Gujarat High Court
Pankajkumar Vanechand Meghani vs Majumdar And Associates, A Partnership ... on 31 March, 2021
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
C/SA/116/2020 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SECOND APPEAL NO. 116 of 2020
With
CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of 2020
In R/SECOND APPEAL NO. 116 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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PANKAJKUMAR VANECHAND MEGHANI
Versus
MAJUMDAR AND ASSOCIATES, A PARTNERSHIP FIRM
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Appearance:
MR DHAVAL D VYAS(3225) for the Appellant(s) No. 1,2
for the Respondent(s) No. 1
MR AMAR N BHATT(160) for the Respondent(s) No. 2
MR AS VAKIL(962) for the Respondent(s) No. 3
MR KUNAL P VAISHNAV(5111) for the Respondent(s) No. 4
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CORAM: HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 31/03/2021
ORAL JUDGMENT
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1. The appellants have filed present Second Appeal under Section 100 of the Civil Procedure Code, 1908 challenging the common judgment and decree dated 18.11.2019 passed by the 8th Additional District Judge, Surat in Appeal Nos. 82, 83 and 84 of 2006, in so far as the impugned judgment is passed in Regular Civil Appeal No.82 of 2006 of the present Appellants. By the impugned judgment, the Appellate Court has partly allowed the Appellants' Regular Civil Appeal No.82 of 2006 and has directed the respondentsdefendants to pay an amount of Rs.1,20,000/ along with interest at the rate of 12% per annum from the date of filing of the Suit till realisation. By the impugned judgment, the Appellate Court has granted the appellantsplaintiffs' alternative prayer of seeking refund of Rs.11,000/ towards earnest money plus a sum of Rs,1,09,999/ towards compensation totaling to Rs.1,20,000/. By the present Page 2 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Second Appeal, the appellantsplaintiffs are pursuing the relief of specific performance of the alleged contract which the Trial Court, as well as the Appellate Court, have refused in their discretion.
2. Brief facts, leading to institution of the present appeal are as under : 2.1 The respondentsdefendants are the owners of the land, bearing Final Plot No. 279 of Ward No. 13 [having Entry No. 300A]. They decided to construct appartments, named as "Sundaram" out of which, Flat No. 1, admeasuring about 1880 sqft was agreed to be sold to the appellants herein for an aggregate sum of Rs 1,16,560/ on 18th October 1978 and against which, the appellantsplaintiffs paid consideration of Rs.11,000/ which was receipted on 16.10.1978, 18.10.1978 and 28.12.1978 by the defendants. The defendants had assured the Plaintiffs that the Page 3 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT construction of good quality flats shall be completed as early as possible. The land was proposed to be acquired U/s 294D by the Income Tax Department. After being aware that the acquisition was to be dropped, the Defendants therefore sent back Rs.11000/ citing impossibility of performance vide letter dated 03.10.1979. The refusal was not acquiesced by the plaintiffs and the cheque was returned to the defendants. Thereafter, the proposed acquisition of the land was dropped which was communicated by the IT Department to the Defendants vide letter dated 15.11.1979 (Exh. 116). The plaintiffs therefore issued notice dated 24.12.1979 calling upon the Defendants to specifically perform the agreement with willingness that in the eventuality of any impediments in Page 4 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT completing construction, the plaintiffs were prepared to bear reasonable expenses and complete the construction. The Defendants responded vide letter dated 01.02.1980 declining to perform the Agreement.
3. The appellantsplaintiffs had filed Special Civil Suit No.163 of 1981 for specific performance of an agreement dated October, 1978 with the following prayers: "1) Kindly pass an order to draw decree of Specific Performance directing to handover the construction of the Sundaram Apartment to the plaintiff or to sell the constructed flat no.1 admeasuring 1880 Sq. Feet after constructing Sundaram Apartments on the land registered vide Mutation Entry No.300A of Ward No.13, Final Plot No.279 of T.P.Scheme near Page 5 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Dhavalgiri in Athwalines of Surat City;
In the alternative
2. Kindly grant the cost to the plaintiffs from the respondents in respect of the earnest money amount of Rs.500/ paid by the plaintiff no.1 and Rs.500/ paid by the plaintiff no.2 and the sale consideration amount of Rs.5000/ taken by the respondents from the plaintiff no.1 and Rs.5000/ taken by the respondents from the plaintiff no.2 and Rs.1,09,999/ towards damages, aggregating to Rs.1,20,000/ with compounding interest @ 12% accrued thereon.
3. Kindly grant the entire cost of the suit from respondents to the plaintiff."
The appellantsplaintiffs had paid Rs.500/ each on 18.10.1978 and Rs.5000/ Page 6 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT each on 26.12.1978 and 28.12.1978 respectively aggregating to Rs.11,000/ to the dependents. The receipts mention Flat No.1, area of 1880 sq. ft. and the total price of Rs.1,16,560/. The Trial Court has framed the issue as to whether plaintiff proves that there was a contract with the defendant to sell suit flats ? The Trial Court has answered the said issue in 'negative' and held that there was no privity of contract. The case of the appellantsplaintiffs was based on oral agreement. Except the receipts, there is no other document evidencing any agreement between the parties even according to the appellantsplaintiffs. The Trial Court has held that under Section 14 of the Specific Relief Act, 1963 no specific performance can be granted as well as rejected the prayer for compensation. From the deposition of the plaintiff - Pankajkumar Vanechand Meghani at Ex.53 it is clearly Page 7 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT established that plaintiff has paid Rs.11,000/ by cheque and, therefore, Trial Court has held that appellantsplaintiffs are entitled to recovery Rs.11,000/ only from the respondentsdefendants with interest at 12% per annum from the date of the suit till realization.
4. Being aggrieved and dissatisfied with the judgment and decree of the Trial Court the original plaintiffs filed Regular Civil Appeals No.82, 83 and 84 of 2006. The present challenge is qua the Regular Civil Appeal No.82 of 2006. The following questions of law came to be framed by the Appellate Court for determination of the appeal :
(i) Wheather there was a concluded contract between the plaintiffs and the defendants?
(ii) Whether the plaintiffs have been ready and willing to perform their part of the contract ?
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(iii) Whether the Special Civil Suit
No.574/89 (Regular Civil Suit No.876/80)
was barred by limitation ?
(iv) Whether the plaintiffs/appellants are entitled to specific performance of the contract or in the alternative to get damages and if entitled to damages, then to what extent ?
(v) Whether the judgment passed by the Ld. Trial Court is liable to be interfered with ?
(vi) What order ?
The Appellate Court in the
Judgment and Decree dated 18.11.2019
has answered the issue nos.1, 2 and 5 in affirmative, issue no.3 in negative and whilst issue no.4 was held partly in affirmative. The Appellate Court has held that there was a concluded contract between the parties and Page 9 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT further held that the contract which requires supervision for its performance, the Court cannot supervise and it is not enforceable contract. The Appellate Court held that the appellantsplaintiffs are not entitled to specific performance of the contract but in the alternative are entitled to get damages of Rs. 1,20,000/ alongwith interest @ 12% p.a. from the date of filing of the suit till the date of realization of the amount. The Appellate Court by judgment and order dated 18.11.2019 passed the following order : "(1) The present Regular Civil Appeals are hereby partly allowed with costs.
(2)The Common Judgment passed on 22.02.1996 by the Ld. 3rd Joint Civil Judge (S.D), Surat, in Special Civil Page 10 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Suit No.l63/81, Special Civil Suit 20.177/81 and Special Civil Suit No.574/89, is hereby modified. (3)Respondents are directed to pay to the plaintiffs /appellants in Special Civil Suit No.163/81. Special Civil Suit no.177/81 and Special Civil Suit No.574/89 an amount of Rs.
1,20,000/alongwith interest @ 12% p.a. from the date of filing of the suit till the date of realization of the amount. It is made clear that in Special Civil Suit No.574/89, the date of filing of the suit shall be considered as of the earlier Suit No.876/80."
5. Feeling aggrieved and dissatisfied with the judgment and decree dated 18.11.2019 passed by the learned 8th Additional District Judge, Surat (hereinafter referred to as 'the Page 11 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT learned Appellate Court Judge') in Regular Civil Appeal No.82 of 2006, 83 of 2006 and 84 of 2006, the appellants have preferred captioned second appeal, raising following substantial questions of law:
1. Having held that the plaintiffs were more than ready and willing to perform a concluded contract, were the Courts justified in refusing decree for specific performance?
2. Were the Courts justified in passing the decree for Rs.120000/ along with interest at the rate of 12% only which placed the defendants to infer advantage?
3. Were the Courts justified in not compensating the plaintiffs proportionate to the present market value of the suit property inter alia of the decree of specific performance?
6. Heard Mr. Dhaval D. Vyas, learned advocate for the appellants, Mr. Amar N. Bhatt, learned advocate on caveat for the respondent no.2 and Mr. A.S. Vakil, learned Page 12 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT advocate for the respondent no.3.
7. Learned counsel Shri Dhaval D Vyas appearing for the appellants contended that the Courts below have committed a substantial error of law in rejecting the claim of the appellantsplaintiffs for specific performance of the contract between the parties. He contended that the learned Appellate Judge has committed an error in not granting a decree for specific performance by holding though that there was a concluded contract between the plaintiffs and the defendants, the plaintiffs were not ready and willing to perform their part of the contract. He further contended that the Appellate Court has failed to appreciate that when it has been established that there was a concluded contract between the parties, and when the plaintiffs were ready and willing to perform their respective part of the contract and even more, have shown Page 13 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT their willingness to spend for the construction, if the defendants were not in a position to raise construction; as per the agreement, the Civil Court was bound to pass a decree for specific performance, when the equitable considerations are all in favour of the appellantsplaintiffs. Learned Counsel for the appellants further contended that the learned Appellate Judge was not justified in restricting direction to the defendants to pay a sum of Rs.1,20,000/ alongwith interest @ 12% per annum from the date of filing of the suit, till its realization. He vehemently submitted that the Court below has committed serious substantial error of law in not passing the decree for specific performance of contract on the mere assumption of there being some objection/restriction from the Income Tax Department, which was nowhere in the picture during the pendency of the proceedings. He added that the Civil Court could have in Page 14 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT such eventuality passed a conditional decree for specific performance, subject to removal of objections; if there being any. However, the Court was not justified in refusing the decree for specific performance of contract without considering the decision of Hon'ble Supreme Court, rendered in the case of Popatji Babji Thakore & Ors. vs. Manubhai Chimanlal Shah and Ors., reported in (2009) 1 G.L.H. 302. He has relied upon the decisions rendered in case of Motilal Jain vs. Smt. Ramdashi Devi reported in AIR 2000 SC 2408, in case of State Bank of India and Ors. vs. S.N. Goyal reported in AIR 2008 SC 2594 and in case of Pratap Lakshman Muchandi and Ors. Vs. Shamlal Uddavadas Wadhwa and Ors. reported in AIR 2008 SC 1378. Learned advocate for the appellants further relied upon the amended section 14 of the Specific Relief Act, 1963.
8. Mr. Vyas has submitted that findings Page 15 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT of the Appellate Court has been arrived at taking into consideration the unamended Sections 10 and 20 of the Specific Relief Act, 1963 which reads as under : "Section 10. Cases in which specific performance of contract enforceable.-- Except as otherwise provided in this Chapter, the specific performance of any contract may , in the discretion of the court , be enforced--
(a) when there exists no standard for ascertaining actual damage caused by the nonperformance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non performance would not afford adequate relief.
Explanation.--Unless and until the contrary is proved, the court shall presume--
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases:--
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff.
Section 20: Discretion as to decreeing specific performance .--
(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not Page 16 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT 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; or
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.
Explanation 1.--Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2.-- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.
(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party ."
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9. He has further submitted that both the above provisions conferring discretion in Courts to decree a specific performance of contract, have been amended by Act No.18 of 2018, which reads as under : "Section 10. Specific purpose in respect of contracts: the specific performance of a contract shall be enforce by the Court subject to the provisions contained in subsection (2) of Section 11, Section 14 and Section
16. Section 20: Substituted performance of contract:
(1) Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872, and, except as otherwise agreed upon by the parties, where the contract is broken due to nonperformance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.
(2) No substituted performance of contract under subsection (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may Page 18 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT get the same performed by a third party or by his own agency: Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under subsection (1) unless he has got the contract performed through a third party or by his own agency. (3) Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub section (1), he shall not be entitled to claim relief of specific performance against the party in breach. (4) Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach ."
10. He has submitted that the amended provisions leave no discretion in the Court but to direct specific performance of the agreement. He submitted that the Hon'ble Supreme Court had an occasion to interpret the amended provisions whilst considering the plea for enforcement of an agreement which was executed prior to the amendment. In support of this submission he relied on the decision in the case of B. Santoshamma and Ors. vs. Page 19 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT D. Sarala and Ors., reported in Manu/SC/0698/2020. Lastly he has prayed that the appeal may be admitted for decision on the questions of law.
11. Per contra, Mr. Amar N. Bhatt, Ld. Advocate for the respondent No.2 has submitted that the lower Appellate Court held that there was a concluded contract between the parties, that the appellants plaintiffs are ready and willing to perform their part of the contract. However, thereafter it is held that the appellants plaintiffs are not entitled to specific performance of the contract but in the alternative are entitled to get damages and the damages that has been awarded are to the extent prayed for. Thus, the real and the limited question as such in the present Second Appeal is whether the lower Appellate Court was justified in refusing specific performance for the reasons stated by the Page 20 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT lower Appellate Court in paragraphs 32, 33, 34, 35, 36 and 37. The discretion is exercised based on the facts and considering the totality of circumstances. The lower Appellate in paragraph 32 has clearly observed that, "the nature of the contract is such that it requires continuous supervision for its performance which cannot be supervised by the Court. The agreement between the parties was oral and as such the minute details and the terms of mode of execution of contract were not reduced in writing and in those circumstances the contract is not capable enough as to direct specific performance of the same". He has submitted that the refusal of the lower Appellate Court is essentially on appreciation of facts and evidence on record and the same cannot in any manner involve a question of law, much less a substantial question of law for this Court to exercise its jurisdiction under Section 100 of the Page 21 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Civil Procedure Code.
12. He has submitted that it will be inequitable to grant a decree of specific performance where it 1s clear that the appellants plaintiffs will have an unfair advantage over the respondents defendants. The lower Appellate Court has clearly explained the reasons for not granting a decree for specific performance and instead granted a decree of recovery of money. The jurisdiction to grant decree of specific performance is discretionary and Section 20(2) lists the cases in which the Court may properly exercise discretion not to grant decree of specific performance. The respondents defendants most humbly submit that it would only be prudent to uphold the lower Appellate Courts judgment not to decree specific performance more particularly so when the plaintiffs of the other two Suits have already unconditionally Page 22 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT accepted the lower Appellate Courts judgment and decree by accepting the entire decretal amount paid over by the respondents - defendants.
13. He has further submitted that the alternate prayer for refund of earnest money deposit and compensation is granted in full. It is in view of the aforesaid that the respondent defendants submit that both the Courts i.e. the Trial Court and the lower Appellate Court have concurrently refused specific performance. The decision of not granting specific performance is "concurrent in nature".
14. He has submitted that the questions raised by the appellants at page (F) of the memo of second appeal cannot at all be construed to be questions of law. In support of his submission, he has placed reliance upon the decision rendered in case of Page 23 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Gurvachan Kaur and Others Vs. Salikram through lrs. reported in (2010) 15 SCC 530 wherein the Hon'ble Supreme Court has held that in para 10, which reads as under:
"10. It is settled law that in exercise of power under Section 100 of the Code of Civil Procedure, the High Court cannot interfere with the finding of fact recorded by the first appellate court which is the final court of fact, unless the same is found to be perverse. This being the position, it must be recorded by the first appellate court on the issues of existence of landlordtenant relationship between the plaintiff and the defendant and default committed by the latter in payment of rent."
15. He further placed reliance upon the decision rendered in case of Damodar Lal vs. Sohan Devi and Others reported in (2016) 3 SCC 78 and the decision rendered in case of Veerayee Ammal vs. Senni Ammal reported in Page 24 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT (2002) 1 SCC 134. After relying upon the above decisions, he submitted that the impugned judgment of the lower appellate Court has applied settled principles and decisions and therefore, no interference is required to be called for in the second appeal. The provision of Section 100 of CPC restricting Second Appeal only on the substantial questions of law is based on the public policy expressed maxim 'interest republican ut sit finis litium' meaning that it is in the interest of the State that there must be an end to litigation. There is no perversity of any kind demonstrated by the lower appellate Court in the matter of appreciation of evidence. It is only after appreciation of evidence, that the lower appellate Court has observed that the performance involved the performance of a continuous duty which the Court cannot supervise and hence the decree of specific performance is refused. Such appreciation of Page 25 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT evidence cannot be termed as 'perverse' much less would warrant any exercise of powers under Section 100 of the CPC. He further submitted that there are concurrent findings of the courts below in so far as prayers of the plaintiffs for specific performance is concerned. Relying on the issues framed and decided by the trial Court and reappreciated by the lower appellate Court, he submitted that the courts below have rightly held that the appellantsplaintiffs have failed to prove that there was concluded contract to sell suit flats, which can be enforced. He also submitted that it will be inequitable to grant a decree of specific performance where it is clear that the appellants plaintiffs will have an unfair advantage over the respondentsdefendants. Reliance is placed upon the decisions rendered in case of Bellachi by lrs. vs. Pakeeran reported in (2009) 12 SCC 95, in case of K. Nanjappa by legal representatives vs. R.A. Hameed @ Page 26 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Ameersab by legal representatives and another reported in (2016) 1 SCC 762, in case of Shamsher singh and others vs. Rajinder kumar and others reported in (2015) 5 SCC 531 and in case of State of H.P. And another vs. Akshara nand by lrs. and others reported in (2000) 3 SCC 661. It is submitted that therefore no substantial questions of law arise in this second appeal. There was no interim relief granted or operating during the pendency of the special civil suit or regular civil appeal. Therefore, the question of granting any interim relief as prayed for in the civil application at any rate does not arise. The second appeal and the civil application may therefore, be dismissed.
16. I have heard learned advocate for the respective parties. I have gone through the submissions advanced by the learned advocates for both the sides. I have also gone through Page 27 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT the orders passed by the learned trial Court and learned Appellate Court as well as the documents on record.
17. The Trial Court has by judgment and decree dated 22.2.1996 partly allowed the suit and granted compensation of Rs.11,000/ to be recovered from the original defendants with interest at the rate of 12% per annum from the date of suit till realization. The original plaintiffs preferred Appeal against the said judgment and decree before the Appellate Court. The Appellate Court has partly allowed the Regular Civil Appeal directing the respondentsdefendants to pay to the original plaintiffs/appellants in Special Civil Suit No.163/81, Special Civil Suit no.177/81 and Special Civil Suit No.574/89 an amount of Rs.1,20,000/ alongwith interest @ 12% p.a. from the date of filing of the suit till the date of realization of the amount.
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C/SA/116/2020 JUDGMENT 18. The present challenge is qua the
Regular Civil Appeal No.82 of 2006. This Court is in agreement with the view taken by the learned Courts below in view of the following:
(a) The Appellate Court has accepted that there is a contract between the parties, however it has held that the quality and details of construction and material was not mutually agreed upon and was dependent only on gentleman's promise of the parties. The test was undertaken by the learned Appellate Court to see if it would be sufficient enough for directing specific performance of contract. The Appellate Court examined the facts to find out as to whether it would be sufficient enough for granting the decree for specific performance of the contract. The learned Appellate Court considered Section 14 of the Specific Relief Act and came to a conclusion that the contract which requires Page 29 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT continuous supervision for its performance which Court cannot specifically enforced by the Court. Subsection 3 of the section is exception to the said rule. However, in order to classify it into the exception, it has to be seen that the building or other work is precisely and sufficiently stated in the terms of the contract between the parties. Further, the plaintiffs must have a substantial interest in the performance of the contract, which could not be a compensated in terms of money. Admittedly, in the present case, the terms regarding the quality and type of construction were not mutually settled between the parties even as per the case of the plaintiffs. Even the plaintiffs had not invested substantial amount of the cost of the project in the project and only paid 5% to 10% of the consideration amount. The nature of the contract is such that it requires continuous supervision for its performance, which cannot Page 30 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT be supervised by the Court. The agreement between the parties was oral and as such the minute details and the terms of mode of execution of contract were not reduced into writing and in those circumstances the contract is not capable enough so as to direct specific performance of the same. Further, present is not the case where the construction had started and was left in between and the completion of the same is to be directed. In the present case, even the plan for construction of flats was not got sanctioned from the SMC. The judgments relied upon by the Ld. Counsel for the appellants in this regard are not applicable to the facts of the present case as in those cases construction of flats was not in question and only land was to be sold.
(b) It is well settled law that the grant of decree of specific performance is the discretion of the court and it is always Page 31 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT not necessary to grant specific performance simply because it is legal to do so. Ordinarily the plaintiff is not to be denied ~ the relief of specific performance only on account of phenomenal the price of property during the pendency of the application but still that it is relevant factor to be taken into consideration while refusing the decree of specific performance specifically than the plaintiff has not paid a considerable amount toward the sale consideration and only paid 5% or 10% of the consideration amount as on the contrary, plaintiff would also have invested the remaining amount somewhere else and would have reaped the benefits of the phenomenal increase in prices of the properties in the vicinity. Furthermore, if other factor beside would also weighs against the grant of specific performance of contract the court may refuse the. same and still award the compensation amount as stipulated under Section 21 of the Specific Relief Act. Page 32 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022
C/SA/116/2020 JUDGMENT As per sub section 4 of the said section, the amount of compensation shall 'be determined in accordance with the principles specified under Section 17 of the Indian Contract Act, 1872. Further sub Section 5 stipulated that such compensation shall not be awarded unless claimed by the plaintiff in his plaint.
(c) Once the specific performance of the contract is declined, it has to be seen as to what would be the quantum of the damages or compensation, which could be awarded in favour of appellants in lieu of specific performance of contract. In the matter at hand, suit land was valued at around Rs.60,000/ during the period when the agreement was entered into between the parties as per the valuation before of the plot filed by the respondent before the Income Tax Department. Learned Counsel for the appellants has filed the current circle rates of the properties in the area as Page 33 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Rs.36,000/ per sqr. Mtr. In the letter dated 15.11.1979 of the Income Tax department, the total area of the suit land was mentioned as 832 sq.yards which would be around 690 sq. mtrs. Accordingly, as per the circle rates current valuation of the subject land is around Rs.2,48,40,000/ i.e. almost four hundred times more than the valuation of the property as was at the time of booking of the flats in the project on the aforesaid property. The plaintiff/appellants have claimed a compensation of Rs.1,20,000/ alongwith interest @ 12% per annum on the same in all the three suits. It is well settled that while deciding compensation, the court should be guided by the principles stipulated under Section 73 of the Indian Contract Act. However, the quantum of the compensation awarded cannot be more than the amount claimed in the plaint. Plaintiffs have paid an amount of Rs.11,000/ in Suit No.163/81, Rs.11,000/ in Suit No.177/81 and Page 34 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT Rs.6,000/ in specific Suit No.574/89. Thus, looking to the multifold increase in prices of the property since the booking of the flats, this Court does not see any reason to grant a lesser compensation than claimed by the appellantplaintiffs in the prayer of the suits filed by them. Accordingly, all the three suits of the plaintiffs are decreed to the extent that the respondents shall pay a compensation of Rs.1,20,000/ alongwith interest @ 12% per annum on the said amount in all the three suits from the date of filing of the suits till the date of realization of the awarded amount.
19. It is well settled that in exercise of power under Section 100 of the Code of Civil Procedure, the High Court cannot interfere with the finding of fact recorded by the first Appellate Court which is the final court of fact, unless the same is found Page 35 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT to be perverse. This Court is in agreement with the findings arrived at by the Courts below that,
(i) The Agreement between the parties was oral and as such the minute details and the terms of mode of execution of contract were not reduced in writing and in those circumstances the contract is not capable enough as to direct specific performance of the same.
(ii) The findings of the Trial Court and Appellate Court being concurrent findings and decree for specific performance being refused and alternative prayer for refund of earnest money deposit and compensation of Rs.1,20,000/ alongwith interest @ 12% p.a. from the date of filing of the suit till the date of realization of the amount is granted.
(iii) The amendment of 2018, exceptions in Section 14(3) are deleted. Section 14(1)(d) has been retained as Section 14(b); a Page 36 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT contract, the performance of which involves the performance of a continuous duty which the Court cannot be supervised. Though in the amendment of 2018 the exception 14(3) are deleted, Section 14(1)(d) even amended, the Specific Relief Act, 2018 will not be helpful to the appellant modifying or interfering with the findings recorded by the Courts below.
(iv) Under Section 20 of the Specific Relief Act, grant of specific performance of contract is discretionary. Though the decree for specific performance is discretionary, yet the court is not bound to grant such a relief merely because it is lawful to do so. But the discretion exercised by the court should not be arbitrary, but sound and reasonable, guided by judicial principles of law and capable of correction by a court of appeal and should be properly exercised keeping in view the settled principles of law Page 37 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT as envisaged in Section 20 of the Act. The jurisdiction of decreeing specific performance is a discretion of the court and it depends upon facts and circumstances of each case. The court would take into consideration circumstances of each case, conduct of the parties, recitals in the Agreement and the circumstances outside the contract have to be seen.
20. The Court is conscious of its limitation while exercising jurisdiction under Section 100 of the Civil Procedure Code. Unless the findings are so perverse, the same cannot be accepted, the Court would not interfere into the same.
21. In view of the above discussion, both the Courts below have appreciated the evidence and came to a conclusion which cannot be faulted with. The Courts below have considered the legal position of law and also Page 38 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022 C/SA/116/2020 JUDGMENT legal position of law post amendment in Specific Relief Act is considered by this Court. In furtherance, findings concurrent in nature this Court is not inclined to interfere with.
22. With the above observations the second appeal is dismissed. Consequently the civil application also stands disposed of.
(VAIBHAVI D. NANAVATI,J) K.K. SAIYED Page 39 of 39 Downloaded on : Thu Jan 13 14:22:37 IST 2022