Allahabad High Court

Ramlata Singh vs Arun Kumar Dubey And Another on 6 August, 2021

Bench: J.J. Munir




HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Court No. - 1
 

 
Case :- SECOND APPEAL No. - 1280 of 2018
 

 
Appellant :- Ramlata Singh
 
Respondent :- Arun Kumar Dubey And Another
 
Counsel for Appellant :- Jitendra Kumar,Ashu Verma
 
Counsel for Respondent :- Ashish Bajpayee,Adya Prasad Tewari,Sheo Shankar Tripathi
 

 
Hon'ble J.J. Munir,J.

1. The moot question involved in this second appeal is : Can specific performance of contract relating to immovable property be arbitrarily refused by the Court?

2. The late Balji Dubey, father of the defendant-respondents, executed a registered agreement to sell, covenanting to transfer by sale land comprising Arazi No. 204 (M), admeasuring 14 biswa and 15 dhur, out of the total area of the plot admeasuring 3 bigha 5 biswa 15 dhur, situate at Mauza Gothaura, Pargana Bhuili, Tehsil Chunar, District Mirzapur, in favour of the plaintiff for a total sale consideration of Rs.30,000/-. An earnest of Rs.15,000/- was paid at the time of contract. The land contracted to be sold as aforesaid, shall hereinafter be referred to as "the suit property". The contract was executed and registered on 29.06.1994. It was covenanted in the suit agreement that the plaintiff would be entitled to call upon the vendor, whenever she wanted the sale deed to be executed in her favour, in terms of the agreement. The plaintiff appears to have called upon Balji a number of times over to execute the sale deed, but he did not discharge his obligations. Pending the unfulfilled promise under the suit agreement, Balji Dubey passed away, leaving behind him, his widow and his sons, Arun Kumar Dubey and Sanjay Kumar Dubey. The plaintiff got a notice served upon the heirs of the late Balji Dubey on 31.12.1996, calling them to come forward and execute a sale deed in terms of the suit agreement. Since that was not done, she instituted Original Suit no.10 of 1997 before the Court of the Civil Judge (Sr. Div.), Mirzapur, praying that a decree for specific performance in terms of the suit agreement be passed in her favour and against the defendant-respondents. In the alternate, relief of refund of the earnest of Rs.15,000/- together with interest at the rate of 2% per month was claimed.

3. The defendant-respondents entered appearance and filed a joint written statement, traversing the plaint allegation. They took the defence that Balji had never executed the suit agreement. The agreement did not bear the signatures or thumb marks of the defendants. The plaintiff had set up an imposter to execute the agreement. Their predecessor-in-title, Balji had not received a penny towards the earnest, mentioned in the suit agreement. The plaintiff was neither ready nor willing to get a sale deed executed in terms of the agreement. The suit is barred by Section 16 of the Specific Relief Act, 1963 (for short "the Act of 1963") as well as the provisions of the U.P. Land Development and Mortgage Act. The plaintiff never served upon the defendants any notice, and, therefore, all allegations regarding service of the notice are baseless. The defendants asked the suit to be dismissed with costs.

4. The Trial Court, upon the pleadings of parties, struck the following issues (translated into English from Hindi vernacular):

(i) Whether the defendants' father, Balji Dubey, had executed the registered agreement to sell dated 29.06.1994 in favour of the plaintiff, covenanting to sell the property in dispute for a sum of Rs.30,000/- and received an earnest of Rs.15,000/- before the Registrar?

(ii) Whether the plaintiff was ever ready and willing to get a sale deed executed and is still ready and willing?

(iii) Whether the suit is barred by Section 20 of the U.P. Land Development and Mortgage Act?

(iv) Relief?

5. The parties went to trial, leading both documentary and oral evidence. The learned Civil Judge (Senior Division), who tried the suit, held that the suit agreement was forged and did not bear Balji Dubey's signatures. It was also held that the suit agreement, being not proved, the question of readiness and willingness was also to be answered against the plaintiff. Issue no.3 was answered in the affirmative in favour of the defendant, holding the suit to be barred by Section 20 of the U.P. Land Development and Mortgage Act. In consequence of the findings recorded on the various issues, the Trial Court dismissed the plaintiff's suit with costs by its judgment and decree dated 20.09.2003. The plaintiff-appellant appealed the decree to the District Judge, Mirzapur vide Civil Appeal no.13 of 2013.

6. The appeal aforesaid was assigned to the Additional District Judge/ Fast Track Court, Mirzapur, before whom, it came up for determination on 04.09.2018. The lower Appellate Court framed two points of determination in accordance with the provisions of Order XLI Rule 31 CPC. These points are (translated into English from Hindi vernacular):

(i) Whether the signatures of Balji Dubey are forged and whether the agreement was not executed by him in favour of the plaintiff?

(ii) Whether failure of the plaintiff, Ramlata Singh to appear in Court, leads to the conclusion that the agreement is not proved and whether an adverse inference on that account is to be raised against the plaintiff?

7. The lower Appellate Court, after a meticulous examination of evidence on record, held that the suit agreement was fully proved by the evidence on record. It was also held that the notice of demand to execute a sale deed was duly served and it was proved that the plaintiff had been ready and willing throughout to get the sale deed executed in her favour in terms of the suit agreement. It was further held that the suit was not at all barred under Section 20 of the U.P. Land Development and Mortgage Act.

8. After returning all findings in favour of the plaintiff-appellant, the lower Appellate Court made a short shrift of the matter to say that though the plaintiff had always been ready and willing to get the sale deed executed, but since she had asked for the alternative relief of refund of earnest, she was entitled to that relief alone. The appeal was, therefore, allowed in the terms that the decree of the Trial Court was set aside, but reversing it, a decree of specific performance was not passed; instead a decree for refund of the earnest in the sum of Rs.15,000/- together with 6% interest was passed.

9. Aggrieved, the present appeal has been instituted.

10. This appeal was admitted to hearing on 17.12.2018 on the following substantial questions of law:

1. Whether, the Court can refuse the main relief of specific performance of contract in suit in spite of finding that the plaintiff had succeeded to prove his/her case?

2. Whether, the Court can refuse or avoid the main relief in the suit for specific performance of contract without assigning any reason?

3. Whether, the Court can grant alternative relief to refund the advance money along with interest in the suit for specific performance of contract without assigning any reason?

11. Heard Mr. Jitendra Kumar, learned Counsel for the plaintiff-appellant and Mr. A.P. Tewari, learned Counsel appearing on behalf of the defendant-respondents.

12. All the three substantial questions of law are interrelated and almost identical in content. These are, therefore, being dealt with and answered together.

13. Mr. Jitendra Kumar, learned Counsel for the appellant points out that the Lower Appellate Court had found, for a fact, that execution of the suit agreement was duly proved. The readiness of the plaintiff-appellant was throughout established, which entitled the appellant, in the opinion of the Lower Appellate Court, to succeed in her suit. In the submission of the learned Counsel, the Lower Appellate Court could not arbitrarily and without assigning any reason, refuse specific performance, by granting the alternate relief of refund of earnest with interest.

14. Mr. Tewari, on the other hand, submits that under Section 20 of the Act 1963, it is open to the Lower Appellate Court, which is the last Court of fact, to exercise its discretion in granting specific performance. He submits that the Lower Appellate Court was well within its jurisdiction to exercise that discretion against the grant of specific performance and instead, order refund of earnest with interest. He emphasizes that the plaintiff-appellant had sought the alternate relief of refund of interest, which empowered the Appellate Court to accept the alternate relief, instead of the principal relief of specific performance.

15. This Court has keenly considered the submissions of the learned Counsel and perused the record.

16. It is true that the Court has discretion to grant specific performance, where it finds for the plaintiff on all the facts in issue and those relevant in a suit for specific performance of contract. But, the discretion to grant or refuse specific performance, cannot be arbitrarily exercised. The foremost index of non-arbitrariness about the order of any Court, or for that matter, even an Authority, is the assignment of reasons for the conclusions reached. A fortiori, howsoever reasonable a premise on which the thought process of a Court is found to reach a particular conclusion, a laconic or cryptic conclusion, bereft of reasons, is inherently arbitrary. Unless the reader of the judgment can know the reasons that weighed with the author to reach his conclusion, arbitrariness would vitiate that order. The requirement of assigning reasons is more onerous in the case of judicial verdicts, rendered by Courts properly so called, or Tribunals, that have trappings of Courts. The power under Section 20 of the Act of 1963 to exercise discretion to grant or refuse specific performance has a number reputed parameters, on which it is exercised, one way or the other. This principle, that the discretion to decree specific performance cannot be arbitrarily exercised, is enumerated in the provisions of Section 20 of the Act of 1963 (as it stood before its amendment by Act no.18 of 2018). It reads:

"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 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 non-performance 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 I.--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 II.--The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff, subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.

(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party."

17. There could still be a number of other factors, on the basis of which, the decision to grant or refuse specific performance, could turn one way or the other. This could be the conduct of the party asking for specific performance or the one resisting it. Specific performance, being an equitable relief, could also be refused on the ground that the plaintiff had not come to Court with clean hands and had suppressed material facts. Likewise, the defendant too could suffer specific performance, because breach of contract being fully proved against him, his conduct prior to commencement of action and during the course of trial disentitle him to the discretion of the Court, granting the alternate relief of refund, instead of specific performance. There could be cases, which are there in ample measure, where phenomenal rise in the price of immovable property have weighed with the Courts in substituting the relief of specific performance by a decree for payment in lump sum of a much higher compensation to the successful plaintiff or requiring the plaintiff to enforce specific performance on payment of a higher sale consideration, rationalized to the contemporary price index. Again, this kind of an adjustment of compensation to the plaintiff or enhanced price to the vendee is not to be ordered, keeping aside relevant factors. These relevant factors could be, whether the delay is attributable to the plaintiff or the defendant; or still more, to none of them, but the judicial process. Sadly, the Lower Appellate Court, while exercising the discretion to refuse specific performance and instead granting the alternate relief of refund with interest, has not done the slightest of this meticulous consideration. At least, not a word has been said in the judgment, that may lead to the interference about a valid exercise of this discretion. It would be imperative here, to extract the short finding recorded by the Lower Appellate Court on the issue in hand. It reads (in Hindi vernacular):

"उपरोक्त विवेचन से स्पष्ट है कि अपीलार्थिनी प्रश्नगत दस्तावेज 32क जो कि वाद का आधार है को सिद्ध करने में सफल रही है। वह प्रश्नगत भूमि पर बैनामा कराने के लिए हमेशा तैयार व रजामन्द रही है, परन्तु प्रतिवादी/ रेस्पान्डेन्ट्स के द्वारा प्रश्नगत भूमि का न तो बैनामा किया गया न ही अपीलार्थिनी द्वारा दी गयी धनराशि को ही अदा किया गया। जब कि वादिनी/ अपीलार्थिनी की अपील स्वीकार किये जाने योग्य है एवं आलोच्य आदेश दिनांकित-20.09.2003, निरस्त किये जाने योग्य है।"

18. In this connection, reference may be made to the decision of a Division Bench of this Court in Tigvijay Singh vs. Ram Autar and another, 2012 (6) AWC 5649. In Tigvijay Singh, it has been held:

"It is an acknowledged legal proposition that a plaintiff can claim more than one relief on the same cause of action. He must claim all; he will otherwise entitle to bring a new suit for omitted relief, unless the omission is for the first time was with leave of the Court. The claim of alternative relief of refund of earnest money along with interest etc. is a usual relief claimed in such suits. The defendant cannot compel a plaintiff to be satisfied by the alternative relief, relief for specific performance of contract to sell instead. It will be travesty of justice if relief for contract to sell is denied on this ground. It is true that discretion has been given to the Court under Section 20 of the Specific Relief Act but the specific performance relief should not be refused arbitrarily. The discretion should be exercised on sound principles of law capable of correction by an appellate court, as laid down by the Apex Court in the case of Lourdu Mari David (supra). It is settled law that the party who seeks to avail of the equitable jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. Here is a case where it was neither found by the trial court nor any material was placed before us by the defendant to show that the plaintiffs has not come to the court with clean hands or they have based their claim on some falsehood. As a matter of fact, the position is otherwise. The defendant has not come to the court with clean hands and has come forward with untrue facts. Refusal of decree for specific performance of contract to sell in such situation would not promote honesty in society."

19. The case in hand and what appears from the finding recorded by the Lower Appellate Court, shows utter breach in observance of the statutory obligation cast upon the Court under Section 20 of the Act of 1963, as it stood prior to its amendment.

20. In view of what has been said hereinabove, substantial no. 1 is answered in the affirmative, in terms that despite the plaintiff succeeding to prove his case of a breach of contract, specific performance may be refused, but the discretion has not to be exercised arbitrarily; it has to be exercised in accordance with Section 20 of the Act of 1963 and other relevant factors reputed under the law. Substantial question of law no.2 is answered in the negative, holding that the Court cannot refuse the relief of specific performance of contract without assigning good and cogent reasons there for. Substantial question no. 3 is also answered in the negative in terms that the alternate relief of refund of earnest, along with interest in a suit for specific performance, cannot be opted by the Court without assigning good and cogent reasons.

21. In the circumstances, there is no alternative but to allow the appeal in part and set aside the impugned judgment and decree passed by the Lower Appellate Court to the extent that it refuses specific performance. The relevant namesake of a finding would also be treated to be nullified. The other findings recorded by the Lower Appellate Court regarding establishment of the plaintiff's case about the validity of the suit agreement, the readiness and willingness and the suit not being barred under Section 20 of the U.P. Land Development and Mortgage Act, are all affirmed. These shall not be reopened. It must also be remarked that there is no cross-appeal preferred by the defendants, questioning the decree for refund with interest or the findings on which it is based. There is, therefore, no occasion for this Court to upset those findings. It is clarified that this Court has not expressed opinion, either way, about the way the Lower Appellate Court, after considering evidence and hearing parties, may exercise its discretion to grant specific performance or opt for the alternative relief. The Lower Appellate Court shall be free to exercise that discretion in accordance with law and after considering the evidence on record.

22. In the result, this appeal succeeds and is allowed in part. The impugned decree passed by the Lower Appellate Court shall stand set aside to the extent alone that it directs refund with interest, instead of specific performance. The appeal shall stand restored to the file of the Lower Appellate Court for determination of the question about the grant of relief of specific performance afresh, after hearing parties and bearing in mind the guidance in this judgment. Costs easy.

23. Let the lower courts records be sent down to the lower Appellate Court at once. Both parties shall appear before the lower Appellate Court on 6th September, 2021.