Himachal Pradesh High Court
Nanda Ram (Deceased) Through Lrs vs Joginder Singh And Another on 22 November, 2023
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA RSA No. 564 of 2019 Reserved on: 18.10.2023 Date of Decision: 22.11.2023 .
Nanda Ram (deceased) through LRs ... Appellants Versus Joginder Singh and another ....Respondents of Coram Hon'ble Mr. Justice Rakesh Kainthla, Judge.
For the Appellants
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Whether approved for reporting?1 Yes
: Mr. Naresh Sharma, Advocate.
For Respondent No.1 : Mr. Neeraj Gupta, Senior Advocate
with Mr. Janesh Gupta & Ms. Rinki
Kashmiri, Advocates.
For Respondent No.2 : Mr. Roop Lal Sharma, Advocate.
Rakesh Kainthla, Judge
The present appeal is directed against the judgment and decree dated 15.10.2019, passed by learned District Judge Shimla whereby the appeal filed by the appellant (plaintiff before the learned Trial Court) and respondent no. 1 (defendant before the learned Trial Court) was partly allowed. (Parties shall hereinafter referred to in the same manner as they were arrayed before the learned trial Court for convenience).
1Whether reporters of Local Papers may be allowed to see the judgment? Yes.
::: Downloaded on - 22/11/2023 20:33:00 :::CIS 22. Briefly stated, the facts giving rise to the present appeal are that the plaintiff filed a Civil Suit before the learned Trial Court seeking the specific performance of an Agreement to Sell dated 13.07.2004 (Ext. PW3/A) regarding the suit land .
mentioned in para 1 of the plaint or in the alternative for the recovery of ₹1,00,000/- along with interest @18% per annum from the date of execution of the agreement. A consequential of relief of permanent prohibitory injunction restraining the defendant from alienating the suit land to any person was also rt sought. It was pleaded that the parties entered into an agreement to sell on 13.07.2004 in the presence of witnesses S.R. Chauhan and Kishan. An amount of ₹50,000/- was paid as earnest money to the defendant. It was agreed that the remaining amount of ₹80,000/- would be paid at the time of the execution of the sale deed. The sale deed was to be executed within 90 days of the execution of the agreement. The time to execute the sale deed was mutually extended by the parties on 28.02.2005 and an endorsement was made to this effect on the back of the agreement. The defendant failed to execute the sale deed even witin the extended time. The plaintiff had constructed the house on the suit land in the year 1991. He was coming in exclusive possession of the suit land. The plaintiff installed Electricity connection and water connections and paid the municipal taxes to ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 3 M.C. Shimla. The plaintiff remained ready and willing to perform his part of the agreement. The defendant failed to execute the sale deed despite the receipt of a valid notice. The plaintiff had constructed the house by spending ₹3,97,584/- and in case, the .
specific performance was not granted, a decree of ₹10,00,000/-
was sought.
3. The suit was opposed by defendant no. 1 by filing a of written statement taking preliminary objections regarding lack of maintainability, cause of action and jurisdiction, the plaintiff rt having suppressed the material fact from the Court, the plaintiff being estopped to file the present suit by his act and conduct, the suit having not been properly valued for the purpose of Court fees and jurisdiction and the suit being bad for non-issuance of notice under Section 80 of CPC. The contents of the plaint were denied on merits. However, it was admitted that the parties entered into an agreement to sell the suit land on 13.07.2004 in the presence of witnesses S.R. Chauhan and Kishan. It was also admitted that the defendant received ₹50,000/- at the time of execution of the agreement and the remaining amount of ₹80,000/- was to be paid within 90 days of the execution of the agreement. It was asserted that the plaintiff failed to pay the remaining amount of ₹ 80,000/- towards the sale consideration. The defendant approached the plaintiff to execute the sale deed but the plaintiff ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 4 failed to arrange ₹80,000/-. He requested the defendant to extend the time for the execution of the sale deed. This request was accepted and the time was extended till 13.07.2004. The plaintiff failed to arrange the money and time was again extended till .
28.02.2005. The plaintiff failed to abide by the terms and conditions of the agreement. It was specifically denied that the plaintiff constructed a house on the suit land. It was asserted that of the construction was made by the defendant and this fact was duly mentioned in the agreement executed between the parties. The rt defendant suffered a huge financial loss as he had to visit Shimla from Delhi for the execution of the agreement. The suit was filed without any basis; hence, it was prayed that the same be dismissed.
4. A separate written statement was filed by defendant no. 2 taking preliminary objections regarding lack of statutory notice and cause of action, the suit being bad for mis-joinder of parties, and the suit having not been properly valued for the purpose of Court fees and jurisdiction. The contents of the plaint were denied on merits. It was asserted that the defendant proposed to acquire the land as per the Land Acquisition Act. The plaintiff has no right to restrain the defendant from proceeding as per law. One-storey Kaccha Dhara existed on the suit land. The defendant acquired 17878.06 sq. mts. Land in Mohal Kasumpti ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 5 Koti, Tehsil and District Shimla, vide Notification dated 25.08.2005. The suit land was included in the land proposed to be acquired. The suit was wrongly filed against defendant no. 2;
hence, it was prayed that the same be dismissed.
.
5. A replication denying the contents of the written statement filed by defendant no. 1 and affirming those of the plaint was filed.
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6. Learned Trial Court framed the following issues on 16.09.2008 and an additional issue on 09.08.2012:-
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1. Whether the plaintiff is entitled for decree of Specific Performance of Agreement to Sell dated 13.07.2004 directing the defendant No.1 to execute the sale deed registered in favour of the plaintiff on the basis of agreement executed by the defendant No.1, as prayed for?
OPP
2. Whether in alternative plaintiff is entitled for recovery of ₹ 1,25,000/- along with interest and costs of the suit, as prayed for? OPP 2A. Whether the plaintiff is entitled for compensation to the tune of Rs.10,00,000/- in case agreement dated 13.07.2004 become unexecutable and unenforceable, as alleged? OPP
3. Whether the plaintiff is entitled for the relief of permanent prohibitory injunction, as prayed for? OPP
4. Whether the suit of the plaintiff is not maintainable? OPD
5. Whether the plaintiff is estopped to file the suit by his own act, deed and conduct? OPD
6. Whether the plaintiff has no cause of action to file the present suit? OPD
7. Whether the suit has not been properly valued for the purpose of Court fee and jurisdiction, as alleged? OPD ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 6
8. Whether the present suit has been filed in violation to the provisions of the Himachal Pradesh Housing and Urban Development Authority Act, 2004? OPD-2.
9. Whether the suit is bad for mis-joinder of necessary parties? OPD-2.
10. Relief .
7. The parties were called upon to produce the evidence and the plaintiff examined Chamel Singh (PW1), Madan Singh (PW2), himself (PW3), Sita Ram (PW4), Usha (PW5), Khem Dass of (PW6), Roop Lal (PW7), Prakash Chand (PW8), and Shyam Lal (PW9). The defendant no. 1 examined himself (DW1) and Dwarka (DW2).
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8. The learned Trial Court held that the version of the plaintiff that he remained ready and willing to perform his part of the agreement was duly proved. The version of the defendant that the plaintiff did not have sufficient funds with him was not proved. The suit land was acquired by defendant no. 2 and an amount of ₹11,12,279/- was paid to him out of which ₹2,00,000/-
was retained by defendant no. 2. Defendant No.1 was liable to compensate the plaintiff by paying double the earnest money;
hence, the plaintiff was entitled to ₹1,00,000/- as compensation with interest @6% per annum. The version of the plaintiff that he had constructed the house was also proved. Since the land was acquired by defendant no.2; therefore, a decree of specific performance could not be passed and the plaintiff was held ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 7 entitled to a compensation of ₹5,00,000/- with interest @6% per annum from the date of the suit till its realization. Learned Trial Court answered Issues no. 1, 3, 5, 6, 8 and 9 in negative, issues no.
2, 4 and 7 partly in affirmative, issue no. 2A in affirmative and .
decreed the suit.
9. Being aggrieved from the judgment and decree passed by the learned Trial Court, the plaintiff and defendant no. 1 filed of two separate appeals, which were decided by the learned District Judge, Shimla. Learned First Appellate Court held that the rt execution of the agreement and payment of ₹50,000/- as earnest money were not disputed. It was also proved that a Notification under Section 4 of the Land Acquisition Act, 1894 for acquiring the land was issued on 25.08.2005; therefore, the specific performance of the agreement was not possible. The defendant no. 1 is liable to compensate the plaintiff for the loss. The version of the plaintiff that he had constructed the house was not proved.
No oral evidence could be led to contradict or vary the terms of the agreement. The plaintiff was ready and willing to perform his part of the agreement; however, the plaintiff was held entitled to compensation of ₹75,000/- in all for the breach of the agreement and ₹5,00,000/- with interest @6% per annum from the date of receiving the compensation by defendant no. 1.
::: Downloaded on - 22/11/2023 20:33:00 :::CIS 810. Being aggrieved from the judgments and decrees passed by the learned Courts below, the plaintiff has filed the present appeal asserting that the learned Courts below erred in declining the relief of specific performance. Learned Courts below .
had granted inadequate compensation to the plaintiff. The plaintiff was illiterate and could only append his signatures. He was unaware of the contents of the agreement. It was duly proved of on record that the plaintiff was paying the house taxes since 1993.
The relief of specific performance was wrongly denied to the rt plaintiff. Therefore, it was prayed that the present appeal be allowed, judgments and decrees passed by learned Courts below be modified and relief of specific performance be granted to the plaintiff.
11. The following substantial questions of law are proposed in the memorandum of appeal:
1. Whether the impugned judgment and decrees to the extent challenged herein are result of misreading and mis-appreciation of the evidence and facts of the case?
2. Whether on account of mis-appreciation of the pleadings and law and also mis-reading, of the oral as well as documentary evidence, available on record, the finding recorded by the Ld. Courts are perverse and erroneous and as such the judgment and decree to the extent challenged herein being vitiated is not legally sustainable?
3. Whether the Ld. Courts below are justified in not granting the decree of specific performance of agreement in view of the fact that the possession of the ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 9 suit land has not been taken over and whether the ld.
Courts below ought to have molded the relief in the given circumstances?
4. Whether the compensation granted is inadequate in the proved facts and circumstances and whether the compensation at prevalent market price would not be .
adequate compensation in view of the hardship likely to be faced by plaintiff?
12. I have heard Mr. Naresh Sharma, learned counsel for the legal representatives of the original plaintiff, Mr Neeraj Gupta, learned Senior Counsel assisted by Mr. Janesh Gupta & Ms Rinki of Kashmiri, learned counsel for respondent no. 1 (defendant no. 1) and Sh. R.L. Sharma, learned counsel for respondent no. 2 rt (original defendant no. 2).
13. Mr. Naresh Sharma, learned counsel for the appellant submitted that the learned Courts below erred in declining the relief of specific performance to the plaintiff. The plaintiff was entitled to compensation of ₹10,00,000/- and the learned Courts below erred in denying the compensation to the plaintiff. Learned First Appellate Court erred in relying upon the agreement when the plaintiff had specifically asserted that its terms and conditions were not explained to him. Therefore, he prayed that the present appeal be admitted on the proposed substantial questions of law.
14. Mr. Neeraj Gupta, learned Senior Counsel supported the judgment and decree passed by the learned First Appellate Court. He submitted that adequate compensation has been ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 10 awarded to the plaintiff. The specific performance of the agreement cannot be granted to the plaintiff because the land has been acquired by defendant no. 2 under the Land Acquisition Act free from all encumbrances. The plaintiff has not proved the .
actual damages suffered by him and the learned Courts below had granted adequate compensation to the plaintiff; therefore, he prayed that the appeal be dismissed.
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15. Mr. R.L. Sharma, learned counsel for respondent no.
2 submitted that the land has been acquired by respondent no. 2 rt under the provisions of the Land Acquisition Act. The specific performance cannot be enforced against defendant no. 2 as it is not privy to the contract entered between the parties. Therefore, he prayed that the appeal be dismissed.
16. I have given considerable thought to the rival submissions at the bar and have gone through the records carefully.
17. Plaintiff Nanda Ram (PW3) stated that he entered into an agreement with the defendant to purchase the suit land. He paid ₹50,000/-. He was in possession of the land and had constructed a one-storeyed house having 8 rooms in it. He had taken the electricity and water connections and he was also paying the taxes. He is illiterate and can only sign the documents. The ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 11 agreement was not read over and explained to him. He stated in his cross-examination that he had produced the agreement to show his title. He denied that defendant no. 1 was the owner of the land and that a dhara existed over the same at the time of entering .
into the agreement to sell. He denied that the house was constructed by defendant no. 1. He admitted that the agreement was written in Hindi. He denied that it was read over and of explained to him. He admitted that the agreement was executed for ₹1,30,000/-. He admitted that the time was extended at rt Shimla. He denied that he did not have sufficient money with him to pay the remaining sale consideration.
18. The agreement (Ext. PW3/A) reads that defendant no. 1 is the owner in possession of the suit land and gair mumkin dhara, as per Jamabandi for the years 1998-1999 and he had entered into an agreement to sell with the plaintiff for ₹1,30,000/- out of which ₹50,000/- was received as earnest money on the date of the execution of the agreement. The remaining amount of ₹80,000/-
would be paid within 90 days by the plaintiff and defendant no.1 would execute the sale deed in favour of the plaintiff. In case of failure to execute the sale deed by defendant no. 1, he would pay double the earnest money to the plaintiff, however, in case, the plaintiff fails to get the sale deed of the house and the land ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 12 registered, the earnest money would be forfeited. The plaintiff will not interfere with three rooms, which were locked.
19. This agreement was propounded by the plaintiff. The .
plaintiff has based his suit on the agreement. He asserted that this agreement was correct in part but incorrect regarding the construction of the house and the possession of the defendant.
This is not permissible. A person cannot blow hot and cold in the of same breath and cannot approbate and reprobate at the same time. It was laid down by the Hon'ble Supreme Court in Union of rt India v. N. Murugesan, (2022) 2 SCC 25 : (2022) 1 SCC (Civ) 711 :
(2022) 1 SCC (L&S) 328: 2021 SCC OnLine SC 895 that a person cannot claim under an instrument while questioning the same. It was observed at page 38:
Approbate and reprobate
26. These phrases are borrowed from the Scots law. They would only mean that no party can be allowed to accept and reject the same thing, and thus one cannot blow hot and cold. The principle behind the doctrine of election is inbuilt into the concept of approbate and reprobate. Once again, it is a principle of equity coming under the contours of common law. Therefore, he who knows that if he objects to an instrument, he will not get the benefit he wants cannot be allowed to do so while enjoying the fruits. One cannot take advantage of one part while rejecting the rest. A person cannot be allowed to have the benefit of an instrument while questioning the same. Such a party either has to affirm or disaffirm the transaction. This principle has to be applied with more vigour as a common law principle, if such a party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 13 other part. An element of fair play is inbuilt into this principle. It is also a species of estoppel dealing with the conduct of a party. We have already dealt with the provisions of the Contract Act concerning the conduct of a party, and his presumption of knowledge while confirming an offer through his acceptance unconditionally.
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20. Similar is the judgment in Lakshmi Ammal and Ors. vs. Ammayi Ammal and Ors. (29.04.2022 - MADHC):
MANU/TN/3281/2022 wherein it was observed:
"19. In the considered view of this Court, the very fact that of the Ex. A1 settlement deed was placed before the Tribunal by Perumal Chettiar and the Tribunal acted upon this document while passing orders on 9.6.1991, is ample proof that the settlement deed has been acted upon. Just because rt Perumal Chettiar had chosen to deal with the properties in spite of executing the settlement deed in favour of his daughters, does not in any way revive the lost right of Perumal Chettiar. A person cannot be allowed to make a judicial or a quasi-judicial forum to act upon a document in order to get a favourable order and thereafter disown the document and continue to deal with the property. A competent Civil Court cannot give its approval for such dishonest conduct and sanctify his illegal act. The foundation of the law of election is that a person cannot accept and reject the same instrument. This is popularly referred to in the legal parlance as approbate and reprobate. The law does not permit a person to both approbate and reprobate.
20. This Court had an occasion to deal with this issue in G. Nagaiyan and Another Vs. K. Palanivel, S.A. No. 125 of 2014, by judgment dated 29.3.2022. The relevant portions in the judgment are extracted hereunder:
"24. It is a well-established rule in equity that a man cannot approbate and reprobate. The general rule, which originated from Scotland and is the foundation of the principle of election, was set out by Lord ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 14 Redesdale in the early case of Birmingham v. Kirwan (1805 2 Sch. & Lef. 449) in the following way:
"The general rule is that a person cannot accept and reject the same instrument, and this is the foundation of the law of election."
25. Years later in Smith v. Baker [[L.R.] 8 C.P. 350], .
Honeyman, J., explained the doctrine thus:
"As to the general rule of law, there is no dispute. A man cannot at the same time blow hot and cold. He cannot say at one time that the transaction is valid, and thereby obtain some advantage, to which he could only be entitled of on the footing that it is valid, and at another time say it is void for the purpose of securing some further advantage."
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26. In Verschures Creameries Limited v. Hull and Netherlands Steamship Company [[1921] 2 K.B. 608], the Court of Appeal noted that the doctrine of election was not confined to instruments alone. These principles were finally approved by the House of Lords in Lissenden v. C.A. Bosch Limited [[1940] A.C. 412], where Viscount Maugham pointed out as under:
"My Lords, I think our first inquiry should be as to the meaning and proper application of the maxim that you may not both approbate and reprobate. The phrase comes to us from the northern side of the Tweed, and there it is of comparatively modern use. It is, however, to be found in Bell's Commentaries, 7th ed., vol. i., pp. 141-2; and he treats "the Scottish doctrine of approbate and reprobate" as "approaching nearly to that of election in English jurisprudence." It is, I think, now settled by decisions in this House that there is no difference at all between the two doctrines."
27. Turning to its application to Wills and other instruments, Viscount Maugham opined thus:
"The doctrine is founded on the intention, explicit or presumed, of the testator in the case of a will and of the author or donor in the case ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 15 of instruments, namely, the intention that a man shall not claim under the will or instrument and also claim adversely to it."
28. These principles have been consistently followed in this country. In R.N. Gosain v. Yashpal Dhir, MANU/SC/0078/1993 : (1992) 4 SCC 683, the Supreme .
Court has observed as under:
"Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that "a person cannot of say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is rt valid, and then turn round and say it is void for the purpose of securing some other advantage". [See: Verschures Creameries Ltd. v.
Hull and Netherlands Steamship Co. Ltd. [[1921] 2 K.B. 608, 612 (CA)], Scrutton, L.J.]"
29. In Joint Action Committee of Air Line Pilots' Assn. of India v. DG of Civil Aviation, MANU/SC/0543/2011 :
(2011) 5 SCC 435, the Supreme Court has held thus:
"12. The doctrine of election is based on the rule of estoppel--the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity..... Taking inconsistent pleas by a party makes its conduct far from satisfactory. Further, the parties should not blow hot and cold by taking inconsistent stands and prolonging proceedings unnecessarily."
30. In Union of India v. N. Murugesan (MANU/SC/0809/2021 : (2022) 2 SCC 25), the English decisions on the point were cited with approval by the Supreme Court. It is important to notice that the Supreme Court has recognised it as a principle emanating out of the common law and not from the ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 16 statutory text of Section 115 of the Evidence Act. This is clear from the following observations:
"A person cannot be allowed to have the benefit of an instrument while questioning the same. Such a party either has to affirm or disaffirm the transaction. This principle has to be applied .
with more vigour as a common law principle, if such a party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the other part. An element of fair play is inbuilt into this principle. It is also a species of estoppel dealing with the conduct of a party."
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31. In its latest decision in Premalata @ Sunita v. Naseeb Bee (Civil Appeal Nos. 2055-2056 of 2022), decided on 23.03.2022, the Hon'ble Supreme Court rt applied the doctrine of approbate and reprobate holding that a litigant cannot be permitted to take two different/contradictory stands before two different forums. The Hon'ble Supreme Court has observed as under:
The respondents - original defendants cannot be permitted to take two contradictory stands before two different authorities/courts. They cannot be permitted to approbate and reprobate once the objection raised on behalf of the original defendants that the Revenue Authority would have no jurisdiction came to be accepted by the Revenue Authority/Tahsildar and the proceedings under Section 250 of the MPLRC came to be and thereafter when the plaintiff instituted a suit before the Civil Court it was not open for the respondents - original defendants thereafter to take an objection that the suit before the Civil Court would also be barred in view of Section 257 of the MPLRC."
32. In the considered view of this Court, the respondent is not entitled to claim for any right or title over the 'C' schedule property. There is no requirement for this Court to undertake the exercise of finding out how much of property was acquired ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 17 and how much was left out by the Government. This is in view of the fact that the respondent went before the competent Civil Court and obtained a Decree on the ground that no right or title was conveyed to him under the sale deed dated 27.8.1974 marked as Ex.B3. This crucial fact was lost sight of by both the Courts .
below and both the Courts unnecessarily undertook the exercise of finding out the ownership of the respondent over the 'C' schedule property. The third substantial question of law is answered accordingly.
21. The principle of law that was discussed in the above judgment will squarely apply to the facts of the present case. The settlement deed marked as Ex.A1 was presented of before the Land Reforms Tribunal by Perumal Chettiar and he had obtained a favourable order and that fact by itself will amount to acting upon Ex.A1 settlement deed. The fact that the said Perumal Chettiar dealt with the properties rt even thereafter, is irrelevant and not binding on his daughters in whose favour the properties were settled. The first and second substantial questions of law and the first additional substantial question of law are answered accordingly in favour of the appellants.
21. In the present case, the plaintiff is taking the benefit under the agreement and is also challenging the same, which is not permissible. Hence, his plea that the agreement was not executed by him after understanding its nature cannot be accepted. He has to accept the agreement or reject it as a whole and cannot accept and reject it at the same time.
22. In any case, the learned Courts below had rightly held that the version of the plaintiff that agreement was not read over and explained to him was not proved. The plaintiff did not examine the marginal witnesses or the scribe to prove that the ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 18 agreement was not read over and explained to him. Therefore, the learned First Appellate Court had rightly held that the version of the plaintiff that agreement was not read over and explained to him was not acceptable.
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23. The plaintiff led evidence to prove that he had constructed the house. This evidence will not assist the plaintiff because he had acknowledged the title and possession of the of defendant in the agreement. He had also acknowledged that the structure on the suit land was constructed by defendant no. 1. He rt admitted that three rooms were locked and he would not interfere with them; hence, the version of the plaintiff in the Court that he had constructed the house on the suit land and he was residing in the same was rightly discarded by learned First Appellate Court.
24. It was undisputed that defendant no. 2 had issued a Notification for the acquisition of the land under the Land Acquisition Act, therefore, the Specific Performance of the Agreement had become impossible. It was laid down by Hon'ble Supreme Court in Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647, that where the land acquisition proceedings were started, specific performance cannot be granted. It was observed:
"19. In Mohamad Abdul Jabbar v. Lalmia [AIR 1947 Nag 254: 1947 NLJ 253: ILR 1947 Nag 328] specific performance of an agreement of sale dated January 16, 1934, was sought by the institution of a suit on January 15, 1937.::: Downloaded on - 22/11/2023 20:33:00 :::CIS 19
During the pendency of the suit, on April 20, 1937, the provincial government started land acquisition proceedings respecting the subject matter of the suit and the same was acquired. The High Court upheld the dismissal of the suit for specific performance and referred an amendment for award of damages. On the .
obvious impermissibility of specific performance, the Nagpur High Court said: (AIR p. 256, para 14) "We accordingly conclude that specific performance is now impossible and we cannot decree it for 'equity like nature does nothing in vain'. We cannot hold the plaintiffs-appellants entitled to the compensation money into which the property was converted of because they had no right nor interest in that property...."
20. Refusing the amendment for the relief for payment of rt money the High Court held: (AIR p. 256, para 14) "We would not allow amendment also because on the facts found by the trial court (with which we see no reason, whatever, to differ) we would have refused specific performance, and the claim for damages on this account would also have been negatived because damages could have been awarded only if specific performance could rightly have been claimed. The appeal, therefore, fails and is dismissed with costs."
21. Support for these conclusions was sought from the oft-quoted, but perhaps a little misunderstood, case of Ardeshir H. Mama v. Flora Sassoon [AIR 1928 PC 208: 55 IA 360: 52 Bom 597]. The passage in Sassoon case [ Id. p.
217] relied upon by the Nagpur High Court is this: (AIR p. 256, para 10) "In a series of decisions, it was consistently held that just as its power to give damages, additional was to be exercised in a suit in which the Court had granted specific performance, so the power to give damages as an alternative to specific performance did not extend to a case in which the plaintiff had debarred himself from claiming that form of relief, nor to a case in which that relief had become impossible.
::: Downloaded on - 22/11/2023 20:33:00 :::CIS 20The case of Sassoon [AIR 1928 PC 208: 55 IA 360: 52 Bom 597] fell within the first category of cases described above under the alternative relief of damages. This case falls within the second part where the relief of specific performance has become impossible."
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25. Similar is the judgment in Urmila Devi v. Mandir Shree Chamunda Devi, (2018) 2 SCC 284 : (2018) 1 SCC (Civ) 558: 2018 SCC OnLine SC 29, wherein, it was held:
"9. From the facts and material on record, it is of undisputed that agreement to sell was executed by Defendants 1 to 5 in favour of the plaintiff and the entire sale consideration of ₹ 90,000 was received and possession was delivered in the year 1989 itself. The rt plaintiff constructed three shops on the suit land. The plaintiff's case that to defeat the rights of the plaintiff a gift deed dated 8-7-1991 was executed by Defendants 1 to 5 in favour of Defendant 6 has been accepted by the courts below which have declared the gift deed as null and void. The decree for specific performance was granted by the trial court, and it was confirmed by the first appellate court. The suit land was acquired and compensation was determined in favour of Defendant 6 whose name was recorded in the revenue records. No objection can be taken to the view of the High Court that consequent of the acquisition of suit land under the land acquisition proceedings decree of specific performance granted in favour of the plaintiff could not have been maintained."
26. Therefore, in view of the binding precedents of the Hon'ble Supreme Court of India, the plaintiff cannot be held entitled to the Specific Performance of the Agreement and his claim was rightly rejected by the learned Courts below.
27. The agreement provides that the plaintiff will be entitled to double the earnest money in case of failure on the part ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 21 of defendant no. 1 to specifically perform the agreement. Both the learned Courts have concurrently found that the plaintiff was ready and willing to perform his part of the agreement and the plea taken by defendant no. 1 that the plaintiff did not have .
₹80,000/- with him to execute the sale deed was rejected by both the learned Courts below. This is a pure finding of fact and is duly supported by the statement of Roop Lal (PW6) that Sita Ram son of of the plaintiff had applied for the house loan of ₹1,33,000/-, which was sanctioned on 26.03.2004. Therefore, the learned rt Courts below had rightly rejected the plea of the defendant that the plaintiff was not ready and willing to perform his part of the contract.
28. The learned Trial Court awarded an amount of ₹1,00,000/- as compensation to the plaintiff for the breach of the agreement as well as ₹5,00,000/-. Learned First Appellate Court modified this amount and awarded ₹75,000/- and ₹ 5,00,000/-
along with interest. It was laid down by the Hon'ble Supreme Court in Chunilal V. Mehta and Sons Ltd. v. Century Spg. and Mfg. Co.
Ltd., 1962 SCC OnLine SC 57: 1962 Supp (3) SCR 549: AIR 1962 SC 1314 that when the parties have themselves provided the precise amount of damages, the Court can award adequate compensation, which shall not be more than the amount specified by the parties.
It was observed:
::: Downloaded on - 22/11/2023 20:33:00 :::CIS 22"11. A perusal of clause 14 clearly shows that the parties have themselves provided for the precise amount of damages that would be payable by the Company to the managing agents if the Managing Agency agreement was terminated before the expiry of the period for which it was made. The clause clearly states that the Managing .
Agent shall receive from the Company as compensation or liquidated damages for the loss of appointment a sum equal to the aggregate amount of the monthly salary of not less than ₹ 6000 for and during the whole of the unexpired portion of the term of the agency. Now, when parties name a sum of money to be paid as liquidated damages they must be deemed to exclude the right to of claim an unascertained sum of money as damages. The contention of the learned counsel is that the words "not less than" appearing before "₹ 6000" in clause 14 clearly bring in clause 10 and, therefore, entitle the appellant to rt claim 10% of the estimated profits for the unexpired period by way of damages. But if we accept the interpretation, it would mean that the parties intended to confer on the managing agents what is in fact a right conferred by Section 73 of the Contract Act and the entire clause would be rendered otiose. Again, the right to claim liquidated damages is enforceable under Section 74 of the Contract Act and where such a right is found to exist no question of ascertaining damages really arises. Where the parties have deliberately specified the amount of liquidated damages there can be no presumption that they, at the same time, intended to allow the party who has suffered by the breach to give a go-by to the sum specified and claim instead a sum of money, which was not ascertained or ascertainable at the date of the breach. Learned counsel contends that upon this view the words "not less than" would be rendered otiose. In our opinion these words, as rightly pointed out by the High Court, were intended only to emphasise the fact that compensation will be computable at an amount not less than ₹ 6000 p.m. Apparently, they thought it desirable to emphasise the point that the amount of ₹ 6000 p.m. was regarded by them as reasonable and intended that it should not be reduced by the court in its discretion."::: Downloaded on - 22/11/2023 20:33:00 :::CIS 23
29. This position was reiterated in Fateh Chand v. Balkishan Dass, 1963 SCC OnLine SC 49 : (1964) 1 SCR 515, wherein it was held:
"8. The claim made by the plaintiff to forfeit the amount of ₹ 24,000 may be adjusted in the light of Section 74 of .
the Indian Contract Act, which in its material part provides:
"When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual of damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount rt so named or as the case may be, the penalty stipulated for."
The section is clearly an attempt to eliminate the sometimes elaborate refinements made under the English common law in distinguishing between stipulations providing for payment of liquidated damages and stipulations in the nature of penalty. Under the common law, a genuine pre-estimate of damages by mutual agreement is regarded as a stipulation naming liquidated damages and binding between the parties: a stipulation in a contract in terrorem is a penalty and the Court refuses to enforce it, awarding to the aggrieved party only reasonable compensation. The Indian Legislature has sought to cut across the web of rules and presumptions under the English common law, by enacting a uniform principle applicable to all stipulations naming amounts to be paid in case of breach, and stipulations by way of penalty.
9. The second clause of the contract provides that if for any reason the vendee fails to get the sale-deed registered by the date stipulated, the amount of ₹ 25,000 (₹ 1000 paid as earnest money and ₹ 24,000 paid out of the price, on delivery of possession) shall stand forfeited and the agreement shall be deemed cancelled. The ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 24 covenant for forfeiture of ₹ 24,000 is manifestly a stipulation by way of penalty.
10. Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and (ii) where the contract contains any other stipulation by way .
of penalty. We are in the present case not concerned to decide whether a contract containing a covenant of forfeiture of deposit for due performance of a contract falls within the first class. The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the Court of has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case. Jurisdiction of the Court to award compensation in rt case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damage";
it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things, or which the parties knew when they made the contract, to be likely to result from the breach.
11. Before turning to the question about the compensation which may be awarded to the plaintiff, it is necessary to consider whether Section 74 applies to stipulations for forfeiture of amounts deposited or paid under the contract. It was urged that the section deals in terms with the right to receive from the party who has broken the contract reasonable compensation and not the right to forfeit what has already been received by the party aggrieved. There is however, no warrant for the ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 25 assumption made by some of the High Courts in India, that Section 74 applies only to cases where the aggrieved party is seeking to receive some amount on breach of contract and not to cases where upon breach of contract an amount received under the contract is sought to be forfeited. In our judgment, the expression "the contract .
contains any other stipulation by way of penalty"
comprehensively applies to every covenant involving a penalty whether it is for payment on breach of contract of money or delivery of property in future, or for forfeiture of right to money or other property already delivered. The duty not to enforce the penalty clause but only to award reasonable compensation is statutorily imposed upon of courts by Section 74. In all cases, therefore, where there is a stipulation in the nature of a penalty for forfeiture of an amount deposited pursuant to the terms of the contract which expressly provides for forfeiture, the rt court has jurisdiction to award such sum only as it considers reasonable, but not exceeding the amount specified in the contract as liable to forfeiture. We may briefly refer to certain illustrative cases decided by the High Courts in India which have expressed a different view.
12. In Abdul Gani& Co. v. Trustees of the Port of Bombay [ITR 1952 Bom 747] the Bombay High Court observed as follows:
"It will be noticed that the sum which is named in the contract either as a penalty or as liquidated damages is a sum which has not already been paid but is to be paid in case of a breach of the contract. With regard to the stipulation by way of penalty, the Legislature has chosen to qualify 'stipulation' as 'any other stipulation', indicating that the stipulation must be of the nature of an amount to be paid and not an amount already paid prior to the entering into of the contract. The section further provides that a party complaining of a breach is entitled to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or the penalty stipulated. Therefore, the section contemplates that the party aggrieved has to receive from the party in default some amount or something ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 26 in the nature of a penalty: it clearly rules out the possibility of the amount which has already been received or the penalty which has already been provided for."
13. In NatesenAiyar v. AppavuPadayachi [ILR 3 Mad 178], the Madras High Court seems to have held that Section 74 .
applies where a sum is named as penalty to be paid in future in case of breach, and not to cases where a sum is already paid and by a covenant in the contract it is liable to forfeiture.
14. In these cases the High Courts appear to have concentrated upon the words "to be paid in case of such of breach" in the first condition in Section 74 and did not consider the import of the expression "the contract contains any other stipulation by way of penalty", which is the second condition mentioned in the section. The rt words "to be paid" which appear in the first condition do not qualify for the second condition relating to stipulation by way of penalty. The expression "if the contract contains any other stipulation by way of penalty" widens the operation of the section so as to make it applicable to all stipulations by way of penalty, whether the stipulation is to pay an amount of money, or is of another character, as, for example, providing for forfeiture of money already paid. There is nothing in the expression which implies that the stipulation must be one for rendering something after the contract is broken.
There is no ground for holding that the expression "contract contains any other stipulation by way of penalty" is limited to cases of stipulation in the nature of an agreement to pay money or deliver property on breach and does not comprehend covenants under which amounts paid or property delivered under the contract, which by the terms of the contract expressly or by clear implication are liable to be forfeited.
15. Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties pre-determined, or where there is a stipulation by way of penalty. However, the application of the enactment is not restricted to cases where the aggrieved party claims relief as a plaintiff. The section does not ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 27 confer a special benefit upon any party; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for forfeiture of any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated. The .
jurisdiction of the court is not determined by the accidental circumstance of the party in default being a plaintiff or a defendant in a suit. Use of the expression "to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party of complaining of breach of contract. The court has to adjudge in every case reasonable compensation to which the plaintiff is entitled from the defendant on breach of the contract. Such compensation has to be ascertained rt having regard to the conditions existing on the date of the breach.
16. There is no evidence that any loss was suffered by the plaintiff in consequence of the default by the defendant, save as to the loss suffered by him by being kept out of possession of the property. There is no evidence that the property had depreciated in value since the date of the contract provided; nor was there evidence that any other special damage had resulted. The contact provided for forfeiture of ₹ 25,000 consisting of ₹ 1039 paid as earnest money and ₹ 24,000 paid as part of the purchase price. The defendant has conceded that the plaintiff was entitled to forfeit the amount of ₹ 1000 which was paid as earnest money. We cannot however agree with the High Court that 13 percent of the price may be regarded as reasonable compensation in relation to the value of the contract as a whole, as that in our opinion is assessed on an arbitrary assumption. The plaintiff failed to prove the loss suffered by him in consequence of the breach of the contract committed by the defendant and we are unable to find any principle on which compensation equal to ten percent of the agreed price could be awarded to the plaintiff. The plaintiff has been allowed ₹ 1000 which was the earnest money as part of the damages. Besides he had use of the remaining sum of ₹ 24,000, and we can rightly ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 28 presume that he must have been deriving an advantage from that amount throughout this period. In the absence therefore of any proof of damage arising from the breach of the contract, we are of the opinion that the amount of ₹ 1000 (earnest money) which has been forfeited, and the advantage that the plaintiff must have derived from the .
possession of the remaining sum of ₹ 24,000 during all this period would be sufficient compensation to him. It may be added that the plaintiff has separately claimed mesne profits for being kept out possession for which he has got a decree and therefore the fact that the plaintiff was out of possession cannot be taken, into account in determining damages for this purpose. The decree passed of by the High Court awarding ₹ 11,250 as damages to the plaintiff must therefore be set aside."
30. Karnataka High Court also took a similar view in rt Narendra Kumar Nakhat v. Nandi Hasbi Textile Mills Ltd., 1996 SCC OnLineKar 576: AIR 1997 Kar 185, wherein it was observed:
"6. Under the terms of the sale offered by this Court a sum of ₹ 5,00,000/- had been deposited by the applicant along with his offer by way of Earnest Money. The characteristic of Earnest Money has been explained tersely but succinctly in Kunwar Chiranjit v. Har Swarup [AIR 1926 PC 1.] and in the words of Lord Shaw -
"Earnest Money is part of the purchase price when the transaction goes forward: it is forfeited when the transaction falls through, by reason of the fault or failure of the vendee." This definition of the 'Earnest Money' has been approved and adopted by the Supreme Court in MaulaBux v. Union of India [(1969) 2 SCC 554: AIR 1970 SC 1955.]. In Shree Hanuman Cotton Mills v. Tata Aircraft Ltd. [(1969) 3 SCC 522: AIR 1970 SC 1986.], the Supreme Court has reiterated the legal position thus: 'Earnest must be given at the moment at which the contract concluded. It represents a guarantee that the contract will be fulfilled, in other words, earnest is given to bind the contract. It is part of the purchase price when the transaction is carried out. It is forfeited when the transaction falls through by reason of default or failure of ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 29 purchaser; and unless, there is anything to the contrary in terms of the contract, or default committed by the buyer, the seller is entitled to forfeit the earnest.' Thus the characteristic of Earnest money is that it serves two purposes--firstly, it goes in part payment of the purchase money for which it is deposited and, secondly, but .
primarily, it is security for the performance of the contract.
7. According to the terms of the offer made in the present case, the sale is subject to confirmation of this Court and the tender money i.e., Earnest money deposit of ₹ 5,00,000/- would be liable for forfeiture in the case of default by the successful bidder. The earnest money of of the unsuccessful bidder shall be refunded forthwith after the conclusion of the tender proceedings. In this case, there is no confirmation of sale in view of the order made by this Court in O.S.A. No. 17/1993, disposed of on rt 26.2.1996 and the bid accepted in favour of the applicant on 18.1.1995 stood cancelled. Thus the offer made by the applicant itself has not been accepted by this Court. The tender proceedings in the present case came to be concluded by the order of this Court in O.S.A. No. 17/1993 on 26.2.1996. Unless the sale is confirmed in terms of Clause-7 of the terms and conditions of sale, the sale would not become absolute. As long as the transaction is inchoate or incomplete for any reason and the acceptance of the bid is cancelled, the parties are relegated to the original position even though the cancellation of the acceptance of the bid may be on account of the conduct of the bidder himself. By virtue of the cancellation of the acceptance of the bid, the offer made by the bidder is not accepted, it is only on acceptance of the offer made by the bidder, other clauses would stand attracted. This is a case where the sale proceedings were cancelled on account of the conduct of the parties in not doing one or the other acts provided under the terms of the sale. The act attributed to the applicant is that he had adopted the stance of fillibuster by indulging in dilatory tactics in postponing the proceedings for confirmation of sale. If the Court had confirmed the sale, other terms and conditions in the offer of sale would have arisen. In the absence of such an event of confirmation of sale, the only ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 30 conclusion we have to draw is that the applicant is prima facie, entitled to the entire refund of the money. But the learned Company Judge restricted the payment to only ₹ 50,00,000/-. The question is whether the amounts due by the applicant by reason of non-performance of his part of the contract in any manner arise and whether any .
damages payable by him could be appropriately adjudicated at a later stage.
8. Clause 6 of the conditions for sale provides for forfeiture of the sum of ₹ 5 lakhs in the event of default by the successful bidder. Section 74 of the Contract Act provides for the measure of damages in two classes of cases - (i) where the contract names a sum to be paid in of case of breach; (ii) where the contract contains any other stipulation by way of penalty. In the latter case, the measure of damages is by Section 74 of the Contract Act - reasonable compensation not exceeding the penalty rt stipulated. In Fateh Chand v. Balkishen Das [AIR 1963 SC 1405.] it was observed that Section 74 of the Contract Act boldly cut across the web of rules under English Common law by enacting uniform principles applicable to all stipulations naming amounts to be paid in case of breach and stipulations by way of penalty. The Supreme Court explained the scope of section 74 of the Contract Act in Sir Chunilal V. Mehta & Sons Ltd. v. Century Spinning and Manufacturing Co. Ltd. [AIR 1962 SC 1314.] and stated that the sum to be paid in repudiated contracts and stipulation for payment of the same by way of liquidated damages would exclude the right to claim an unascertained sum of money as damages. The right to claim liquidated damages is enforceable under Section 74 of the Contract Act and when such a right is found to exist, no question of ascertaining damages really arises. Where the parties have deliberately specified the amount of liquidated damages, there can be no presumption that they at the same time, intended to allow the party who has suffered by the breach to give a go-by to the sum specified and claim instead a sum of money which was not ascertained or ascertainable at the date of the breach. It has been noticed in MaulaBux's Case [(1969) 2 SCC 554: AIR 1970 SC 1955.] that forfeiture of earnest under a contract of sale of property - if the amount reasonable, does not fall within ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 31 the scope of Section 74 for forfeiture of a reasonable amount paid as earnest money which does not amount to imposing a penalty. But if forfeiture is of the nature of penalty, Section 74 applies. Thus where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which has .
already been paid to the party complaining of breach of contract, the undertaking is of the nature of penalty. The Earnest Money Deposit in this case must be treated as by way of liquidated damages and in Clause 6, this position is made clear that such amount will be liable for forfeiture on account of any default by him. Therefore, by no stretch of imagination can we say that the respondent can insist of upon retention of money in excess of the sum ordered by the Learned Company Judge."
31. Therefore, the plaintiff is entitled to compensation not rt more than ₹1,00,000/- in the present case as this was the amount agreed by the parties, however, the actual compensation would be paid keeping in view the damages sustained by the plaintiff.
32. The plaintiff pleaded in Para 12 of the plaint that he had suffered huge financial loss and mental agony and was entitled to ₹25,000/- on account of suffering. Therefore, the learned First Appellate Court had rightly reduced the compensation from ₹50,000/- to ₹ 25,000/.
33. The Hon'ble Supreme Court held in Jagdish versus Nathu Singh (supra) that in case of acquisition of land, the compensation awarded may be taken as a measure of damages subject to the deduction of the monetary value of services and ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 32 time and energy expended by a person in pursuing the claim of compensation. It was observed:
"29. In the present case, there is no difficulty in assessing the quantum of the compensation. That is ascertainable .
with reference to the determination of the market value in the land acquisition proceedings. The compensation awarded may safely be taken to be the measure of damages subject, of course, to the deduction therefrom of the monetary value of the services, time and energy expended by the appellant in pursuing the claims of compensation and the expenditure incurred by him in the of litigation culminating in the award.
30. We accordingly confirm the finding of the High Court that the respondent was willing and ready to perform the rt contract and that it was the appellant who was in breach. However, in substitution of the decree for specific performance, we make a decree for compensation, equivalent to the amount of the land acquisition compensation awarded for the suit lands together with solatium and accrued interest, less a sum of ₹ 1,50,000 (one lakh fifty thousand only) which, by a rough and ready estimate, we quantify as the amount to be paid to the appellant in respect of his services, time and money expended in pursuing the legal claims for compensation."
34. A similar view was taken in Urmila Devi (supra), wherein it was held:
"12. This Court had the occasion to consider Section 21 of the Specific Relief Act in the context of a case which arose almost on similar facts in Jagdish Singh v. Natthu Singh [Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647]. In the above case also suit was also filed for specific performance on the basis of a contract to sell dated 3-7- 1973, the suit was dismissed by the trial court as well as the first appellate court. However, the High Court in the second appeal reversed [Nathu Singh v. Jagdish Singh, 1991 SCC OnLine All 273: AIR 1992 All 174] the finding of the courts below and held that the plaintiff was ready and willing to perform the contract and was entitled to a ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 33 decree. In the above case also during the pendency of the second appeal before the High Court, proceedings for compulsory acquisition of the land were initiated and the land was acquired. The question arose as to whether the plaintiff was entitled for the amount of compensation received in the land acquisition proceedings or was .
entitled only to the refund of the earnest money. The High Court in the above case has modified the decree of the specific performance of the contract with a decree for a realisation of compensation payable in lieu of acquisition. In para 13 of the judgment, the directions [Nathu Singh v. Jagdish Singh, 1991 SCC OnLine All 273: AIR 1992 All 174] of the High Court were extracted which is to of the following effect: (Jagdish Singh case [Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647], SCC pp. 652-53, para 13) "13. The High Court issued these consequential rt directions:
'If the decree for specific performance of a contract in question is found incapable of being executed due to acquisition of subject land, the decree shall stand suitably substituted by a decree for the realisation of compensation payable in lieu thereof as may be or have been determined under the relevant Act and the plaintiff shall have a right to recover such compensation together with solatium and interest due thereon. The plaintiff shall have a right to recover it from the defendant if the defendant has already realised these amounts and in that event, the defendant shall be further liable to pay interest @ 12 per cent from the date of realisation by him to the date of payment on the entire amount realised in respect of the disputed land.' "
13. In the above context, this Court proceeded to examine the ambit and scope of Section 21 of the Specific Relief Act. This Court came to the opinion that when the contract has become impossible with no fault of the plaintiff, Section 21 enables the Court to award compensation in lieu of the specific performance. Paras 24, 29 and 30 are extracted below: (Jagdish Singh ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 34 case [Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647], SCC pp. 656-57) "24. When the plaintiff by his option has made specific performance impossible, Section 21 does not entitle him to seek damages. That position is common to both Section 2 of Lord Cairn's Act, 1858 .
and Section 21 of the Specific Relief Act, 1963. But in Indian law where the contract, for no fault of the plaintiff, becomes impossible of performance Section 21 enables the award of compensation in lieu and substitution of specific performance. *** of
29. In the present case there is no difficulty in assessing the quantum of the compensation. That is ascertainable with reference to the determination of the market value in the land acquisition proceedings. rt The compensation awarded may safely be taken to be the measure of damages subject, of course, to the deduction therefrom of the monetary value of the services, time and energy expended by the appellant in pursuing the claims of compensation and the expenditure incurred by him in the litigation culminating in the award.
30. We accordingly confirm the finding of the High Court that the respondent was willing and ready to perform the contract and that it was the appellant who was in breach. However, in substitution of the decree for specific performance, we make a decree for compensation, equivalent to the amount of the land acquisition compensation awarded for the suit lands together with solatium and accrued interest, less a sum of ₹ 1,50,000 (one lakh fifty thousand only) which, by a rough and ready estimate, we quantify as the amount to be paid to the appellant in respect of his services, time and money expended in pursuing the legal claims for compensation."
14. This Court in Kanshi Ram v. Om Prakash Jawal [Kanshi Ram v. Om Prakash Jawal, (1996) 4 SCC 593] has again in the context of a suit for specific performance of the contract held that (SCC p. 595, para 5) granting decree for specific performance of the contract is one of the ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 35 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.
15. From materials brought on record, it does appear compensation was determined in favour of Defendant 6 .
to the extent of the amount of ₹ 10,03,743. It also appears that compensation towards shops was also determined. The name of Defendant 6 being recorded in the revenue records, and compensation was determined in its favour.
In view of the judgment and decree of courts below whereby the gift deed dated 8-7-1991 has been declared void, Defendant 6 is left with no right in the suit land and of is clearly not entitled to receive any amount consequent to the acquisition of the suit land. It has not come on the record as to whether compensation consequent to the acquisition of the suit land has been received by rt Defendant 6 (Respondent 1 to the appeal) or not."
35. In the present case, no material was brought on record to assess the exact compensation provided regarding the suit land.
Dwarka Singh (DW2) proved the copy of the award (Ext. DW2/A) and payment voucher (Ext. DW2/B). The copy of the award shows that compensation was determined @₹2660 per square meter and an amount of ₹11,12,279/- was paid for 418.15 square meters. The suit land measures 157.52 square meters and will be worth ₹4,19,003/- @ ₹2660 per square meter, hence, the compensation of ₹5,00,000/- awarded by learned First Appellate Court is more than the market value of the land assessed during the acquisition.
Moreover, it is to be noticed that this amount is in addition to ₹25,000/- awarded as compensation and no amount is deducted towards the efforts made by defendant no. 1 for pursuing the ::: Downloaded on - 22/11/2023 20:33:00 :::CIS 36 litigation; hence, the plea that inadequate compensation was awarded by the learned First Appellate Court is not acceptable.
36. Significantly, the plaintiff did not provide any evidence .
to prove the market value of the land. No sale deed executed by any person showing the market value of the similar land in the locality was proved; therefore, the learned Courts below cannot be faulted for determining the compensation as per the amount of assessed by the Land Acquisition Collector.
37. Thus, there was no misappreciation of the pleadings rt and evidence. The specific performance could not have been granted when the land was acquired by the State and more than adequate compensation was awarded to the plaintiff. Hence, the appeal does not involve any substantial question of law and the same cannot be admitted on the proposed substantial questions of law.
Final Order:
38. In view of the above, the present appeal fails and the same is dismissed. Pending miscellaneous applications, if any, also stand disposed of.
(Rakesh Kainthla) Judge 22nd November 2023 (saurav pathania) ::: Downloaded on - 22/11/2023 20:33:00 :::CIS