D. P. WADHWA, J. ( 1 ) THIS is a original suit filed for specific performance of an agreement to sell respecting certain property at Kailash Colony, New Delhi, which agreement had been entered into between the plaintifs as the purchasers and the defendants as the sellers. The plaintiffs filed this suit on 8 March 1989. They not only sought specific performance of the aforesaid agreement to sell which is dated 2 February 1987 but also sought certain relief for injunction as well as claiming a decree for damages in the alternative. When the suit came up for hearing before the learned Single Judge on 9 March 1989, he adjourned the same to the following day. The learned Single Judge suo moto raised a question if suit for specific performance of an agreement to sell was at all maintainable in view of Article 300a of the Constitution. He, therefore, referred the question to be decided by a larger Bench. In the meanwhile, three more suits (Suits Nos. 692/ 89, 849/89 and 1 "29/89) were also filed for specific performance of respective agreements to sell and the learned Single Judge following his order dated 10 March 1989 in Suit No. 685/89 again referred the question which also arose in those suits for decision by larger Bench. Hence, this reference before us. ( 2 ) AS to how the learned Single Judge thought that the question needed examination by larger Bench, if will be appropriate to set out his order which is as under :- "this is a suit for specific performance of an agreement to sell dated 2. 2. 1987, which is stated ro have been entered into between the plaintiffs and the defendants to sell the entire first and second floors, staircase, miani and the roof on the second floor of the promises known as H -26, Kailash Colony, New Delhi. It is also stated that plaintiff No. 1 is also the tenant of the first floor of the premises. According to the said agreement between the parties, the sale-deed is to be executed within a month upon obtaining income-tax clearance certificate, or upto 30. 8,1987. whichever is later. It is asserted in para 8 of the plaint that the income-tax clearance certificate has not been applied for, for the reason mentioned therein.
According to the said agreement between the parties, the sale-deed is to be executed within a month upon obtaining income-tax clearance certificate, or upto 30. 8,1987. whichever is later. It is asserted in para 8 of the plaint that the income-tax clearance certificate has not been applied for, for the reason mentioned therein. This suit for specific performance, like other suit for specific performance, would raise an issue of constitutional importance, namely, the effect of Article 300a on the provisions of the Specific Relief Act, insofar as they relate to specific performance of agreement to sell an immovable property. " ( 3 ) ARTICLE 300a of the Constitution is in the following terms ;- "no person shall be deprived of his property save by authority of law. " This provision of the Constitution is a new provision, and stands by itself in Chapter IV of the Constitution, having been inserted by the Constitution (Forty-fourth Amendment) Act, 1978 (w. e. f. 20. 6. 1979 ). LOOKING back into the history and interpretation of provisions of the Constitution, it is found that Article 19 (1) (f)conferred and gave to the citizens a fundamental right to acquire, hold and dispose of property. This right was, however, subject to reasonable restrictions postulated by clause 19 (5) of the Constitution, restrictions that were imposed by "law". Law was taken to be law made by Parliament which was competent to enact it. Law also included intra vires subordinate legislation. (See Yasin v. Town Area Committee, 1952 SCR 572 : Wazir v, State of HP. 1954 S. C. 415: Ganpati v. State of Ajmer, (1955) 2 S. C. R. 1065; Babu Lal v. State of Maharashtra. 1961 S. C. 884; Bishan Dass v. State of Punjab, 1961 S. C 1570; Kharak Singh v. State of U. P, 1963 S. C. 1295; and Cooper v. Union of India, 1970 S. C. 564 ). A suit for specific performance of a contract (not an agreement) to sell immovable property will result in an inter parties "judgment". Is judgment law within the meaning of constitutional provisions ? This question does not appear to have been subject matter of adjudication of Court. If judgment is law, then Article 300a would mean that it can deprive a person of his property.
Is judgment law within the meaning of constitutional provisions ? This question does not appear to have been subject matter of adjudication of Court. If judgment is law, then Article 300a would mean that it can deprive a person of his property. If the judgment is not law, then the judgment cannot so do as in any case the courts are required to uphold the Constitution and the Laws. IT is also to keep in view that the provisions of the Specific Relief Act state that specific performance is not to be granted merely because it is lawful to do so (Section 20 of the Specific Relief Act ). Earlier, Article 30 of the Constitution contemplated compulsory acquisition of property, and it stated in clause (1) that no person shall be deprived of his property save by authority of law. The old Aiticle 31 (1) and the present Article 300a are identical in terms, but appear to have been incorporated in the Constitution for different purposes. Article 31 related to compulsory acquisition of property, and Article 300a is to prevent deprivation of property. ALL the cases decided under Article 31 appear to be with reference to Parliament enacted statutes for compulsory acquisition. There appears to be no case on Article 31 which held that judgment inter partics is "law" within the meaning. of Article 31 of the Constitution. Indeed such a question could not have been raised, as the provision related to compulsory acquisition of property in exercise of power of eminent domain by the State. If judgment of court passed in a suit for specific performance is not law within the meaning of Arlicle 300a of the Constitution, a decree for specific performance would be futile and ought not to be passed. This is the question which needs tobe decided by a larger bench. It is stated by counsel for the plainiffs that he has not come across any case in which the provisions of tie Specific Relief Act have been examined vis-a-vis Article 300a of the Constitution. That question would stell need to be adjudicated upon. There is a difference between the wordings used in Article 300a and Article 21 of the Constitution, which also needs to be noted :- ( 4 ) ARTICLE 300a reads as follows :- "no person shall be deprived of his property save by authority of law.
That question would stell need to be adjudicated upon. There is a difference between the wordings used in Article 300a and Article 21 of the Constitution, which also needs to be noted :- ( 4 ) ARTICLE 300a reads as follows :- "no person shall be deprived of his property save by authority of law. " ( 5 ) ARTICLE 21 reads as follows :- "no person shall be deprived of his life or personal liberty except according to procedure established by law". The procedure established by law and authority of law, prima facie, being different expressions, would not mean one and the same thing. Legislature is not supposed to indulge in tautology (1974 S. C. 130, at page 133), can tautology be attributed. to the Constitution. If the words in Article 300a had been, "no person shall be deprived of his property save by the procedure established by law", then, prima facie, following the procedure in the Specific Relief Act, a person could be deprived of his property. The words used in the Article are, however, authority of law. Under Chapter II of the Delhi High Court (Original Side) Rules, the above question should be referred to a bench of two or more Judges. By virtue of Order XXVIIA of the Code of Civil Procedure, suits involving a substantial question of law as to interpretation of the Constitution, would require notice to the Attorney General. The aforesaid question would need to be decided as a constitutional question. Therefore, it may be proper to issue notice to the Attorney General. The papers be laid before Hon ble the Chief Justice for passing appropriate orders. sd/- Mahinder Narain, J. " ( 6 ) THE question, thus, raised and to be examined in the referring order is "the effect of Article 300a on the provisions of the specific relief Act in so far as they relate to the specific performance of agreement to sell an immovable property". What applies to immovable property will also apply to any other property as property in Article 300a is not confined merely to immovable property and it would include property "in all its forms. " ( 7 ) TO us it appears that the referring order proceeds on a wrong "premise that there is "deprivation of property in a suit for specific performance of contract within the meaning of Article 300 A".
" ( 7 ) TO us it appears that the referring order proceeds on a wrong "premise that there is "deprivation of property in a suit for specific performance of contract within the meaning of Article 300 A". The learned Single Judge then raised a poser if "judgment of a court is law. " There is yet another poser and it is "if judgment of court passed in a suit for specific performance is not law within the meaning of Article 300a of the Constitution, a decree for specific performance would be futile and ought not to be passed". The learned Judge then refers to the terms "authority of law" as appearing in Article 300a and "procedure established by law" as appearing in Article 21 and says that these are two different expressions. We do not think we need go into all these questions which appear to us to be more fit for academic discussion. ( 8 ) NONE of the parlies in all these four suits has come forward to support the reference. Counsel for the plaintiffs even went to the extent that reference was net at all necessary. Mr. G. R. Chopra, learned counsel for the defendants in Suit No. 685 of 1989, said that he would support the reference. When called upon to argue in support of the reference he merely stood up and said be had nothing further to add to what has been stated in the referring order. But we have seen, the order only raises certain "questions, some of them not quite relevant to the issues involved in the suits. ( 9 ) BEFORE we answer the question raised, we may as well refer to the law of specific performance of contract in general. ( 10 ) AS to what is the nature and purpose of the remedy of specific performance, the American Jurisprudence (Second Edition, Volume 71 says as under :- "specific performance of contracts is an equitable remedy of very ancient origin. It has been declared to be the most useful of the various equitable remedies, although it is available only to protect contract rights. Specific performance connotes "performance specifically as agreed.
It has been declared to be the most useful of the various equitable remedies, although it is available only to protect contract rights. Specific performance connotes "performance specifically as agreed. " The parpose of the remedy is to give the one who seeks it the benefit of his contract in specie by compelling the other party to the contract to do that which he has agreed to do-perform the contract-and hence a decree for specific performance is nothing more or lese than a means of compelling a party to do precisely what he ought to have done without being coerced by a court Equity proceeds upon the assumption that the normal end or termination of every con:ract is performance in accordance with the agreement, and equity takes jurisdiction to require the specific performance of the contract in order to do more complete justice between the parties than can be had in an action at law. The remedy of specific performance of contracts is given as a substitute for the legal remedy of damage", or monetary compensation, whenever the legal remedy is inadequate or impracticable. Where the remedy at law is not adequate, equity assumes jurisdiction, to decree specific performance, in order to prevent the travesty of justice involved in permitting parties to refuse performance of their contracts at pleasure by electing to pay inadequate damages for breach. It acts. however, only on the principle that it would be unjust and inequitable to permit the contract to remain unperformed, or has been stated, where nothing can. answer the justice of the case but the performance of the contract in specie. Neither party has any legal right to perform the obligations imposed, in the absence of a reservation of the right to terminate the contract upon some contingency, unless because of circumstances subsequently arising there exists some valid legal excuse for non-performance. Thus, while the right to refuse performance depends upon some justification recognized in the law. the power to violate the contract by refusal to perform, subject to liability in an action for damages, exists when the circumstances are such that the courts will not decree the specific performance of the contract. " ( 11 ) THEN the nature of specific performance is described in the Halsbury s Laws of England, Fourth Edition, Volume 44. . (para 401) as under :- "401.
" ( 11 ) THEN the nature of specific performance is described in the Halsbury s Laws of England, Fourth Edition, Volume 44. . (para 401) as under :- "401. The remedy by specific performance: Specific performance is equitable relief, given by the court to enforce against a defendant the duty of doing what be agreed by contract to do a plaintiff may, therefore, obtain judgment for specific performance even though there has not, in the strict sense been any default by the defendant before the issue of the writ Inearly times a court of equity assumed jurisdiction to compel a party to a contract to perform his part of the contract whendamages recoverable at law were not an acqurate remedy, The remedy of specific performance is thus in contrast with the remedy by way of damages for breach of contract, which gives pecuniary compensation for failure to carry out the terms of the contract. The remedy is special and extraordinary in its character, and the court has a discretion either to grant it, or to leave the parties to their rights at law. However, the discretion is not an arbitrary or capricious discretion; it is not to be exercised on fixed principles in accordance with the previous authorities The judge must exercise his discretion in a judicial manner. If the contract is within the category of contracts of which specific performance will be granted, is valid in form, has been made between competent parties and is unobjectionable in its nature and circumstances, specific performance is in effect granted as a matter of course, even though the judge may think it is very favourable to one party and unfavourable to the other, unless the defendant can rely on one of the recognised equitable defences. Where such a defence is available, the existance of a valid contract is not in itself enough to bring about the interference of the court. The conduct of the plaintiff such as delay, acquiescence, breach on his part, or some other circumstance outside the contract, may render it inequitable to enforce it, or the contract itself may, for example on the ground of misdescription, be such that the court will refuse to enforce it". ( 12 ) THESE principles of specific performance are in term codified in Chapter II (sections 9 to 24) of the Specific Relief Act, 1963. the law as enacted by Parliament.
( 12 ) THESE principles of specific performance are in term codified in Chapter II (sections 9 to 24) of the Specific Relief Act, 1963. the law as enacted by Parliament. It repealed the earlier Act of 1877. Section 9 deals with defences respecting suits for relief based on contract. It says "except as otherwise provided berein, where any relief is claimed under this Chapter in respect of a contract, the person against whom the relief is claimed may plead by way of defence any ground which is available to him under any law relating to contracts". Remaining sections in Chapter II are divided into various subheadings which are (1) Contracts which can be specifically enforced , (2) Contracts which cannot be specifically enforced ; (3) Persons for or against whom contracts may be specifically enforced and (4) Discretion and powers of court. Section 20 deals with discretion of the court as to decreeing specific performance. It says that this jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so ; but the direction of the court is not arbitrary but sound and reasonable, guided by Judicial principles and capable of correction by a court of appeal. Sub-section (2) of this section gives cases in which the court may properly exercise discretion not to decree specific performance. ( 13 ) IT will be, thus, seen that relief for specific performance is resorted to under the specific Relief Act to enforce reghts arising under contracts. In the present suits, as the plaintiffs allege, defendants have entered into agreements to to sell their properties to the respective plaintiffs on an agreed consideration. The plaintiffs only want that the defendants be made bound by their agreements and sell their properties and take the agreed consideration The court will enforce such agreements unless the defendands bring their cases within the exceptions or challenge the validity of the agreements under the law relating to contracts or the court exercises its discretion not to decree specific performance. No quetion of deprivation of any property of the defendants arises in such cases. ( 14 ) ARTICLE 300 A was inserted by the Constitution (44th) Amendment Act 1978 effective from 20 June 1979.
No quetion of deprivation of any property of the defendants arises in such cases. ( 14 ) ARTICLE 300 A was inserted by the Constitution (44th) Amendment Act 1978 effective from 20 June 1979. Prior to this the right to property was granted by Article 31 falling under Part III of the Constitution periaining to fundamental rights. What was earlier Article 31 (1) is now Article 300a Article 31wasitselfrepsaledbythe aforesaid Constitution Amendment Act. That Constitution Amendment Act also repealed Article 19 (l) (f) which guaranteed the rigtit to acquired and hold property. Supreme Court in P. D. Shamdasani v. The Central Bank of India Ltd. AIR 1952 Supreme Court 59, had said that neither Article 19 (l) (f) nor Article 31 (1) on its true construction was intended to prevent wrongful individual acts or to provide protection against merely private conduct. It said that the violation of rights of property by individuals was not within the purview of the Article 19 (l) (f) and as regards position under Article 31 (1) it was no better. It further observed as under : "even assuming that clause (1) of Article 31 has to be read and construed apart from clause (2), it is clear that it is a declaration of the fundamental right of private property in the same negative form in which Article 21 declares the fundamental right to life and librety. There is no express reference to the State in Article 21. But it cannot be suggested on that Account that that article was intended to aford protection to life and personal liberty against violation by private individual. The words "except by procedure established by law. " plainly exclude such a suggestion. Similarly, the words "save by authority of law" in clause (1) of Article 31 show that it is a prohibition of unauthorised governmental action against private property, as there can be no question of one private individual being authorised by law to deprive another of his property. " ( 15 ) RELYING on this decision, the Supreme Court in Smt. Vidya, Verma through next friend R. S. V. Mani v. Dr Shiv Narain Verma, AIR 1986 SC 108 .
" ( 15 ) RELYING on this decision, the Supreme Court in Smt. Vidya, Verma through next friend R. S. V. Mani v. Dr Shiv Narain Verma, AIR 1986 SC 108 . reaffirmed that violation of rights of property by a private individual was not within the purview of Articles 19 (l) (f) and 31 (1) and, therefore, a person whose rights of property were infringed by a private individual must seek his remedy under the ordinary law. In M/s Al. Hasianjit and Sons v. The state of Madhya Pradesh, AIR 1955 Supreme Court 470, the appellant entered into an agreement with the Government for increase in the rate of royalty payable to the Government. Then the appellant filed a civil suit for recovery of the increased amount so paid on the ground that the agreement for increase in rate of royalty was not valid under Mining Rules of 1913 and was also in contravention of provisionsof the Mines and Minerals (Regulation and Development) Act 1948. The Court negatived the contentions and while dealing with one of the contentions it said as under:- "it was contended that the terms imposed upon the appellants by the State would amount to deprivation of properly without the authority of law. It is manifest that this ground of attack is wholly devoid of any force because the State has not deprived them of any property. What they have paid to the Government was realisable under the terms of the contract, which on the findings recorded above is not vitiated. Under the agreement which we bold to be enforceable, the defendant may have struck a hard bargain but that cannot be brought under the prohibition of Article 31 (1) of the Constitution, even assumed that the Constitution applied to the transaction in question. " ( 16 ) IN Bishambhardayal Chandra Mohan and others v. State of Uttar pradesh and others, (1982)1 Supreme Court Cases 39, the Supreme Court observed as under (para 41 ) : "there still remains the question whether the seizure of wheat amounts to deprivation of property without the authority of law. Article 3 (C-A provides that no person shall be deprived of his property save by authority of law.
Article 3 (C-A provides that no person shall be deprived of his property save by authority of law. The State Government cannot while taking recourse to the executive power of the State under Article 162, deprive a person of his property Such power can be exercised only by authority of law and not by a mere executive fiat or order Article 162, as is clear from the opening words, is subject to other provisions of the Constitution. It is, therefore, necessarily subject to Article 300-A. The word "law" in the context of Article 300-A must mean an Act of Parliament or of a State legislature, a rule, or a statutory order, having the force of law, that is positive or State made law. . . . . . " ( 17 ) REFERENCE may also be made to a Bench decision of the Orissa High Court in Paika Padhano v. Pindiko Patro, AIR 1958 Orissa 15, where the court said that when the dispute was not between an individual on the one hand and the State on the other but between two regarding their respective civil rights there was no question of invasion of the fundamental rights. The court said this when reliance was placed on the fundamental rights guaranteed under Article 19 and 31 (1) of the Constitution and said, these Articles were entirely out of place. ( 18 ) IT was also submitted that there would be no question of any deprivation of any property unless it was the State who took away the property. That appears to be rather a much wider question not arising in the present case and particularly in view of the Benami Transactions (Prohibition) Act, 1988. As noted above, it is also not necessary for us to go into the different terminology used in Article 21 and Article 300a of the Constitution for answering the question referred to Lastly, it was submitted that the Supreme Court itself in numerous appeals coming before it and arising out of suits for specific performance dealt with law of specific relief as contained in Chapter II of the Specific Relief Act but it never held that decree for specific performance would be futile and ought not to be passed because of Article 300 A of the Constitution.
( 19 ) SUIT for specific performance of contrac,t of sale of immovable property therefore, lies to enforce rights under contract which the law of specific relief recognises. Thus, that Article 300 A of the Constitution has no effect on the provisions of the Specific Relief Act relating to agreement to sell an immovable property. Reference is answered accordingly.