Judgment : BHASKAR BHATTACHARYA, J. (1). THIS first appeal is at the instance of the defendants in a suit for specific performance of contract and is directed against the judgment and decree dated 26th February, 2004 passed by the learned Civil Judge, Senior Division, 2nd court, Hooghly in Title Suit No. 4 of 2000 thereby granting a decree for specific performance of contract of sale of the immovable property. (2). THE case made out by the plaintiff/respondent may be summed up thus: (a) The suit property originally belonged to one Prabir Banerjee, the husband of the defendant no. 1 and the father of the defendant nos. 2 and 3, who agreed to sell the suit property, as mentioned in a schedule, to the plaintiff at the price of Rs. 2,50,000/ -. A deed of agreement for sale was prepared and executed by the said Prabir Banerjee on 1st October 1997 and the same was presented before a Notary Public at Serampore on 3rd october, 1997 by the said Prabir Banerjee. On 1st October, 1997, Prabir banerjee received a sum of Rs. 15,000/- as part of the consideration money and subsequently, received a further sum of Rs. 6,000/-from the plaintiff on 15th December, 1997 and acknowledged the receipt of the said amount by writing on the reverse side of the stamp paper of that agreement. (b) Thereafter, it was settled between the parties that the deed of agreement for sale of the suit property would be registered by paying full non-judicial stamp paper according to the existing law and it was further stipulated that within six months from the date of execution and registration of the said deed, Prabir Banerjee would vacate the property and would not get any further time for execution and registration of the sale-deed. (c) Consequently, the predecessor-in-interest of the defendants executed and registered a deed of agreement for sale of the suit property in favour of the plaintiff, which was registered at Serampore Additional Sub-Registry Office on 5th January, 1998. That deed of agreement for sale was written at his instruction in the presence of his wife, namely, Smt. Chayanika Banerjee and his friend Manosh Kumar Ghosh who were all along present at the time of negotiation of the sale between the plaintiff and Prabir Banerjee. (d) The plaintiff bore the cost of purchasing the stamp paper of Rs.
That deed of agreement for sale was written at his instruction in the presence of his wife, namely, Smt. Chayanika Banerjee and his friend Manosh Kumar Ghosh who were all along present at the time of negotiation of the sale between the plaintiff and Prabir Banerjee. (d) The plaintiff bore the cost of purchasing the stamp paper of Rs. 12,510/-and registration fee and other expenses for registration of the deed. Thus, the contract, entered into between the said Prabir Banerjee and the plaintiff for sale of the suit property, became a concluded contract and the agreement for sale dated 1st October, 1997 merged into the agreement for sale dated 5th January, 1998. (e) In the agreement, it was contemplated that the sale should be completed within six months from the date of execution of the said deed of agreement and it was further agreed that the vendor would vacate the property before execution and registration of the sale-deed. (f) Unfortunately, Prabir Banerjee died on 17th January, 1998 leaving behind the defendants as his sole heirs and legal representatives. After the death of Prabir Banerjee, the obligation to sell the suit property devolved upon the defendants and the plaintiff approached the defendant no. 1 for the sale of the suit property in terms of the said agreement. The defendant no. 1 assured the plaintiff that she would abide by terms and conditions of the agreement executed and registered by her husband. In pursuance of her such commitment, she executed a deed of indemnity on 28th January, 1998 as the original deed of gift by her mother-in-law and sister-in-law was found lost. (g) The plaintiff after execution of the agreement dated 1st October, 1997 within the knowledge of Prabir Banerjee and his wife applied for loan of rs. 1,30,000/- from HDFC Bank to purchase the suit property. The HDFC, after getting all the relevant documents from the plaintiffs side as well as from the defendants side and after being satisfied with the title of a schedule property, sanctioned Rs. 1,30,000/- to the plaintiff and issued a bank draft in the name of the defendant no. 1. (h) The plaintiff after getting the said bank draft requested the defendants to receive the said bank draft and the balance consideration money and to execute the sale-deed in his favour but the defendant no.
1,30,000/- to the plaintiff and issued a bank draft in the name of the defendant no. 1. (h) The plaintiff after getting the said bank draft requested the defendants to receive the said bank draft and the balance consideration money and to execute the sale-deed in his favour but the defendant no. 1, for the reason best known to her, for self and as natural guardian of the other defendants, was taking time to receive the said bank draft and the balance consideration money and to execute and register the sale-deed in favour of the plaintiff. (i) The plaintiff, in such circumstances, was compelled to issue a registered notice on 6th June, 1998 to the defendant no. 1 to act according to the terms of the said agreement for sale and also to accept the bank draft issued by the HDFC in her name on 12th March, 1998 and lying with the plaintiff and she was further requested to execute and register the sale-deed in favour of the plaintiff after receiving the balance consideration money. (j) The defendant no. 1 received the said notice and on 23rd August, 1998, sent a reply of that notice in which she made commitment that she would execute and register the sale-deed in favour of the plaintiff and she would vacate the suit property by 7th October, 1998. She, for herself and as natural guardian of the minor defendants, on 7th October, 1998, accepted the bank draft issued by the HDFC from the plaintiff but she neither executed and registered the sale-deed in favour of the plaintiff nor did she vacate the suit property though she gave a written undertaking on 7th october, 1998 to the plaintiff that she would execute and register the sale-deed on 14th October, 1998 and she also would quit and vacate the suit property on that date. (k) The HDFC had to revalidate the bank draft dated 12th March, 1998 on 16th september, 1998. The said bank draft was received by the defendant no. 1 for herself and her two minor daughters as a part of the consideration money of Rs. 2,50,000/-and she encashed the bank draft through her own account being S. B. A/c No. 17253 of the Allahabad Bank, Baidyabati brach. The defendant for herself and for her two minor daughters further took Rs.
1 for herself and her two minor daughters as a part of the consideration money of Rs. 2,50,000/-and she encashed the bank draft through her own account being S. B. A/c No. 17253 of the Allahabad Bank, Baidyabati brach. The defendant for herself and for her two minor daughters further took Rs. 10,000/-from the plaintiff on 12th September, 1998 and she acknowledged the receipt of Rs. 10,000/- by endorsing it in a non-judicial stamp paper. (l) The plaintiff had so far paid Rs. 1,61,000/-as a part of the consideration money out of total sum of Rs. 2,50,000/- and the plaintiff had been paying interest at the rate of 15 percent per annum on Rs. 1,30,000/-from the date of issuance of the bank draft of Rs. 1,30,000/- and also had been living in a rented house at a rent of Rs. 800/-a month. (m) Though the plaintiff tendered the balance amount of Rs. 89,000/-, the defendant no. 1 refused to accept the said amount. The plaintiff, therefore, sent a notice through his lawyer on 16th December, 1998 under registered post with A/d and under certificate of posting to the defendant no. 1 thereby requesting the defendant no. 1 to execute and register the sale-deed on any day. The defendant no. 1, though received the notice on 16th december, 1998, did not act in terms of the notice, sent a reply through her lawyer with false statement, and refused to execute the sale-deed. (n) The plaintiff smelling a scent of foul play of the defendant no. 1 filed a criminal case against the defendant no. 1 in the Court of the learned Sub-Divisional Judicial Magistrate, Serampore on 29th December, 1998 under sections 419, 420, 406, 403 and 114 of the Indian Penal Code and the police submitted charge sheet. (o) In the abovementioned circumstances, plaintiff filed the suit for specific performance of contract. (3). THE suit was contested by the defendants by filing written statement in which they gave a vague denial of the entire statements made in the plaint. Subsequently, however, the defendants filed an additional written statement and the case made out in the additional written statement may be summed up thus: (1) During September 1997, the plaintiff, a political worker, came forward to solve the problem of Prabir Banerjee who was then lying ill and assured him for his recovery, which encouraged the defendant no.
Subsequently, however, the defendants filed an additional written statement and the case made out in the additional written statement may be summed up thus: (1) During September 1997, the plaintiff, a political worker, came forward to solve the problem of Prabir Banerjee who was then lying ill and assured him for his recovery, which encouraged the defendant no. 1 and said prabir Banerjee to bestow their faith upon the plaintiff. (2) The plaintiff assured the defendants that he would arrange for money for recovery of the said Prabir Banerjee and further assured that within 5/6 months Prabir Banerjee would get rid of his illness and would be able to join his business. The plaintiff proposed to Prabir Banerjee that he was required to help the plaintiff by putting his signatures on the papers to be supplied by the plaintiff and made Prabir Banerjee to believe that the papers and documents would be prepared in a fashion and style to secure loan from the HDFC who usually granted loan with the long repayment terms. (3) Relying upon the assurance made by the plaintiff, Prabir Banerjee signed the documents as those were prepared and placed by the plaintiff for the signature of the said Prabir Banerjee and his men. The plaintiff during last part of January, 1999 in an amicable manner disclosed that it would not possible for the defendant no. 1 to return the money supplied by the plaintiff during the illness of Prabir Banerjee and since the loan had been granted in the name of the plaintiff by the HDFC and since the plaintiff was incurring loss at the rate of 15 percent per annum towards interest on the said loan amount of Rs. 1,30,000/-, the plaintiff advised the defendant no. 1 to quit and vacate the suit property on receive of some more money from the plaintiff. (4) The defendant no. 1 reminded the plaintiff of the oral understanding between the said Prabir Banerjee and the plaintiff to the effect that the money, which would be supplied by the plaintiff, would be returned after his recovery and by instalments. At this, the plaintiff threatened the defendants that he would take step for getting the suit property by hook and crook. (5) Valuation of the property at the material point of time was more than rs.
At this, the plaintiff threatened the defendants that he would take step for getting the suit property by hook and crook. (5) Valuation of the property at the material point of time was more than rs. 5,00,000/-and Prabir Banerjee had no occasion to alienate the property in favour of any third party. (6) The plaintiff seized the bank account of the defendant no. 1 where she deposited the bank draft of Rs. 1,30,000/- supplied by him issued through hdfc. (7) In the criminal case filed by the plaintiff, defendant no. 1 honourably acquitted and, therefore, the suit should be dismissed. At the time of hearing, three witnesses deposed for the plaintiff while the defendant no. 1 herself and one Prasanta Kumar Pal deposed in favour of the defendant. (4). THE learned Trial Judge, as indicated earlier, by the judgment and decree impugned herein had decreed the suit. Being dissatisfied, the defendants have come up with the present first appeal. (5). MR. Rakshit, the learned advocate appearing on behalf of the appellants has raised twofold submissions in support of this appeal. First, according to him, the valuation of the property at the relevant point of time was about Rs. 5 lakh whereas due to illness of the predecessor-in-interest of the appellants he was compelled to enter into agreement for sale of such a valuable property only at the price of Rs. 2,50,000/- and therefore, the learned Trial Judge ought to have refused to exercise discretion in favour of his clients as the agreement was entered into by taking advantage of the precarious condition of the predecessor-in-interest of his clients. (6). SECONDLY, Mr. Rakshit contends that even if it is assumed for the sake of argument that the agreement was valid, the Court should have exercised its discretion in favour of his clients by applying the principles contained in Section 20 (2) of the Specific Relief Act. Mr. Rakshit, therefore, prays for setting aside the judgment. (7). THEREFORE, the first question that arises for determination in this appeal is whether the price of the property was fixed at a shockingly low price by taking advantage of the helpless condition of the predecessor-in-interest of the appellants. (8). IT appears that the agreement was entered into in the year 1997 for the sale of the property at the price of Rs. 2. 5 lakh. The total area of land is 1265 sq.
(8). IT appears that the agreement was entered into in the year 1997 for the sale of the property at the price of Rs. 2. 5 lakh. The total area of land is 1265 sq. feet in a locality under the Baidyabati Municipality in the District of Hooghly with one storied building standing thereon covering an area of 734 sq. feet. No material has been placed by the appellants in support of their contention that the price of the property was abnormally low, having regard to the then market price of the area. Therefore, we find no substance in the contention of Mr. Rakshit, the learned advocate appearing on behalf of the appellants that the price of the suit property was below the market price of that area. (9). THE next question is whether the grant of the decree for specific performance in this case would cause undue hardship to the appellants. In this case, on the basis of the agreement between the parties, the plaintiff took loan of Rs. 1. 30 lakh from HFDC at the rate of 15% per annum for the purpose of making payment to the appellants and after taking such loan, the plaintiff had actually paid the amount to the appellant no. 1 and the same has been encashed and deposited in the bank account of the appellant no. 1. It is pointed out by Mr. Chatterjee, the learned senior advocate appearing on behalf the respondent that for not delivering possession of the property the plaintiff has been compelled to stay in a rented house by payment of rent. Therefore, it is admitted fact that the appellants and their predecessor have already taken Rs. 1,61,000/-from the plaintiff out of which Rs. 1,30,000/- were taken on loan by payment of annual interest of 15%. If we compare the respective hardship of the parties, we find that the plaintiff had paid the aforesaid amount about 11 years ago after taking loan at the rate of interest at the rate of 15% per annum and had taken responsibility of repayment with interest at that rate whereas the appellants have enjoyed the money and at the same time is still enjoying the property. Money becomes double within four years if the interest is payable at the rate of 15% per annum and as such it will be more than six times the principal amount in course of 10 years.
Money becomes double within four years if the interest is payable at the rate of 15% per annum and as such it will be more than six times the principal amount in course of 10 years. Therefore, in this case it will be a case of extreme hardship to the plaintiff if we refuse the prayer of specific performance. (10). MR. Rakhsit lastly contended that the criminal case against his client having been failed, the Court below should have dismissed the suit. We find from the judgement of the Criminal Court that in view of the civil nature of the dispute, the appellant no. 1 was acquitted in the criminal case but such fact cannot be a ground of dismissing the suit for specific performance of contract when the execution of the agreement, acceptance of the earnest money to the extent of Rs. 1,61,000/-, the fairness of the agreement and the readiness and willingness to perform the contract at all material time of the part of the plaintiff have been conclusively proved. (11). WE now propose to deal with the decisions cited by Mr. Rakshit. In the case of Bijoy Kumar Chatterjee vs. Minor Pradip Kumar Dutta and others reported in 2004 (1) CHN 243 , a Division Bench of this Court reiterated the following well-settled principles to be followed by a Court before considering the question of discretion of grant of a decree of specific performance: a) whether the contact was fair, equal and reasonable; b) whether it would be just in the circumstances to enforce the specific performance against the defendant; c) Whether the plaintiffs conduct had been conscientious; Applying the aforesaid principles to the facts of that case, the Division bench held that the plaintiff had in order to gain advantage got the agreement for the purchase of the only dwelling house at shockingly low price on payment of rs. 500/- as earnest money and as such, the decree for specific performance should be refused. In the case before us, no material was placed before the Court to show that the value fixed by the parties for sale of a small one storied building at Baidyabati in the year 1997 was shockingly low. On the other hand, it appears that on the basis of the agreement, the plaintiff took loan of Rs.
In the case before us, no material was placed before the Court to show that the value fixed by the parties for sale of a small one storied building at Baidyabati in the year 1997 was shockingly low. On the other hand, it appears that on the basis of the agreement, the plaintiff took loan of Rs. 1,30,000/- from the Bank on condition to repay the same with interest at the rate of 15% per annum and a total sum of Rs. 1,61,000/-was paid to the defendants or their predecessor before the filing of the suit out of the total consideration of Rs. 2. 5 lakh. Therefore, at this stage, after the lapse of 11 years, we should not interfere with the just discretion exercised by the learned Trial Court. The said decision rather goes against the appellants. (12). IN the unreported decision of a Division Bench of this Court in the case of ramendra Kumar Ghosh and another vs. Sm. Jyotsna Roy Chowdhury and others in F. A. No. 10 of 1983 disposed of on December 18, 1984, the defendant agreed to sell their residential house at the price of Rs. 65,000/- after taking a sum of Rs. 5,001/-as earnest money with the expectation that she would construct a new house of her own and for that purpose also purchased a land. Ultimately, she could not construct such house due to financial stringency and was compelled to sell the said land. In such circumstances, the Division Bench was of the view that due to unforeseen circumstances, the defendant was unable to honour the agreement and it would be a hardship to compel performance. The division bench, thus, directed refund of the earnest money with 8% interest on that amount with further direction upon the defendant to pay compensation of rs. 5,000/-to the plaintiff. In the case before us, the plaintiff on the assurance of the predecessor of the defendants took loan of Rs. 1,30,000/- at the rate of 15% interest from the bank and has repaid such interest and at the same time, is residing in the rented house. The plaintiff was all along ready and willing to perform his part of the agreement and at the same time, it has not been established the consideration money fixed was low.
1,30,000/- at the rate of 15% interest from the bank and has repaid such interest and at the same time, is residing in the rented house. The plaintiff was all along ready and willing to perform his part of the agreement and at the same time, it has not been established the consideration money fixed was low. In such a case, it would be a real hardship to the plaintiff, a teacher now aged about 64 years, if we refuse the prayer for specific performance by compelling him to stay in the rented house for the rest of his life for no fault on his part. The defendants cannot take advantage of their own wrong after enjoyment of the sum of Rs. 1,61,000/-for the last ten years by compelling the plaintiff to take loan at the rate of 15% per annum from the Bank. The said decision, therefore, does not help Mr. Rakshit in anyway. (13). IN the case of Parakunnan Veetill Josephs Son Mathew vs. Nedumbara kuruvilas Son and others reported in AIR 1987 SC 2328 , the Supreme Court reiterated the well-settled proposition of law that Section 20 of the Specific Relief act preserves judicial discretion to Courts with regard to passing of decree of specific performance and that the Court should meticulously consider all the facts and circumstances of the case before it. According to the Apex Court, the court is not bound to grant specific performance merely because it is lawful to do so and the motive behind the litigation should also enter into the judicial verdict. (14). THE Supreme Court emphasised that the Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff. Such observations were made in a case where by an agreement, the owner of a property agreed to sell the property to one "c" and the latter paid certain amount as advance. After the death of the owner, three parties "k", his wife and his brother-in-law "m", interested in purchasing the property in question, got a registered lease deed in respect of a part of the property in question and subsequently an agreement to sell the entire property was executed from the legal representatives of the owner in favour of "m".
After the death of the owner, three parties "k", his wife and his brother-in-law "m", interested in purchasing the property in question, got a registered lease deed in respect of a part of the property in question and subsequently an agreement to sell the entire property was executed from the legal representatives of the owner in favour of "m". Eventually, the legal representatives of the owner sold the property to "m" and received full consideration from "m" alone. Subsequent to the execution of the sale deed, the father of "k" at Ks instance got an assignment of agreement of sale that was executed by the owner in favour of "c". The averments of Ks father in a suit filed by "k" for declaration that he alone was entitled for all the claims and rights over the property, as per lease deed, the agreement to sell and the sale deed in favour of "m" and that "m" did not have any claim or right were suggestive of the fact that the lease deed and agreement to sell in view of the fact that the lease deed and agreement to sell in favour of "m" were executed with a view to close the agreement to sell executed by the owner in favour of "c" and the deeds in the name of "m" would serve as source of strength for closing the said agreement with "c". Those averments also impliedly suggested that the lease deed and agreement to sell in favour of "m" were not obtained to defraud "c" from his legitimate rights, if any, under the agreement to sell in his favour. He had stated in his written statement in that case that the lease deed and agreement to sell in favour of "m" were executed with the intention of purchasing the property as per the agreement with "c", This according to the Supreme Court evidently indicated that the said lease deed and the agreement for sale were obtained from the legal representatives of the owner of the estate after taking "c" into confidence and such fact left no doubt about the implied consent of "c" for executing those documents and the parties setting his rights under agreement to sell in his favour executed by the owner before his death.
To put it in other words, "c" must have waived his rights to purchase the estate for himself under the aforesaid agreement in his favour. In such a case, it was held that since "c" had waived his rights under the agreement of sale executed by the owner in his favour, "k"s father as an assignee could not get a better right to enforce that agreement. He, therefore, was not entitled to a decree for specific performance. We fail to appreciate how the said decision can have any application to a case like the present one where the plaintiff would be prejudiced if the prayer for specific performance is refused. (15). IN the case of M/s. P. R. Deb and Associates v. Sunanda Roy reported in air 1996 SC 1504 , in a suit for Specific performance of contract for sale of immoveable property, according to the terms of agreement, the plaintiff was under the obligation to make part-payment within a stipulated time but he failed. Such failure on the part of the plaintiff affected the right of the defendant to purchase suitable accommodation for himself out of the part-payment. In such a case, it was held that the plaintiff was not entitled to get a decree for specific performance of contract. In the case before us, the plaintiff was all along ready and willing to perform his part of the contract and there was no fault on his part. Therefore, the said decision cannot have any application to the facts of the present case. (16). IN the case of Kanshi Ram vs. Om Prakash Jawal and others reported in air 1996 SC 2150 , the Apex Court was dealing with a case where an agreement of sale dated April 7, 1969 was executed to convey the property on the plot of land measuring 100 square yards situated in Dayanand Colony, Rajpat Nagar, new Delhi for Rs. 15,000/-and Rs. 2,500/- were paid as earnest money. The respondent filed the suit for the specific performance of the agreement and at the same time, claimed, alternatively, damages for a sum of Rs. 12,000/-with interest payable thereon. The Courts below granted the decree for specific performance. Thus, the appeal was filed before the Supreme Court by special leave. In such an appeal, it was contended on behalf of the appellant that he was prepared to pay a sum of Rs.
12,000/-with interest payable thereon. The Courts below granted the decree for specific performance. Thus, the appeal was filed before the Supreme Court by special leave. In such an appeal, it was contended on behalf of the appellant that he was prepared to pay a sum of Rs. 10 lakh as alternative relief though the respondent claimed Rs. 12,000/-and at that distant time, it would be unjust, inequitable and unfair to grant a decree for specific performance. In answer to the aforesaid argument, it was contended by the learned counsel for the respondent that the respondents had secured the balance money and he was always ready and willing to perform his part of the contract and such findings were affirmed by both the Courts below; the appellant had avoided execution of the sale deed; therefore the Courts below had rightly granted the decree; and there is no justification for interference with the decree granted by the Courts below. While deciding such a case, the Apex Court held that the rise in prices of the property during the pendency of the suit might not be the sole consideration for refusing to decree the suit for specific performance. However, it was equally settled law that grant of decree for specific performance of a contract of immovable property is not automatic. It is one of discretion to be exercised on sound principles. According to the Supreme Court 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, the Supreme Court proceeded, in view of the fact that the respondent himself had claimed alternative relief for damages, the Courts would have been well justified in granting alternative decree for damages, instead of ordering specific performance which would be unrealistic and unfair. The appeal was accordingly allowed by directing the appellant to pay Rs. 10 lakh within a period of three months with further direction that the appellant should not again sell the property for five years. In the case before us, the plaintiff did not pray for alternative relief of return of earnest money nor have the defendants offered to pay such huge money to the plaintiff. In this case, the sum of Rs. 1,30,000/- with interest at the rate of 15% per annum at which the plaintiff had repaid and the additional sum of Rs.
In the case before us, the plaintiff did not pray for alternative relief of return of earnest money nor have the defendants offered to pay such huge money to the plaintiff. In this case, the sum of Rs. 1,30,000/- with interest at the rate of 15% per annum at which the plaintiff had repaid and the additional sum of Rs. 31,000/-paid by the plaintiff would come to more than Rs. 10 lakh in course of 10 years. Moreover, in the facts of the present case, as indicated above, it would be a hardship to the plaintiff if we refuse the prayer of specific performance as pointed out above. We, therefore, find that the decisions cited by Mr. Rakshit are of no avail of his clients. At this stage, we cannot help mentioning the following observations of a three-Judges-decision of the Supreme Court in the case of Prakash Chandra vs. Angadlal and others reported in AIR 1979 SC 1241 where the Apex Court pointed out the rules as regards the exercise of discretion in the matter of grant of a decree for specific performance of contract: "the ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief. In the present case, the conduct of the appellant has not been such as to disentitle him to the relief of specific performance. He has acted fairly throughout, and there is nothing to show that by any act of omission or commission he encouraged Mohsinali and Qurban Hussain to enter into the sale with the first and second respondents. There is no evidence that the appellant secured an unfair advantage over Mohsinali and Qurban Hussain when he entered into the agreement. Nor is there anything to prove that the performance of the contract would involve the respondents in some hardship which they did not foresee. In our opinion, there is no reason why the appellant should not be granted the relief of specific performance. " (17). THE aforesaid observations apply on all fours to the facts of the present case. On consideration of the entire materials on record we, therefore, find no merit in this appeal and the same is dismissed. In the facts and circumstances, there will be, however, no order as to costs.