Dave Ramshankar Jivatram v. Bai Kailasgauri — 1972 DIGILAW 112 (GUJ)

JUDGEMENT :- This is original defendant's second appeal directed against the decision of the learned Assistant Judge, Baroda, given on September 26, 1967, in Regular Civil Appeal No. 162 of 1965, thereby affirming the decision given in respondent-plaintiff No. 1's suit or a decree of specific performance of an immovable property, situated in the City of Baroda, which the appellant-defendant had earlier purchased and then agreed to reconvey the same within a period seven years from the date of agreement of reconveyance Exhibit 27. The Courts below have rejected the defence of the specific performance will give the plaintiff respondent an unfair advantage over the defendant-appellant which he did not foresee. The Courts have thus taken the view that the case does not fall under clause (a) or clause (b) of Sub-Sec. (2) of Section 20 of the specific Relief Act, 1963 (Act No. 47 of 1963) hereinafter referred to as the Act). The defence contention further was that the granting of such a decree was discretionary and the discretion should be exercised on sound judicial principles and that in view of the admitted fact that plaintiff No. 1 had, before the date of the institution of sale the suit entered into an agreement of sale of the said property in favour of two other persons who were joined in the trial Court as plaintiffs Nos. 2 and 3 the decree for specific performance should be refused. The contention does not appear to have been dealt with at length or may not have been urged before the lower appellate Court in details. 2. It appears that file plaintiff-respondent Bal Kailasgauri, widow of Desai Ishwarbhai Ranchhodbhai was the owner of the suit property, which is a house having a ground floor and two upper floors, situated in Ghantivada in the City of Baroda. She also owned another house known as the Haveli, in which she was residing. The Ghantivada house was rented out by her to three different tenants end was in occupation of the tenants at all material tunes. She executed a sale deed of this Ghantivada house in favour of Dave Ramshanker Jivatram, defendant-appellant who was a school teacher. The sale was by a registered sale deed, dated June 25, 1959 for a consideration of Rs. 5,999. She executed a sale deed of this Ghantivada house in favour of Dave Ramshanker Jivatram, defendant-appellant who was a school teacher. The sale was by a registered sale deed, dated June 25, 1959 for a consideration of Rs. 5,999. The relevant recital in the sale deed speaks of the consideration and also of the material fact that the house was old and in a dilapidated condition and there was no latrine in the house. It states that it was sold to the defendant-appellant permanently end with possession and that, under no circumstance the house was to be taken back from the defendant-appellant. This sale deed was got registered on the next day, June 25, 1959. It was on this very day on which the sale deed was got registered that the parties entered into an agreement of reconveyance of the said property by a document, Exhibit 27 dated June 26, 1959. It was executed on a stamp-paper of Rs. 1.50, signed and duly attested. The defendant-appellant, who had purchased the property, had executed the document in favour of plaintiff No. 1, respondent. The document states that, although the executant had purchased the property and had become the owner of the property, still because of the good relations between the parties, toe executant agreed to sell the property for the same amount of consideration, viz., Rs. 5,999/- to the plaintiff-respondent within a period of seven years. It further states that, as the property was in a dilapidated condition and did not have a latrine therein, the executant was entitled to make necessary repairs and incur expenses upto limit of Rs. 751/-. If plaintiff No. 1 required the property to be reconveyed to her within a period of seven years, the executant would hand over the property to the plaintiff on the same consideration plus Rs. 751, as the expenses incurred for repairs, etc. Thus, on the day following the day on which the defendant purchased the suit property from plaintiff No. 1, defendant agreed to reconvey the property to plaintiff No. 1 within a period of seven years for the same consideration plus Rs. 751, as the, amount of expenses incurred. In repairs, etc. The plaintiff No. 1, who wants the property to be reconveyed, has filed the present suit being Regular Civil Suit No. 415 of 1963, on March 14, 1963. In the Court of the 4th Joint Civil Judge. 751, as the, amount of expenses incurred. In repairs, etc. The plaintiff No. 1, who wants the property to be reconveyed, has filed the present suit being Regular Civil Suit No. 415 of 1963, on March 14, 1963. In the Court of the 4th Joint Civil Judge. Junior Division, Baroda. The plaintiff offered to pay the same amount of consideration plus the amount of expenses as stipulated. The defendant resisted the suit and contended, inter alia, that the grant of the decree of specific performance would give an unfair advantage to the plaintiff over the defendant and would cause hardship to the defendant. It was contended that the decree for specific performance should not he granted in view of the fact that plaintiff No. 1 had entered into an agreement of sale of the suit Property with plaintiffs Nos. 2 and 3 and, therefore, compensation in money was the adequate relief. It was also contended that the agreement of reconveyance, Exhibit 27, was without consideration and it was out of good relations between the parties that it was entered into. It was contended that Exhibit 27 was executed on a blank pacer and the defendant had relief upon the representation made by one Mahendrakumar, nephew of plaintiff No. 1 to the effect that the suit house was to be given for personal use of plaintiff No. 1 only, in case she was required to sell her Haveli building, in which she was residing, for paying off her debts. It was contended that both documents. Exhibits Nos. 17 and 27 were not simultaneously executed and formed part of one and the same transaction and that document. Exhibit 27, required registration and in the absence of the document having been registered, it could not affect the property sought to be reconveyed thereby. The Courts below have rejected all these contentions. However, as aforesaid, the Courts do not appear to have considered the question of compensation in money being the adequate relief. The learned trial Judge passed a decree of specific performance in favour of plaintiff No. 1 and ordered that the defendant should execute the sale deed of the suit property in favour of plaintiff No. 1 on payment by her of Rs. 5,999 plus Rs. 751 as costs of repairs, etc. The learned trial Judge passed a decree of specific performance in favour of plaintiff No. 1 and ordered that the defendant should execute the sale deed of the suit property in favour of plaintiff No. 1 on payment by her of Rs. 5,999 plus Rs. 751 as costs of repairs, etc. the costs of execution and registration of the sale deed to be borne by the plaintiff No. 1; possession of the suit property shall be delivered by the defendant to the plaintiff No. 1. The Court directed that if the defendant failed to execute the sale deed as above within one month, the plaintiff No. 1 should be at liberty to have the sale deed executed through the Court. No relief was granted in favour of plaintiffs Nos. 2 and 3 and it was held that plaintiffs Nos. 2 and 3 had no legal right to specific performance of the agreement in the appeal against this decision, the learned Assistant Judge, Baroda. has rejected the defence and confirmed the decree of the trial Court. It is found that the agreement was not made, as alleged in paragraph 13 of the written statement of the defendant wherein a plea of the document having been executed on a representation being made by one Mahendrakumar was taken. It was found that the suit agreement was not without consideration. It was found that the plaintiff was entitled to the reconveyance being made. The decree of the trial Court has thus been confirmed. To this appeal, original plaintiffs Nos. 2 and 3 were not parties. They did not make any application to be joined as parties and did not seek any relief. It is against this decision that the present second appeal is directed and is filed by the original defendant and to which the original plaintiff No. 1 is the sole respondent Plaintiff Nos. 2 and 3 have filed Civil Application No. 2293 of 1968 for joining them as parties in this appeal. 3. Mr. M.B. Shah, learned advocate appearing on behalf of the appellant had contended before me that the document. Exhibit 27, was without consideration, was brought about on the representation made by Mahendrakumar and that it was executed and sinned on a blank paper. These are questions of fact and these contentions have been rejected by the two Courts below. 3. Mr. M.B. Shah, learned advocate appearing on behalf of the appellant had contended before me that the document. Exhibit 27, was without consideration, was brought about on the representation made by Mahendrakumar and that it was executed and sinned on a blank paper. These are questions of fact and these contentions have been rejected by the two Courts below. It would, therefore, not be open to me to go into these questions. 4. Mr. M.B. Shah then contended that the document Exhibit 27 required registration because it varied the persons or the document, Exh. 17, both of which were parts of one and the some transaction and further because Exhibit 2 prohibited any construction on the open land to one north of the suit house. Now, it is clear that document, Exhibit 17, which is a sale deed executed by plaintiff No. 1 in favour of the defendant was executed on June 25, 1959. The agreement of reconveyance was executed subsequently. It is true that document, Exhibit 17, was registered on the same day on which document, Exhibit 27, came to be executed namely, on June 26, 1959. But document Exhibit 27, came to be executed after the execution of the documents together, it is clear that they are not part of the one the same transaction. Thus the Exhibit 27, which is an agreement of reconveyance, does not require any registration. The question of variation does not arise in this situation. If the document, which has not been registered is really a part parcel of the transaction, which is only partly evidenced by the registered document, then It is clear that the other document also requires to be registered. But, if the agreement to reconvey can be treated as a separate transaction, then under Section 54 of T. P. Act, it vests interest in the property and need not be registered. The documents, Exhibit Nos. 17 and 27 are distinct transactions. The document Exhibit 27, therefore, does not require registration. 5. It was contended that the document, Ex. 27. lacken mutuality and therefore, the plaintiff could not enforce the agreement as it was not simultaneous. The documents, Exhibit Nos. 17 and 27 are distinct transactions. The document Exhibit 27, therefore, does not require registration. 5. It was contended that the document, Ex. 27. lacken mutuality and therefore, the plaintiff could not enforce the agreement as it was not simultaneous. As observed by a Division Bench of the Bombay High Court in R.S. Ghadge v. L.S. Ghadge - AIR 1960 Bom 105 - an agreement to reconvey land to the vendor at any time on repayment of the sale price could not be said to be void on the ground of absence of mutuality and was Specifically enforceable. The contention raised by Mr. M.B. Shah thus does not survive. 6. Mr. M.B. Shah then contended that the right of specific performance would give an unfair advantage to the plaintiff No. 1 over the defendant and that the performance of the contract would involve some hardship on the defendant, which he did not foresee, whereas non-performance would involve no such hardship on the plaintiff No. 1 Mr. Shah wants thus to rely on clauses (a) and (b) of Sub-Section (2) of Section 20 of the Act, In Mr. Shah's submission 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. Thus, relying on clauses (a) and (b) of Sub-Section (2) of Section 20 of the Act. he contends that the decree of specific performances should have been refused on these grounds. Now it is clear that the defendant knew, at the time when be entered into the agreement of reconveyances, that he would be put to some hardship. He had thus taken a calculated risk. It is true that he has got the house repaired and also constructed a latrine in house. It is also true that he has got the first and the second floors of the house vacated and he himself is occurring the same. But, these facts would not entitle the defendant to a plea covered under clauses (a) and (b) of Sub-Section (2) of Section 20 of the Act. It is well settled that the question of hardship must be judged as on the date of the transaction and not in the light of subsequent events and the hardship should be one collateral to the contract and not in relation to a term of the contract. It is well settled that the question of hardship must be judged as on the date of the transaction and not in the light of subsequent events and the hardship should be one collateral to the contract and not in relation to a term of the contract. The question of hardship of a contract is to be judged as at the time at which it is entered into. This is a general rule. It also contemplates an exception to the general rule in cases where events involving hardship have occurreds subsequent to the contract due in some way to the party who seeks specific performance. Thus the defendant would not be entitled to a plea of hardship in the instant case. There is no question of any undue advantage either. The contention of Mr. Shah has thus no merit and is rejected. 7. However, the material question, which now falls for my consideration and which has been seriously contended by Mr. M.B. Shah for the defendant, is that having regard to the facts of the case this is a contract for the non-performance of which compensation in money is an adequate relief and, therefore, the case is covered by clause (a) of Sub-Section (1) of Section 14 of the Act. Now, as aforesaid the document of sale. Exhibit 17, which is a registered sale deed, was entered into between the plaintiff No. 1 and the defendant and the plaintiff No. 1 thereby sold the suit property to fee present defendant in the existing condition. The document itself mentions that the suit house is in a dilapidated condition and has been let out to the tenants and it states that the defendant is entitled to make repairs and that the possession of the property is handed ever to the defendant permanently and was not to be taken back for any reason whatever. The undisputed fact is that at the date of the sale, the plaintiff No. 1 was residing in another house, known as the Haveli. The suit property was rented out by plaintiff No. 1 to three different tenants. The suit property consisted of a ground floor and two upper floors. The defendant was residing to a rented premises. He filed a civil suit for eviction against the tenants. The suit property was rented out by plaintiff No. 1 to three different tenants. The suit property consisted of a ground floor and two upper floors. The defendant was residing to a rented premises. He filed a civil suit for eviction against the tenants. He got the first and the second floors vacated for himself for his own use and occupation and has been occupying the two floors ever since. He has given the ground floor to the tenant, who was occupying the two upper floors as a tenant. The defendant is thus occupying the suit property as an owner and is in actual possession of the two floors, which he is using for the residence of himself and the members of his family. He has repaired the house. He has constructed a latrine therein. He has thus made substantial changes in the house. Plaintiff No. 1 does not require the suit house for her own residence and that is the material fact. Even before the date of the institution of the suit, she had entered into an agreement of sale with original plaintiffs Nos. 2 and 3 and executed a Banakhat. Exhibit 25, dated February 14, 1963. The agreement of sale is for a consideration of Rs. 11,999 and Rs. 501 has been given as an earnest money, as stated in the document it is stated in the plaint itself, in paragraph 2, that the plaintiff No. 1 has entered into an agreement of sale of the suit property on 14-2-1963 with plaintiffs Nos. 2 and 3. In the plaint, relief is claimed that the sale deed be executed in favour of plaintiffs Nos. 2 and 3 or, in the alternative, in favour of plaintiff No. 1. These are material fads, which are not in dispute before me. These facts indicate that plaintiff No. 1 does not require the suit property for her own use or occupation. She only wants to reconvey the property. Having regard to the peculiar facts of the case, the document. Exhibit 27, is a contract for the non-performance of which compensation in money is an adequate relief. In such a case, the contract cannot be specifically enforced, as provided in clause (a) of Sub-Section (1) of Section 14 of the Act Plaintiff No. 1, who is the respondent herein, has already entered into an agreement of sale of the suit property. In such a case, the contract cannot be specifically enforced, as provided in clause (a) of Sub-Section (1) of Section 14 of the Act Plaintiff No. 1, who is the respondent herein, has already entered into an agreement of sale of the suit property. She does not require the property for her own self. She could be adequately compensated in money and, in my opinion, it would be an adequate relief. 8. Mr. S.B. Muzumdar, learned advocate appearing on behalf of the respondent-plaintiff, relied upon a decision of the Division Bench of this Court in Abdul Satar v. Manilal - AIR 1970 Guj 12 - wherein the Division Bench has taken the view that, circumstances prevailing at date of agreement are to be considered and not as to what happened Subsequently. But that is the answer when a plea, under Sub-Section (2) of Section 20 of the Act is taken, which corresponds to Section 22 of the Specific Belief Act 1877, that the discretion of the Court has to be exercised on sound judicial principles and not arbitrarily. It is well settled that the second appellate Court is competent to interfere in the exercise of discretion under Section 20 of the Act, where the discretion has not been properly exercised. This is a case in which the Court has not considered the question of applicability of clause (a) of Sub-Section (1) of Section 14 of the Act. The discretion has thus not been rightly exercised and it is a case in which I should properly interfere. 9. It was contended by Mr. Muzumdar that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money and that is the rule provided in Section 10 of the Act. That, is so. But, Mr. Muzumdar misses the Explanation to Section 10 of the Act which provides that, unless and until the contrary is proved, the Court shall presume - (i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money. Thus, the presumption which arises in respect of breach of a contract to transfer immovable property, namely, that it cannot be adequately relieved by compensation in money, is a rebuttable presumption. The facts are eloquent and clearly they rebut the presumption. The plaintiff No. 1, admittedly does not require the suit property for her own self. Thus, the presumption which arises in respect of breach of a contract to transfer immovable property, namely, that it cannot be adequately relieved by compensation in money, is a rebuttable presumption. The facts are eloquent and clearly they rebut the presumption. The plaintiff No. 1, admittedly does not require the suit property for her own self. She only wants to sell away the suit property to plaintiffs Nos. 2 and 3 at a profit She has entered into an agreement of sale Exhibit 25, Banakhat, dated 14-2-1963. The sale is to be for a price of Rs. 11,999. Thus, what she wants is the money value of the property. The defendant has purchased the property for a sum of Rs 5.99 p. He is entitled to make repairs and incur other expenses, the extent of Rs. 751, as provided for in the agreement of reconveyance. Ex. 27. The difference therefore, would be only of Rupees 5,549. The plaintiff No. 1 would thus be adequately compensated in money if I decree an award of Rs. 5,249 in her favour, as compensation in money for the admitted breach of the specific performance of the agreement to reconvey evidenced by the document. Exhibit 27. Mr. Shah, on behalf of the appellant, declares that his client is ready to pay this amount as compensation. I need not therefore, go into further detail on this point as regards the quantum of damages. Accordingly, although I have dismissed the other contentions of Mr. Shah. I must accept the last one. I hold that, having regard to the special facts of the case stated earlier this is not a case in which specific performance of the contract to transfer the immovable property should be granted although there is a breach off such contract. In my opinion, the breach would be adequately relieved by compensation in money. I, accordingly, set aside the decree of specific performance passed by the learned 4th Joint Civil Judge, Junior Division, Baroda, in Regular Civil Suit No. 415 of 1963, and confirmed by the learned Assistant Judge, Baroda, in Regular Civil Appeal No. 162 of 1965, and instead decree that the defendant-appellant do pay to the plaintiff No. 1 (respondent herein) a sum of Rs. 5,249 as compensation in money for the breach of the agreement. Exhibit 27. 5,249 as compensation in money for the breach of the agreement. Exhibit 27. The defendant to pay this amount within ten weeks from today failing which the amount will carry interest at 6 per cent per annum from the date of the expiry of the period of ten weeks. The appeal is partly allowed with no order as to costs in the circumstances of the case. 10. The respondent herein has filed cross-objections against the decision of the learned trial Judge holding that plaintiffs Nos. 2 and 3 have no legal right to demand specific performance of the agreement. Exhibit 27. There is no merit in the cross-objections. Cross-objections are therefore, dismissed with costs. 11. Civil Application No. 2293 of 1968 is filed by original plaintiffs Nos. 3 and 3 of the original suit out of which this second appeal arises. By this application, they want to be Joined as parties to the appeal. Now, the suit of original plaintiffs Nos. 2 and 3 was dismissed by the trial Court. No appeal was filed by them before the District Court. Even in the defendant's appeal, which was filed in the District Court, their application, to be joined as parties, was rejected because the cause of action against the defendant arose out of the suit agreement to which plaintiffs Nos. 2 and 3 were not parties. They have thus no cause of action. They have no right to be joined in the appeal. Civil Application No. 2293 of 1968 is therefore, dismissed with costs. 12. Mr. Muzumdar submits that plaintiff No. 1 has deposited to the trial Court a sum of Rs. 5,999 as the consideration amount payable to the defendant for specific performance which was decreed and in view of the decree now being passed by which specific performance is refused, plaintiff No. 1 may be allowed to withdraw the amount. Mr. Shah has no objection. The plaintiff No. 1 is therefore, allowed to withdraw the amount deposited by her in the trial Court.