Shri Jamna Dass vs Sh. Chiman
2006 Latest Caselaw 1005 Del

JUDGMENT

Swatanter Kumar, J.

1. Shri Jamna Dass filed a suit for specific performance of the agreement to sell dated 9.2.1996 in relation to sale of half undivided share of 640 shares out of the total shares of 63783 shares measuring about 826.02 bighas situated in the revenue estate of village Aya Nagar, Tehsil Mehrauli, New Delhi. The respondent and his brother who were stated to be co-owners/bhumidars and in possession of the land as khudkasht, had agreed to sell the said land to the appellant for a total consideration of Rs. 4,31,800/- @ of Rs. 5,00,000/- per acre. The parties having agreed to the terms and conditions of the sale executed the agreement to sell dated 9.2.1996. The appellant had paid a sum of Rs. 43,000/-, receipt of which was acknowledged in the agreement itself. The balance sale consideration was agreed to be paid at the time of execution and registration of the sale deed before the Sub-Registrar, Delhi. The respondent was to obtain a no objection certificate under the Delhi Land (Restriction on Transfer) Act, 1972 and the property was to be transferred in favor of the appellant. According to the appellant, he had approached the respondent and his co-bhumidar for transferring of the said land in terms of the agreement but of no consequence. On the contrary, the co-owner who was the brother of the respondent informed the plaintiff that he had not signed any agreement and he was not willing to transfer his share of the property in favor of the appellant. The respondent when confronted with this situation stated to have agreed to sell his share i.e. 1/4th of the above land but later on, the respondent neither obtained any permission to transfer the said property nor acceded to any of the requests made by the appellant to the respondent. The appellant served a notice dated 19th July, 1997 requesting the respondent to perform his part of the agreement and transfer the property. Despite service of the notice, the respondent did not discharge any of the obligations under the terms of the agreement. The appellant having left with no alternative, thus, filed a suit for specific performance and in alternative, for decree for recovery of Rs. 2,15,900/- with interest @ 24 per cent per annum and at the same time also prayed for refund of Rs. 43,000/- which was given by the appellant as earnest money to the respondent.

2. The respondent was served in the suit but despite service he did not appear and was ordered to be proceeded against ex parte vide order of the trial court dated 15th July, 1999.

3. The learned trial court examined the evidence led by the plaintiff and the plaintiff had produced two witnesses - himself and Mr. Dayal Dass, PW2, and only exhibited the agreement as Ex.P-1 and the legal notice served upon the respondent as Ex.P-2. Considering this documentary and oral evidence, the learned trial court vide its judgment and decree dated 20th October, 2001 partially decreed the suit of the appellant and passed a decree for recovery of Rs. 43,000/- along with interest @ 18 per cent p.a. from the date of filing of the suit till realisation.

4. Correctness of this judgment of the trial court is questioned on law and fact in the present appeal. When the notice of the present appeal was sent to the respondent, notice was returned with the report that the respondent had refused to accept the notice. Consequently, he was treated as deemed to have been served in accordance with law by order of the court dated 2nd May, 2005.

5. The learned Counsel appearing for the appellant while relying upon the judgment of the Supreme Court in the case of Kartar Singh v. Harjinder Singh and Ors. has contended that the learned trial court has fallen in error of law in not decreeing the suit for specific performance as the suit at least to the extent of the share of the respondent should have been decreed even if other co-owner was not signatory to the agreement. Further, it is contended ECHO is on. that at least damages should have been awarded to the plaintiff and the trial court has further fallen in error in not appreciating the documentary and oral evidence on record in its correct perspective.

6. It may be noticed that the findings of the trial court have been recorded keeping in view the prayer made by the appellant and the evidence produced on record. Before the trial court, there was a specific prayer made by the appellant that at least the defendant's share in common land to the extent of 1/4th, should be transferred in favor of the appellant. The relief of damages in addition to refund of earnest money with interest @ 24 per cent p.a. was also prayed. The trial court while exercising its discretion as contemplated under Sections 20(1) and 20(2) of the Specific Relief Act declined the relief for specific performance and damages and only granted refund of earnest money with interest @ 18% p.a. from the date of filing of the suit till realisation.

7. As far as denial of relief of specific performance is concerned, we are unable to see any error of law to which the trial court has fallen. There could be cases where the property is held jointly and one of the co-owners is not a signatory to the agreement still specific performance to the extent of the share of the vendor who is signatory to the agreement to sell could be granted by the court. The court in its discretion could grant or decline the relief of specific performance and is also vested with the jurisdiction to grant such a relief after directing that the property be partitioned between the rightful owners. However, exercise of such discretion would be exceptional. Of course, this discretion has to be regulated and controlled by specific principles of law. We may refer to the law governing the subject which was discussed by the court at some length in the case of Mr. M.K. Sehgal v. Smt. Mohinder Kaur, RFA 566/2004 decided on 11th May, 2006, which is as under:

6....It is a settled principle of law that it is not mandatory for a court to grant relief of decree for specific performance, simply for the reason that the plaintiff has proved his case and it is lawful to do so. But this discretion vested in the court is not arbitrary and can be exercised only for sound and reasonable ground. The need for sound reasoning is illustrated in the statute by the language used by the legislature in Section 20 of the Act. The discretion exercised, guided by judicial norms has to be capable of correction by a court of appeal. Reference in this regard can be made to a judgment of this Court in the case of Raj Kumar Sharma v. Smt. Pushpa Jaggi and Ors. (CS(OS) No. 1186/2005) decided on November 24, 2006, where the Court held as under:

The present suit is a suit for specific performance and the relief is one granted by the Court primarily on equitable principles. Section 20 of the Act vests a wide discretion in the Court to grant or decline a decree for specific performance. Of course, this discretion is to be exercised in accordance with the settled principles of law applicable to the facts of the case. It is not necessary for the Court to grant specific performance merely because it is lawful to do so. In the facts of the present case Ex.P-1 does not give any unfair advantage to the plaintiff over the defendants. The parties had agreed to extend the period for execution of the sale deed from June, 2005 to July, 2005 and the measurement of the land in question was a persisting dispute as is clear from the various notices sent by the plaintiff to the defendants. If the specific performance is granted to the plaintiff, it would not involve great hardship to the defendants as what has happened, the parties could foresee the same at the time of execution of the agreement. The mentioning of the price per sq.yard does indicate and even subsequent conduct of the parties including the present defendants show that there was some dispute with regard to the measurement of the land and it is own case of the defendants that they had further reduced the price from Rs. 39.50 lacs to Rs. 38.50 lacs and intended to sell the plot on as is where is basis.

The stand taken by the defendants is ECHO is on. unfair and certainly tilts the equity against them rather than in their favor. Firstly, they denied the very knowledge about the transaction in question and subsequently have taken contradictory stand even in regard to smallest of the things. Ex.D-1 suffers from the infirmity of suspicion. In these circumstances, it would no way be unfair to grant relief to the plaintiff whose 5 lacs of rupees have been retained by the defendants for all this time and the plaintiff filed the present suit without any unnecessary delay and in fact in less than one month, that too after serving notice upon the defendants from the agreed date for execution of the sale deed i.e. 25th July, 2005. The defendants have not even spelled out in their written statement what is the breach committed by the plaintiff. The notices issued by the plaintiff to the defendants have been received and replied to by the defendants. In fact, in their reply to the notice, they had stated that they are willing to sell the land and parties were trying to resolve the dispute with regard to measurement of the land in question. In the circumstances of the present case, it is difficult to hold that plaintiff has committed any specific breach of the terms of the agreement and/or has acted malafidely in a manner which would disentitle him from getting the equitable relief of specific performance in the discretion of the Court. At this stage, it would be appropriate to make a reference to the judgment in the case of Rattan Lal v. Smt.Bharpai and Ors 1998 (4) ICC 412, where the Court after considering the law at length and the judgment of the Supreme Court as well as of that Court in the case of Ram Dass v. Ram Lubhaya PLR 1998 (2) 326, held as under :

It is clear from the above finding that no fault can be attributed to the plaintiffs. They never attempted to gain undue advantage over the defendant. The plaintiffs were always willing and ready to perform their part of the agreement and had gone to the Court Complex with the money on the appointed dates. The stand of the defendant is totally inconsistent. No averments of fraud have been pleaded. The defendant claims to have gone to the court complex to perform the agreement. However, at no point of time he pleaded that plaintiffs had breached the terms of the agreement and as such the earnest money was liable to be forfeited. Coming to the legal aspect of the matter in the case of S.Rangaraju Naidu v. S.thiruvarakkarasu, the Supreme court never intended to lay down as a principle of law that specific performance should be denied, if alternative relief is asked for. Keeping in view the special facts of that case, as there was undue delay on the part of the plaintiff, the Hon'ble Supreme Court had denied the specific performance. Their Lordships specifically observed that the order is being passed in view of the fact of that case. This court in a recent judgment in the case of Ram Dass Versus Ram Lubhaya PLR, 1998 (2) 326 considered this aspect at a great length and observed as under :

Coming to the second contention, the learned Counsel for the appellant has relied upon the judgment of the Hon'ble Supreme Court in the case of Kanshi Ram v. Om Parkash Jawal and Ors. and Rangaraju Naidu v. S.Thiruvarakkarasu . The principles of law enunciated in these case is the reiteration of settled principles of law. The principle of equity good conscience and fairness being very foundation for grant of relief of specific performance is the concept not introduced by judicial pronouncement but explicitly indicated by the Legislature in the provision of Section 20 of the Specific Relief Act. The very language of Section 20 spells out and indicates the wide discretion that is vested in the Court of competent jurisdiction to grant or decline to grant a relief of specific performance for transfer of immoveable property. The guiding principles for determination of such ECHO is on. controversies have been consistently cogitated by various courts but to a common end. The common weal sought to be achieved is to avoid resultant undue hardship to one party while avoiding undue gain to the other by mere lapse of time attributable to erring party.

An alternative prayer by a plaintiff in a suit cannot be construed as a waiver or abandonment of the main relief in the suit. An alternative prayer is a relief which is claimed by the party if the party is found to be not entitled to the principle of main relief claimed in the suit. The submission of the learned Counsel appears to be totally contradictory to the well accepted concept of pleadings and cannot be accepted.

The jurisdiction vested in the Court to decline specific performance and grant alternative relief is a jurisdiction of equity and good conscience and must be exercised in consonance of the settled principles of law. Even principles emerging from judicial verdicts which are to guide the courts concerned while passing such a decree and which have been specifically acted upon, are still open to correction by the court of appeal. The provisions indicate the intention of the Legislature to vest the Court with the wide discretion but still define the extent of caution with which such power should be exercised. Settled canone of limitations on the discretion of the court have been well defined by various judicial pronouncements. Precept of equity are accepted good in law. Reliefs in equity are founded on the principle of good conscience and grant of effective relief. The maxim Actio de in rem verso appears to be the underlining feature under the provision of Section 20 of the Act. Exercise of judicial discretion does not admit a limitation extending to a prohibition for grant of relief of specific performance. It is only where the judicial conscience of the court is pricked to an extent that the Court first is able to see inequities, imbalances created against one party and in favor of other, that it would consider exercising its discretion under these provisions. The scheme of this Act clearly shows that where a contract is proved in accordance with law and party has acted without undue delay and has pursued its remedy in accordance with law without infringing the settled canon of equity the grant of specific relief by enforcing the contract would certainly be a relief which equity would demand. The Legislative intention behind Section 20 cannot be stated to be that a party first fails to perform its part of the agreement later contests litigation on frivolous basis then that party cannot be permitted to raise a plea in equity that value of the property has increased disproportionately resulting in an undue advantage to the plaintiff in a suit. Resultantly it would not be fair to deny specific performance against such a party.

A lawful agreement being proved and judicial conscience of the court being satisfied the equity would demand enforcement of an agreement rather than granting an alternative relief of damages to the plaintiff. It need not be reiterated that equity must give relief where equity demands. Equitas nuquam liti ancillatur ubi remedium potest dare is a clear illutration which has been duly accepted by the Indian Courts. The time taken by the courts in deciding suit or appeals would normally be not permitted to work to the disadvantage of the party to the lis. Acts of the courts shall cause prejudice to none was so stated by the Hon'ble Apex Court in the case of Atma Ram Mittal v. Ishwar Singh Punia .

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Further more the courts have also found that the respondent was always ready and willing to perform his part of the agreement. The litigation before the Courts ECHO is on. has been prolonged for all this time by the appellant without any fruitful result. In these circumstances I am unable to see any equities in favor of the appellant and reliance placed upon the observations of the Hon'ble Supreme Court in the case of S.Rangaraju Naidu Vs Thiruvarakkarasu (supra) is misplaced one. No facts and circumstances have been brought on the record nor any evidence has been adduced to show that the case of the appellant was covered under any of the exceptions carved under sub Clause (a) to (c ) of sub Section (2) of Section 20. The appellant has suffered no unfair disadvantage. No such hardship has been caused to the appellant which would justify nonperformance on his part. The appellant has also not been placed at any inequitable situation. Equities have to be balanced. It is only when totally unequitable and unjust and unfair advantage is given to one party that court has to consider such factors. The conduct of the appellant is certainly not worthy of claiming any special equities while conduct of the respondent has been to the accepted standard demanded by the equity and he has persued his remedy carefully and in the earliest point of time, while things are taken to be done in their normal course. Reference is made to Krishna Singh v. Krishna Devi .

In view of the above settled principles of law, the contention raised on behalf of the defendant is without merit. The plaintiffs had no point of time delayed the legal remedies available to them and acted with prudence and reasonable expectation.

The principle of wide discretion vested in the Courts, in terms of Section 20 of the Specific Relief Act has consistently been upheld by the Courts. No doubt such discretion is to be guided by settled principles of law and is applicable to the facts of a given case. It is a well settled norm that Court may amplify, extend justice but within the prescribed limitation of its jurisdiction. This was also accepted by the Supreme Court in the case of Her Highness Maharani Shantidevi P. Gaikwad v. Savjibhai Haribhai Patel and Ors. . The relevant extract of the judgment is as under :

The grant of decree for specific performance is a matter of discretion under Section 20 of the Specific Relief Act, 1963. The court is not bound to grant such relief merely because it is lawful to do so but the discretion is not required to be exercised arbitrarily. It is to be exercised on sound and settled judicial principles. One of the grounds on which the Court may decline to decree specific performance is where it would be inequitable to enforce specific performance. The present is clearly such a case. It would be wholly inequitable to enforce specific performance for (i) residential houses for weaker sections of the society cannot be constructed in view of the existing master plan and thus, no benefit can be given to the said section of the society; (ii) In any case, it is extremely difficult, if not impossible, to continuously supervise and monitor the construction and thereafter allotment of such houses; (iii) the decree is likely to result in uncalled for bonanza to the plaintiff; (iv) patent illegality of order dated 20th June, 1998; (v) absence of law or any authority to determine excess vacant land after construction of 4356 dwelling units; and (vi) agreement does not contemplate the transfer of nearly 600 acres of land in favor of the plaintiff for construction of 4356 units for which land required is about 65 acres. The object of the Act was to prevent concentration of urban land in hands of few and also to prevent speculation and profiteering therein. The object of Section 21 is to benefit weaker sections of the Society and not the owners. If none of these objects can be achieved, which is the factual position, it would be inequitable to still maintain decree for specific performance. ECHO is on.

7. The discretion of the court is a judicial discretion and must have a plausible reasoning which can be sustained in law. The reasoning is the soul of any judgment and reasoning ought to be within the four corners of the statute. A reason which is alien to the provisions of law where the legislature has opted to provide such limitations illustratively, would hardly stand the scrutiny of law.

8. Sub-section (2) of Section 20 further clearly indicates the kind of cases where it is proper for the court to exercise its discretion in not decreeing the suit for specific performance. The present case does not fall in any of the clauses (a) to (c) of the Sub-section (2). The discretion must be exercised within the circumscribed limits of the dos and dont's enumerated by the Legislature in Section 20 of the Act.

8. In the present case, the appellant was aware at the time of entering into the agreement to sell (Ex.P1) that there is another co-owner and he had not signed the said agreement as well as that the respondent herein was not an authorised person or an attorney holder on behalf of the other co-owner. Thus the appellant had entered into the agreement with open eyes and he knew the risk that he has taken. It is not a clearly defined share where the respondent was in possession of the property. It was an agricultural land wherein both the co- owners together owned one half share of 640 shares out of larger joint holding of 63783 shares in the revenue estate of village Aya Nagar. Under the terms of the agreement, no objection had to be obtained from various authorities and the said no objection itself would pose a serious difficulty in the way of the appellant in claiming the decree for specific performance. In the notice, he did not call upon the said respondent to seek permission and transfer his share in the said property. The notice (Ex.P2) was served on 19th July, 1997. By that time, the appellant had already become aware of the complete facts. In the notice also, he did not claim any damages. The other co-owner is obviously not bound by the agreement and the same cannot be enforced against him in fact and in law. It would be somewhat inequitable and is bound to give rise to multiplicity of litigation if the suit of the appellant for specific performance would have been decreed. An equitable jurisdiction can be exercised in favor of a plaintiff where it is possible and permissible to pass a clear, definite and executable decree. However, where these impediments of fact and law are obvious, it would not be equitable and fair for the court to pass a decree for specific performance. Therefore, we are unable to find any error in the judgment of the trial court in declining this relief in exercise of its equitable jurisdiction vested as per the terms of the Statute in the court.

9. Again coming to the question of damages, the appellant did not lead any evidence whatsoever to show as to under which terms of Ex.P1 he was claiming damages and how had he suffered these damages. In the entire evidence, there is not even a statement by the appellant that the value of the properties have gone up to the extent that he would have to pay a sum of Rs. 5 lacs or more. In fact, his statement does not even fully substantiate the pleas taken in the plaint itself. The judgment and decree passed by the trial court, declining the relief of damages also does not call for any interference.

10. Coming to what relief ultimately the court could have granted to the appellant, again we can hardly find any fault in the judgment of the trial court except that to balance some equity between the parties and the fact that the appellant had paid a sum of Rs. 43,000/- under the terms of the agreement which has not been returned to him nor the defendant has performed his obligations, it would have been proper for the court to pass the decree for refund of Rs. 43,000/- but with the same rate of interest as claimed in the plaint which remained undisputed.

11. In view of our discussion, we modify the decree of the trial court limited to the extent that the plaintiff would be entitled to the sum of Rs. 43,000/- along with interest @ 24 per cent per annum from the date the amount ECHO is on. was paid to the respondent till realisation. The appellant would also be entitled to costs.

12. The appeal and CM 120/2002 are finally disposed of.