REPORABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8102 OF 2011
(arising out of SLP(C)No.21139 of 2007)
PRAKASH CHANDRA … APPELLANT
Versus
NARAYAN … RESPONDENT
J U D G M E N T
SUDHANSU JYOTI MUKHOPADHAYA, J.
Leave was granted on 22.9.2011.
2. This appeal has been preferred by the appellant-plaintiff
against the judgment and order dated 6th March, 2007 passed by the
learned Single Judge of the High Court of Judicature of Mumbai, Nagpur
Bench in Second Appeal No.198 of 2006, whereby the judgment and decree
passed by the District Court, Pandharkawada (Kelapur) in Regular Civil
Appeal No.129 of 2002 came to be confirmed.
3. The first appellate court by the aforesaid judgment and decree
reversed the judgment and decree dated 23rd September, 1998 and 3rd
October, 1998 in Special Civil Suit No.175 of 1997 which was preferred
by the appellant-plaintiff for specific performance.
4. The suit in question was filed by the appellant against the
respondent for specific performance of agreement for sale dated 18th
April, 1996 in respect of agricultural land admeasuring 1 H. 61Are. at
a price of Rs.51,000/-. It was the case of the appellant that he had
paid the earnest money of Rs.39,000/- while the balance amount was to
be paid on the date of execution of the sale deed which was fixed for
18th March, 2007, but despite the appellant being present for the
purpose of completion of the formalities of agreement for sale, the
respondent did not turn up. Consequently, the appellant purchased a
stamp paper of Rs.100/- on 18th March, 1997 and issued a notice to the
respondent on 2nd April, 1997 and called upon him to execute the sale
deed dated 21st April, 1997 but a false reply was given by the
respondent on 15th April, 1997. As the respondent refused to perform
his part of the contract, the appellant filed Special Civil Suit No.175
of 1997 for specific performance of contract, and alternatively to
refund the earnest money.
5. The respondent contested the case claiming that his signatures
were obtained on a blank stamp paper for the outstanding money of
Rs.12,000/- for the purchase of fertilizers and clothes etc. The trial
court by its judgment dated 23rd September, 1998 and decree dated 3rd
October, 1998 decreed the suit for specific performance.
6. On appreciation of the material on record, the trial court held
that the appellant had proved that the respondent agreed to sell the
suit land for consideration of Rs.51,000/- by executing an agreement
for sale on 18th April, 1996 and that he had paid earnest money of
Rs.39,000/- to the respondent. The respondent failed to prove that he
had signed on a blank Stamp paper in the presence of Vithal Sitaram
Thaori. On the other hand there is sufficient material on record to
show that the appellant was ready and willing to perform his part of
the contract and, therefore, the appellant is entitled to the decree
for specific performance of contract while the alternative prayer needs
no consideration. The respondent is not entitled to compensatory cost.
All the six issues were decided in favour of the appellant and against
the respondent with a direction to the respondent to execute the sale
deed on or before 31st August, 1998 in respect of the suit land i.e.
southern portion of the land admeasuring 1 H 61Are having Gat No.1/2
situated at village Khadki on payment of the balance consideration of
Rs.12,000/-. The Court also directed the respondent to deliver the
possession of the suit land to the appellant with the clear condition
that in the event of the respondent failing to execute the sale deed on
or before the fixed date, the appellant will deposit the balance amount
in the Court to get the sale deed executed.
7. The respondent took up the matter vide first appeal before the
District Court. The following questions were framed for determination:
1) Whether the defendant has agreed to sell and the plaintiff has
agreed to purchase the suit property for consideration of
Rs.51,000/- on 18.4.1996?
2) Whether the defendant has signed Ex.25 blank Stamp paper in
lieu of the credit amount of the plaintiff towards the clothes
and fertilizers?
3) Whether the plaintiff was and is ready and willing to perform
his part of the contract?
4) Whether the defendant has failed to perform his part of the
contract?
5) Whether it is necessary to interfere with the impugned judgment and
decree?
6) What order and relief?”
8. The first appellate court on hearing the parties and on
appreciation of the material on record answered all the issues in
favour of the appellant but reversed the judgment and decree thereby
allowing discretion in favour of the respondent by directing him to pay
the earnest money with interest.
Referring Clause (b) of sub-section (2) of Section 20 of
Specific Relief Act, the First Appellate Court held as follows:
“20. Having regard to the facts on the record, it is evident
from the evidence of the defendant and also an admitted fact that
the defendant was having the only suit land and he would be
landless if the decree would be granted for specific performance.
On the other hand, the plaintiff is having landed properties and
all the riches including the business of clothes and fertilizers.
Therefore these aspects are not considered by the learned lower
court, while exercising the discretion, in granting the decree for
specific performance. The amount of Rs.12,000/- were not paid or
deposited to the defendant’s favour since the agreement for sale
till the date of decree. Therefore having regard to all these
circumstances and facts on the record, this Court is of the
opinion that this Court should interfere in the discretion
exercised by the learned lower court while granting the decree for
specific performance. The hardship would be, in all probabilities
and facts and circumstances caused to the defendant than the
plaintiff. In the result, the court is of the opinion that
alternative relief for refund of the earnest amount of Rs.39,000/-
to the plaintiff by the defendant, would meet the ends of justice.
The same can be utilized and exercised by awarding the damages by
way of an interest on the earnest amount……..”
9. When the matter was taken up in the second appeal, the learned
Single Judge vide impugned judgment dated 6th March, 2007 dismissed the
second appeal on the ground that the first appellate court has
factually found that the respondent would be landless as against the
appellant who is having various businesses as well.
10. According to the learned counsel for the appellant, there was
no impediment in according a relief of specific performance
particularly when all the issues have been decided in favour of the
appellant and against the respondent. He further submitted that, in
the absence of any defence taken by the respondent that he would become
landless if the relief for specific performance is granted and in
absence of any material on record, the finding of the first appellate
court cannot be sustained.
11. Learned counsel for the appellant referring to the cross-
examination of the respondent contended that the respondent would not
become landless as is evident from the fact that after the agreement
reached with the appellant, he sold 4 acres of land to one Dilip
Karekar. Even thereafter the respondent is having 2.25 H of cultivable
land apart from 0.88 H uncultivable land.
12. According to the learned counsel for the respondent, as
hardship would be caused to the respondent, the appellate court
rightly held that it would sub-serve the ends of justice if the entire
amount of earnest money received by the respondent is directed to be
paid back to appellant along with interest.
13. We have heard the learned counsel for the parties. The learned
counsel appearing on either side elaborately took us through the
findings of the trial court, the first appellate court as well as the
High Court in second appeal. From the materials on record and the
agreement dated 18th April, 1996 and from the judgment of the trial
court and the first appellate court, it is evident that no issue
relating to the hardship of the respondent was framed. In a case of
Specific performance, hardship is a good defence provided such defence
is taken by the defendant and evidence in support of such defence is
brought on record, while in this case no such defence was taken by the
respondent and no evidence was brought on record in its support.
14. The appellant has specifically pleaded that the respondent
possessed agricultural land admeasuring 5 H. 76.R. in Gat No. ½, which
has not been denied by the respondent. The appellant proved that an
agreement was reached between the parties on 18th April, 1996 to sell
southern portion of land admeasuring 1.61 H. by making an east-west
boundary for the consideration of Rs. 51,000/- for which appellant had
paid Rs.39,000/- to the respondent as earnest money. The appellant
also proved that he was always ready and willing to perform his part of
the contract. These issues were decided in favour of the appellant.
During cross-examination the respondent stated that he sold only 4
acres of land during the pendency of the case, thereby remaining 2.25 H
cultivable and 0.88 H uncultivable land is still available with the
respondent.
15. The question as to whether the grant of relief for specific
performance will cause hardship to the defendant within the meaning of
Clause (b) of sub-section (2) of Section 20 of the Specific Relief Act,
1963, being a question of fact, the first appellate court without
framing such an issue ought not to have reversed the finding of the
trial court while concurring with it on all other issues with regard to
the appellant’s entitlement to relief for specific performance of
contract.
The High Court in the second appeal failed to notice that the
respondent had not taken any defence of hardship and no such issue was
framed and in absence of any such evidence on record, the first
appellate court held that he would be landless should the decree for
specific performance be granted.
16. For the reasons stated above, we are of the view that the
appellant is entitled to the specific performance of agreement for
sale, as ordered and decreed by the trial court. The appeal is
accordingly allowed. The order passed by the High Court in the second
appeal and the judgment and decree passed by the first appellate court
are set aside. The judgment and decree passed by the Trial Court is
affirmed. The appellant is allowed two months to pay the balance
consideration to the respondents. If the respondent fails to execute
the sale deed, such amount will be deposited in the trial court which
will ensure the execution of the sale deed as per its judgment and
decree.
……………………………………………….J.
( G.S. SINGHVI )
……………………………………………….J.
( SUDHANSU JYOTI MUKHOPADHAYA)
NEW DELHI,
APRIL 23, 2012.
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