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2011 DIGILAW 2206 (ALL)

Vijai Narain Verma v. Surendra Kumar Vaish

2011-09-20

PRAKASH KRISHNA

body2011
Prakash Krishna, J.;- This is defendant's appeal against the judgment and order dated 24th of October, 1983 passed by the Additional District Judge, Badaun in Civil Appeal Nos.149 of 1980 and 24/81, which arose out of the suit no.188 of 1978 decree dated 21st of September, 1980. 2. Surendra Kumar Vaishya, respondent herein instituted original suit no.188 of 1978 against Vijay Narain Verma, the appellant, for specific performance of contract to sell dated 23rd of April, 1973 in respect of 1/4th share of residential house described in the plaint, on the allegations that the defendant appellant agreed to sell the aforestated 1/4th share for a total sum of Rs.3,500/-, out of which a sum of Rs.500/- was given as earnest money. It was agreed that sale deed would be executed within a period of two and half years after lifting of the ban for registration of sale documents, by the Government. The Government lifted the ban on 4th of April, 1976 but the defendant failed to execute the sale deed, as per terms of the aforestated registered agreement dated 23rd of April, 1973 in spite of registered notice dated 9th of August, 1978 which was served on him on 10th of August, 1978. The plaintiff was always ready and willing to perform his part of the contract. In alternative relief for refund of earnest money along with damages to the extent of Rs.1,000/- total Rs.1,500/- was prayed for. 3. As usual, the defendant contested the suit by denying the plaint allegations as also the sale agreement dated 23.4.1973. He also denied the receipt of any amount as earnest money. In addition, it was pleaded that the house belongs to his father and he has 1/5th share therein. 4. The parties led evidence in support of their respective cases. 5. The trial court found that the defendant did enter into the agreement dated 23.4.1973 but has refused to grant the relief for specific performance of contract to sell as it was of the opinion that title of the defendant was defective. The alternative relief for refund of Rs.1,500/- was granted. The matter was carried in appeals by both i.e. plaintiff and defendants which have been decided by common judgment by the court below who decreed the suit for specific performance of contract to sell also, on the finding that there was no defect in title. The alternative relief for refund of Rs.1,500/- was granted. The matter was carried in appeals by both i.e. plaintiff and defendants which have been decided by common judgment by the court below who decreed the suit for specific performance of contract to sell also, on the finding that there was no defect in title. As a matter of fact, it was found that another co-sharer has sold his 1/4th share to a stranger and the defendant has the title to the extent of 1/4th share in the house in question. The appeal preferred by the present appellant was dismissed and the appeal preferred by the plaintiff, thus, was allowed. The following substantial question was framed at the time of admission of the appeal:- "Whether in the circumstances of the case as found by the Courts below, the decree for partition of the dwelling house was proper and legal." 6. It appears that when the appeal was ripe up for hearing, an application was filed by the appellants which was allowed, the following two additional questions of law were framed by the order dated 11th of May, 2007:- "Whether in absence of an issue framed by the trial court regarding the readiness and willingness of the plaintiff to perform his part of the contract, the Appellate Court could have decreed the suit for specific performance and record finding on the said issue without formally framing any such issue? 7. Whether the Appellate Court was justified in decreeing the suit for specific performance of contract relating to sale of 1/4th share in a dwelling house in view of the fact that only a paltry sum of Rs.500/- was paid as earnest money against the agreed consideration of Rs.3500/- and further that at the time of passing of the decree more than 10 years had elapsed from the date of the agreement, more so when the Trial Court had refused specific performance?" 8. It may not be out of place to mention here that during the pendency of the appeal, the sole appellant expired and in his place his heirs and legal representatives namely Smt. Laxmi Verma and minor son Ajay Verma were substituted vide court's order dated 3rd of March, 2006. 9. The appeal came up for hearing before me on 9th of November, 2010 on the nomination made by the then Senior Judge. 10. 9. The appeal came up for hearing before me on 9th of November, 2010 on the nomination made by the then Senior Judge. 10. Sri Manoj Mishra, learned counsel for the appellant at the time of hearing half heartedly challenged the finding of two Courts below on the question whether the agreement in question was duly executed by the defendant appellant, passing of earnest money, readiness and willingness of the plaintiff to perform his part of the contract and with regard to the defective title of the defendant. However, when it was pointed out to him that all these questions are questions of fact and there is no illegality or perversity therein, he did not pursue these questions any further. Thus, the findings recorded by the Courts below on these aspects of the matter have attained finality. 11. Then, with all vehemence at his command he urged that the appellants are prepared to pay a sum of Rs.50,000/- as damages instead of granting a relief for specific performance of contract to sell at this distance of time a decree awarding damages be passed. He submits that during the pendency of litigation, the original defendant appellant has expired, only a paltry sum of Rs.500/- as found by the two courts below was given as earnest money and trial court did not grant the decree for specific performance of contract to sell instead alternative relief for refund of earnest money along with the damages was decreed. It is the appellate court who granted the decree for specific performance of contract to sell that too after about ten years. Elaborating the argument, it was submitted that the grant of relief for specific performance of contract to sell is in discretion of the Court and in appropriate cases the Court may refuse to grant the said relief even if the agreement to sell is established. The hearing of appeal was adjourned by recording the following order:- "During the course of argument, Shri Manoj Mishra, learned counsel for the appellant submits that the appellant is prepared to pay a sum of Rs.50,000/- as damages instead of granting a decree for specific performance of contract to sell. The agreement is of the year 1973 and only a sum of Rs.500/- was given as advance and the total sale consideration was Rs.3,500/-. The agreement is of the year 1973 and only a sum of Rs.500/- was given as advance and the total sale consideration was Rs.3,500/-. After hearing the learned counsel for the parties at some length, this Court is of the view that if the appellant is prepared to pay a sum of Rs.1,00,000/-, it may exercise the discretion in favour of the appellant. At this stage, Shri Rajiv Joshi, learned counsel for the respondent wants to obtain instruction in this regard. Two weeks time as prayed for, is granted so that the parties may arrive at an amicable settlement with the intervention of the Court. List on 26.11.2010. If, I am not sitting singly, the case may be listed after lunch." 12. The entry in the order sheet dated 11th of January, 2011 records that Sri Manoj Mishra, Advocate, has shown his willingness to pay a sum of Rs.1 Lakh and has also filed an affidavit on 29th of November, 2010 to that effect. The matter was listed on number of occasions thereafter. Time was given to Sri Rajeev Joshi, learned counsel for the respondents, to obtain instructions. He after lapse of a great amount of time, informed the Court that there is no response to his letters. The hearing of the appeal concluded on 8th of September, 2011. Sri Manoj Mishra, learned counsel for the appellant submits that in view of the following decisions of the Apex Court as also the statutory provision as contained in section 20 of Specific Relief Act, this Court may take a pragmatic view by suitably compensating the plaintiff and relieving the appellants from liability to execute the sale deed for 1/4th share in the residential house. 13. In S. Rangaraju Naidu Vs. S. Thiruvarakkarasu, 1995 Supp (2) SCC 680, the Apex Court set aside the decree for specific performance of contract to sell as the respondents therein were moneylenders with whom the appellant had entered into an agreement being not in a position to pay the amount due. The Court was of the view that the predominant object of the agreement was payment of dues with interest. 14. The aforesaid decision was followed in Kashi Ram Vs. Om Prakash Jawal and others, (1996) 4 SCC 593 . In this case, the Apex Court posed a question--Whether it would be just, fair and equitable to grant a decree for specific performance? 14. The aforesaid decision was followed in Kashi Ram Vs. Om Prakash Jawal and others, (1996) 4 SCC 593 . In this case, the Apex Court posed a question--Whether it would be just, fair and equitable to grant a decree for specific performance? It has been held as follows:- ".........................It is true that the rise in prices of the property during the pendency of the suit may not be the sole consideration for refusing to decree the suit for specific performance. But it is equally settled law that granting decree for specific performance of a contract of immovable property is not automatic. It is one of discretion to be exercised on sound principles. When the court gets into equity jurisdiction, it would be guided by justice, equity, good conscience and fairness to both the parties. Considered from this perspective, in view of the fact that the respondent himself had claimed alternative relief for damages, we think that the courts would have been well justified in granting alternative decree for damages, instead of ordering specific performance which would be unrealistic and unfair. Under these circumstances, we hold that the decree for specific performance is inequitable and unjust to the appellant." 15. From a reading of the aforesaid extract of the judgement of the Apex Court in the case of Kashi Ram (supra) it is apparent that where an alternative relief for refund has also been claimed, the court in its discretion may in appropriate cases grant alternative decree for damages instead of ordering specific performance which would be unrealistic and unfair. 16. In Her Highness Maharani Shantidevi P. Gaikwad v. Savjibhai Haribhai Patel, (2001) 5 SCC 101 , a bench of three learned Judges held as follows:- "59. The grant of decree for specific performance is a matter of discretion under Section 20 of the Specific Relief Act, 1963. The court is not bound to grant such relief merely because it is lawful to do so but the discretion is not required to be exercised arbitrarily. It is to be exercised on sound and settled judicial principles. One of the grounds on which the court may decline to decree specific performance is where it would be inequitable to enforce specific performance." 17. The aforesaid decision has been followed in V. Muthusami (Dead) by Lrs. Versus Angammal and others, (2002) 3 SCC 316 wherein it has been laid down as follows:- "19. One of the grounds on which the court may decline to decree specific performance is where it would be inequitable to enforce specific performance." 17. The aforesaid decision has been followed in V. Muthusami (Dead) by Lrs. Versus Angammal and others, (2002) 3 SCC 316 wherein it has been laid down as follows:- "19. Now the question is, to what relief is the plaintiff entitled? It is settled position of law that grant of a decree for specific performance is a discretionary one. This Court in K. Narendra v. Riviera Apartments (P) Ltd., (1999) 5 SCC 77 held that Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles. It was further held that if performance of a contract involves some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance and the doctrine of comparative hardship, has been statutorily recognized in India." 18. Sri Rajeev Joshi, learned counsel for the plaintiff respondent, on the other hand, supports the findings of the Courts below and submitted that the Court should not set aside the decree for specific performance of contract to sell as there is no fault of his client. He should not suffer for the delay caused due to justice delivery system over which the plaintiff has no control. He further stated that in absence of any instruction from his client he is not in a position to say anything except that he supports the decree appealed. 19. Now, coming to the facts of the case on hand, the agreement was with regard to the sale of 1/4th undivided share in the house. Though the agreement is valid but it is also true that the original party to the agreement has expired and the agreement was entered into way back on 23rd of April, 1973 for a total sum of Rs.3,500/-, out of which Rs.500/- was paid as earnest money. 20. Though the agreement is valid but it is also true that the original party to the agreement has expired and the agreement was entered into way back on 23rd of April, 1973 for a total sum of Rs.3,500/-, out of which Rs.500/- was paid as earnest money. 20. Taking into consideration that by now about thirty two years have gone and the prices of immovable properties have sky-rocketed, it would be travesty of justice to grant the alternative relief for payment of Rs.1,500/- only. During this period, there is devaluation of money to a large extent. Equally, it would be harsh to confirm the decree for specific performance of contract to sell on payment of balance amount of Rs.3,000/-. Equities between the parties can be adjusted by asking the defendant appellants to pay/deposit with trial court a sum of Rs.1,10,000/- (Rupees One Lakh Ten Thousand) inclusive of all costs etc. on or before 30th of October, 2011 by way of bank draft/pay order drawn in favour of the plaintiff respondent. To this extent, the judgment and decree of the courts below stands modified and the appeal stands allowed in part. 21. It is further provided that in case of failure on the part of the appellant to pay/deposit the stipulated amount within the time stipulated above, the appeal shall stand dismissed with costs.