Delhi High Court
Mohinder Nath Sharma(Decd.) Thr. ... vs Ram Kumar & Ors. on 22 March, 2012
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.228/2003
% 22nd March, 2012
MOHINDER NATH SHARMA(DECD.) THR. LR‟S ..... Appellants
Through: Mr. P.V.Kapoor, Sr. Adv. with
Mr. Indermeet Sharma &
Mr. Aman Anand, Advs.
VERSUS
RAM KUMAR & ORS. ..... Respondents
Through: Mr. B.R.Sharma, Adv.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? Yes
VALMIKI J. MEHTA, J (ORAL)
1. The challenge by means of this Regular First Appeal (RFA) filed under Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned judgment of the Trial Court dated 25.1.2003. By the impugned judgment, the Trial Court decided two suits. Suit No.209/2002 (originally Suit No.728/1982) titled as Ram Kumar & Ors. vs. Mohinder Nath Sharma, was a suit for possession, declaration and recovery of damages of `62,000/- filed by the proposed sellers (the respondents herein) against the proposed buyer (now represented by his legal heirs-the appellants). The RFA No.228/2003 Page 1 of 33 second suit was suit No.210/2002 (originally Suit No.817/1982) titled as Mohinder Nath Sharma vs. Ram Kumar & Ors. seeking specific performance of an Agreement to Sell and possession of balance land, filed by the proposed buyer against the proposed sellers. The impugned judgment dismisses the suit of the proposed buyer, Sh.Mohinder Nath Sharma for specific performance and decrees the suit filed by the proposed sellers for possession and damages. For the sake of convenience in this judgment, I will refer to the proposed sellers as the respondents and the proposed buyer as the appellant. The original proposed buyer, Sh. Mohinder Nath Sharma has expired, and he is now represented by his legal heirs as the appellants.
2. The disputes in the present case pertain to an agreement to sell dated 1.6.1979. The agreement to sell was entered into between the proposed sellers, Sh.Ram Kumar, Sh. Jai Prakash and Sh. Parmanand with the proposed buyer Sh. Mohinder Nath Sharma. The subject matter of the agreement to sell was a piece of land situated on property no.894 & 894/1, Alipur, Delhi-36 admeasuring 2,000 sq. yds. and having a boundary wall on three sides alongwith certain constructions on the same. The price which was agreed under the agreement to sell was `1,60,000/-. The agreement recites the receiving of `1,00,000/- by the respondents. There is RFA No.228/2003 Page 2 of 33 also a separate receipt executed of the same date of agreement to sell showing the receipt of a sum of `1,00,000/- by the respondents.
3. The agreement to sell though apparently appeared to be clear with respect to the buyer, the sellers, the area of the land to be sold and the price at which it was sold, however, actually there was uncertainty qua the area and consequently the price, and which aspect emerges from para 3 of the agreement to sell which reads as under:-
"3. That the party No.1 has delivered the actual physical possession of the above said property unto the party No.2 on the date of execution of this agreement but the possession shall be considered finally on making up the balance valuation and paying the same to the party No.1."
A reading of the aforesaid para 3 of the agreement to sell shows that the issue of possession was to be finally considered on making up of the balance valuation and paying the same to the party no.1, i.e. the respondents. This para therefore shows that though in the earlier part of the agreement to sell there is certainty as to the area of land being 2,000 sq. yds. and the price at `1,60,000/-, however, in reality there was lack of certainty with respect to the area of 2,000 sq. yds. and consequently there was no crystallization of the price of the property. The reason for such uncertainty was on account of the facts stated hereinafter. RFA No.228/2003 Page 3 of 33
4. In order to appreciate para 3 of the agreement to sell, it is necessary to understand the ownership of the respondents with respect to the suit land. The respondents were undisputed owners/title-holders of a total of 1300 sq. yds. of land, and which area of 1300 sq. yds. of land was purchased by means of two sale deeds dated 22.6.1973, each sale deed being for 650 sq. yds.. The sale deeds were in favour of Sh.Ram Kumar/plaintiff no.1(in the suit of the proposed sellers)/respondent no.1 herein, and Sh. Jai Prakash-plaintiff no.2(in the suit of the proposed sellers), the respondent No.2 herein. Besides the area of 1300 sq. yds., there were also claimed rights by the respondents in a plot of 1000 sq. yds. under a general power of attorney dated 25.6.1973 executed in favour of the aforesaid plaintiffs no. 1 and 2/respondents no.1 and 2. Therefore, there was with the respondents a total area of 2300 sq. yds., of which, there was no doubt with respect to title/ownership of 1300 sq. yds., however, so far as the area of 1000 sq. yds. was concerned, there was no title by a regular sale deed, but, only a general power of attorney.
As referred to here-in-above, when under the agreement to sell possession of the subject land was given by the respondents to the appellant, there was boundary wall only on three sides, but, there was no boundary wall on the fourth side. This was because the portion, in which RFA No.228/2003 Page 4 of 33 there was no boundary wall, was partly a dried-up pond. The fact that on the fourth side no wall was constructed also again brings to the fore the fact that there was uncertainty with respect to the area of which possession was actually transferred at the time of executing of the agreement to sell, and also as to finally what would be the area which will be transferred/sold.
5. As per the appellant at the time of the execution of the agreement to sell, possession of about 1000 sq. yds. was given. The possession of the balance area was to be made up subsequently. After the giving of the possession, which was possible finally, there would then take place the consequent correct valuation/price of the land which was to be sold.
6. The appellant pleaded that after entering into the agreement to sell, the respondents started filling up the pond with earth and thus subsequent to the Agreement to Sell gave certain additional area- in the evidence led on behalf of the appellant, this additional area is said to be around 500 sq. yds.. The appellant claimed that the respondents asked for additional payment of `20,000/- against the promise to give further possession, and consequently the appellant gave two cheques of `10,000/- each to the respondents on 29.8.1979. At the time of giving of these RFA No.228/2003 Page 5 of 33 cheques of `10,000/- each totalling to `20,000/-, an endorsement was got made on the back of the agreement to sell which reads as under:
"Both the parties have mutually agreed to extend the period upto the date 5-10-1977, under the same and similar terms of this agreement and the party No.1 and the party No.2 also shall be bound by the said agreement dated 1-6-1979;
In token thereof both the parties have signed on this 29th day of Aug.1979 at Delhi.
Party No.1 Party No.2"
7. It appeared that the respondents had differences with the Gram Pradhan of the village where the suit land was situated, and the Gram Pradhan objected to filling up of the pond claiming that the said land belongs to Gram Sabha and whereupon disputes were stated to have arisen with respect to a portion of the land. As a result of disputes which arose, proceedings were initiated by the Gram Sabha under the Delhi Land Reforms Act, 1954 with respect to the suit land. In these proceedings before the Revenue Authorities, the appellant herein were also made as a party/respondent and in which proceedings the proposed sellers were the main respondents. Written statements were filed in those revenue proceedings on behalf of the respondents therein i.e. both the proposed sellers and the proposed buyer herein. The revenue proceedings RFA No.228/2003 Page 6 of 33 culminated in dismissal of these proceedings in favour of the respondents herein vide the judgment of the Revenue Assistant in which it was held that not only the proceedings initiated by the Gram Sabha were barred by time, but also that the suit property was not owned by the Gram Sabha. I may state that the judgment in the case was passed by the Revenue Assistant after the evidence was led by all the parties in that case. The subject suits for possession (filed by the respondents herein) and for specific performance (filed by the appellants herein) came to be filed during the pendency of the proceedings before the Revenue Authorities.
8. The basic case of the appellant/proposed buyer in the Court below was that there was lack of certainty as to the area of which possession was transferred and finally to be transferred at the time of entering into of the Agreement to Sell, the additional area transferred thereafter, and consequently, there was lack of crystallization of the area and thus also the consideration/price. It was also the case of the appellant that till there was actual measurement of the area of which possession was given (there being uncertainty about the same) , the price could not be decided, and there was hence no breach of contract on the part of the appellant. It was also the case of the appellant that two cheques of `10,000/- each given on 29.8.1979 were got dishonoured as the RFA No.228/2003 Page 7 of 33 respondents failed to give further possession of the land which would have made up the total area of 2000 sq. yds. which was agreed to be sold. One of the further grounds pleaded as breach of contract on the part of the respondents was the issue of the cloud on the ownership of the suit land.
9. The case of the respondents was that under the agreement to sell only `80,000/- was paid and not `1,00,000/- as was written in the agreement to sell and the receipt of the same date. It was pleaded that two self cheques of `10,000/- each were given at the time of agreement to sell, and which were replaced by the two cheques of `10,000/- each on 29.8.1979, and which cheques were admittedly dishonoured and therefore, there was breach of contract on behalf of the appellant. It was also pleaded that the appellant had received the complete possession of 2000 sq. yds., and the appellant was unnecessarily backing out of the agreement to sell by refusing to pay the balance sale consideration and therefore again there was breach of contract on the part of the appellant. It was also pleaded that the appellant was not ready and willing to perform the contract and being guilty of breach of contract, was not entitled to specific performance, and therefore, the suit of the respondents for possession and mesne profits was to be decreed. It was also pleaded that the appellant had not come to the Court with clean hands in his suit for specific performance and therefore RFA No.228/2003 Page 8 of 33 was disentitled to the discretionary remedy of specific performance including because the ownership of the respondents of the suit land was wrongly denied by the appellant.
10. In the suit filed by the respondents, the following issues were framed:-
"1. Is the suit properly valued for the purpose of court fee and jurisdiction?
2. Is the suit not barred under Order 2 Rule 2 CPC, in view of the plaintiffs having filed suit No.494 of 1980 before the Subordinate Judge?
3. Is the suit barred on the principles of resjudicata in view of the decision in the said suit No.494 of 1980?
4. Is the suit barred under the provisions of Transfer of Property Act and/or Specific Relief Act?
5. Are the plaintiffs entitled to possession?
6. Whether in the fact and circumstances of the case the plaintiffs are entitled to a declaration for cancelling the agreement dated 1st June, 1979?
7. Are the plaintiffs entitled to these profits/damages? If so, at what rate and for which period?
8. Relief."
11. In the suit filed by the appellant for specific performance, the following issues were framed:-
RFA No.228/2003 Page 9 of 33
"1. Is the plaintiff entitled to specific performance of the agreement to sell dt. 1st June, 1979?
2. Have the defendants not performed their obligations under the agreement as alleged?
3. Has the plaintiff been ready and willing to perform his obligations under the said agreement to sell?
4. Relief."
12. Before this Court, the appeal was argued under the following heads:
i) Who was guilty of breach of contract, i.e. whether the appellant/proposed buyer was guilty of breach of contract or were the respondents/proposed sellers guilty of the breach of contract?
ii) Whether the appellant was ready and willing to perform his part of the agreement to sell?
iii) Whether the appellant was entitled to the discretionary relief for specific performance inasmuch as he had not come to the Court with clean hands and also as to whether discretionary relief for specific performance ought to be declined on account of the delay in filing of the suit for specific performance and the subsequent delays which have taken place during the pendency of the suit?RFA No.228/2003 Page 10 of 33
13. With respect to the issue as to who is the person who is the guilty of breach of contract, there would be sub-issues as to whether at the time of entering into the agreement to sell actually only `80,000/- was allegedly paid as claimed by the respondents or was actually `1,00,000/- paid. Related aspect will be as to whether the cheques of `10,000/- each dated 29.8.1979 were, in fact, to substitute the self cheques of `10,000/- each given at the time of agreement to sell or were towards additional payment. On the aspect of breach of contract, the further issue will also be as to whether complete possession was given of the area of 2000 sq. yds. under the agreement to sell as is being argued on behalf of the respondents, and not less as was the case of the appellant.
14. Let me take up the different aspects with respect to the breach of the agreement to sell. So far as the issue that only `80,000/- was paid at the time of entering into agreement to sell and not `1,00,000/-, I am of the opinion that this point raised on behalf of the respondents is quite clearly false. This I say so because not only the agreement to sell recites the factum of the payment of `1,00,000/- having been received by the respondents, there is also a receipt of the same date of agreement to sell mentioning the receipt by the respondents of the sum of `1,00,000/-. There is no reference at all in either the agreement to sell or the receipt of an RFA No.228/2003 Page 11 of 33 amount of `20,000/- being given by two self cheques of `10,000/- each. Not only there is no such mention in the agreement to sell and the receipt of `20,000/- being given by self cheques of `10,000/- each, even the subsequent endorsement dated 29.8.1979 does not at all mention that the two cheques of `10,000/- each given on 29.8.1979 are to substitute the alleged self cheques of `10,000/- each given at the time of entering into the agreement to sell. I, therefore, hold that the plea of payment having been made of only `80,000/- and not of `1,00,000/- has been falsely raised by the respondents to avoid performance of their obligations under the agreement to sell. In fact, it was legally not open to the respondents to even raise this plea of having received only a sum of `80,000/- and not ` 1,000,00/- as stated in the Agreement to Sell inasmuch as, as per provisions of Sections 91 and 92 of the Evidence Act, 1872, once there is a contract in writing between the parties, there cannot be led parol evidence to contradict or vary the written terms of the agreement. Therefore, both factually and legally it is clear that the appellant did pay at the time of execution of the Agreement to Sell a sum of `1,00,000/- out of the total price of `1,60,000/.
15. The agreement to sell in its para 3 also shows quite clearly that there was lack of clarity with respect to total area of land of which possession was to be finally given to the appellant and it is for that purpose RFA No.228/2003 Page 12 of 33 para 3 of the agreement to sell clearly provided that the final valuation will be made of the land subsequently, i.e. the final price which is payable by the appellant to the respondents would be determined after final measurement. In fact this para 3 of the agreement to sell also shows that the parties proceeded on the assumption that strictly the exact area to be sold was not to be exactly 2000 sq. yds. but could be less or more and the final price would be accordingly determined when the area, which is to be sold, is determined and possession transferred. This the respondents seem to have done inasmuch as I have given the history of ownership of the subject land of the respondents, and which shows that there was clear title by means of sale deeds for only 1300 sq. yds. of land, and for the balance land of 1000 sq. yds., „ownership‟ was only under a power of attorney besides the fact that it also appeared that part of the subject land was in fact part of a pond. I have already stated above that the area to be sold was not to be exactly 2000 sq. yds. is also clear from the fact that the plot was covered with boundary wall on three sides and there was no wall on the fourth side towards the pond. During the course of hearing in this Court, I note that whereas the appellants claimed that possession with them was of approximately 1360 sq. yds., the respondents claimed that possession with the appellant is approximately 1560 sq. yds.. It has also come in the RFA No.228/2003 Page 13 of 33 deposition of the son of the appellant, Sh. Surinder Mohan Sharma (DW1) that an area of approximately 500 sq. yds. of land was given to the appellant subsequent to the agreement to sell after filling up of the part of the pond. Also, I tend to believe the stand of the appellant that the two cheques of `10,000/- each were given on 29.8.1979 were dishonoured inasmuch as the respondents failed to give possession of the complete balance land totalling to 1000 sq. yds. as was promised and they only gave possession of approximately 500 sq. yds. after the agreement to sell was entered into.
16. In sum and substance therefore at each stage, whether of the time of entering into the agreement to sell; subsequently when two cheques of `10,000/- each were given on 29.8.1979; when possession of further area of approximately 500 sq. yds. was given, there were always uncertainties and lack of finality with respect to the area of which possession was transferred and to be finally transferred, of the ownership, and consequently there was no final crystallization of the price of the property. In such a scenario, it cannot be said that the stage of performance by the appellant under the agreement had come, and therefore, there does not arise any issue of breach of contract on the part of the appellant as alleged. This aspect of breach will also cover the issue of readiness and RFA No.228/2003 Page 14 of 33 willingness inasmuch as there is readiness and willingness if there is certainty as to the area as also the price, and once there is no certainty as to the area and the price it cannot be said that the appellant should still be held liable to pay the balance price. The balance price was to be payable only when the exact area, which the appellant was to have had, was determined, and a sale deed was executed with respect to that specific area.
17. At this stage, I must turn to the aspect, and which is an important aspect, on the basis of which trial Court has held that the appellant is guilty of breach of contract and setting up a false case that he only had with him about 1000 sq. yds. at the time of entering into agreement to sell whereas allegedly he actually always had 2000 sq. yds.. The trial Court has arrived at this finding from the alleged deposition of the appellant in the proceedings before the revenue authorities and the consequent judgment of Revenue Assistant on the basis of that said statement/deposition.
In my opinion, the finding of the trial Court in this regard borders on perversity. This I say so because when we read the statement of the appellant given in the proceedings before the Revenue Assistant all that was said by the appellant was that the appellant was entitled, under the agreement to sell, to 2000 sq. yds. and that he could have been in RFA No.228/2003 Page 15 of 33 possession of approximately 2000 sq. yds., however this statement nowhere shows the so called categorical admission of the appellant of being in possession of 2000 sq. yds. In order to appreciate the perversion in the findings of the trial Court in reading this statement, the relevant part of the deposition given on behalf of the appellant in proceedings before the Revenue Assistant can be read and the same reads as under:-
"..........
I cannot tell the area of my property and the measurement thereof. It is incorrect to suggest that the area in my occupation is more than 2000 sq ft. I cannot say that the measurement of the foundary property which is in my occupation the width and length. Even after the filling of the present suit by the G.S. I have not measured the area of the foundary in my occupation present. I did not measure the area of my property even when I filed a suit in the High Court.
...........
I am saying so approx 1000 sq yds is in my possession although I have not measured the same till now. This is just my presumption."
18. Surely, the aforesaid statements only compound the confusion and cannot be said to give any clarity with respect to the alleged fact that, in fact, 2000 sq. yds. of area of land was in possession of the appellant. I therefore do not find any reason to agree with the findings of the trial Court, and which is based on the following portion of the judgment of the Revenue Assistant, that the appellant had with him 2000 sq. yds., and RFA No.228/2003 Page 16 of 33 which was a finding basically on the portions of the statement reproduced above:-
"He admitted that he cannot tell the area of his property and its measurement. But he said that the area is not more than 2000 sq. yards under his possession. He admitted that he has not measured the area of his property in his occupation. He admitted that he cannot give the total area of the shed. He admitted that he had seen the Lal Dora Certificate in respect of the land in dispute at the time of its purchase, which were in the name of the party No.2(respondent No.1). He admitted that he has given in writing the taking of the possession of 2000 sq. yards, at the time of execution of the agreement. He admitted that he does not know the correct area under his possession and is saying 1000 sq. yards in his possession just as his presumption."
19. The relevant findings and conclusions made by the trial Court in this regard are contained in para 29 of the impugned judgment, and which reads as under:-
"29. In view of such admissions made by the defendant before the SDM concerned and the certified copy of the statement being proved by the plaintiff, I find that the possession of 2000 sq. yards has been duly admitted by the defendant, that has been handed over at the time of execution of the agreement to sell. Therefore, there was no reason or justification for the defendant to raise the dispute by the telegram and the notice dt. 4.10.1979 and 5.10.1979, that the plaintiff had handed over 1000 sq. yards of land the plaintiff has also has to hand over the 1000 sq. yards of land. These flimsy grounds have been raised by the defendant in response to the letter dt. 15.9.1979 sent by the plaintiff after the said two cheques have been dishonoured. Had such plea been taken before the dishonour of the said cheques had been RFA No.228/2003 Page 17 of 33 intimated to the defendant and defendant was called upon to make the payment of `80,000/- instead of `60,000/- being the balance amount for sale consideration at the time of execution of the sale consideration at the time of execution of the sale deed, the matter could be different. Thereafter, no payment had been offered and no letter has been sent for tendering the payment either in lieu of the sale consideration as well as in lieu of the dishonour of the cheques. Therefore, I find that the defendant had committed the breach of the contract in that regard and for the breach of the contract, the plaintiff was entitled to restore the possession as claimed in the suit."
20. I therefore set aside the findings and conclusions of the trial Court contained in para 29 of the impugned judgment and hold that there is no categorical admission, much less any clarity as to the appellant in fact having already received possession of 2000 sq. yds. of land. It is quite clear that there was never any specific joint measurement, by both the parties, at any stage delineating exact area, much less duly supported by a site plan signed by the parties, so that there could be clarity to the exact area of land of which possession was given to the appellant. All that emerges from the record is that parties intended to enter into an agreement to sell for approximately 2000 sq. yds.; certain area plus or minus; and, possession of certain portion of the land was given under the agreement to sell, thereafter certain more area was also given, however, even as on today, the appellant does not have the area of 2000 sq. yds. inasmuch as even the case of the RFA No.228/2003 Page 18 of 33 respondents before this Court as per the statements made by their counsel is that the appellant has 1560 sq. yds. of land.
21. Learned counsel for the respondents laid great stress, during the course of arguments, that the appellant has not come to the Court with clean hands and therefore he should be denied the relief of specific performance. I have, however, frankly failed to understand any of the arguments urged on behalf of the respondents as to how the appellant did not come to the Court with clean hands.
The first point under this head of unclean hands raised on behalf of the respondents was that there was contradiction between the pleadings and the evidence of the appellant because in the pleadings it was stated that possession of 1000 sq. yds. was given whereas there is actual possession of 2000 sq. yds. of land with the appellant. Besides the fact that the plaint only mentions the area of 1000 sq. yds. approximately as on only a specific day i.e. the date of the Agreement to Sell and not subsequently, I also do not find any admission in the evidence led on behalf of the appellant that the appellant has in his possession 2000 sq. yds. of land. Para 6 of the plaint mentions that at the time of entering into the agreement to sell about 1000 sq. yds. was given and this pleading cannot be confused so as to make out a case thereon that there is an alleged conflict that at one RFA No.228/2003 Page 19 of 33 place it is stated that possession of 1000 sq. yds. was given and subsequently it is stated that 2000 sq. yds. is given.
Also, I find no merit that there is unclean hands on the ground that the appellant got dishonoured two cheques of ` 10,000/- each and therefore has committed breach of contract inasmuch as this aspect has more to do with breach of contract by the appellant and not to do with the issue of unclean hands.
Further, merely because at the time when the cheques given on 29.8.1979 were got dishonoured, no notice was sent by the appellant giving the reason for dishonouring them, cannot really be an issue of unclean hands as argued on behalf of the respondents. I may note that the appellant has already taken up a case and deposed accordingly that payment by the cheques was conditional upon giving complete possession and since complete possession was not given, these cheques were got dishonoured. Surely, in law it is not required that on each action and a reaction, a legal notice has to necessarily follow. This argument therefore raised on behalf of the respondents that legal notice ought to have been sent by the appellant after getting the cheques of ` 10,000/- each, given on 29.8.1979, dishonoured and is thus an issue of unclean hands, is wholly without merit. RFA No.228/2003 Page 20 of 33
22. Learned counsel for the respondents finally argued that discretionary relief of specific performance should not be given in the facts of the present case where out of ` 1,60,000/- only ` 80,000/- is paid and the appellant already had with him complete area of 2000 sq. yds. under the agreement to sell. In fact, at one stage, it was sought to be argued on behalf of the respondents that not only 2,000 sq. yds. of land is with the appellant but, in fact, possession of 2300 sq. yds. of land was given to the appellant inasmuch as respondents were owners of 2300 sq. yds. of land and possession of total area of this 2300 sq. yds. of land was given to the appellant. In my opinion, in the facts of the present case, the issue of discretionary relief will not be an issue to be held against the appellant inasmuch as the situation which has emerged in the present case of lack of clarity of the area, lack of clarity of the price, disputes with respect to a portion of land of which ownership was claimed by the respondents, handing over of further land after the agreement to sell was entered into, there being no wall on the fourth side and which was a pond and which was filled up by the respondents etc are all aspects which show that it cannot be said that there exist such clear cut circumstances that it was the appellant who had received a specific area of 2000 sq. yds. and he was refusing to pay the balance amount of ` 60,000/-. In fact, the present situation is of the RFA No.228/2003 Page 21 of 33 making of the respondents who were seeking to blow hot and cold and avoid performance of their obligation under the agreement to sell. Also in my opinion, the issue of denial of discretionary relief cannot be raised by the respondents who are themselves guilty of breach of contract. Further, the discretion in granting or denying the specific performance is a judicial discretion to be exercised as per the facts of each case and once it is clear that agreement to sell has in fact been acted upon, substantial price i.e. over 60% of the price is paid, possession of the substantial portion of the land has been given to the appellant, it cannot be said that specific performance should be denied in the facts of the present case once we take note of Section 20(3) of the Specific Relief Act, 1963. Some of the instances of the Court being entitled to refuse the discretion of specific performance, are contained in Section 20(2) and the facts of the present case do not fit in any sub-provision of the said Section 20(2) inasmuch as so far as the scenarios falling under sub Sections (b) & (c) of Section 20(2) are concerned, I am in the later part of this judgment directing a forty times increase in the balance price payable, if of course there will remain any balance price payable.
23. I have also had an occasion to consider this aspect in the judgment reported as M/s. Nehru Place Hotels Ltd. vs. Smt. Kanta Bala, RFA No.228/2003 Page 22 of 33 2011(123) DRJ 148, wherein after considering many Supreme Court judgments on this aspect, I have observed as under:
16(i). In my opinion, the argument as raised by the learned senior counsel for the appellant/defendant that instead of specific performance only the relief of damages ought to have been granted deserves rejection for the various reasons stated herein after. What has been argued before this Court is that there has been considerable rise in the price of the property and therefore specific performance should not be granted. Reliance for this proposition was placed on behalf of the appellant/defendant, on the judgments of the Supreme Court reported as Kanshi Ram Vs. Om Prakash Jawal and Others (1996) 4 SCC 593, M. Meenakashi and Others Vs. Metadin Agarwal (dead) by LRS. (2006) 7 SCC 470, Nirmala Anand Vs. Advent Corporation (P) Ltd. AIR 2002 SC 3396 and Jai Narain Parasrampuria (dead) and Others Vs. Pushpa Devi Saraf and Others (2006) 7 SCC 756.
....................
17(i). Let me now assume that a ground was raised in the written statement and in the grounds of appeal that instead of specific performance alternative relief of damages should be granted and deal with the same. Let us also assume that this has also been proved in evidence, though it has not been so proved and as noted in para 16(iii) above. There is no quarrel to this proposition that a Court can and does in the facts and circumstances of a particular case use its discretion, which is a judicial discretion, so as to deny the relief of specific performance and grant only the relief of damages. A reference to the decision of Kanshi Ram (supra) cited by the learned senior counsel for the appellant/defendant shows that the said decision is in the nature of an order and there is no discussion in the same as to what were the facts and circumstances due to which the Supreme Court granted the alternative relief of damages instead of specific performance. This becomes clear from RFA No.228/2003 Page 23 of 33 para 5 of the said judgment which is relied upon by the learned counsel for the appellant/defendant and which reads as under:-
"5. Having regard to the facts of this case and the arguments addressed by the learned counsel, the question that arises for consideration is: whether it would be just, fair and equitable to grant the decree for specific performance? It is true that the rise in prices of the property during the pendency of the suit may not be the sole consideration for refusing to decree the suit for specific performance. But it is equally settled law that granting decree for specific performance of a contract of immovable property is not automatic. It is one of discretion to be exercised on sound principles. When the court gets into equity jurisdiction, it would be guided by justice, equity, good conscience and fairness to both the parties. Considered from this perspective, in view of the fact that the respondent himself had claimed alternative relief for damages, we think that the courts would have been well justified in granting alternative decree for damages, instead of ordering specific performance which would be unrealistic and unfair. Under these circumstances, we hold that the decree for specific performance is inequitable and unjust to the appellant."
The decisions in the cases of M. Meenakashi and Others (supra) and Jai Narain Parasrampuria (dead) and Others (supra) lay down the same ratio and holds that in certain cases once there is increase in prices during the pendency of the litigation or some increase in cost, instead of specific performance, the relief of damages can be granted. Reliance is also similarly placed on the decision of Nirmala Anand (supra) and para 6 whereof reads as under:-
"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 RFA No.228/2003 Page 24 of 33 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 consideration 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 the 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."
(ii) The proposition of law that relief of specific performance is a discretionary relief is in fact statutorily provided in Section 20 of The Specific Relief Act, 1963 which contains various instances where specific performance is not granted but only damages are granted. Section 20 has been expounded upon by the Supreme Court in various decisions, including in the decisions which have been cited by the learned senior counsel for the appellant/defendant. However, a reference to each of these cases shows that the discretion is a judicial discretion which is exercised in the facts of each case and increase in price (or cost) is only one of the factor which has to be considered in the totality of the facts of each case. For example, a buyer may have paid only a very nominal consideration of about 5% to 10% of the total price and in which RFA No.228/2003 Page 25 of 33 circumstances, the Court may feel that instead of specific performance alternative relief of damages is to be granted. This is to be contrasted with the case where a buyer has paid most of the price or after paying the price has received actual possession of the property and in which cases the relief of specific performance is granted and not the alternative relief of damages. Further, there are many cases and circumstances where there is caused undue hardship or inequity on account of specific performance therefore instead of specific relief only the relief of damages is granted. In the present case, I do find it a very strained logic of the appellant/defendant to argue that as a builder since his property became more valuable, (inasmuch as the price has increased), instead of specific performance, damages should be granted. The argument in fact is totally without substance because if this argument is accepted every builder whose project is delayed, whether for genuine reasons or not, will come and say that now contemporary prices during the litigation are much higher and therefore instead of specific performance only damages must be granted. In fact, I may note that the decision of Nirmala Anand (supra) in fact goes against the appellant/defendant because what is held in that judgment is that ordinarily specific performance ought to be granted and only very rarely the relief of specific performance is to be denied. In the present case it is the appellant who is the defaulting party and who in any case is getting the requisite escalated cost. I have also in the subsequent part of this judgment not only granted interest (which was not granted by the Trial Court) to the appellant/defendant but a very high one. I therefore reject this argument of the learned counsel for the appellant/defendant that only damages should have been granted and not specific performance. In fact, I have already noted above if there is any equity the same is towards the respondent because almost the entire basic price was paid and the dispute for the balance and additional payment became inextricably linked with the illegal and unreasonable action of the appellant/defendant in changing the prime location and also reducing the area which had been agreed to be sold. Further it is the appellant/defendant RFA No.228/2003 Page 26 of 33 itself who started using the space which was constructed for being allotted to the respondent/plaintiff, as its own office, and as so noted by the trial Court in the impugned judgment. The injustice/prejudice/undue hardship will thus be to the respondent/plaintiff if specific performance is not granted."
I therefore hold that there are no valid reasons for denying the relief of specific performance in the facts of this case as detailed hereinabove.
24. The issue now boils down to the fact that should specific performance be granted because there is lack of clarity today as to the exact area in possession of the appellant and consequently lack of clarity in the price. The other argument raised on behalf of the respondents relying upon the judgment of the Supreme Court in the case of K.S.Vidyanandam & Ors. Vs Vairavan, AIR 1997 SC 1751 that on account of the delays in filing of the suit for specific performance and subsequent delays, the relief of specific performance should be denied as today the respondents cannot get a property of the equivalent value of the balance price of ` 60,000/- which could have been purchased by the respondents in the year 1979, will stand decided against the respondents in view of my observations made in the case of Nehru Place Hotels Ltd. (supra).
25. The facts of this case in fact, in my opinion are tailor-made, so to say, for invoking of the provision of Section 12 of the Specific Relief RFA No.228/2003 Page 27 of 33 Act, 1963 and sub Sections 3 and 4 thereof. Under Section 12, specific performance can be granted even of a part of the contract. In the present case, sub section 3 of Section 12 squarely applies. In order to appreciate the reasoning on the basis of Section 12, I would like to reproduce the entire Section and which reads as under:-
"12. Specific performance of part of contract.-
(1) Except as otherwise hereinafter provided in this section the court shall not direct the specific performance of a part of a contract.
(2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed by only a small proportion to the whole in value and admits of compensation in money, the court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.
(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either-
(a) forms a considerable part of the whole, though admitting of compensation in money‟ oar
(b) does not admit of compensation in money, he is not entitled to obtain a decree for specific performance; but the court may, at the suit of other party, direct the partly in default to perform specifically so much of his part of the contract as he can perform, if the other party-
(i) In a case falling under clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and a RFA No.228/2003 Page 28 of 33 case falling under clause (b), the consideration for the whole of the contract without any abatement; and
(ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant.
(4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stand on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part."
26. As per Section 12(3)(b), a party to a contract including the buyer can insist on specific performance of a part of the contract by proportionately reducing the consideration to the proportionately reduced area of the land of which ownership will have to be transferred under the agreement to sell. Learned senior counsel for the appellant states that the appellant relinquishes all other claims under the agreement to sell, and which is required of the appellant by virtue of Section 12(3)(b)(ii) of the Specific Relief Act, 1963. Accordingly, by virtue of the relevant part of Section 12(3) of the Specific Relief Act, 1963, specific performance in this case will have to be granted with respect to the area which is in possession of the appellant, being the land of which ownership vests with the respondents, and ownership of which area has to be transferred to the RFA No.228/2003 Page 29 of 33 appellant by specific performance of the subject agreement to sell dated 1.6.1979. However, this cannot take place unless it is known as to what is the exact area of the land which is presently in possession of the appellant. The appellant claims there is an area of approximately 1360 sq. yds. with him, plus of course the area under the boundary walls, whereas the respondents on the other hand contend that the appellant has around 1560 sq. yds. of land in his possession.
27. Accordingly, while accepting the appeal and setting aside the impugned judgment of the Trial Court dated 25.1.2003, it would be required that a competent person be appointed to measure the exact area of land which is in the possession of the appellant, so that the balance price which may be payable by the appellants to the respondent for specific performance of the subject agreement to sell can be decided. Today, no orders can be passed as to what is the balance amount which the respondents will be entitled to inasmuch as I intend to modulate the amount which would be payable to the respondents depending on the exact area which is found to be in possession of the appellant. However, I hold that whatsoever would be the balance price, which would be if payable, should be multiplied by 40 times inasmuch as I would take the rough appreciation of the prices in a city like Delhi in these last 33 years from 1979 till date at RFA No.228/2003 Page 30 of 33 approximately 40 odd times. Of course the factor of 40 times is also taken not only with reference to the increase of prices from the date of the Agreement to Sell to today but also as per the facts of the case where I feel that multiplication of balance price by forty times will meet the ends of justice. I have also taken note of the fact that the subject land is not situated in the prime localities of Delhi such as the South Delhi and Central Delhi, and is situated in North Delhi which did not rapidly urbanise. That the Courts have the power to alter the price in order to promote equity, justice and good conscience is no longer res integra and direct judgment of the Supreme Court entitling Courts to suitably alter the price payable to a seller on account of passage of time is the judgment of the Supreme Court in the case of Nirmala Anand vs. Advent Corporation (P) Ltd. 2002(8) SCC 146. However, I may hasten to clarify that this observation with respect to multiplying the balance price by 40 times is made by me on the assumption that in fact considering the actual area with the appellant taken with the price already paid of `1,00,000/-, the price paid to the respondents is less than as compared to and as a proportion to the total price of `1,60,000/- i.e. there would be payable balance price by the appellants as they would be having proportionately larger area than the area which ought to be with the appellant when this area of which appellant is in possession RFA No.228/2003 Page 31 of 33 is taken in proportion to the price paid being ` 1 lakh out of the total price of ` 1,60,000/-.
28. Appeal is therefore accepted. Impugned judgment and decree dismissing the suit of the appellant for specific performance and decreeing the suit of the respondents for possession and mesne profits is set aside. Suit of the respondents for possession, declaration, damages, etc. shall stand dismissed. Suit of the appellant for specific performance shall stand decreed. In order to pass further orders with respect to passing of the exact directions for specific performance, since the area of the land has to be measured, I direct both the parties to file in Court within four weeks an agreed name of an Architect, and who can be appointed to take the exact measurement of the area of the land in possession of the appellant. I am directing the giving of a common name in order to avoid further prolongation of litigation because if an Architect as suggested by one of the party is appointed or even if an independent Architect is appointed, parties may want to file objections even with respect to the measurement, seeing bitterness of the litigation.
29. List for further proceedings on 9th May, 2012 and on which date counsel for both the parties will give the name of the Architect acceptable to both the parties who will be required to go to the spot and RFA No.228/2003 Page 32 of 33 take actual measurement of the area in possession of the appellant and the land which was the subject matter of the agreement to sell dated 1.6.1979. Other related or consequential directions, will also, if so required, be passed on the next date of hearing.
VALMIKI J. MEHTA, J
MARCH 22, 2012
ak/Ne
RFA No.228/2003 Page 33 of 33