Research › Search › Judgment

Delhi High Court · body

2010 DIGILAW 1312 (DEL)

Malik Mohammed Tahseen v. Syed Aijaz Hasan

2010-12-20

S.RAVINDRA BHAT

body2010
S. Ravindra Bhat, J. 1. In this suit the plaintiff seeks decree for specific performance of a contract for purchase of Flat No. 22, Zakir Bagh, New Delhi, (hereafter called "the suit property"). 2. The facts, to the extent they are undisputed by the parties in their pleadings, are that the plaintiff entered into an agreement on 21.03.2006 for purchase of the suit property for a total consideration of Rs. 75 lakhs. The Agreement to sell is embodied in a written document marked as Ex. P-1. The defendant is concededly the owner of the suit property. The relevant terms of the agreement marked as Ex. P-1 are extracted below: "...WHEREAS with the mutual discussion between the parties to this very deed the First Party has agreed to sell out the said property bearing No. 22, 6th floor, Zakir Bagh, New Delhi for a consideration of Rs. 75 lacs (Rupees Seventy Five Lakhs only) to the Second Party. WHEREAS the Second Party has agreed to the said consideration amount and Rs. 5 lakhs as earnest money and acknowledge t he receipt by the first party and Rs. 40 lacs (Rupees Forty Lacs) will be paid by the Second Party at the destination by 15th May, 2006 and place of the choice of the first party and balance of Rs. 15 lacs (Rupees Fifteen Lacs only) will be paid uptill 15.5.2006 in cash at the home of second party and the balance of Rs. 15 lacs at the time of execution of documents of alienation (in shape of draft). That the whole deal will be completed within three months from the execution of this deed of agreement or earnest money and the possession of property in sale will deliver after one month of final payment. That the detailed agreement to sell and other relevant documents will be executed at the later stage when the second intalment of Rs. 40 lacs (Rupees Forty lacs only) will be paid by the second party to the First Party as per the choice of the First Party. That the detailed agreement to sell and other relevant documents will be executed at the later stage when the second intalment of Rs. 40 lacs (Rupees Forty lacs only) will be paid by the second party to the First Party as per the choice of the First Party. That in case of default on the part of first party then the second party will be entitled to get the double of the paid amount and in the same fashion in case of fault the part of second party then first party will be en titled to forfeit the paid amount in respect of schedule of payment and delivery of possession. WITNESS WHEREOF the parties have signed this Agreement of Sell on the date, month and year first above mentioned." 2. The plaintiff used to live in Zambia; he had entered into the agreement to purchase the suit property with the defendant. It is submitted that this was with the intention to settle down in that property. There is no dispute that Rs. 35 lakhs had been paid to the defendant on or before 14.05.2006. The plaintiff had alleged in the suit that a bank draft for Rs. 9 lakhs dated 16.05.2006 was received by the defendant; the latter however, denies it. The plaintiff had also alleged having paid Rs. 23 lakhs in cash on 14.05.2006 and having paid Rs. 10 lakhs - out of that amount- to the plaintiff's attorney. This too has been denied. 3. It is alleged that the plaintiff assured and agreed that the entire transaction would be completed within 3 months as stipulated. The plaintiff alleges that he paid a total amount of Rs. 44 lakhs. The plaintiff, however, contends that according to an oral understanding the defendant expressed no objection in executing the documents of title in favour of the plaintiff's daughter on the basis that balance consideration of Rs. 40 lakhs, was to be towards fittings and fixtures. The plaintiff relies upon stamp paper purchased in that regard for Rs. 2,28,000/- on 10.05.2006. The said stamp paper has been produced, exhibited and marked as Ex.PW-1/9. It is also alleged that plaintiff's daughter Ms. Shumhsa Tahseen had come down to Delhi from Dubai on 11.05.2006 to complete the transaction on account of the defendant's assurance and even visited the office of the Sub-Registrar the next day, i.e. 12.05.2006. 2,28,000/- on 10.05.2006. The said stamp paper has been produced, exhibited and marked as Ex.PW-1/9. It is also alleged that plaintiff's daughter Ms. Shumhsa Tahseen had come down to Delhi from Dubai on 11.05.2006 to complete the transaction on account of the defendant's assurance and even visited the office of the Sub-Registrar the next day, i.e. 12.05.2006. It is, however, submitted that since the defendant was not present she executed a special power of attorney in favour of the plaintiff's nephew, which is marked as PW-1/10. The plaintiff, however, submitted that despite repeated requests the defendant did not perform his part of the bargain since the cost of the property had escalated. The plaintiff also adverts to a legal notice issued on 10.08.2006, by the defendant to him, in connection with the agreement to sell, which was replied on 28.08.2006. The plaintiff's reply is marked as Ex. PW1/11. 4. It is submitted that the plaintiff continues to be ready and willing to comply with the terms of the agreement and pay the balance amount. On the basis of these allegations that plaintiff seeks the relief claimed in the suit. 5. The defendant in the written statement contends that the suit is devoid of any cause of action, since the plaintiff had failed to pay Rs. 60 lakhs as on 15.05.2006. The defendant relies upon the stipulation that the transaction for payment of Rs. 60 lakhs was to be completed by the said date and also relies upon the default clause that in the event of the plaintiff defaulting to pay such consideration on or before that date 15.05.2006, the latter (i.e. defendant/owner) would be entitled to double the amount paid- by the plaintiff. The defendant also adverts to criminal proceedings initiated against him by the plaintiff. 6. In the written statement, all the payments made up to 14.05.2006 to the extent of Rs. 35 lakhs are admitted. However, the defendant denies receiving the draft dated 16.05.2006 since the amount, i.e. Rs. 60 lakhs had not been paid as on the stipulated date, i.e. 15.05.2006. It is further contended that the said demand draft dated 16.05.2006 was delivered on 18.05.2006 but was later on taken away since the parties could not sort out their differences. The defendant further states that he tried his level best to resolve the matter up till 09.08.2006, however, being unsuccessful sent a legal notice on 10.08.2006. It is further contended that the said demand draft dated 16.05.2006 was delivered on 18.05.2006 but was later on taken away since the parties could not sort out their differences. The defendant further states that he tried his level best to resolve the matter up till 09.08.2006, however, being unsuccessful sent a legal notice on 10.08.2006. The defendant denies that any amount of Rs. 23 lakhs or Rs. 10 lakhs was received by him in cash on 14.05.2006. The defendant denies having agreed to execute the sale or conveyance documents in favour of the plaintiff's daughter Ms. Shumsha Tahseen, disclosing the apparent consideration as Rs. 40 lakhs. He also denies the purchase of stamp paper as alleged in the suit. It is argued that the plaintiff's attorney in the connivance with the said Ms. Tahseen exerted pressure on the defendant, to execute the sale deed and that such pressure was put without the plaintiff's written consent. It is submitted that there was no privity of contract between the said Ms. Tahseen and the defendant and that he never intended to sell fixtures and fittings since the agreement dated 23.03.2006 was only in respect of the suit property. The defendant denies that the plaintiff is ready and willing to perform his part of the bargain and states that the suit is liable to be dismissed. 7. On 26.11.2007 the Court framed the following issues for trial which are as under : "1. Whether the time was the essence of the contract under the agreement between the parties dated 21.03.2006 in respect of the suit property and if so, to what effect? OPD 2. Whether the plaintiff was ready and willing and is still ready and willing to perform his part of the contract under the agreement dated 21.03.2006? OPD 3. Whether the defendant was justified in forfeiting the amount received by him from the plaintiff as advance under the agreement dated 21.03.2006? OPD 4. Whether the plaintiff is entitled to specific performance of contract under the agreement dated 21.03.2006 and if not, to what other reliefs the plaintiff is entitled in the present suit. OPP? 5. Relief." Issue No. 1 8. As is evident the onus of proving that the time was the essence of the contract was upon the defendant. In this case Ex.P-1 is the agreement between the parties. The relevant contention in this regard is as follows: "... OPP? 5. Relief." Issue No. 1 8. As is evident the onus of proving that the time was the essence of the contract was upon the defendant. In this case Ex.P-1 is the agreement between the parties. The relevant contention in this regard is as follows: "... That the whole deal will be completed within three months from the execution of this deed of agreement or earnest money and the possession of property in sale will deliver after one month of final payment." 9. The defendant's case is that the entire consideration had to be paid by the plaintiff to him on or before the expiry of 3 months. He strongly relies on the recitals, and contents of the Agreement itself, which prescribes a particular date for the performance. Chand Rani v. Kamal Rani, AIR 1993 SC 1742 clarifies, that normally in a contract for sale of immovable property, there is no presumption that time is of the essence of the contract. At the same time, the Court had held that in given circumstances, it may be a matter of inference having regard to the express terms, the nature of the property and the surrounding circumstances, i.e. the object of making the contract, that it has to be performed within reasonable time. A.K. Lakshmipathy (Dead) and Ors. v. Rai Saheb Pannalal H. Lahoti Charitable Trust and Ors., (2010) 1 SCC 287 and later rulings such as Man Kaur v. Hartar Singh Sangha, (Civil Appeal Nos. 147-148 of 2001 decided on 05.10.2010 by the Supreme Court, and also reported as 2010 (9) UJ 4569 (SC)) have made it clear that mention of time in a contract, does not make it automatically of the essence of the contract, and that all surrounding circumstances, including the plaintiff's conduct, such as evidence of his readiness and willingness to perform the contract, under Section 16 (c) of the Specific Relief Act, 1963 ("the Act") are to be examined. Here, the plaintiff has led some evidence in that regard; the defendant's notice was issued on 10th August, 2006. Having regard to all these factors, it is held that though time was mentioned in the contract, which also contained a forfeiture clause, such time was not considered to be of the essence of the contract. At best, it was an important factor, and the parties wished that the agreement should be performed within reasonable time. Having regard to all these factors, it is held that though time was mentioned in the contract, which also contained a forfeiture clause, such time was not considered to be of the essence of the contract. At best, it was an important factor, and the parties wished that the agreement should be performed within reasonable time. The issue is accordingly answered against the defendant, and in favour of the plaintiff. Issue No. 2 & 4 10. These are the main issues requiring determination, in the suit. In support of his case about being ready and willing to perform his part of the contract, the plaintiff examined himself, and also produced receipts (Ex. PW-1/4, PW-1/5,and PW-1/6,) evidencing cash payments to the tune of Rs. 30 lakhs. The defendant does not dispute that Rs. 5 lakhs was paid to him earlier. The plaintiff has also produced a banker's cheque for the sum of Rs. 9 lakhs, as Ex. PW-1/7 dated 16th May, 2006 which was tendered to the defendant, through his (the plaintiff's attorney) but returned. The plaintiff has produced a statement of his bank account, certified by the banker (ICICI Bank Ltd, New Friends Colony, New Delhi) as Ex. PW-1/9A, which discloses that as on 16th May, 2006, the amount in his account, after debiting Rs. 9 lakhs, was Rs. 38,48,150/-. The stamp papers for Rs. 2,28,00/- are produced as Ex. PW-1/9 (Collectively). The plaintiff also relies on the registered Power of attorney executed in favour of PW-2, his nephew, by his daughter, on 12th May, 2006; it is marked as Ex. PW-1/10. The plaintiff, as PW-1 and his nephew and Power of Attorney holder, PW-2, have deposed and proved these documents; they have also confirmed to the despatch and receipt (by Plaintiff to PW-2) of a letter - along with postal envelope, dated 18th April, 2006, stating that due to the Plaintiff's injury, he would be unable to come to Delhi to execute the sale documents, and that he and the defendant had agreed that without changing the documents, or the terms of contract, the sale deed could be executed in favour of the plaintiff's daughter. The letter, its translation and the envelope, are marked as Ex. PW-1/8 (Collectively). 11. The defendant submits that the plaintiff's version is unbelievable and riddled with contradictions. The letter, its translation and the envelope, are marked as Ex. PW-1/8 (Collectively). 11. The defendant submits that the plaintiff's version is unbelievable and riddled with contradictions. It is highlighted that the terms of agreement entered into between the parties on 21.03.2006 clearly stipulated that by 15.05.2006, the sum of Rs. 60 lakhs was payable to the defendant and that the rest or balance amount was payable at the stage of registration of the document. It is stated that the plaintiff did not comply with this essential term, which was the reason why the Pay Order for Rs. 9 lakhs was returned by the defendant, on 18.05.2006. It is argued that there is no material on record to substantiate the plaintiff's contention about a subsequent agreement whereby his daughter was to be treated as the vendee of the suit property. It is submitted that apart from the self-serving statement of the plaintiff and his power of attorney holder, PW-2, there is no other material at all contemporaneously at the relevant time to support the so-called change in the terms of the agreement. It is argued that once the parties to an agreement reduce all the terms in writing, unless they mutually change the terms in the same manner, by executing another document incorporating the new or substituted terms, the Court cannot conclude that a novation of contract of the kind urged by the plaintiff in this case, took place. It is submitted that having regard to the facts of the case, the plaintiff has been unable to establish that a change in terms of contract took place, as contended; it is also emphasized that the substitution of the original buyer, i.e. the plaintiff, with his daughter, meant that the latter stepped into his shoes. She has however, not been impleaded, nor has she made any claim, nor even entered the witness box, which clearly belies the entire case. 12. The defendant relies on the oral testimony of the plaintiff, particularly his cross examination, and submits that his affidavit was at variance with the averments in the suit. It is also urged that the so called change in the contract, or terms is not clear, but entirely vague. 12. The defendant relies on the oral testimony of the plaintiff, particularly his cross examination, and submits that his affidavit was at variance with the averments in the suit. It is also urged that the so called change in the contract, or terms is not clear, but entirely vague. Here, it is urged that the plaintiff, in his pleading and chief examination, did not mention any date, or time when the so called change in terms took place, but instead, tried to cover it up, in the oral evidence stating that such change took place, during his telephonic conversation, a few days before he wrote to his nephew PW-2, on 18.04.2006. Such a testimony, says the defendant, does not inspire any confidence. 13. The defendant argues, through counsel, that the agreement, from its express terms, is only to enter into an agreement to sell and purchase property, and not to enter into as sale transaction. It is also submitted that the plaintiff's case is further confusing, and even unconvincing, because after relying on the Agreement, which mentions the entire consideration for the flat at Rs. 75 lakhs, another significant change is pleaded, which is that the sum of Rs. 40 lakhs was to be received or adjusted towards fittings. It is urged, additionally, that the stamp duty of 6 percent on the consideration, which is sought to be relied on by the plaintiff to show readiness and willingness, is inadequate, for a transaction of Rs. 75 lakhs, and that the stamp duty is much more than that amount. It is lastly urged, that the plaintiff never showed, by his conduct, that he was interested in completing the transaction within time, as he would have in that case, caused a legal notice or some such correspondence to be issued; here, he merely replied to the defendant's legal notice of 10.08.2006. 14. The defendant urges that for these reasons, the Court should conclude that the plaintiff has been unable to show readiness and willingness, or prove any part of his case. It is submitted that having regard to well settled principles applicable to Section 20 of the Act, the Court should decline to grant a decree of specific performance, and instead, dismiss the suit with costs. It is submitted that having regard to well settled principles applicable to Section 20 of the Act, the Court should decline to grant a decree of specific performance, and instead, dismiss the suit with costs. Reliance is placed on the judgments reported as Azhar Sultana v. B. Rajamani, AIR 2009 SC 2157 , and Ram Awadh v. Achhaibar Dubey, 2000 (1) SCR 566 . The Court, it is submitted that having regard to the realities of property value, the Court should take a realistic view that the plaintiff's failure to pay the amounts within time, or even reasonable time, put the defendant to serious prejudice, which should persuade this Court to decline specific performance of the contract. Here, reliance was placed upon M. Meenakshi v. Metadin Agarwal, 2006 (7) SCC 470 . 15. The question whether a potential buyer is ready and willing to perform his part of the contract, is not a mere ritualistic formality to be completed in the pleadings. There must, invariably, be in every case, proof to that effect. What amounts to conduct that discloses such readiness and willingness largely depends upon the facts of each individual case. Here, the plaintiff's conduct in paying about Rs. 30 lakhs proximate in point of time, to 15th May, 2006 and also showing that he had the requisite funds to complete the transactions, i.e. about Rs. 48 lakhs (the total amount working out to the total consideration amount agreed) has, in the opinion of the Court displayed conduct and intention to complete the bargain. It is not disputed by the defendant - a fact deposed by him, in the oral evidence - that if the agreed amount of Rs. 60 lakhs (with a balance of Rs. 15 lakhs payable at the time of registration of the document- were paid, he would have also completed his part of the bargain. 16. The plaintiff avers, consistently that he had a conversation with the defendant, whereby it was agreed that the latter would execute the conveyance deed/ document in favour of the plaintiff's daughter, who was living in Dubai, and came down for the purpose at the relevant time. The Court would examine the defendant's arguments about novation at a later point. However, what has come on record is that the said daughter had executed a registered power of attorney in favour of PW-2, who was empowered to sign the sale deed. The Court would examine the defendant's arguments about novation at a later point. However, what has come on record is that the said daughter had executed a registered power of attorney in favour of PW-2, who was empowered to sign the sale deed. These are sought to be tied up with the letter written to PW-2, dated 18.04.2006, which stated that the defendant had agreed to sign the document in favour of the plaintiff's daughter. The plaintiff also relies on the purchase of stamp paper, before 15th of May, 2006. These circumstances, in this Court's opinion, further strengthen the plaintiff's case that he had the requisite means, and was willing to perform his part of the bargain. 17. Now as far as novation goes, the decision in Lata Construction v. Rameshchandra Ramniklal Shah (Dr), (2000) 1 SCC 586 , clarifies the law on the subject in the following terms: "One of the essential requirements of "novation", as contemplated by Section 62, is that there should be complete substitution of a new contract in place of the old. It is in that situation that the original contract need not be performed. Substitution of a new contract in place of the old contract which would have the effect of rescinding or completely altering the terms of the original contract, has to be by agreement between the parties. A substituted contract should rescind or alter or extinguish the previous contract. But if the terms of the two contracts are inconsistent and they cannot stand together, the subsequent contract cannot be said to be in substitution of the earlier contract." It is not the plaintiff's case that the parties re-negotiated the material terms, such as completely changed the total consideration payable to the defendant, or even sought to change the date, etc. All that the plaintiff says is that instead of executing the document in his favour, it was agreed that the same would be in favour of the daughter. Now, there is no law prohibiting such course of action; the consequence of this, if completed, would have been that the daughter would have been considered the owner, and the plaintiff would have, by virtue of the Benami Transactions (Prohibition) Act, been prevented from asserting his title. But as far as the defendant was concerned, he was not resiling from any commitment. But as far as the defendant was concerned, he was not resiling from any commitment. There is of course some inconsistency, in so far as the treatment of the balance Rs. 40 lakhs is concerned, because there is no mention of it in Ex. PW-1/8. Yet, the Court is of the opinion that this cannot be such a significant factor as to render the claim fatal. The letter Ex. PW-1/8 with the envelope gives, in the context, sufficient reason why the plaintiff and defendant agreed that the sale documents were to be executed in favour of the plaintiff's daughter; he had slipped and fallen, and had claimed this as the reason for being unable to come to India. The visit of the daughter, at the most proximate point of time, the payments made, the status of bank account, and indeed, even the letter of 18th April, 2006 present an overall picture that lends credence to the plaintiff's case of being ready, and the defendant's consent having been given to him, for the change in the manner of execution of the document. 18. The Court is also, in the context, not unmindful of the overall circumstances, which can be inferred without much difficulty. The plaintiff was living in Zambia, according to his deposition- a fact not disputed by the defendant. He depended upon his nephew, PW-2. The agreement between the parties, though reduced in writing, was not done through professional intervention, as is apparent from the drafting of the contract, particularly some conditions - especially the one pertaining to forfeiture. Having regard to the station occupied by the parties, there was an element of faith, or "gentleman's word" underlying the transaction. This is also clear from the circumstance that the plaintiff did not issue a legal notice, and says in his deposition - as does PW-2 that the defendant was approached repeatedly to complete the transaction, according to the later understanding. This has been stated in the reply to the defendant's notice, issued on behalf of the plaintiff, on 25.08.2006. One can understand that this faith inspired confidence between the parties - or at least the plaintiff, who apparently felt that his understanding with the defendant would be honoured. This has been stated in the reply to the defendant's notice, issued on behalf of the plaintiff, on 25.08.2006. One can understand that this faith inspired confidence between the parties - or at least the plaintiff, who apparently felt that his understanding with the defendant would be honoured. The Court does not discern any other reason why the plaintiff, who has no business in India, and who lived in Zambia, despite being possessed of the resources at that time, did not wish to execute the agreement. Therefore, the Court is of the opinion that the plaintiff did approach the defendant through PW-2 to execute the documents, as alleged in the suit and the evidence. 19. Now, so far as the defendant's argument that the agreement is incapable of specific performance, since it is merely one to enter into another agreement is concerned, the same is untenable. The relevant portions of the agreement (Ex. PW-1/3) read as follows: "...WHEREAS the Second Party has agreed to the said consideration amount and Rs. 5 lakhs as earnest money and acknowledge t he receipt by the first party and Rs. 40 lacs (Rupees Forty Lacs) will be paid by the Second Party at the destination by 15th May, 2006 and place of the choice of the first party and balance of Rs. 15 lacs (Rupees Fifteen Lacs only) will be paid uptill 15.5.2006 in cash at the home of second party and the balance of Rs. 15 lacs at the time of execution of documents of alienation (in shape of draft). That the whole deal will be completed within three months from the execution of this deed of agreement or earnest money and the possession of property in sale will deliver after one month of final payment..." It is clear that the reference to the "documents of alienation" is in respect of conveyance of title. The later recital, referring to the exhibit as a deed of agreement, also reinforces the Court's finding. Besides, there appears to be no reason or logic when the bulk of the consideration is paid, after which the parties are to execute an agreement to sell. It is therefore, held that Ex. PW-1/3 itself constituted the agreement to sell. 20. The later recital, referring to the exhibit as a deed of agreement, also reinforces the Court's finding. Besides, there appears to be no reason or logic when the bulk of the consideration is paid, after which the parties are to execute an agreement to sell. It is therefore, held that Ex. PW-1/3 itself constituted the agreement to sell. 20. The defendant had argued that a decree for specific performance should not be granted merely because it is lawful to do so, and the Court should consider all equities, in exercising discretion. It was submitted that the lapse of time, in the conduct of the case, has led to a situation where the defendant would be unable to purchase any suitable property, with the agreed consideration, on account of rising real estate prices. The defendant had relied on several rulings, in this regard. 21. This aspect of the question was dealt with by the Supreme Court, in S.V.R. Mudaliar v. Rajabu F. Buhari, (1995) 4 SCC 15 , in the following terms: "27. Insofar as the delay in the disposal of the case and the rise in prices during interregnum, Shri Parasaran urges that the delay not having been occasioned by any act of the plaintiff, he may not be punished for the same on the principle of "actus curiae neminem gravabit" - an act of the court shall prejudice no man. As regards the rise in prices, the submission is that it should not weigh with the court in refusing the relief if otherwise due, as opined in S.V. Sankaralinga Nadar v. P.T.S. Ratnaswami Nadar8, which decision was cited with approval in Mir Abdul Hakeem Khan v. Abdul Mannan Khadri9. We are in agreement with this view because of the normal trend of rise in prices of properties situate especially in metropolitan city like Madras, where the property in question is situate. If merely because the prices have risen during the pendency of litigation, we were to deny the relief of specific performance if otherwise due, this relief could hardly be granted in any case, because by the time the litigation comes to an end a sufficiently long period is likely to elapse in most of the cases. If merely because the prices have risen during the pendency of litigation, we were to deny the relief of specific performance if otherwise due, this relief could hardly be granted in any case, because by the time the litigation comes to an end a sufficiently long period is likely to elapse in most of the cases. This factor, therefore, should not normally weigh against the suitor in exercise of discretion by a court in a case of the present nature." In a later decision, Bal Krishna v. Bhagwan Das, (2008) 12 SCC 145 the Supreme Court explained the meaning of discretion, in such matters, as follows: "14. It is also settled by various decisions of this Court that by virtue of Section 20 of the Act, the relief for specific performance lies in the discretion of the court and the court is not bound to grant such relief merely because it is lawful to do so. The exercise of the discretion to order specific performance would require the court to satisfy itself that the circumstances are such that it is equitable to grant decree for specific performance of the contract. While exercising the discretion, the court would take into consideration the circumstances of the case, the conduct of parties, and their respective interests under the contract. No specific performance of a contract, though it is not vitiated by fraud or misrepresentation, can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee. In other words, the court's discretion to grant specific performance is not exercised if the contract is not equal and fair, although the contract is not void." It may also be mentioned here that unless the plaintiff's conduct displays some glaring fault, if all other ingredients necessary to prove the essentials to claim a decree of specific performance are satisfied, the mere fact that property prices have risen itself cannot lead the court to refuse to exercise discretion to grant such relief (See P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi, (2007) 10 SCC 231 ; P. D'Souza v. Shondrilo Naidu, 2004 (6) SCC 649 , and Jai Narain Parasrampuria (Dead) and Ors. v. Pushpa Devi Saraf and Ors., 2006 (7) SCC 756 ). 22. v. Pushpa Devi Saraf and Ors., 2006 (7) SCC 756 ). 22. In view of the above discussion and findings, these issues (No. 2 and No. 4) are held in favour of the plaintiff, who is entitled to a decree for specific performance, and has proved his readiness and willingness, and continued readiness and willingness. Issue No. 3 23. The onus of proving this issue was upon the defendant. He relied mainly on the following term of the agreement: "That in case of default on the part of first party then the second party will be entitled to get the double of the paid amount and in the same fashion in case of fault the part of second party then first party will be en titled to forfeit the paid amount in respect of schedule of payment and delivery of possession..." He also deposed in the suit, in support of his justification for forfeiting the amount received (Rs. 35 Lakhs) stating that the condition applied uniformly, both to the plaintiff as well as himself. In his evidence, it was stated that if there was default on his part in performing his obligations and executing the sale documents, the plaintiff could recover twice the amount of money paid to him. He also deposed that in the eventuality the plaintiff defaulted, he i.e. the defendant would be entitled to twice the amount received by way of consideration. It was also stated that the amount was needed to fund another property, which would have been bought from the consideration paid. 24. While there is no doubt that the parties had consciously stipulated for a consequence, in the event the contract was not performed, due to the fault of either of them, this Court is of the opinion that the condition was with a view to secure performance of the obligations, rather than to act as a penalty or forfeiture clause. This view is fortified by Section 23 of the Specific Relief Act, which says that the Court has to consider, in all cases, whether such a condition was to secure performance, or to bar specific relief. Section 23 of the Specific Relief Act, 1963, pertinently, in this context, reads as under: "23. This view is fortified by Section 23 of the Specific Relief Act, which says that the Court has to consider, in all cases, whether such a condition was to secure performance, or to bar specific relief. Section 23 of the Specific Relief Act, 1963, pertinently, in this context, reads as under: "23. (1) A contract, otherwise proper to be specifically enforced, may be so enforced though a sum be named in it as the amount to be paid in case of its breach and the party in default is willing to pay the same, if the court, having regard to the terms of the contract and other attending circumstances, is satisfied that the sum was named only for the purpose of securing the performance of the contract and not for the purpose of giving to the party in default an option of paying money in lieu of specific performance. (2) When enforcing specific performance under this section, the court shall not also decree payment of the sum so named in the contract." In M.L. Devender Singh v. Syed Khaja, 1973 (2) SCC 515 the court ruled that: "The question always is: What is the contract? Is it that one certain act shall be done, with a sum annexed, whether by way of penalty or damages, to secure the performance of this very act? Or, is it that one of the two things shall be done at the election of the party who has to perform the contract, namely, the performance of the act or the payment of the sum of money? If the former, the fact of the penal or other like sum being annexed will not prevent the court's enforcing performance of the very act, and thus carrying into execution the intention of the parties: if the latter, the contract is satisfied by the payment of a sum of money, and there is no ground for proceeding against the party having the election to compel the performance of the other alternative. From what has been said it will be gathered that contracts of the kind now under discussion are divisible into three classes- (i) where the sum mentioned is strictly a penalty - a sum named by way of securing the performance of the contract, as the penalty is a bond; (ii) where the sum named is to be paid as liquidated damages for a breach of the contract; (iii) where the sum named is an amount the payment of which may be substituted for the performance of the act at the election of the person by whom the money is to be paid or the act done. Where the stipulated payment comes under either of the two first-mentioned heads, the court will enforce the contract, if in other respects it can and ought to be enforced, just in the same way as a contract not to do a particular act, with a penalty added to secure its performance or a sum named as liquidated damages, may be specifically enforced by means of an injunction against breaking it. On the other hand, where the contract comes under the third head, it is satisfied by the payment of the money, and there is no ground for the court to compel the specific performance of the other alternative of the contract.' " It was also held that: "20. The fact that the parties themselves have provided a sum to be paid by the party breaking the contract does not, by itself, remove the strong presumption contemplated by the use of the words `unless and until the contrary is proved'. The sufficiency or insufficiency of any evidence to remove such a presumption is a matter of evidence. The fact that the parties themselves specified a sum of money to be paid in the event of its breach is, no doubt, a piece of evidence to be considered in deciding whether the presumption has been repelled or not. But, in our opinion, it is nothing more than a piece of evidence. It is not conclusive or decisive. 21. The fact that the parties themselves specified a sum of money to be paid in the event of its breach is, no doubt, a piece of evidence to be considered in deciding whether the presumption has been repelled or not. But, in our opinion, it is nothing more than a piece of evidence. It is not conclusive or decisive. 21. The second assumption underlying the contentions on behalf of the defendant-appellants is that, once the presumption, contained in Explanation to Section 12 of the old Act, is removed, the bar contained in Section 21 of the old Act, against the specific enforcement of a contract for which compensation in money is an adequate relief, automatically operates, overlooks that the condition for the imposition of the bar is actual proof that compensation in money is adequate on the facts and circumstances of a particular case before the court. The effect of the presumption is that the party coming to court for the specific performance of a contract for sale of immovable property need not prove anything until the other side has removed the presumption. After evidence is led to remove the presumption, the plaintiff may still be in a position to prove, by other evidence in the case, that payment of money does not compensate him adequately." The above decisions, and subsequent judgments which followed it, were approved and applied in P. D'Souza v. Shondrilo Naidu, (2004) 6 SCC 649 . 25. The law relating to penalties and forfeiture was comprehensively discussed and declared, in the five judge ruling of the Supreme Court in Fateh Chand v. Balkishan Dass, (1964) 1 SCR 515 . The judgment is binding, and has been followed in several other subsequent decisions, by the Supreme Court and various High Courts. The relevant statement of the law, is as follows: "15. Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties pre-determined, or where there is a stipulation by way of penalty. But the application of the enactment is not restricted to cases where the aggrieved party claims relief as a plaintiff. Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties pre-determined, or where there is a stipulation by way of penalty. But the application of the enactment is not restricted to cases where the aggrieved party claims relief as a plaintiff. The section does not confer a special benefit upon any party; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for forfeiture of any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated. The jurisdiction of the court is not determined by the accidental circumstance of the party in default being a plaintiff or a defendant in a suit. Use of the expression "to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract. The court has to adjudge in every case reasonable compensation to which the plaintiff is entitled from the defendant on breach of the contract. Such compensation has to be ascertained having regard to the conditions existing on the date of the breach." 26. It is thus clear that while parties can prescribe, what they consider as liquidated damages in the event of breach of the obligations under the contract, the amount would be the maximum that the party aggrieved would be entitled to. However, the obligation to prove breach and damages, so as to be entitled to reasonable amount not exceeding the stipulated sum, is upon him who alleges it. In this case, no doubt the parties stipulated that in the event of breach by one of them, the other would be entitled to the amount deposited, to the extent of twice such sum. However, there is an element of uncertainty and subjectivity because much depends on the amount deposited all given by one party to the other. For instance, if one party, i.e. the buyer, gives the other Rs. 50 Lacs but is unable to perform the contract, the consequence would be that the other would be entitled to Rs. 1 crore. 27. Apart from alleging that the plaintiffs deposit of Rs. For instance, if one party, i.e. the buyer, gives the other Rs. 50 Lacs but is unable to perform the contract, the consequence would be that the other would be entitled to Rs. 1 crore. 27. Apart from alleging that the plaintiffs deposit of Rs. 35 Lakhs had to be forfeited and further deposing that such amount or twice such amount was meant to compensate the defendant seller in the event of licence, the defendant has not led any evidence to show how Rs. 35 Lakhs was a reasonable compensation in the circumstances of the case. There is no positive evidence to show that the defendant had entered into any other transaction for purchase of property from out of the consideration received by him towards sale of the suit property. In these circumstances, upholding the mere assertion of the defendant would be to sanctify pleading without proof and what is more up-hold the forfeiture on the basis of a relatively vague clause. For these reasons, this issue is answered in the negative against the defendant and the finding is returned in favour of the plaintiff. Issue No. 5: 28. In view of the findings on the above issues, the plaintiff is entitled to a decree for specific performance. He is directed to pay to the defendant the entire balance of Rs. 40 lakhs within four weeks. Thereupon the defendant is directed to execute and have the sale deed registered in favour of the plaintiff, within eight weeks from today. In the event of default, the said amount shall be deposited in the name of the Registrar of the Court, and the plaintiff would be entitled to execution of a sale or conveyance deed, through orders of Court. 29. The suit is decreed in terms of the directions in the preceding paragraph, with costs.