Pradeep Bhargav vs Ram Pyari Etc.
1991 Latest Caselaw 743 Del

JUDGMENT

D.P. Wadhwa, J.

(1) [ED. facts:-Pffs. & Defts. had entered into an agreement of sale of property on 2.2.87. On 8.3.89, pffs. filed suit for specific performance of the agreement. Single Judge suo moto raised the question whether such a suit was maintainable in view of Art. 300-A of the Constitution and referred the question to a larger Bench. He raised same question in three other similar suits. The D.B. after referring to the law of Specific Performance of contracts in American Jurisprudence (2nd Ed., Vol. 71) and Halsbury Laws of England (4th Ed. Vol. 44, para 401), proceeded thus :-

(2) These principles of specific performance are in term codified in Chapter Ii (sections 2 to 24) of the Specific Relief Act, 1963, the law as enacted by Parliament. It repealed the earlier Act of 1877. Sec, 9 deals with defenses respecting suits for relief based on contract. It says "except as otherwise provided herein, where any relief is claimed under this Chapter in respect of a contract, the person against whom the relief is claimed may plead by way of defense any ground which is available to him under any law relating to contracts." Remaining sections in Chapter Ii are divided into various sub headings which are (1) Contracts which can be specifically enforced ; (2) Contracts which can not be specifically enforced ; (3) Persons for or against whom contracts may be specifically enforced ; and (4) Discretion and powers of court. Sec. 20 deals with discretion of the court as to decreeing specific performance. It says that this 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. Sec. 20(2) gives cases in which the court may properly exercise discretion not to decree specific performance.

(3) It will be, thus, seen that relief for specific performance is resorted to under the Specific Relief Act to enforce rights arising under contracts. In the present suits, as the plaintiffs allege, defendants have entered into agreements to sell their properties to the respective plaintiffs on an agreed consideration. The pff. only want that the defendants be made bound by their agreements and sell their properties and take the agreed consideration. The court will enforce such agreements unless the defendants bring their cases within the exceptions or challenge the validity of the agreements under the law relating to contracts or the court exercises its discretion (not to decree specific performance. No question of deprivation of any property of the deft. arises in such cases.

(4) ART. 300-A was inserted by the Constitution (44th) Amendment Act 1978 effective from 20.6.79. Prior to this the right to property was granted by Art. 31 falling under Part Iii of the Constitution pertaining to fundamental rights. What was earlier Art. 31(1) is now Art. 300-A. Art. 31 was itself repealed by the aforesaid Constitution Amendment Act. That Act also repealed Art. 19(l)(f) which guaranteed the right to acquire and hold property. Supreme Court in , had said that neither Art. 19(l)(f) nor Art. 31(1) on its true construction was intended to prevent wrongful individual acts or to provide protection against merely private conduct. It said that the violation of rights of property by individuals was not within the purview of the Art. 19(l)(f) and as regards position u/Art. 31(1) it was no better. It further observed :

"EVEN assuming that clause (1) of Article 31 has to be read and construed apart from clause (2), it is clear that it is a declaration of the fundamental right of private property in the same negative form in which Article 21 declares the fundamental right to life and liberty. There is no express reference to the State in Article 21. But it cannot be suggested on that account that article was intended to afford protection to life and personal liberty against violation by private individual. The words "except by procedure established by law," plainly exclude such a suggestion. Similarly, the words "save by authority of law" in clause (1) of Article 31 show that it is a prohibition of unauthorised governmental action against private property, as there can be no question of one private individual being authorised by law to deprive another of his property."

(5) Relying on this decision, the Supreme Court in Vidya Verma v. Dr. Shiv Narain, , reaffirmed that violation of rights of property by a private individual was not within the purview of Articles 19(l)(f) and 31(1) and, therefore, a person whore rights of property were infringed by a private individual must seek his remedy under the ordinary law. In M. Hassanjit & Sons vs. State of M.P. , the appellant entered into an agreement with the Govt. for increase in the rate of royalty payable to the Government. Then the appellant filed a civil suit for recovery of the increased amount so paid on the ground that the agreement for increase in rate of royalty was not valid under Mining Rules of 1912 and was also in contravention of the Mines and Minerals (Reg. and Dev.) Act, 1948. The court negatived the contentions and while dealing with one of the contentions it said : IT was contended that the terms imposed upon the appellants by the State would amount to deprivation of property without the authority law. It is manifest that this ground of attack is wholly devoid of any force because the State has not deprived them of any property. What they have paid to the Government was realisable under the terms of the contract, which on the findings recorded above is not vitiated. Under the agreement which we hold to be enforceable, the defendant may have struck a hard bargain but that cannot be brought under the prohibition of Article 31(I) of the Constitution, even assuming that the Constitution applied to the transaction in question."

(6) In Bishambhar Dayal vs. State (U.P.) (1982) 1 S, 39, the Supreme Court observed. "THERE still remains the question whether the seizure of wheat amounts to deprivation of property without the authority of law. Article 300-A provides that no person shall be deprived of his property save by authority of law. The State Government cannot while taking recourse to the executive power of the State under Article 162, deprive a person of his property. Such power can be exercised only by authority of law and not by a mere executive fiat or order. Article 162, as is clear from the opening words, is subject to other provisions of the Constitution. It is, therefore, necessarily subject to Article 300-A. The word "law" in the context of Article 300-A must mean an Act of Parliament or of a State legislature, a rule, or a statutory order, having the force of law, that is positive or State-made law......"

(7) Reference may also be made to Paika Padhano vs. Pindiko Patro, , where the court said that when the dispute was not between an individual on the one hand and the State on the other but between two persons regarding their respective civil rights there was no question of invasion of the fundamental rights. The court said this when reliance was placed on the fundamental rights guaranteed u/Art. 19 and 31(1) of the Constitution and said these Articles were entirely out of place.

(8) It was also submitted that there would be no question of any deprivation of any property unless it was the State who took away property. That appears to us to be rather a much wider question not arising in the present case and particularly in view of the Benami Transactions (Prohibition) Act, 1988. As noted above, it is also not necessary for us to go into the different terminology used in Art. 21 and Art. 300-A of the Constitution for answering the question referred to. Lastly, it was submitted that the Supreme Court itself in numerous appeals coming before it and arising out of suits for specific performance dealt with law of specific relief as contained in Chapter Ii of the Specific Relief Act but it never held that decree for specific performance would be futile and ought not to be passed because of Art. 300-A of the Constitution.

(9) Suit for specific performance of contract of sale of immovable property, therefore, lies to enforce rights under contract which the law of specific relief recognises. We are, thus, of the opinion that Art. 300-A of the Constitution has no effect on the provisions of the Specific Relief Act relating to agreement to sell an immovable property. Reference is answered accordingly.