2007) 10 SCC 231] and more recently in Narinderjit Singh v. North Star Estate Promoters Ltd. [(2012) 5 SCC 712 : (2012) 3 SCC (Civ) 379] may be usefully recapitulated.
41. The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalising the plaintiffs for no fault on their part; to deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour. From another perspective it may also indicate the inadequacies of the law to deal with the long delays that, at times, occur while rendering the final verdict in a given case. The aforesaid two features, at best, may justify award of additional compensation to the vendor by grant of a price higher than what had been stipulated in the agreement which price, in a given case, may even be the market price as on date of the order of the final court.
42. Having given our anxious consideration to all the relevant aspects of the case we are of the view that the ends of justice would require this Court to intervene and set aside the findings and conclusions recorded by the High Court of Delhi in Anis Ahmed Rushdie v. Bhiku Ram Jain [Anis Ahmed Rushdie v. Bhiku Ram Jain, RFA (OS) No. 11 of 1984, decided on 31-10-2011 (Del)] and to decree the suit of the plaintiffs for specific performance of the agreement dated 22-12-1970. We are of the further view that the sale deed that will now have to be executed by the defendants in favour of the plaintiffs will be for the market price of the suit property as on the date of the present order. As no material, whatsoever is available to enable us to make a correct assessment of the market value of the suit property as on date we request the learned trial Judge of the High Court of Delhi to undertake the said exercise with such expedition as may be possible in the prevailing facts and circumstances."
xxx xxx xxx
50. It is settled law that mere delay by itself, without more, cannot be the sole factor to deny specific performance - See Mademsetty Satyanarayana v. G. Yelloji Rao, (1965) 2 SCR 221 at pp. 229-230. Thus, in K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1, this Court made it clear that if property prices have risen dramatically within a period of two and a half years before filing of the suit for specific performance, and it is coupled with violation of the agreement by the plaintiff, specific performance will not be decreed. The Court held:
"10. ... In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades -- particularly after 1973 [It is a well-known fact that the steep rise in the price of oil following the 1973 Arab-Israeli war set in inflationary trends all over the world. Particularly affected were countries like who import bulk of their requirement of oil]. In this case, the suit property is the house property situated in Madurai, which is one of the major cities of Tamil Nadu. The suit agreement was in December 1978 and the six months' period specified therein for completing the sale expired with 15-6-1979. The suit notice was issued by the plaintiff only on 11-7-1981, i.e., more than two years after the expiry of six months' period. The question is what was the plaintiff doing in this interval of more than two years? ... The defendants' consistent refrain has been that the prices of house properties in Madurai have been rising fast, that within the said interval of 2½ years, the prices went up three times and that only because of the said circumstance has the plaintiff (who had earlier abandoned any idea of going forward with the purchase of the suit property) turned round and demanded specific performance. Having regard to the above circumstances and the oral evidence of the parties, we are inclined to accept the case put forward by Defendants 1 to 3. We reject the story put forward by the plaintiff that during the said period of 2½ years, he has been repeatedly asking the defendants to get the tenant vacated and execute the sale deed and that they were asking for time on the ground that tenant was not vacating. The above finding means that from 15-12-1978 till 11-7-1981, i.e., for a period of more than 2½ years, the plaintiff was sitting quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of six months within which he was expected to purchase stamp papers, tender the balance amount and call upon the defendants to execute the sale deed and deliver possession of the property. We are inclined to accept the defendants' case that the values of the house property in Madurai town were rising fast and this must have induced the plaintiff to wake up after 2½ years and demand specific performance.
11. Shri Sivasubramaniam cited the decision of the Madras High Court in S.V. Sankaralinga Nadar v. P.T.S. Ratnaswami Nadar [AIR 1952 Mad 389 : (1952) 1 Mad LJ 44] holding that mere rise in prices is no ground for denying the specific performance. With great respect, we are unable to agree if the said decision is understood as saying that the said factor is not at all to be taken into account while exercising the discretion vested in the court by law. We cannot be oblivious to the reality -- and the reality is constant and continuous rise in the values of urban properties -- fuelled by large-scale migration of people from rural areas to urban centres and by inflation. Take this very case. The plaintiff had agreed to pay the balance consideration, purchase the stamp papers and ask for the execution of sale deed and delivery of possession within six months. He did nothing of the sort. The agreement expressly provides that if the plaintiff fails in performing his part of the contract, the defendants are entitled to forfeit the earnest money of Rs. 5000 and that if the defendants fail to perform their part of the contract, they are liable to pay double the said amount. Except paying the small amount of Rs. 5000 (as against the total consideration of Rs. 60,000) the plaintiff did nothing until he issued the suit notice 2½ years after the agreement. Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties -- evolved in times when prices and values were stable and inflation was unknown -- requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so. The learned counsel for the plaintiff says that when the parties entered into the contract, they knew that prices are rising; hence, he says, rise in prices cannot be a ground for denying specific performance. May be, the parties knew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said time-limit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such time-limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as non-existent? All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties)."
xxx xxx xxx "13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2½ years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices -- according to the defendants, three times -- between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff.
14. Shri Sivasubramaniam then relied upon the decision in Jiwan Lal (Dr) v. Brij Mohan Mehra [(1972) 2 SCC 757 : (1973) 2 SCR 230] to show that the delay of two years is not a ground to deny specific performance. But a perusal of the judgment shows that there were good reasons for the plaintiff to wait in that case because of the pendency of an appeal against the order of requisition of the suit property. We may reiterate that the true principle is the one stated by the Constitution Bench in Chand Rani [(1993) 1 SCC 519]. Even where time is not of the essence of the contract, the plaintiffs must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property."
51. Likewise, this Court, in Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18, made it clear that given the steep rise in urban land prices, it may not be correct now to say that time is not of essence in performance of a contract of sale of immovable property. Thus, where time can be said to be of the essence in the facts of a given case, and the purchaser does not take steps to complete the sale within the stipulated period and the vendor is not responsible for any delay, the steep rise in price within the stipulated time would be a circumstance which would make it inequitable to grant the relief of specific performance. This Court held:
"36. The principle that time is not of the essence of contracts relating to immovable properties took shape in an era when market values of immovable properties were stable and did not undergo any marked change even over a few years (followed mechanically, even when value ceased to be stable). As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed. The assumption was that grant of specific performance would not prejudice the vendor defendant financially as there would not be much difference in the market value of the property even if the contract was performed after a few months. This principle made sense during the first half of the twentieth century, when there was comparatively very little inflation, in India. The third quarter of the twentieth century saw a very slow but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the twentieth century. There has been a galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are no longer stable or steady. We can take judicial notice of the comparative purchase power of a rupee in the year 1975 and now, as also the steep increase in the value of the immovable properties between then and now. It is no exaggeration to say that properties in cities, worth a lakh or so in or about 1975 to 1980, may cost a crore or more now.
37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and "non-readiness". The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for rupees one lakh and received rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees.
xxx xxx xxx
41. A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this Court in K.S. Vidyanadam v. Vairavan [(1997) 3 SCC 1] (by Jeevan Reddy, J. who incidentally was a member of the Constitution Bench in Chand Rani [(1993) 1 SCC 519]). This Court observed : (SCC pp. 7 & 9, paras 10-11) "10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. ... in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades-- particularly after 1973. ...
11. ... We cannot be oblivious to the reality-- and the reality is constant and continuous rise in the values of urban properties--fuelled by large-scale migration of people from rural areas to urban centres and by inflation. ... Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties--evolved in times when prices and values were stable and inflation was unknown--requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so."
(emphasis in original)
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.
(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."
52. In Nanjappan v. Ramasamy, (2015) 14 SCC 341, the suit for specific performance was filed many years after the agreement dated 30.09.1987, which agreement was extended by three years twice and thereafter, by another two years. It was only after these extensions and exchange of legal notices between the parties that the respondents filed a suit for specific performance. It was in this factual background that the Court held:
"10. In a suit for specific performance, the plaintiff has to aver and prove with satisfactory evidence that he was always ready and willing to perform his part of contract at all material time as mandatorily required under Section 16(c) of the Specific Relief Act, 1963. The first appellate court and the High Court recorded findings that the plaintiff was always ready and willing to perform his part of the contract. By a careful reading of the recitals in the agreement, the concurrent findings so recorded do not seem to reflect the conduct of the parties. As per recitals in Ext. P-1 agreement dated 30-9-1987, an amount of Rs. 25,000 was paid by the respondent-plaintiffs to the appellant-defendant. Balance amount of Rs. 20,000 was to be paid within 2½ years thereafter and get the sale executed. In the second agreement of sale (Ext. P-2 dated 21-3-1990) it is stated that the plaintiffs were unable to pay the balance amount within the stipulated period and get the sale deed executed and therefore the second sale agreement was executed extending the period for execution of sale deed for a further period of three years. As could be seen from the recitals from Ext. P-2, the respondents were unable to pay the balance sale consideration and get the sale deed executed. It is pertinent to note that the time for performance of contract was extended again and again totalling period of eight years. Even though the first appellate court and the High Court recorded findings that the respondent-plaintiffs were ready and willing to perform their part of contract, the fact that time was extended for eight years is to be kept in view while considering the question whether discretion is to be exercised in favour of the respondent-plaintiffs."
xxx xxx xxx "13. The first sale agreement was executed on 30-9-1987 about twenty-seven years ago. The property is situated in Coimbatore City and over these years, value of property in Coimbatore City would have considerably increased. In Saradamani Kandappan v. S. Rajalakshmi [(2011) 12 SCC 18 : (2012) 2 SCC (Civ) 104], this Court has held that the value of the property escalates in the urban areas very fast and it would not be equitable to grant specific performance after a lapse of long period of time. In the instant case, the first agreement was executed on 30-9-1987 i.e. twenty-seven years ago. In view of passage of time and escalation of value of the property, grant of specific relief of performance would give an unfair advantage to the respondent-plaintiffs whereas the performance of the contract would involve great hardship to the appellant-defendant and his family members.
14. Considering the totality and the facts and circumstances, in our view, it is not appropriate to grant discretionary relief of specific performance to the respondent-plaintiffs for more than one reason. Admittedly, the suit property is the only property of the appellant-defendant and the appellant is said to have constructed a house and where he is currently residing with the family. As compared to the respondents, the appellant will suffer significant hardship if a decree for specific performance is granted against the appellant. Considering the circumstances, such as the construction of the residential house over the suit property, sale consideration, passage of time and hardship caused to the appellant, makes it inequitable to exercise the discretionary relief of specific performance and the concurrent finding of the first appellate court and the High Court decreeing the suit for specific performance is to be set aside."
53. The resultant position in law is that a suit for specific performance filed within limitation cannot be dismissed on the sole ground of delay or laches. However, an exception to this rule is where immovable property is to be sold within a certain period, time being of the essence, and it is found that owing to some default on the part of the plaintiff, the sale could not take place within the stipulated time. Once a suit for specific performance has been filed, any delay as a result of the court process cannot be put against the plaintiff as a matter of law in decreeing specific performance. However, it is within the discretion of the Court, regard being had to the facts of each case, as to whether some additional amount ought or ought not to be paid by the plaintiff once a decree of specific performance is passed in its favour, even at the appellate stage."
55. Recently in Shenbagam and others v. K.K. Rathinavel, 2022 SCC OnLine SC 71, the Apex Court in paragraphs 36 to 41 held as under:-
"36. Even assuming that the respondent was willing to perform his obligations under the contract, we must decide whether it would be appropriate to direct the specific performance of the contract in this case. In Zarina Siddiqui v. A. Ramalingam (2015) 1 SCC 705 a two-judge Bench of this Court while dealing with a suit for specific performance of a contract regarding the sale of immovable property observed that the remedy for specific performance is an equitable remedy and Section 20 of the Specific Relief Act confers a discretion on the Court. The Court held:
"24. It is well settled that remedy for specific performance is an equitable remedy. The court while granting decree of specific performance exercises its discretionary jurisdiction. Section 20 of the Specific Relief Act specifically provides that the Court's discretion to grant decree of specific performance is discretionary but not arbitrary. Discretion must be exercised in accordance with sound and reasonable judicial principles."
37. In the context of the discretion under Section 20 of the Specific Relief Act, several decisions of this Court have considered whether it is appropriate to direct specific performance of a contract relating to the transfer of immovable property, especially given the efflux of time and the escalation of prices of property. In Satya Jain v. Anis Ahmed Rushdie (2013) 8 SCC 131 this Court held:
"39. The long efflux of time (over 40 years) that has occurred and the galloping value of real estate in the meantime are the twin inhibiting factors in this regard. The same, however, have to be balanced with the fact that the plaintiffs are in no way responsible for the delay that has occurred and their keen participation in the proceedings till date show the live interest on the part of the plaintiffs to have the agreement enforced in law.
40. 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 the 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 emphasised that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. [...]
41. The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalising the plaintiffs for no fault on their part; to deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour."
(emphasis supplied)
38. In directing specific performance of the agreement, this Court in Satya Jain (supra) held that sale deed must be executed for the current market price of the suit property.
39. In Nirmala Anand v. Advent Corporation (P.) Ltd. (2002) 8 SCC 146, a three-judge Bench of this Court observed that in case of a phenomenal increase in the price of the land, the Court may impose a reasonable condition in the decree such as payment of an additional amount by the purchaser. In decreeing the suit for specific performance, the Court observed:
"6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen."
(emphasis supplied)
40. In KS Vidyanadam v. Vairavan (1997) 3 SCC 1, an agreement to sell immovable property was entered into between the plaintiff-buyer and the defendant-seller for a consideration of Rs. 60,000, where earnest money of Rs. 5,000 had been paid in advance. The agreement stipulated that the plaintiff had to purchase stamp papers and pay the balance amount within six months and call upon the defendants to execute the sale deed. The plaintiff filed a suit for specific performance after a lapse of two and a half years seeking performance of the contract. The Court held:
"10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing.
[...] In this case, the suit property is the house property situated in Madurai, which is one of the major cities of Tamil Nadu. The suit agreement was in December 1978 and the six months' period specified therein for completing the sale expired with 15-6-1979. The suit notice was issued by the plaintiff only on 11-7-1981, i.e., more than two years after the expiry of six months' period. The question is what was the plaintiff doing in this interval of more than two years? [...] There is not a single letter or notice from the plaintiff to the defendants calling upon them to get the tenant vacated and get the sale deed executed until he issued the suit notice on 11-7-1981. It is not the plaintiff's case that within six months', he purchased the stamp papers and offered to pay the balance consideration.
[...]
13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2½ years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices -- according to the defendants, three times -- between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff."
(emphasis supplied)
41. True enough, generally speaking, time is not of the essence in an agreement for the sale of immoveable property. In deciding whether to grant the remedy of specific performance, specifically in suits relating to sale of immovable property, the courts must be cognizant of the conduct of the parties, the escalation of the price of the suit property, and whether one party will unfairly benefit from the decree. The remedy provided must not cause injustice to a party, specifically when they are not at fault. In the present case, three decades have passed since the agreement to sell was entered into between the parties. The price of the suit property would undoubtedly have escalated. Given the blemished conduct of the respondent-plaintiff in indicating his willingness to perform the contract, we decline in any event to grant the remedy of specific performance of the contract. However, we order a refund of the consideration together with interest at 6% per annum."
56. Now after having taken note of the legal provisions and the settled propositions and the nuances which can be culled out from the decisions noted hereinabove and applying it to the facts and circumstances of the present case, it would be found that insofar as the registered agreement to sell dated 10.08.1983 is concerned, both the Courts have concurrently found that Sarju Prasad had executed the registered agreement to sell dated 10.08.1983 for a total sale consideration of Rs.12,500/- in pursuance whereof Rs.500/- was paid as earnest money. This finding has not been assailed by the appellants before this Court. However, what is urged is that the plaintiffs did not approach the Court with promptness nor the plaintiffs were ready and willing to perform their part of the contract and this is being urged by indicating that the agreement provided for a time limit of one month for executing the sale-deed whereas the notice issued by the plaintiffs to the defendants, prior to institution of the suit, is dated 04.08.1984 i.e. almost after a year and a half from the time which was agreed in the agreement for execution of the sale-deed and again almost after a year and a half of issuance of notice the suit for specific performance was instituted which indicates that the plaintiffs were not serious in their readiness and willingness nor was it continuous from the date of the agreement and throughout the proceedings.
57. In order to buttress the aforesaid submissions, learned counsel for the appellants has relied upon the decision of the Apex Court in Shenbagam (supra) and has submitted that in the said case before the Apex Court, the agreement had provided a time for executing the sale-deed which was not adhered but rather the plaintiffs brought the suit with much delay and despite the suit having been decreed by the High Court, the Apex Court reversed the decree and returned the amount with interest.
58. It is also urged that in the aforesaid decision of Shenbagam (supra), the Apex Court had also noticed the earlier decision of the Apex Court in the case of Nirmala Anand (supra) which was cited by the respondents and thus it is submitted that the circumstances involved in the instant case are quite similar to the case in Shenbagam (supra), consequently, the exercise of discretion by the trial Court was right while it was not properly considered by the lower Appellate Court while reversing the findings and decreeing the suit.
59. In this regard, this Court finds that while filing the suit, the plaintiffs had referred to the agreement to sell dated 12.08.1983 and in Paragraph-4 it was stated that the plaintiffs were always ready and willing to perform their part of the contract and still are. However, from a perusal of the written statement, it would be found that this averment has not been denied by the defendants. There is no denial of this fact nor it has been stated that the plaintiffs were never willing or ready to perform their part. The entire written statement revolved around two pleas (i) Sarju Prasad died on 23.09.1982 and, therefore, he could have executed the agreement to sell on 12.08.1983 and apparently the agreement was fraudulent (ii) Sarju Prasad was physically and mentally weak and even otherwise did not have the authority to sell, consequently, the agreement was void and not binding.
60. If the aforesaid pleas are tested, it would be found from the record that the burden of proving that Sarju Prasad died on 23.09.1982 was on the defendants. No adequate material was brought on record to indicate that Sarju Prasad expired on 23.09.1982. In order to establish the aforesaid plea, the defendants relied upon the death certificate issued by the Nagar Palika, Unnao dated 18.04.1985 indicating that it is recorded therein that Sarju Prasad died on 23.09.1982. This death certificate is the sheet anchor for the contention raised by the defendants, however, the same could not be proved in accordance with the law inasmuch as in order to establish, it was required to state and prove that the said death certificate was issued by the competent authority in accordance with law.
61. At this juncture, it will be necessary to notice that a death certificate is issued by the Registrar under The Registration of Birth and Death Act, 1969. The said Act was made applicable in the State of U.P. in pursuance of the notification dated 7th March, 1970 and was made effective from 1st April, 1970. Certain relevant provisions of the Act of 1969 are being noticed hereinafter:-
"8 Persons required to register births and deaths.--(1) It shall be the duty of the persons specified below to give or cause to be given, either orally or in writing, according to the best of their knowledge and belief, within such time as may be prescribed, information to the Registrar of the several particulars required to be entered in the forms prescribed by the State Government under sub-section (1) of section 16,--
(a) in respect of births and deaths in a house, whether residential or non-residential, not being any place referred to in clauses (b) to (e), the head of the house or, in case more than one household live in the house, the head of the household, the person, who is so recognised by the house or the household, and if he is not present in the house at any time during the period within which the birth or death has to be reported, the nearest relative of the head present in the house, and in the absence of any such person, the oldest adult male person present therein during the said period;
(b) in respect of births and deaths in a hospital, health centre, maternity or nursing home or other like institution, the medical officer in charge or any person authorised by him in this behalf;
(c) in respect of births and deaths in a jail, the jailor in charge;
(d) in respect of births and deaths in a choultry, chattram, hostel, dharmasala, boarding-house, lodging-house, tavern, barrack, toddy shop or place of public resort, the person in charge thereof;
(e) in respect of any new-born child or dead body found deserted in a public place, the headman or other corresponding officer of the village in the case of a village and the officer in charge of the local police station elsewhere: Provided that any person who finds such child or dead body, or in whose charge such child or dead body may be placed, shall notify such fact to the headman or officer aforesaid;
(f) in any other place, such person as may be prescribed.
(2) Notwithstanding anything contained in sub-section (1), the State Government, having regard to the conditions obtaining in a registration division, may by order require that for such period as may be specified in the order, any person specified by the State Government by designation in this behalf, shall give or cause to be given information regarding births and deaths in a house referred to in clause (a) of sub-section (1) instead of the persons specified in that clause."
xxx ------ xxx------ xxx------ xxx------ xxx------ xxx------ xxx "11 Informant to sign the registrar.--Every person who has orally given to the Registrar any information required under this Act shall write in the register maintained in this behalf, his name, description and place of abode, and, if he cannot write, shall put his thumb mark in the register against his name, description and place of abode, the particulars being in such a case entered by the Registrar."
"12 Extracts of registration entries to be given to informant.--The Registrar shall, as soon as the registration of a birth or death has been completed give, free of charge, to the person who gives information under section 8 or section 9 an extract of the prescribed particulars under his hand from the register relating to such birth or death."
"13 Delayed registration of births and deaths.--(1) Any birth of which information is given to the Registrar after the expiry of the period specified therefore, but within thirty days of its occurrence, shall be registered on payment of such late fee as may be prescribed.
(2) Any birth or death of which delayed information is given to the Registrar after thirty days but within one year of its occurrence shall be registered only with the written permission of the prescribed authority and on payment of the prescribed fee and the production of an affidavit made before a notary public or any other officer authorised in this behalf by the State Government.
(3) Any birth or death which has not been registered within one year of its occurrence, shall be registered only on an order made by a Magistrate of the first class or a Presidency Magistrate after verifying the correctness of the birth or death and on payment of the prescribed fee.
(4) The provisions of this section shall without prejudice to any action that may be taken against a person for failure on his part to register any birth or death within the time specified therefor and any such birth or death may be registered during the pendency of any such action."
62. From the perusal aforesaid sections, it would reveal that a complete procedure has been outlined in the Act of 1969 relating to the registration of birth and death. From a perusal of the aforesaid sections, it would indicate that persons have been mentioned in Section 8 who are required to report the fact of birth and death with the authority concerned. The person, who gives the information is also required to sign on the register specifically made for the aforesaid purpose. Section 13 clearly indicates that in case any information regarding birth or death is given with delay, but within 30 days of its occurrence, then such information can be taken on payment of such fee as may be prescribed, however, if such information is given after 30 days, but within one year of its occurrence, it can only be registered with the written permission of the prescribed authority and production of an affidavit made before a public notary. Any birth or death which has not been registered within one year of its occurrence can be registered only by an order made by the Magistrate of first class after verifying the correctness of birth or death and on payment of prescribed fee.
63. Thus, it would be seen that in the instant case, there was no evidence led by the defendants to substantiate, who informed the authority and whether the information was accompanied by an affidavit of the informant. Since, apparently the death was registered with delay, there is no material on record to indicate that any order was passed by the Magistrate of first class permitting such registration. Accordingly, it cannot be said that the procedure as prescribed has been followed and, therefore, it casts a doubt over the alleged certificate which has been relied upon by the defendants. There is another aspect of the matter and i.e. the defendants in the written statement did not give any clear date of death of Sarju Prasad and only a vague averment was made that he died about 3-4 years prior to the date of filing of the written statement. The defendant did not file any order of any Court in pursuance whereof the alleged death certificate was issued.
64. Another significant aspect is that Arjun son of Sarju Prasad was examined as DW-1 who deposed that at the time of Sarju Prasad's death, he was in Abhu Dhabhi and after he returned, he got the death certificate prepared by moving an application on 05.03.1984. On the same very date, he also got death certificate prepared of his brother who died about 5 years ago and his sister, who had died about 10 years ago. While it is alleged that an application was moved before the Nagar Palika on 15.09.1983 which was served upon the defendants on 16.02.1984 and the death certificate was issued on 05.03.1984. Thus, in light of the aforesaid facts and circumstances alongwith the evidence and the procedure and law as per the Act of 1969 the plea regarding date of death of Sarju Prasad was not proved and it did not find favour with the two Courts, who rejected the said plea.
65. The plea regarding the agreement being not executed by Sarju Prasad was also belied inasmuch as the plaintiffs had got the signatures/thumb impression verified through handwriting expert who stated that the signatures/thumb impression on the agreement and that on admitted document Exhibit-A-1, was that of Sarju Prasad. The defendants could not establish their plea to resist the suit and the lower Appellate Court also clearly confirmed the finding that the defendants could not substantiate their defence and hold that the agreement was actually executed by Sarju Prasad.
66. In view of the aforesaid, two things are clear (i) The agreement was executed by Sarju Prasad which has been concurrently held by the two Courts. (ii) The defendants had raised a plea which was not bonafide and the defendants tried to cast a doubt over the entire transaction by resorting to different pleas including giving incorrect date of death of Sarju Prasad to shroud the execution of the agreement itself, with suspicion which could not be substantiated. Hence, the agreement, the payment of sale consideration, the issuance of notice prior to institution of the suit seeking specific performance and also instituting the suit for getting a decree of specific performance has been sufficiently proved by the plaintiffs. The readiness and willingness has been specifically pleaded by the plaintiffs and there is no denial either in the pleadings or in the evidence by the defendants. Thus, these important ingredients stand proved. There is no plea raised by the plaintiffs which is found to be false or not in good faith and thus it would be seen that the ingredients for grant of specific performance was proved by the plaintiffs.
67. Now, the only issue that requires to be resolved is whether the defendants were entitled to any discretion which was granted by the trial Court and whether it was justly reversed by the lower Appellate Court.
68. In this regard, upon a perusal of the material on record, this Court finds that neither there are any such terms in the agreement to sell which creates an unconscionable bargain in favour of the plaintiffs against the defendants. There is no circumstances pleaded or proved which may persuade this Court to hold that any discretion exercised in favour of the plaintiffs would cause an irreparable damage or injury to the defendants. However, in order to exercise the discretion, one important aspect to be considered too, is in relation to the conduct of the respective parties qua the respective plea taken by them.
69. From the record, it indicates that the manner in which the defendants had raised a plea in their written statement denying the execution of the agreement to sell, giving incorrect date of death of Sarju Prasad and also alleging that there are certain mala-fides of the plaintiffs who had moved certain applications in the Nagar Palika. All these were belied from the evidence on record which indicates that the defendants had not raised the defence in good faith. In the aforesaid circumstances and considering the grounds taken by the trial Court in its judgment to refuse the decree of specific performance that the DW-1 Arjun Prasad had given the value of the property as Rs.60,000/- against the value given in the agreement to sell as Rs.12,500/- is not sufficient enough for the reason that there was no material to substantiate how and what was the basis of the statement of Arjun Prasad. If the statement of the witness on record is seen, it would indicate that the figure of Rs.60,000/- which has been mentioned is hypothetical and made by mere estimation and is not based on any material. The manner in which the trial Court has used the statement is clearly out of context and it has been read in isolation. Merely on the ground of escalation of price, the trial Court was not quite justified in refusing the decree of specific performance. This aspect has already been considered by this Court with the aid of decisions of the Apex Court while dealing with Section 20 of the Specific Relief Act and it is now settled that mere rise in the value of the property is not enough to refuse the grant of a decree of specific performance, without any other accentuating circumstances.
70. This Court further finds that since the defence of the defendants was not in good faith and a suit for specific performance is an equitable relief and while exercising the discretion in terms of Section 20 of the Specific Relief Act, 1963, the conduct of the parties have to be seen and in this case, the conduct of the defendants was not such so as to tilt the discretion in favour of the defendants. For the aforesaid reasons, this Court is satisfied that the discretion which was exercised by the trial Court was not appropriate and the judgment and decree passed by the lower Appellate Court is justified in the facts and circumstances of the case.
71. While taking a holistic view of the matter, this Court while confirming the decree of the lower appellate Court cannot refrain from noticing the dictum of the Apex Court in K. Prakash v. B.R. Sampath Kumar, (2015) 1 SCC 597 and the relevant paragraphs 19 and 20 of the aforesaid report are quoted as under for convenience.
"19. However, the court may take notice of the fact that there has been an increase in the price of the property and considering the other facts and circumstances of the case, this Court while granting decree for specific performance can impose such condition which may to some extent compensate the defendant owner of the property. This aspect of the matter is considered by a three-Judge Bench of this Court in Nirmala Anand v. Advent Corpn. (P) Ltd. [(2002) 8 SCC 146] , wherein this Court held: (SCC p. 150, para 6) "6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen."
20. As discussed above the agreement was entered into between the parties in 2003 for sale of the property for a total consideration of Rs 16,10,000. Ten years have passed by and now the price of the property in that area where it situates has increased by not less than five times. Keeping in mind the factual position we are of the view that the appellant should pay a total consideration of Rs 25 lakhs, being the price for the said property."
72. Similarly, the Apex Court in Zarina Siddiqui v. A. Ramalingam (2015) 1 SCC 705 held as under:-
"36. As held by this Court time and again, efflux of time and escalation of price of the property by itself cannot be a valid ground to deny the relief of specific performance. But the Court in its discretion may impose reasonable conditions including payment of additional amount to the vendor. It is equally well settled that the plaintiff is not to be denied specific performance only on account of phenomenal increase of price during the pendency of litigation.
37. The respondent-defendant alternatively pleaded in the written statement that even at the relevant time the price of the suit property was Rs 3,00,000 when the said agreement was executed for Rs 40,000 only. But on the other hand it has come in evidence that against Rs 40,000, the appellant-plaintiff has paid a total amount of Rs 65,000.
38. Be that as it may, in the facts and circumstances of the case and considering the phenomenal increase in price during the period the matter remained pending in different courts, we are of the considered opinion that the impugned order [A. Ramalingam v. H. Siddiqui, RFA No. 265 of 1999, decided on 1-3-2012 (KAR)] under appeal be set aside but with a condition imposed upon the appellant-plaintiff to pay a sum of Rs 15,00,000 (Rupees fifteen lakhs) in addition to the amount already paid by the appellant to the respondent. On deposit in the trial court of the aforesaid amount by the appellant, for payment to the respondent, within three months from today, the respondent shall execute and register the sale deed in favour of the plaintiff in respect of the suit property. In the event the aforesaid condition of deposit of Rs 15 lakhs is fulfilled within the time stipulated hereinabove but if the defendant fails to comply with the direction, then the appellant shall be entitled to execute the decree in accordance with the procedure provided in law."
73. The Apex Court lately in U.N. Krishnamurthy Vs. A.M. Krishnamurthy; 2022 SCC Online SC 840, in paragraph nos. 38 to 42 has observed as under:-
"38. In this case, we cannot overlook the fact that the suit property is located in the industrial town of Hosur located about 30/40 kms. from Bengaluru. The Court is obliged to take judicial notice of the phenomenal rise in the price of real estate in Hosur. The proposition finds support from case reported in K.S. Vidyanadam v. Vairavan (supra). To quote this Court "we cannot be oblivious to reality - and the reality is constant and continuous rise in the values of urban properties-fuelled by large scale migration of people from rural areas to urban centres and by inflation."
39. Mr. Venugopal argued that the Plaintiff had only paid an insignificant amount of Rs. 10,001/- as advance when the consideration was Rs. 15,10,000/-. Having paid an insignificant amount the Plaintiff was not entitled to discretionary equitable relief of Specific Performance, as observed by this Court in Saradamani Kandappan v. S. Rajalakshmi (2011) 12 SCC 18. The relevant paragraph of the judgment of this Court is set out hereinbelow:--
"37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and "non-readiness". The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for rupees one lakh and receiving rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees."
40. As argued by Mr. Venugopal, the fact that the suit had been filed after three years, just before expiry of the period of limitation, was also a ground to decline the Respondent Plaintiff the equitable relief of Specific Performance for purchase of immovable property. Mr. Venugopal's argument finds support from the judgments of this Court in P.R. Deb and Associates v. Sunanda Roy (1996) 4 SCC 423; K.S. Vidyanadam v. Vairavan (1997) 3 SCC 1; Manjunath Anandappa v. Tammanasa (2003) 10 SCC 390, Azhar Sultana v. B. Rajamani (2009) 17 SCC 27; Saradamani Kandappan v. S. Rajalakshmi (2011) 12 SCC 18.
41. In K.S. Vidyanadam v. Vairavan (supra) this Court held:
"10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the court by both Sections 10 and 20. As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani [(1993) 1 SCC 519] : (SCC p. 528, para 25) "... it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident?) : (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract."
In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised..."
42. In Azhar Sultana v. B. Rajamani (supra) this Court held:--
"28. ...The court, keeping in view the fact that it exercises a discretionary jurisdiction, would be entitled to take into consideration as to whether the suit had been filed within a reasonable time. What would be a reasonable time would, however, depend upon the facts and circumstances of each case. No hard-and-fast law can be laid down therefor. The conduct of the parties in this behalf would also assume significance.
***
35. We, therefore, are of the opinion that interest of justice would be subserved if this Court refuses to exercise its discretionary jurisdiction in terms of Section 20 of the Act, directing the defendant to pay a sum of Rs. 60,000 to the plaintiff which sum would include the amount of advance paid by her.""
74. In this backdrop, this Court notices that the parties have been litigating since 1983 and almost 40 years have lapsed and the defendants, who are before this Court are residing in the said premises. The premises has come within the urban agglomeration with passage of time and the defendants must have made improvements too and also noticing the fact that in terms of the agreement against a sum of Rs.12,500/-, the plaintiffs-respondents had only paid a sum of Rs.500/- alone and considering that there are changed circumstances including escalation of price in respect of property in question, the inflationary trends and following the dictum of the Apex Court in this regard and for doing the substantial justice between the parties, this Court modifies the judgment and decree passed by the lower Appellate Court to the extent that the plaintiffs-respondents shall be entitled to a decree of specific performance in pursuance of the agreement to sell dated 10.08.1983 provided that now the respondents-plaintiffs shall pay a total sum of Rs.8,00,000/- to the defendants-appellants within a period of 90 days or in the alternate deposit the same before the Executing Court after adjusting any amount already paid or deposited. Upon payment of the aforesaid sum or deposit of Rs.8,00,000/- before the Executing Court, the plaintiffs-respondents shall be entitled to get the sale-deed executed from the defendants-appellants failing which they shall be entitled to get the same executed through the Executing Court, in accordance with law. In case non-deposit of the amount by the plaintiffs-respondents in time as provided herein then the plaintiffs-respondents shall not be entitled to get the sale-deed in their favour.
75. Subject to the aforesaid modification in the judgment and decree dated 02.12.1992 passed in Civil Appeal No.37 of 1992 which is affirmed, this Court does not find merit in this appeal which is accordingly dismissed. In the facts and circumstances, there shall be no order as to costs. The record of the lower Court shall be returned expeditiously.
Order Date :- 5th July, 2023 Rakesh/-