Himachal Pradesh High Court
Amar Chand And Another vs Jagan Nath (Deceased) Through His Lrs ... on 15 July, 2019
Author: Tarlok Singh Chauhan
Bench: Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA .
R.S.A. No. 465 of 2007 Reserved on: 8.7.2019.
Date of decision: 15.07.2019.
Amar Chand and another ....Appellants/Plaintiffs Versus Jagan Nath (deceased) through his LRs Smt. Paramjeet Kaur and others ...Respondents/Defendants Coram The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
Whether approved for reporting ?1 No
For the Appellants : Mr. Abhiskek Sood, Advocate, vice
Mr. Suneet Goel, Advocate.
For the Respondents : None for respondent No.1.
Ms. Devyani Sharma, Advocate for
respondent No.2.
Tarlok Singh Chauhan, Judge
The plaintiffs are the appellants, who aggrieved by the judgment and decree passed by learned first Appellate Court 1 Whether reporters of Local Papers may be allowed to see the Judgment ?Yes ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 2 whereby it partly allowed the appeal filed by the defendant Jagan Nath and instead of directing the specific performance of the contract .
as was directed by the learned trial Court, modified the decree and held the plaintiffs entitled to a sum of Rs. 1,00,000/ with costs and interest at the rate of 6% from the date of advance of earnest money till its realisation.
2. Since the agreement of sale is not in dispute, therefore, it was not at all necessary to refer to the respective case of the parties suffice it to state that the agreement to sell was entered into between the parties on 13.9.1999 when the plaintiffs paid a consideration amount of Rs.1,00,000/ as earnest money for the purchase of land measuring 4 Kanals 14 Marlas situated in Village Mussewal Pargana and Tehsil, Nalagarh, District Solan, comprised in Khewat/Khatauni Nos. 176/184, bearing Khasra Nos. 359/167 as per jamabandi for the year 19992000.
3. As observed above, the suit of the plaintiffs was decreed for specific performance. However, such findings were reversed by the learned first Appellate Court and instead of directing the specific performance, it ordered the refund of earnest money alongwith interest.
4. Aggrieved by the judgment and decree passed by the learned first Appellate Court, the plaintiffs have filed the instant ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 3 appeal which came to be admitted on 17.3.2008 on the following substantial questions of law:
.
1. Both Courts having concurrently as a question of fact accepted the execution of the agreement dated 13.9.1999, was the appellate Court justified in ordering the refund of amount instead of specific performance particularly when in such like cases specific performance is the rule under the provisions of the Specific Relief Act?
2. The impugned decree passed by the first appellate Court is result of misreading and misappreciation of revidence produced by parties especially of the plaintiff after upholding the agreement?
3. Whether the learned District Judge, Solan was right in partly allowing appeal and modifying the judgment decree, since the contract is for the sale of immovable property and the clear breach on the part of the respondent No.1 could not have been adequately relieved by compensation of money?
5. Since all these substantial questions of law are intrinsically interlinked and interconnected, therefore, these were taken up together for consideration and are being disposed of by a common reasoning.
6. Section 20 of the Specific Relief Act reads thus:
"20. Discretion as to decreeing specific performance.--::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 4
(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 nonperformance 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.
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).
::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 5Explanation II.-- 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 other party."
7. It is more than settled that 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".
8. Explanation 1 (supra) 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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 6 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. (Refer: Jayakantham and others vs. Abaykumar, (2017) 5 SCC 178) 9 Having made a note of the well settled principles, certain binding precedents on the subject also need to be considered.
Though there is plethora of law on the subject, however, the court need not to make note of the entire law and reference to certain recent decisions in this regard shall suffice.
10. In K. Nanjappa vs. R.A. Hameed, (2016) 1 SCC 762, it was held by the Hon'ble Supreme Court that in a suit for specific performance of a contract, the court has to keep in mind Section 20 of the Specific Relief Act, 1963. Section 20 preservers 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. Relief of specific performance is ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 7 discretionary but not arbitrary, hence, discretion must be exercised in accordance with sound and reasonable 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. It shall be apt to reproduce relevant observations as contained in paras 22 to 28 thereof, which read thus:
"22. However, in a case where the plaintiff come forward to seek a decree for specific performance of contract of sale of immoveable property on the basis of an oral agreement or a written contract, heavy burden lies on the plaintiff to prove that there was consensus ad idem between the parties for the concluded agreement for sale of immoveable property. Whether there was such a concluded contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immoveable property were concluded between the parties.
23. In a suit for specific performance of a contract, the Court has to keep in mind Section 20 of the Specific Reliefs Act. This Section preserves judicial discretion to ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 8 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 the case of Surya Narain Upadhyaya vs. Ram Roop Pandey and others, 1995 Supp (4) SCC 542, this Court while considering Section 20 of the Specific Relief Act held as under: "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 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 appellant court, namely ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 9 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 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 the case of Mayawanti vs. Kaushalya Devi, (1990) 3 SCC 1, this Court observed as under: "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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 10 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 the case of K. Prakash vs. B.R. Sampath Kumar, (2015) 1 SCC 597, this Court held:
"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 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.::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 11
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 followed Rooke's case 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, 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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 12 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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 13 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 the case of Zarina Siddiqui vs. A. Ramalingam, 2015 (1) SCC 705, this Court observed as under: r"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."
11. Similar reiteration of law can be found in Satish Kumar vs. Karan Singh, (2016) 4 SCC 352, wherein it was observed as under: ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 14 "8. It is well settled that the jurisdiction to order specific performance of contract is based on the existence of a valid and enforceable contract. 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 not be there even though the contract is otherwise valid and enforceable.
9. This Court in Mayawanti vs. Kaushalya Devi (1990) 3 SCC 1 held thus: "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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 15 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."
in the case of
10. Exercise of discretionary power under Section 20 of the Specific Relief Act for granting a decree, this Court r Parakunnan Veetill Joseph's Son Mathew vs. Nedumbara Kuruivila's Son and others, AIR 1987 SC 2328 observed: "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. The High Court has failed to consider the motive with which Varghese instituted the suit. It was ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 16 instituted because Kuruvila could not get the estate and Mathew was not prepared to part with it. The sheet anchor of the suit by Varghese is .
the agreement for sale Exhibit A1. Since Chettiar had waived his rights thereunder, Varghese as an assignee could not get a better right to enforce that agreement. He is, therefore, not entitled to a decree for specific performance."
12. The principles as noted above, have thereafter been reiterated in recent r decision of Hon'ble Supreme Court in Jayakantham and others vs. Abaykumar, (2017) 5 SCC 178, wherein it was observed 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. Subsection 2 of Section 20 contains a stipulation of those cases where the court may exercise ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 17 its discretion not to grant specific performance. Sub Section 2 of Section 20 is in the following terms :
.
"Section 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 r 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 nonperformance 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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 18 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, 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. Smt. Krishna Devi: (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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 19 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, 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 nonperformance 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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 20 Arogiaswamy 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. Smt. Ahalya Naik, with the following observations : (SCC pp. 604 & 606, paras 7 & 15) "7. The jurisdiction to decree specific relief is r 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."
::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 21"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 Vs. Advent Corporation (P) Ltd. and Ors., 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 ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 22 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."
13. Similar reiteration of law can be found in the judgment of this Court in Rajesh Kumar Sood vs. Parvej Nowrojee, 2016 (3) SLC 1673 = 2016 (4) ILR 1583.
14. In view of the law expounded in the aforesaid judgments, it can be taken to be well settled that even though the Court is not bound to grant the relief of specific performance merely because it is lawful to do so, yet merely because the inadequacy of consideration or the mere fact that the contract is onerous to the defendant would ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 23 not be a consideration for denying the relief of specific performance.
The Court has meticulously considered all facts and circumstances .
of the case and to see that no unfair advantage is obtained by either of the parties. Even though, the relief of specific performance is discretionary, but at the same time, it is not arbitrary. Discretion has to be exercised in accordance with the sound and reasonable judicial principles. 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. This 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 him 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 either of the parties while enforcing or refusing the specific performance.
There may be one or other circumstances on which the parties may not have any control. Thus, this is totality of the circumstances that ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 24 are required to be seen while granting or refusing the decree of specific performance.
.
15. Judged in light of the aforesaid pronouncements of the Hon'ble Supreme Court, it would be noticed that there was virtually no specific reasons available with the first appellate Court to have denied the specific performance to the appellants, that too, on the basis of the reasonings as contained in para11 of the judgment, which reads as under:
"11. However, the findings of the Ld. Trial Court with regard to the entitlement of the respondents/plaintiffs to specific performance of the contract cannot be sustained for the reason that whole of this transaction have an element of some hanky panky dealing first if whole amount had been paid by the respondents/plaintiffs to the appellant/defendant then what was the need to execute an agreement to sell and not a sale deed outrightly when parties happened to be present in Tehsil premises. Furthermore, the appellant/ defendant on the very day of execution of the agreement had also appointed one Shri Hakam Ram as general power of attorney empowering him to effect sale, mortage etc. of the suit land, then why the respondents/plaintiffs did not get the sale deed executed from the general power of attorney for as long as four years. There is no evidence of respondents/plaintiffs having taken any steps for getting the sale deed registered till it was mortgaged by ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 25 the appellant/defendant with respondent No.3. There is also no evidence that either the General Power of Attorney or the appellant were avoiding the execution of .
the sale deed."
16. To say the least, the aforesaid reasoning is totally flawed and rather verges on absurdity. Once the agreement of sale is held to be valid then there was no question in holding that "whole of the transaction have an element of some hanky panky". In case it was so, then it was incumbent upon the learned first appellate Court to have firmly concluded that the agreement of sale had not been proved on record. None of the three reasons assigned by learned first Appellate Court can be said to be sound in law so as to deprive the plaintiffs of specific performance of the contract. The findings recorded by the learned first appellate Court are based on conjectures and surmises, that too, based on surmises and conjectures and cannot therefore be countenanced or sustained.
17. As observed by the Hon'ble Supreme Court, that 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.
::: Downloaded on - 29/09/2019 00:45:43 :::HCHP 2618. Further, once the 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.
19. No doubt, the appellate Court had the discretion and was not bound to grant the relief of specific performance merely because it was lawfully to do so, but then such discretion ought not to be arbitrary and had to be "sound and reasonable" guided by judicial principles.
Substantial questions of law are answered accordingly.
20. In view of the aforesaid discussion, I find merit in this appeal and the same is allowed and the judgment and decree passed by learned first Appellate Court is setaside and that of the learned trial Court is restored.
21. The appeal is disposed of in the aforesaid terms, leaving the parties to bear their own costs. Pending application(s) if any also stands disposed of.
(Tarlok Singh Chauhan) 15 th July, 2019. Judge (GR) ::: Downloaded on - 29/09/2019 00:45:43 :::HCHP