Punjab-Haryana High Court
Rakesh Kumar And Ors. vs Sat Pal on 14 April, 1986
Equivalent citations: AIR1986P&H335, AIR 1986 PUNJAB AND HARYANA 335, 1986 REV LR 425, (1986) 90 PUN LR 214, (1986) 2 CURLJ(CCR) 532, 1986 PUNJ LJ 515, ILR (1986) 2 P&H 366, (1986) ILR 2 P&H 366
JUDGMENT Prem Chand Jain, C.J.
1. The legal question that needs decision by us may be formulated thus:--
"Can a decree for specific performance be ordered for lesser share of the property than agreed upon to be sold?"
2. In order to appreciate the controversy, certain salient features of the case may be noticed.
3. Shiv Ram was the father of Sat Pal plaintiff and defendants No. 1 to 3. Smt. Rattan Devi, defendant No. 4, is the widow of Shiv Ram. Smt. Raj Kumari and Smt. Veena are the daughters of Shiv Ram. The house in dispute was owned by Shiv Ram deceased. Rakesh Kumar and others, defendants, represented to plaintiffs that Smt. Raj Kumari and Smt. Veena had relinquished their rights and title in the house in dispute in favour of the parties to the suit, with the result that each one of them had 1/5th share in the house in dispute. It is further averred that the defendants entered into an agreement dated 12th July, 1980, with the plaintiff to sell their 4/5th share in the house to him. The defendants received from the plaintiff Rs. 5,400/- out of the sale consideration and the remaining amount was to be paid in instalments i.e. Rs. 9,000/- on 30th August, 1980, Rs. 8,000/- on 30th October, 1980 and Rs. 8,000/- on 30th December, 1980.
It is next averred that the plaintiff paid to the defendants the sum of Rs. 9,000/- on 30th August, 1980. On 30th Oct., 1980, he offered the amount of Rs. 8,000/- out of the sale consideration against receipt, but the defendants avoided to accept that amount. A notice dated 4th Nov., 1980, was also issued, but the defendants did not accept that notice; rather they sent a notice to be plaintiff that he had failed to pay the instalments payable on 30th Oct., 1980, and that the amount paid by him to them stood forfeited. The plaintiff thereafter sent registered notices to the defendants. Consequently, the plaintiff filed a suit for specific performance of the agreement dated 12th July, 1980, in respect of 4/5th share of the defendants in the house in dispute on payment of the balance sale consideration of Rs. 16,000/-.
4. The suit was contested by the defendants. Preliminary objections were taken to the effect that the suit for specific performance of the agreement to sell the house was not maintainable, that the suit was bad for non-joinder of necessary parties and that the agreement to sell was not legally enforceable. On merits, the execution of the agreement of sale dated 12th July, 1980, was not disputed, nor was it denied that the defendants had received the sum of Rs. 5,400/- as earnest money and the first instalment of Rs. 8,000/- was paid on 30th August, 1980. However, it was denied that the plaintiff ever approached the defendants to receive the amount of the instalment of Rs. 8,000/- on 30th October, 1980, out of the sale consideration. It is in this manner that the defendants have controverted the claim of the plaintiff for the specific performance of the agreement dated 12th July, 1980.
5. On the pleadings of the parties, various issues were framed by the trial Court. On consideration of the entire matter, the learned Subordinate Judge Ist Class vide his judgment and decree dated 18th May, 1984, did not grant the decree for specific performance and instead granted a decree for the recovery of Rs. 14,000/- and interest at the rate of 6 per cent per annum from the date of the decree till realisation in favour of the plaintiff and against the defendants with proportionate costs. Feeling aggrieved from the judgment and decree of the trial Court, the plaintiff preferred an appeal. The learned Additional District Judge accepted the appeal and granted a decree for specific performance of 4/7th share in the house in dispute against Rakesh Kumar and others, defendants, on payment of a sum of Rs. 30,400/- to them by the plaintiff minus Rs. 14,400/- already paid as earnest money. The cross-objections filed by the defendants were dismissed.
6. Dissatisfied from the judgment and decree of the learned Additional District Judge, Rakesh Kumar and others, defendants, preferred the present appeal, which came up for hearing before a learned single Judge of this Court. On consideration of the entire matter in the light of the legal issue raised, my learned brother S. P. Goyal, J. vide his order dated 23rd May, 1985, which reads as under, referred the case for decision by a larger Bench:
"Relying on Harjinder Singh v. Kartar Singh, 1975 Rev LR 377, a D.B. decision of this Court, the learned counsel contends that the decree for specific performance could not be ordered for lesser share of the house than agreed upon to be sold. This decision runs counter to the rule laid down by the Supreme Court in Balmukand v. Kamla Wati, AIR 1964 SC 1385 (para 11). The decision of the Supreme Court was not noticed, by the Bench. Still, it would not be proper for me to take a contrary view sitting singly. This appeal is consequently admitted and ordered to be placed before my Lord, the Chief Justice for constituting a larger Bench to settle the question noted above.
On reference, the matter was placed before a Division Bench of this Court, which agreed with the view of S. P. Goyal, J. and finding that the view taken in Harjinder Singh v. Kartar Singh, 1975 Rev LR 377, deserved to be reconsidered, referred the matter to be decided by still a larger Bench. That is how we are seized of the matter.
7. As has come in the opening part of the judgment, the only point and the question of law that needs determination is whether a decree for specific performance could not be ordered for lesser share of the house than agreed upon to be sold.
8. After hearing the learned counsel for the parties, we are of the view that the answer to the aforesaid question has to be in the affirmative.
9. Section 12 of the Specific Relief Act makes a provision for the specific performance of part of contract and the relevant provision with which we are concerned, is in the following terms:--
"12. Specific performance of part of Contract (1) & (2) x x x x (3) Where a party to a contract is unable to perform the whole of his part of it, and part which must be left unperformed either:--
(a) forms a considerable part of the whole, though admitting of compensation in money; or
(b) does not admit compensation in money; he is not entitled to obtain a decree for specific performance but the Court may, at the suit of the other party, direct the party 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 in case falling under clause (b), pays, or has paid 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 loss or damage sustained by him through the default of the defendant.
(4) X X X X X Before the enactment of Act of 1963, the relevant provisions of the 1877 Act, corresponding to S. 12(3) was S. 15, which reads as under:--
" SPECIFIC PERFORMANCE OF PART OF CONTRACT WHERE PART UNPERFORMED IS LARGE.
15. 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 forms considerable portion of the whole, or 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 the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform provided that the plaintiff relinquishes all claim to further performance, and all right to compensation either for the deficiency or for the loss or damage sustained by him through the default of the defendant."
10. Sub-section (3) of S. 12 of the Specific Relief Act, 1963, provides that where a party to a contract is unable to perform the whole of his part of it, he is not entitled to obtain a decree for specific performance if the part which must be left unperformed forms a considerable part of the whole, though admitting of compensation in money, or if the part which must be left unperformed does not admit of compensation in money. However, at the suit of the other party, the Court may direct such a party in default to perform specifically so much of his part of the contract as he can perform if the party bringing the suit i.e. the plaintiff fulfils the conditions laid down in Cls. (i) and (ii) of that sub-section. These conditions are: firstly, that in the case in which the part which must be left unperformed forms a considerable part of the whole and admits of compensation in money the plaintiff must pay the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed, while in the case in which the unperformed part does not admit of compensation in money, the plaintiff must pay consideration for the whole of the contract without any abatement. The second condition is that in either of the above two cases the plaintiff must relinquish 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.
As earlier observed, similar was the situation under S. 15 of the old Act. In view of this provision, it can hardly be urged that a decree for specific performance cannot be ordered for lesser share of the property than agreed upon to be sold. Section 12 of the Act envisages passing of the decree for specific performance of a part of a contract in the event of the satisfying of the pre-requisites as enumerated in the respective provisions of the section. Where a party agrees to sell a property in which some other persons have also a share, then with regard to such a property under S. 12(3) specific performance can be directed in respect of so much of his/their part of the contract as he/they could perform. In other words, he/they could be directed to sell his/their share of the land to the plaintiff, but this could be done provided the latter relinquished all claims to further performance and also all right to compensation for the deficiency or the loss or damage sustained through the default of the defendant. The point is not res integra as in Balmukand v. Kamla Wati, AIR 1964 SC 1385, it has been observed by their Lordships that the plaintiff would have been entitled to the benefit of S. 15 of the Specific Relief Act and that a decree for a part could always be granted; but the same was declined as the plaintiff in that case was not willing to pay the entire consideration for obtaining a decree.
11. Coming to the judgment of this Court in Harinder Singh's case (1975 Rev LR 377) (supra), which necessitated the reference, I find that the said judgment cannot be read to mean that no decree for specific performance could be granted under S. 12 of the Act of 1963 for the share of the defendant who had agreed to sell the whole of the property. In that case, while dealing with the facts, the learned Judges came to the conclusion that the case was not covered by any of the exceptions provided under S. 12 of the Act. It appears that before the learned Judges in that case no plea was taken that a decree for 1/2 share of the defendant be passed as the plaintiff was ready to relinquish 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.
It is correct that the learned Judges did refuse to grant a decree for 1/2 share, but, as earlier observed. the plea having not been put forth by the plaintiff who claimed decree for 1/2 share only, the learned judges in my view were justified in just awarding the amount of damages and in ordering the refund of the amount of Rs. 2,000/- which had been paid as earnest money. To emphasise, the learned single Judge in that case had granted a decree of the share of the defendant on payment of Rs. 10,000/- when the property had been agreed to be sold for an amount of Rs. 20,000/-. If the plaintiff in that case had wished to take benefit of the provisions of S. 12(3) of the Act, then he was bound to pay the entire amount with a further undertaking that he was not to claim any interest in the remaining part of the contract and also not to claim compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant. In this view of the matter, I find that the decision in Harinder Singh's case (1975 Rev LR 377) (supra) is distinguishable and the same has rightly been decided on the facts of that case.
12. As a result of the aforesaid discussion, I hold that a decree for specific performance can be ordered for lesser share of the property than agreed upon to be sold subject to the fulfilment of the conditions enumerated in S. 12. I further order that the appeal shall now go back for decision on other points on merits, before the learned single Judge.
13. Answered accordingly.