Delhi High Court
Mohinder Nath Sharma(Decd.) Thr. ... vs Ram Kumar & Ors. on 22 March, 2012
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.228/2003
% 22nd March, 2012
MOHINDER NATH SHARMA(DECD.) THR. LR‟S ..... Appellants
Through: Mr. P.V.Kapoor, Sr. Adv. with
Mr. Indermeet Sharma &
Mr. Aman Anand, Advs.
VERSUS
RAM KUMAR & ORS. ..... Respondents
Through: Mr. B.R.Sharma, Adv.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? Yes
VALMIKI J. MEHTA, J (ORAL)
1. The challenge by means of this Regular First Appeal (RFA)
filed under Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the
impugned judgment of the Trial Court dated 25.1.2003. By the impugned
judgment, the Trial Court decided two suits. Suit No.209/2002 (originally
Suit No.728/1982) titled as Ram Kumar & Ors. vs. Mohinder Nath
Sharma, was a suit for possession, declaration and recovery of damages of
`62,000/- filed by the proposed sellers (the respondents herein) against the
proposed buyer (now represented by his legal heirs-the appellants). The
RFA No.228/2003 Page 1 of 33
second suit was suit No.210/2002 (originally Suit No.817/1982) titled as
Mohinder Nath Sharma vs. Ram Kumar & Ors. seeking specific
performance of an Agreement to Sell and possession of balance land, filed
by the proposed buyer against the proposed sellers. The impugned
judgment dismisses the suit of the proposed buyer, Sh.Mohinder Nath
Sharma for specific performance and decrees the suit filed by the proposed
sellers for possession and damages. For the sake of convenience in this
judgment, I will refer to the proposed sellers as the respondents and the
proposed buyer as the appellant. The original proposed buyer, Sh.
Mohinder Nath Sharma has expired, and he is now represented by his legal
heirs as the appellants.
2. The disputes in the present case pertain to an agreement to sell
dated 1.6.1979. The agreement to sell was entered into between the
proposed sellers, Sh.Ram Kumar, Sh. Jai Prakash and Sh. Parmanand with
the proposed buyer Sh. Mohinder Nath Sharma. The subject matter of the
agreement to sell was a piece of land situated on property no.894 & 894/1,
Alipur, Delhi-36 admeasuring 2,000 sq. yds. and having a boundary wall
on three sides alongwith certain constructions on the same. The price
which was agreed under the agreement to sell was `1,60,000/-. The
agreement recites the receiving of `1,00,000/- by the respondents. There is
RFA No.228/2003 Page 2 of 33
also a separate receipt executed of the same date of agreement to sell
showing the receipt of a sum of `1,00,000/- by the respondents.
3. The agreement to sell though apparently appeared to be clear
with respect to the buyer, the sellers, the area of the land to be sold and the
price at which it was sold, however, actually there was uncertainty qua the
area and consequently the price, and which aspect emerges from para 3 of
the agreement to sell which reads as under:-
"3. That the party No.1 has delivered the actual
physical possession of the above said property unto the
party No.2 on the date of execution of this agreement but
the possession shall be considered finally on making up
the balance valuation and paying the same to the party
No.1."
A reading of the aforesaid para 3 of the agreement to sell
shows that the issue of possession was to be finally considered on making
up of the balance valuation and paying the same to the party no.1, i.e. the
respondents. This para therefore shows that though in the earlier part of the
agreement to sell there is certainty as to the area of land being 2,000 sq.
yds. and the price at `1,60,000/-, however, in reality there was lack of
certainty with respect to the area of 2,000 sq. yds. and consequently there
was no crystallization of the price of the property. The reason for such
uncertainty was on account of the facts stated hereinafter.
RFA No.228/2003 Page 3 of 33
4. In order to appreciate para 3 of the agreement to sell, it is
necessary to understand the ownership of the respondents with respect to
the suit land. The respondents were undisputed owners/title-holders of a
total of 1300 sq. yds. of land, and which area of 1300 sq. yds. of land was
purchased by means of two sale deeds dated 22.6.1973, each sale deed
being for 650 sq. yds.. The sale deeds were in favour of Sh.Ram
Kumar/plaintiff no.1(in the suit of the proposed sellers)/respondent no.1
herein, and Sh. Jai Prakash-plaintiff no.2(in the suit of the proposed
sellers), the respondent No.2 herein. Besides the area of 1300 sq. yds.,
there were also claimed rights by the respondents in a plot of 1000 sq. yds.
under a general power of attorney dated 25.6.1973 executed in favour of
the aforesaid plaintiffs no. 1 and 2/respondents no.1 and 2. Therefore,
there was with the respondents a total area of 2300 sq. yds., of which, there
was no doubt with respect to title/ownership of 1300 sq. yds., however, so
far as the area of 1000 sq. yds. was concerned, there was no title by a
regular sale deed, but, only a general power of attorney.
As referred to here-in-above, when under the agreement to sell
possession of the subject land was given by the respondents to the
appellant, there was boundary wall only on three sides, but, there was no
boundary wall on the fourth side. This was because the portion, in which
RFA No.228/2003 Page 4 of 33
there was no boundary wall, was partly a dried-up pond. The fact that on
the fourth side no wall was constructed also again brings to the fore the fact
that there was uncertainty with respect to the area of which possession was
actually transferred at the time of executing of the agreement to sell, and
also as to finally what would be the area which will be transferred/sold.
5. As per the appellant at the time of the execution of the
agreement to sell, possession of about 1000 sq. yds. was given. The
possession of the balance area was to be made up subsequently. After the
giving of the possession, which was possible finally, there would then take
place the consequent correct valuation/price of the land which was to be
sold.
6. The appellant pleaded that after entering into the agreement to
sell, the respondents started filling up the pond with earth and thus
subsequent to the Agreement to Sell gave certain additional area- in the
evidence led on behalf of the appellant, this additional area is said to be
around 500 sq. yds.. The appellant claimed that the respondents asked for
additional payment of `20,000/- against the promise to give further
possession, and consequently the appellant gave two cheques of `10,000/-
each to the respondents on 29.8.1979. At the time of giving of these
RFA No.228/2003 Page 5 of 33
cheques of `10,000/- each totalling to `20,000/-, an endorsement was got
made on the back of the agreement to sell which reads as under:
"Both the parties have mutually agreed to extend
the period upto the date 5-10-1977, under the same and
similar terms of this agreement and the party No.1 and
the party No.2 also shall be bound by the said agreement
dated 1-6-1979;
In token thereof both the parties have signed on
this 29th day of Aug.1979 at Delhi.
Party No.1
Party No.2"
7. It appeared that the respondents had differences with the Gram
Pradhan of the village where the suit land was situated, and the Gram
Pradhan objected to filling up of the pond claiming that the said land
belongs to Gram Sabha and whereupon disputes were stated to have arisen
with respect to a portion of the land. As a result of disputes which arose,
proceedings were initiated by the Gram Sabha under the Delhi Land
Reforms Act, 1954 with respect to the suit land. In these proceedings
before the Revenue Authorities, the appellant herein were also made as a
party/respondent and in which proceedings the proposed sellers were the
main respondents. Written statements were filed in those revenue
proceedings on behalf of the respondents therein i.e. both the proposed
sellers and the proposed buyer herein. The revenue proceedings
RFA No.228/2003 Page 6 of 33
culminated in dismissal of these proceedings in favour of the respondents
herein vide the judgment of the Revenue Assistant in which it was held that
not only the proceedings initiated by the Gram Sabha were barred by time,
but also that the suit property was not owned by the Gram Sabha. I may
state that the judgment in the case was passed by the Revenue Assistant
after the evidence was led by all the parties in that case. The subject suits
for possession (filed by the respondents herein) and for specific
performance (filed by the appellants herein) came to be filed during the
pendency of the proceedings before the Revenue Authorities.
8. The basic case of the appellant/proposed buyer in the Court
below was that there was lack of certainty as to the area of which
possession was transferred and finally to be transferred at the time of
entering into of the Agreement to Sell, the additional area transferred
thereafter, and consequently, there was lack of crystallization of the area
and thus also the consideration/price. It was also the case of the appellant
that till there was actual measurement of the area of which possession was
given (there being uncertainty about the same) , the price could not be
decided, and there was hence no breach of contract on the part of the
appellant. It was also the case of the appellant that two cheques of
`10,000/- each given on 29.8.1979 were got dishonoured as the
RFA No.228/2003 Page 7 of 33
respondents failed to give further possession of the land which would have
made up the total area of 2000 sq. yds. which was agreed to be sold. One of
the further grounds pleaded as breach of contract on the part of the
respondents was the issue of the cloud on the ownership of the suit land.
9. The case of the respondents was that under the agreement to
sell only `80,000/- was paid and not `1,00,000/- as was written in the
agreement to sell and the receipt of the same date. It was pleaded that two
self cheques of `10,000/- each were given at the time of agreement to sell,
and which were replaced by the two cheques of `10,000/- each on
29.8.1979, and which cheques were admittedly dishonoured and therefore,
there was breach of contract on behalf of the appellant. It was also pleaded
that the appellant had received the complete possession of 2000 sq. yds.,
and the appellant was unnecessarily backing out of the agreement to sell by
refusing to pay the balance sale consideration and therefore again there was
breach of contract on the part of the appellant. It was also pleaded that the
appellant was not ready and willing to perform the contract and being
guilty of breach of contract, was not entitled to specific performance, and
therefore, the suit of the respondents for possession and mesne profits was
to be decreed. It was also pleaded that the appellant had not come to the
Court with clean hands in his suit for specific performance and therefore
RFA No.228/2003 Page 8 of 33
was disentitled to the discretionary remedy of specific performance
including because the ownership of the respondents of the suit land was
wrongly denied by the appellant.
10. In the suit filed by the respondents, the following issues were
framed:-
"1. Is the suit properly valued for the purpose of court fee
and jurisdiction?
2. Is the suit not barred under Order 2 Rule 2 CPC, in view
of the plaintiffs having filed suit No.494 of 1980 before
the Subordinate Judge?
3. Is the suit barred on the principles of resjudicata in view
of the decision in the said suit No.494 of 1980?
4. Is the suit barred under the provisions of Transfer of
Property Act and/or Specific Relief Act?
5. Are the plaintiffs entitled to possession?
6. Whether in the fact and circumstances of the case the
plaintiffs are entitled to a declaration for cancelling the
agreement dated 1st June, 1979?
7. Are the plaintiffs entitled to these profits/damages? If
so, at what rate and for which period?
8. Relief."
11. In the suit filed by the appellant for specific performance, the
following issues were framed:-
RFA No.228/2003 Page 9 of 33
"1. Is the plaintiff entitled to specific performance of the
agreement to sell dt. 1st June, 1979?
2. Have the defendants not performed their obligations
under the agreement as alleged?
3. Has the plaintiff been ready and willing to perform his
obligations under the said agreement to sell?
4. Relief."
12. Before this Court, the appeal was argued under the following
heads:
i) Who was guilty of breach of contract, i.e. whether the
appellant/proposed buyer was guilty of breach of contract or were the
respondents/proposed sellers guilty of the breach of contract?
ii) Whether the appellant was ready and willing to perform his
part of the agreement to sell?
iii) Whether the appellant was entitled to the discretionary relief
for specific performance inasmuch as he had not come to the Court
with clean hands and also as to whether discretionary relief for
specific performance ought to be declined on account of the delay in
filing of the suit for specific performance and the subsequent delays
which have taken place during the pendency of the suit?
RFA No.228/2003 Page 10 of 33
13. With respect to the issue as to who is the person who is the
guilty of breach of contract, there would be sub-issues as to whether at the
time of entering into the agreement to sell actually only `80,000/- was
allegedly paid as claimed by the respondents or was actually `1,00,000/-
paid. Related aspect will be as to whether the cheques of `10,000/- each
dated 29.8.1979 were, in fact, to substitute the self cheques of `10,000/-
each given at the time of agreement to sell or were towards additional
payment. On the aspect of breach of contract, the further issue will also be
as to whether complete possession was given of the area of 2000 sq. yds.
under the agreement to sell as is being argued on behalf of the respondents,
and not less as was the case of the appellant.
14. Let me take up the different aspects with respect to the breach
of the agreement to sell. So far as the issue that only `80,000/- was paid at
the time of entering into agreement to sell and not `1,00,000/-, I am of the
opinion that this point raised on behalf of the respondents is quite clearly
false. This I say so because not only the agreement to sell recites the
factum of the payment of `1,00,000/- having been received by the
respondents, there is also a receipt of the same date of agreement to sell
mentioning the receipt by the respondents of the sum of `1,00,000/-. There
is no reference at all in either the agreement to sell or the receipt of an
RFA No.228/2003 Page 11 of 33
amount of `20,000/- being given by two self cheques of `10,000/- each.
Not only there is no such mention in the agreement to sell and the receipt of
`20,000/- being given by self cheques of `10,000/- each, even the
subsequent endorsement dated 29.8.1979 does not at all mention that the
two cheques of `10,000/- each given on 29.8.1979 are to substitute the
alleged self cheques of `10,000/- each given at the time of entering into the
agreement to sell. I, therefore, hold that the plea of payment having been
made of only `80,000/- and not of `1,00,000/- has been falsely raised by
the respondents to avoid performance of their obligations under the
agreement to sell. In fact, it was legally not open to the respondents to
even raise this plea of having received only a sum of `80,000/- and not `
1,000,00/- as stated in the Agreement to Sell inasmuch as, as per provisions
of Sections 91 and 92 of the Evidence Act, 1872, once there is a contract in
writing between the parties, there cannot be led parol evidence to contradict
or vary the written terms of the agreement. Therefore, both factually and
legally it is clear that the appellant did pay at the time of execution of the
Agreement to Sell a sum of `1,00,000/- out of the total price of `1,60,000/.
15. The agreement to sell in its para 3 also shows quite clearly that
there was lack of clarity with respect to total area of land of which
possession was to be finally given to the appellant and it is for that purpose
RFA No.228/2003 Page 12 of 33
para 3 of the agreement to sell clearly provided that the final valuation will
be made of the land subsequently, i.e. the final price which is payable by
the appellant to the respondents would be determined after final
measurement. In fact this para 3 of the agreement to sell also shows that
the parties proceeded on the assumption that strictly the exact area to be
sold was not to be exactly 2000 sq. yds. but could be less or more and the
final price would be accordingly determined when the area, which is to be
sold, is determined and possession transferred. This the respondents seem
to have done inasmuch as I have given the history of ownership of the
subject land of the respondents, and which shows that there was clear title
by means of sale deeds for only 1300 sq. yds. of land, and for the balance
land of 1000 sq. yds., „ownership‟ was only under a power of attorney
besides the fact that it also appeared that part of the subject land was in
fact part of a pond. I have already stated above that the area to be sold was
not to be exactly 2000 sq. yds. is also clear from the fact that the plot was
covered with boundary wall on three sides and there was no wall on the
fourth side towards the pond. During the course of hearing in this Court, I
note that whereas the appellants claimed that possession with them was of
approximately 1360 sq. yds., the respondents claimed that possession with
the appellant is approximately 1560 sq. yds.. It has also come in the
RFA No.228/2003 Page 13 of 33
deposition of the son of the appellant, Sh. Surinder Mohan Sharma (DW1)
that an area of approximately 500 sq. yds. of land was given to the
appellant subsequent to the agreement to sell after filling up of the part of
the pond. Also, I tend to believe the stand of the appellant that the two
cheques of `10,000/- each were given on 29.8.1979 were dishonoured
inasmuch as the respondents failed to give possession of the complete
balance land totalling to 1000 sq. yds. as was promised and they only gave
possession of approximately 500 sq. yds. after the agreement to sell was
entered into.
16. In sum and substance therefore at each stage, whether of the
time of entering into the agreement to sell; subsequently when two cheques
of `10,000/- each were given on 29.8.1979; when possession of further
area of approximately 500 sq. yds. was given, there were always
uncertainties and lack of finality with respect to the area of which
possession was transferred and to be finally transferred, of the ownership,
and consequently there was no final crystallization of the price of the
property. In such a scenario, it cannot be said that the stage of performance
by the appellant under the agreement had come, and therefore, there does
not arise any issue of breach of contract on the part of the appellant as
alleged. This aspect of breach will also cover the issue of readiness and
RFA No.228/2003 Page 14 of 33
willingness inasmuch as there is readiness and willingness if there is
certainty as to the area as also the price, and once there is no certainty as to
the area and the price it cannot be said that the appellant should still be held
liable to pay the balance price. The balance price was to be payable only
when the exact area, which the appellant was to have had, was determined,
and a sale deed was executed with respect to that specific area.
17. At this stage, I must turn to the aspect, and which is an
important aspect, on the basis of which trial Court has held that the
appellant is guilty of breach of contract and setting up a false case that he
only had with him about 1000 sq. yds. at the time of entering into
agreement to sell whereas allegedly he actually always had 2000 sq. yds..
The trial Court has arrived at this finding from the alleged deposition of the
appellant in the proceedings before the revenue authorities and the
consequent judgment of Revenue Assistant on the basis of that said
statement/deposition.
In my opinion, the finding of the trial Court in this regard
borders on perversity. This I say so because when we read the statement of
the appellant given in the proceedings before the Revenue Assistant all that
was said by the appellant was that the appellant was entitled, under the
agreement to sell, to 2000 sq. yds. and that he could have been in
RFA No.228/2003 Page 15 of 33
possession of approximately 2000 sq. yds., however this statement
nowhere shows the so called categorical admission of the appellant of
being in possession of 2000 sq. yds. In order to appreciate the perversion
in the findings of the trial Court in reading this statement, the relevant part
of the deposition given on behalf of the appellant in proceedings before the
Revenue Assistant can be read and the same reads as under:-
"..........
I cannot tell the area of my property and the
measurement thereof. It is incorrect to suggest that the
area in my occupation is more than 2000 sq ft. I cannot
say that the measurement of the foundary property which
is in my occupation the width and length. Even after the
filling of the present suit by the G.S. I have not
measured the area of the foundary in my occupation
present. I did not measure the area of my property even
when I filed a suit in the High Court.
...........
I am saying so approx 1000 sq yds is in my possession
although I have not measured the same till now. This is
just my presumption."
18. Surely, the aforesaid statements only compound the confusion
and cannot be said to give any clarity with respect to the alleged fact that,
in fact, 2000 sq. yds. of area of land was in possession of the appellant. I
therefore do not find any reason to agree with the findings of the trial
Court, and which is based on the following portion of the judgment of the
Revenue Assistant, that the appellant had with him 2000 sq. yds., and
which was a finding basically on the portions of the statement reproduced
above:-
"He admitted that he cannot tell the area of his property
and its measurement. But he said that the area is not
more than 2000 sq. yards under his possession. He
admitted that he has not measured the area of his property
in his occupation. He admitted that he cannot give the
total area of the shed. He admitted that he had seen the
Lal Dora Certificate in respect of the land in dispute at
the time of its purchase, which were in the name of the
party No.2(respondent No.1). He admitted that he has
given in writing the taking of the possession of 2000 sq.
yards, at the time of execution of the agreement. He
admitted that he does not know the correct area under his
possession and is saying 1000 sq. yards in his possession
just as his presumption."
19. The relevant findings and conclusions made by the trial Court
in this regard are contained in para 29 of the impugned judgment, and
which reads as under:-
"29. In view of such admissions made by the
defendant before the SDM concerned and the certified
copy of the statement being proved by the plaintiff, I find
that the possession of 2000 sq. yards has been duly
admitted by the defendant, that has been handed over at
the time of execution of the agreement to sell. Therefore,
there was no reason or justification for the defendant to
raise the dispute by the telegram and the notice dt.
4.10.1979 and 5.10.1979, that the plaintiff had handed
over 1000 sq. yards of land the plaintiff has also has to
hand over the 1000 sq. yards of land. These flimsy
grounds have been raised by the defendant in response to
the letter dt. 15.9.1979 sent by the plaintiff after the said
two cheques have been dishonoured. Had such plea been
taken before the dishonour of the said cheques had been
intimated to the defendant and defendant was called upon
to make the payment of `80,000/- instead of `60,000/-
being the balance amount for sale consideration at the
time of execution of the sale consideration at the time of
execution of the sale deed, the matter could be different.
Thereafter, no payment had been offered and no letter has
been sent for tendering the payment either in lieu of the
sale consideration as well as in lieu of the dishonour of
the cheques. Therefore, I find that the defendant had
committed the breach of the contract in that regard and
for the breach of the contract, the plaintiff was entitled to
restore the possession as claimed in the suit."
20. I therefore set aside the findings and conclusions of the trial
Court contained in para 29 of the impugned judgment and hold that there is
no categorical admission, much less any clarity as to the appellant in fact
having already received possession of 2000 sq. yds. of land. It is quite clear
that there was never any specific joint measurement, by both the parties, at
any stage delineating exact area, much less duly supported by a site plan
signed by the parties, so that there could be clarity to the exact area of land
of which possession was given to the appellant. All that emerges from the
record is that parties intended to enter into an agreement to sell for
approximately 2000 sq. yds.; certain area plus or minus; and, possession of
certain portion of the land was given under the agreement to sell, thereafter
certain more area was also given, however, even as on today, the appellant
does not have the area of 2000 sq. yds. inasmuch as even the case of the
respondents before this Court as per the statements made by their counsel is
that the appellant has 1560 sq. yds. of land.
21. Learned counsel for the respondents laid great stress, during
the course of arguments, that the appellant has not come to the Court with
clean hands and therefore he should be denied the relief of specific
performance. I have, however, frankly failed to understand any of the
arguments urged on behalf of the respondents as to how the appellant did
not come to the Court with clean hands.
The first point under this head of unclean hands raised on
behalf of the respondents was that there was contradiction between the
pleadings and the evidence of the appellant because in the pleadings it was
stated that possession of 1000 sq. yds. was given whereas there is actual
possession of 2000 sq. yds. of land with the appellant. Besides the fact that
the plaint only mentions the area of 1000 sq. yds. approximately as on only
a specific day i.e. the date of the Agreement to Sell and not subsequently, I
also do not find any admission in the evidence led on behalf of the
appellant that the appellant has in his possession 2000 sq. yds. of land.
Para 6 of the plaint mentions that at the time of entering into the agreement
to sell about 1000 sq. yds. was given and this pleading cannot be confused
so as to make out a case thereon that there is an alleged conflict that at one
place it is stated that possession of 1000 sq. yds. was given and
subsequently it is stated that 2000 sq. yds. is given.
Also, I find no merit that there is unclean hands on the ground
that the appellant got dishonoured two cheques of ` 10,000/- each and
therefore has committed breach of contract inasmuch as this aspect has
more to do with breach of contract by the appellant and not to do with the
issue of unclean hands.
Further, merely because at the time when the cheques given on
29.8.1979 were got dishonoured, no notice was sent by the appellant giving
the reason for dishonouring them, cannot really be an issue of unclean
hands as argued on behalf of the respondents. I may note that the appellant
has already taken up a case and deposed accordingly that payment by the
cheques was conditional upon giving complete possession and since
complete possession was not given, these cheques were got dishonoured.
Surely, in law it is not required that on each action and a reaction, a legal
notice has to necessarily follow. This argument therefore raised on behalf
of the respondents that legal notice ought to have been sent by the appellant
after getting the cheques of ` 10,000/- each, given on 29.8.1979,
dishonoured and is thus an issue of unclean hands, is wholly without merit.
22. Learned counsel for the respondents finally argued that
discretionary relief of specific performance should not be given in the facts
of the present case where out of ` 1,60,000/- only ` 80,000/- is paid and the
appellant already had with him complete area of 2000 sq. yds. under the
agreement to sell. In fact, at one stage, it was sought to be argued on behalf
of the respondents that not only 2,000 sq. yds. of land is with the appellant
but, in fact, possession of 2300 sq. yds. of land was given to the appellant
inasmuch as respondents were owners of 2300 sq. yds. of land and
possession of total area of this 2300 sq. yds. of land was given to the
appellant. In my opinion, in the facts of the present case, the issue of
discretionary relief will not be an issue to be held against the appellant
inasmuch as the situation which has emerged in the present case of lack of
clarity of the area, lack of clarity of the price, disputes with respect to a
portion of land of which ownership was claimed by the respondents,
handing over of further land after the agreement to sell was entered into,
there being no wall on the fourth side and which was a pond and which was
filled up by the respondents etc are all aspects which show that it cannot be
said that there exist such clear cut circumstances that it was the appellant
who had received a specific area of 2000 sq. yds. and he was refusing to
pay the balance amount of ` 60,000/-. In fact, the present situation is of the
making of the respondents who were seeking to blow hot and cold and
avoid performance of their obligation under the agreement to sell. Also in
my opinion, the issue of denial of discretionary relief cannot be raised by
the respondents who are themselves guilty of breach of contract. Further,
the discretion in granting or denying the specific performance is a judicial
discretion to be exercised as per the facts of each case and once it is clear
that agreement to sell has in fact been acted upon, substantial price i.e. over
60% of the price is paid, possession of the substantial portion of the land
has been given to the appellant, it cannot be said that specific performance
should be denied in the facts of the present case once we take note of
Section 20(3) of the Specific Relief Act, 1963. Some of the instances of
the Court being entitled to refuse the discretion of specific performance, are
contained in Section 20(2) and the facts of the present case do not fit in any
sub-provision of the said Section 20(2) inasmuch as so far as the scenarios
falling under sub Sections (b) & (c) of Section 20(2) are concerned, I am
in the later part of this judgment directing a forty times increase in the
balance price payable, if of course there will remain any balance price
payable.
23. I have also had an occasion to consider this aspect in the
judgment reported as M/s. Nehru Place Hotels Ltd. vs. Smt. Kanta Bala,
2011(123) DRJ 148, wherein after considering many Supreme Court
judgments on this aspect, I have observed as under:
16(i). In my opinion, the argument as raised by the
learned senior counsel for the appellant/defendant that
instead of specific performance only the relief of damages
ought to have been granted deserves rejection for the
various reasons stated herein after. What has been argued
before this Court is that there has been considerable rise in
the price of the property and therefore specific performance
should not be granted. Reliance for this proposition was
placed on behalf of the appellant/defendant, on the
judgments of the Supreme Court reported as Kanshi Ram
Vs. Om Prakash Jawal and Others (1996) 4 SCC 593, M.
Meenakashi and Others Vs. Metadin Agarwal (dead) by
LRS. (2006) 7 SCC 470, Nirmala Anand Vs. Advent
Corporation (P) Ltd. AIR 2002 SC 3396 and Jai Narain
Parasrampuria (dead) and Others Vs. Pushpa Devi Saraf
and Others (2006) 7 SCC 756.
....................
17(i). Let me now assume that a ground was raised
in the written statement and in the grounds of appeal that
instead of specific performance alternative relief of damages
should be granted and deal with the same. Let us also
assume that this has also been proved in evidence, though it
has not been so proved and as noted in para 16(iii) above.
There is no quarrel to this proposition that a Court can and
does in the facts and circumstances of a particular case use
its discretion, which is a judicial discretion, so as to deny
the relief of specific performance and grant only the relief of
damages. A reference to the decision of Kanshi Ram
(supra) cited by the learned senior counsel for the
appellant/defendant shows that the said decision is in the
nature of an order and there is no discussion in the same as
to what were the facts and circumstances due to which the
Supreme Court granted the alternative relief of damages
instead of specific performance. This becomes clear from
para 5 of the said judgment which is relied upon by the
learned counsel for the appellant/defendant and which reads
as under:-
"5. Having regard to the facts of this case and the
arguments addressed by the learned counsel, the
question that arises for consideration is: whether it
would be just, fair and equitable to grant the decree for
specific performance? It is true that the rise in prices of
the property during the pendency of the suit may not be
the sole consideration for refusing to decree the suit for
specific performance. But it is equally settled law that
granting decree for specific performance of a contract
of immovable property is not automatic. It is one of
discretion to be exercised on sound principles. When
the court gets into equity jurisdiction, it would be
guided by justice, equity, good conscience and fairness
to both the parties. Considered from this perspective,
in view of the fact that the respondent himself had
claimed alternative relief for damages, we think that
the courts would have been well justified in granting
alternative decree for damages, instead of ordering
specific performance which would be unrealistic and
unfair. Under these circumstances, we hold that the
decree for specific performance is inequitable and
unjust to the appellant."
The decisions in the cases of M. Meenakashi and
Others (supra) and Jai Narain Parasrampuria (dead) and
Others (supra) lay down the same ratio and holds that in
certain cases once there is increase in prices during the
pendency of the litigation or some increase in cost, instead
of specific performance, the relief of damages can be
granted. Reliance is also similarly placed on the decision of
Nirmala Anand (supra) and para 6 whereof reads as under:-
"6. It is true that grant of decree of specific
performance lies in the discretion of the Court and it is
also well settled that it is not always necessary to grant
specific performance simply for the reason that it is
legal to do so. It is further well settled that the Court in
its discretion can impose any reasonable condition
including payment of an additional amount by one
party to the other while granting or refusing decree of
specific performance. Whether the purchaser shall be
directed to pay an additional amount to the seller or
converse would depend upon the facts and
circumstances of a case. Ordinarily, the plaintiff is not
to be denied the relief of specific performance only on
account of the phenomenal increase of price during the
pendency of litigation. That may be in a given case,
one of the considerations besides many others to be
taken into consideration for refusing the decree of
specific performance. As a general rule, it cannot be
held that ordinarily the plaintiff cannot be allowed to
have, for her alone, the entire benefit of phenomenal
increase of the value of the property during the
pendency of the litigation. While balancing the
equities, one of the consideration to be kept in view is
as to who is the defaulting party. It is also to be borne
in mind whether a party is trying to take undue
advantage over the other as also the hardship that may
be caused to the defendant by directing the specific
performance. There may be other circumstances on
which parties may not have any control. The totality of
the circumstances is required to be seen."
(ii) The proposition of law that relief of specific
performance is a discretionary relief is in fact statutorily
provided in Section 20 of The Specific Relief Act, 1963
which contains various instances where specific
performance is not granted but only damages are granted.
Section 20 has been expounded upon by the Supreme Court
in various decisions, including in the decisions which have
been cited by the learned senior counsel for the
appellant/defendant. However, a reference to each of these
cases shows that the discretion is a judicial discretion which
is exercised in the facts of each case and increase in price
(or cost) is only one of the factor which has to be considered
in the totality of the facts of each case. For example, a
buyer may have paid only a very nominal consideration of
about 5% to 10% of the total price and in which
circumstances, the Court may feel that instead of specific
performance alternative relief of damages is to be granted.
This is to be contrasted with the case where a buyer has paid
most of the price or after paying the price has received
actual possession of the property and in which cases the
relief of specific performance is granted and not the
alternative relief of damages. Further, there are many cases
and circumstances where there is caused undue hardship or
inequity on account of specific performance therefore
instead of specific relief only the relief of damages is
granted. In the present case, I do find it a very strained logic
of the appellant/defendant to argue that as a builder since his
property became more valuable, (inasmuch as the price has
increased), instead of specific performance, damages should
be granted. The argument in fact is totally without
substance because if this argument is accepted every builder
whose project is delayed, whether for genuine reasons or
not, will come and say that now contemporary prices during
the litigation are much higher and therefore instead of
specific performance only damages must be granted. In fact,
I may note that the decision of Nirmala Anand (supra) in
fact goes against the appellant/defendant because what is
held in that judgment is that ordinarily specific performance
ought to be granted and only very rarely the relief of
specific performance is to be denied. In the present case it is
the appellant who is the defaulting party and who in any
case is getting the requisite escalated cost. I have also in the
subsequent part of this judgment not only granted interest
(which was not granted by the Trial Court) to the
appellant/defendant but a very high one. I therefore reject
this argument of the learned counsel for the
appellant/defendant that only damages should have been
granted and not specific performance. In fact, I have
already noted above if there is any equity the same is
towards the respondent because almost the entire basic price
was paid and the dispute for the balance and additional
payment became inextricably linked with the illegal and
unreasonable action of the appellant/defendant in changing
the prime location and also reducing the area which had
been agreed to be sold. Further it is the appellant/defendant
itself who started using the space which was constructed for
being allotted to the respondent/plaintiff, as its own office,
and as so noted by the trial Court in the impugned judgment.
The injustice/prejudice/undue hardship will thus be to the
respondent/plaintiff if specific performance is not granted."
I therefore hold that there are no valid reasons for denying the
relief of specific performance in the facts of this case as detailed
hereinabove.
24. The issue now boils down to the fact that should specific
performance be granted because there is lack of clarity today as to the exact
area in possession of the appellant and consequently lack of clarity in the
price. The other argument raised on behalf of the respondents relying upon
the judgment of the Supreme Court in the case of K.S.Vidyanandam &
Ors. Vs Vairavan, AIR 1997 SC 1751 that on account of the delays in
filing of the suit for specific performance and subsequent delays, the relief
of specific performance should be denied as today the respondents cannot
get a property of the equivalent value of the balance price of ` 60,000/-
which could have been purchased by the respondents in the year 1979, will
stand decided against the respondents in view of my observations made in
the case of Nehru Place Hotels Ltd. (supra).
25. The facts of this case in fact, in my opinion are tailor-made, so
to say, for invoking of the provision of Section 12 of the Specific Relief
Act, 1963 and sub Sections 3 and 4 thereof. Under Section 12, specific
performance can be granted even of a part of the contract. In the present
case, sub section 3 of Section 12 squarely applies. In order to appreciate
the reasoning on the basis of Section 12, I would like to reproduce the
entire Section and which reads as under:-
"12. Specific performance of part of contract.-
(1) Except as otherwise hereinafter provided in this
section the court shall not direct the specific performance
of a part of a contract.
(2) Where a party to a contract is unable to perform the
whole of his part of it, but the part which must be left
unperformed by only a small proportion to the whole in
value and admits of compensation in money, the court
may, at the suit of either party, direct the specific
performance of so much of the contract as can be
performed, and award compensation in money for the
deficiency.
(3) Where a party to a contract is unable to perform
the whole of his part of it, and the part which must be left
unperformed either-
(a) forms a considerable part of the whole, though
admitting of compensation in money‟ oar
(b) does not admit of compensation in money,
he is not entitled to obtain a decree for specific
performance; but the court may, at the suit of other
party, direct the partly in default to perform
specifically so much of his part of the contract as he
can perform, if the other party-
(i) In a case falling under clause (a), pays or has
paid the agreed consideration for the whole of
the contract reduced by the consideration for
the part which must be left unperformed and a
case falling under clause (b), the consideration
for the whole of the contract without any
abatement; and
(ii) in either case, relinquishes all claims to the
performance of the remaining part of the
contract and all right to compensation, either
for the deficiency or for the loss or damage
sustained by him through the default of the
defendant.
(4) When a part of a contract which, taken by itself,
can and ought to be specifically performed, stand on a
separate and independent footing from another part of the
same contract which cannot or ought not to be
specifically performed, the court may direct specific
performance of the former part."
26. As per Section 12(3)(b), a party to a contract including the
buyer can insist on specific performance of a part of the contract by
proportionately reducing the consideration to the proportionately reduced
area of the land of which ownership will have to be transferred under the
agreement to sell. Learned senior counsel for the appellant states that the
appellant relinquishes all other claims under the agreement to sell, and
which is required of the appellant by virtue of Section 12(3)(b)(ii) of the
Specific Relief Act, 1963. Accordingly, by virtue of the relevant part of
Section 12(3) of the Specific Relief Act, 1963, specific performance in this
case will have to be granted with respect to the area which is in possession
of the appellant, being the land of which ownership vests with the
respondents, and ownership of which area has to be transferred to the
appellant by specific performance of the subject agreement to sell dated
1.6.1979. However, this cannot take place unless it is known as to what is
the exact area of the land which is presently in possession of the appellant.
The appellant claims there is an area of approximately 1360 sq. yds. with
him, plus of course the area under the boundary walls, whereas the
respondents on the other hand contend that the appellant has around 1560
sq. yds. of land in his possession.
27. Accordingly, while accepting the appeal and setting aside the
impugned judgment of the Trial Court dated 25.1.2003, it would be
required that a competent person be appointed to measure the exact area of
land which is in the possession of the appellant, so that the balance price
which may be payable by the appellants to the respondent for specific
performance of the subject agreement to sell can be decided. Today, no
orders can be passed as to what is the balance amount which the
respondents will be entitled to inasmuch as I intend to modulate the amount
which would be payable to the respondents depending on the exact area
which is found to be in possession of the appellant. However, I hold that
whatsoever would be the balance price, which would be if payable, should
be multiplied by 40 times inasmuch as I would take the rough appreciation
of the prices in a city like Delhi in these last 33 years from 1979 till date at
approximately 40 odd times. Of course the factor of 40 times is also taken
not only with reference to the increase of prices from the date of the
Agreement to Sell to today but also as per the facts of the case where I feel
that multiplication of balance price by forty times will meet the ends of
justice. I have also taken note of the fact that the subject land is not
situated in the prime localities of Delhi such as the South Delhi and Central
Delhi, and is situated in North Delhi which did not rapidly urbanise. That
the Courts have the power to alter the price in order to promote equity,
justice and good conscience is no longer res integra and direct judgment of
the Supreme Court entitling Courts to suitably alter the price payable to a
seller on account of passage of time is the judgment of the Supreme Court
in the case of Nirmala Anand vs. Advent Corporation (P) Ltd. 2002(8)
SCC 146. However, I may hasten to clarify that this observation with
respect to multiplying the balance price by 40 times is made by me on the
assumption that in fact considering the actual area with the appellant taken
with the price already paid of `1,00,000/-, the price paid to the respondents
is less than as compared to and as a proportion to the total price of
`1,60,000/- i.e. there would be payable balance price by the appellants as
they would be having proportionately larger area than the area which ought
to be with the appellant when this area of which appellant is in possession
is taken in proportion to the price paid being ` 1 lakh out of the total price
of ` 1,60,000/-.
28. Appeal is therefore accepted. Impugned judgment and decree
dismissing the suit of the appellant for specific performance and decreeing
the suit of the respondents for possession and mesne profits is set aside.
Suit of the respondents for possession, declaration, damages, etc. shall
stand dismissed. Suit of the appellant for specific performance shall stand
decreed. In order to pass further orders with respect to passing of the exact
directions for specific performance, since the area of the land has to be
measured, I direct both the parties to file in Court within four weeks an
agreed name of an Architect, and who can be appointed to take the exact
measurement of the area of the land in possession of the appellant. I am
directing the giving of a common name in order to avoid further
prolongation of litigation because if an Architect as suggested by one of the
party is appointed or even if an independent Architect is appointed, parties
may want to file objections even with respect to the measurement, seeing
bitterness of the litigation.
29. List for further proceedings on 9th May, 2012 and on which
date counsel for both the parties will give the name of the Architect
acceptable to both the parties who will be required to go to the spot and
take actual measurement of the area in possession of the appellant and the
land which was the subject matter of the agreement to sell dated 1.6.1979.
Other related or consequential directions, will also, if so required, be
passed on the next date of hearing.
VALMIKI J. MEHTA, J
MARCH 22, 2012
ak/Ne
