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2012 DIGILAW 848 (HP)

Jagdish Singh v. Nirmala Devi

2012-11-19

KULDIP SINGH

body2012
Judgment Kuldip Singh, J. The plaintiff having lost in both the Courts below has filed the appeal against judgment, decree dated 29.12.2000 passed by learned District Judge, Una in Civil Appeal No. 87 of 1995 affirming judgment, decree dated 1.4.1995 passed by learned Sub Judge 1st Class, Amb, in Civil Suit No. 189 of 1990. 2. The facts, in brief, are that the appellant had filed suit for specific performance of contract against Karam Singh, predecessor-in-interest of the respondents in respect of land measuring 0-66-00 Hect. (17 K-2 Mls.) out of 0-98-39 Hectares, Khasra No. 2343 new as per Khatauni Settlement Jadid for the year 1988-89 village Pirthipur on payment of Rs.16,000/- the balance sale consideration, in alternative, recovery of Rs.40,000/- as damages for non-performance of contract. 3. The further case of the appellant is that Karam Singh vide an agreement dated 25.2.1988 agreed to sell 10 Kanals land out of the suit land for a consideration of Rs.22,000/-. Karam Singh had received Rs.15,000/- as earnest money and possession of the land was delivered to appellant. The balance sale consideration Rs.7,000/- was agreed to be paid at the time of execution of the sale deed which was to be executed on or before 24.2.1990.On failure of payment to perform his part of contract, earnest money of appellant was to be forfeited and on failure of Karam Singh to execute the sale deed, a sum of Rs.30,000/- was to be paid by him to the appellant. 4. Karam Singh evaded the execution of the sale deed. On 21.12.1988 Karam Singh entered into an agreement to sell remaining 7 Kanals 2 Marlas land out of the suit land for consideration of Rs.14,000/-, out of which, he received Rs.5,000/-. The balance sale consideration was agreed to be paid at the time of the execution of the sale deed which was to be executed on or before 24.2.1990. The possession of that land was also delivered to the appellant. On failure of Karam Singh to execute the sale ded, a sum of Rs.10,000/- was to be paid to appellant and on failure on the part of the appellant to perform his part of the contract, his earnest money was to be forfeited. 5. The appellant approached Karam Singh many times and also issued registered notice on 19.2.1990 asking Karam Singh to perform his part of the contract but without any response. 5. The appellant approached Karam Singh many times and also issued registered notice on 19.2.1990 asking Karam Singh to perform his part of the contract but without any response. On 5.3.1990 Karam Singh executed fresh agreement, he acknowledged the execution of previous agreements and receipt of earnest money Rs.20,000/-. He agreed to execute sale deed on or before 5.7.1990 on payment of sale consideration Rs.16,000/- and on his failure to do so, he agreed to pay Rs.40,000/- to appellant. Karam Singh failed to perform his part of the contract, therefore, the suit was filed. 6. The suit was contested by Karam Singh by filing written statement. He took preliminary objections of estoppel, limitation and maintainability. On merits, he admitted agreement dated 25.2.1988 to sell 10 Kanals land for a consideration of Rs.22,000/-. He admitted that a sum of Rs.15,000/- was received by him, he denied that possession of the suit land was delivered to the appellant. It was pleaded that the suit land was already mortgaged with the Cooperative Agricultural Society Bank, Kangra for Rs.51,000/- which fact was told to appellant at the time of the execution of the agreement dated 25.2.1988. He was told that the land could not be sold as it was already mortgaged. The execution of agreement dated 21.12.1988 and receipt of Rs.5,000/- was denied. The notices were admitted. It has been pleaded that the appellant was told that the land could not be sold. The agreement dated 5.3.1990 was denied. 7. The replication was filed. On the pleadings of the parties, the following issues were framed:- 1. Whether the defendant executed agreement to sell in favour of plaintiff-bank qua the suit land on 22.2.1988 for a consideration of Rs.22,000/- ? OPP 2. Whether consideration of Rs.15,000/- stood paid by the plaintiff and received by the defendant, as alleged? OPP 3. Whether the plaintiff is ready and willing to perform his part of the agreement, as alleged? OPP 4. Whether the defendant further agreed to sell remaining suit land of 7 K-2 Mls. to the plaintiff for a consideration of Rs.14,000/- vide agreement dated 21.12.88, as alleged? OPP 5. Whether consideration of Rs.5,000/- passed on to the defendant from the plaintiff, as alleged? OPP 6. Whether the plaintiff is entitled to recover Rs.40,000/- in the alternative, as alleged? OPP 7. Whether the suit is within time? OPP 8. Whether the suit is not maintainable, as alleged? OPP 5. Whether consideration of Rs.5,000/- passed on to the defendant from the plaintiff, as alleged? OPP 6. Whether the plaintiff is entitled to recover Rs.40,000/- in the alternative, as alleged? OPP 7. Whether the suit is within time? OPP 8. Whether the suit is not maintainable, as alleged? OPP 9. Whether the act and conduct of the plaintiff is a bar to the present suit? OPD 10. Whether the agreement dated 21.12.1988 is result of fraud and mis-representation and undue influence, as alleged? OPD 11. Relief. The issues No. 1 to 7 were answered in affirmative, issues No. 8 to 10 in negative and the suit was decreed on 1.4.1995 for Rs.40,000/- alongwith interest at the rate of 6% per annum from the date of institution of the suit till realisation. The appeal filed by the appellant against judgment, decree dated 1.4.1995 was dismissed on 29.12.2000, hence second appeal which has been admitted on the following substantial question of law:- “Whether Courts below erred in appreciating the provisions of Specific Relief Act governing the grant of decree for possession with special reference to the Section 13, thereby vitiating the impugned judgments and decrees?” 8. I have heard Mr. Ajay Sharma, Advocate, learned counsel for the appellant and none appeared on behalf of the respondents. The learned counsel for the appellant has submitted that the appellant has filed CMP No. 549 of 2010 under Order 41 Rule 27 CPC for additional evidence. It has been submitted that the appellant has received information vide letter dated 14.6.2010 from the Kangra Co-operative Primary Agriculture and Rural Development Bank Limited (for short ‘Bank’) that Karam Chand had liquidated the bank loan, the information disclosed by the letter dated 14.6.2010 is subsequent in time and is necessary to adjudicate the matter completely and effectively. The prayer has been made for allowing the application and placing on record letter dated 14.6.2010. It has also been submitted that the learned Courts below have misconstrued, misinterpreted the relevant provisions of Specific Relief Act, 1963 (for short ‘Act’) and more particularly Section 13. The prayer for alternative relief in the suit is no ground to decline the decree of specific performance of land to the plaintiff. 9. It has also been submitted that the learned Courts below have misconstrued, misinterpreted the relevant provisions of Specific Relief Act, 1963 (for short ‘Act’) and more particularly Section 13. The prayer for alternative relief in the suit is no ground to decline the decree of specific performance of land to the plaintiff. 9. In CMP No. 493 of 2012 the learned counsel for the appellant has submitted that on 31.3.2001 the High Court had directed the parties to maintain status quo qua the possession of the suit land. On 22.5.2001 the respondents entered over the suit land alongwith three tractors at about 10.30 a.m. The respondent Surjeet Singh was driving the tractor of Mohinder. Kashmir Singh and Joginder Singh are the owners of the other tractors. They started ploughing the field. The appellant objected but he was threatened with dire consequences. Some persons gathered there on hearing the noise. Some amount was taken away from the pocket of the appellant in the scuffle, the matter was reported to the police but no action was taken by the police. On 9.6.2001 the matter was reported to Sub Divisional Magistrate, Amb with reminder lateron, but no action has been taken. The appellant has filed a complaint in the Court of Judicial Magistrate 1st Class, Amb. The submission has been made for taking appropriate action against the respondents for disobedience of the order dated 31.3.2001. 10. The letter dated 14.6.2010 filed with application under Order 41 Rule 27 CPC discloses that Karam Chand had taken Rs.51,000/- loan for purchasing tractor implements. The loan was given on 8.1.1986 and loan has been cleared on 19.6.1999, now nothing was due from Karam Chand. The appellant has prayed for placing on record letter dated 14.6.2010 of the bank. In the letter there is reference of letter dated 28.5.2010 of the appellant, but the copy of that letter has not been placed on record. In the letter dated 14.6.2010, there is no reference of suit land nor it has been stated that the suit land was now no more encumbered and mortgaged amount has been cleared. No doubt, there is mention of Rs.51,000/- loan amount in the letter dated14.6.2010 but it cannot be assumed on the basis of letter dated 14.6.2010 that this was the only amount taken on loan by Karam Chand. No doubt, there is mention of Rs.51,000/- loan amount in the letter dated14.6.2010 but it cannot be assumed on the basis of letter dated 14.6.2010 that this was the only amount taken on loan by Karam Chand. This is more so when in the letter dated 14.6.2010 there is no reference of mortgage of the suit land against Rs.51,000/- and clearing of the mortgage on payment of mortgage amount by Karam Chand. 11. The letter dated 14.6.2010 reveals that the loan amount was cleared by Karam Chand on 19.6.1999. In the application it has been stated that information given in the letter dated 14.6.2010 is subsequent in point of time which came to the notice of the appellant after 14.6.2010 but in the application there is no statement to infer due diligence on the part of the appellant to collect the information immediately after 19.6.1999 when the loan amount was allegedly cleared by Karam Chand. The first appeal was decided on 29.12.2000 the loan was allegedly cleared by Karam Chand on 19.6.1999, no application for additional evidence was filed by the appellant when the matter was pending in the lower appellate Court nor there is any averment in the application whether before 28.5.2010 appellant made any inquiry from the bank regarding the status of the loan taken by Karam Chand from the bank. The application is highly belated, the same does not appear to be bonafide. The information sought to be placed on record vide letter dated 14.6.2010 is vague and does not touch the point in issue. In the application prayer has been made for placing on record letter dated 14.6.2010 and not to prove letter dated 14.6.2010 by way of additional evidence. The letter dated 14.6.2010 will not assist this Court in adjudicating the real dispute between the parties, hence CMP No. 549 of 2010 is dismissed. 12. In the application prayer has been made for placing on record letter dated 14.6.2010 and not to prove letter dated 14.6.2010 by way of additional evidence. The letter dated 14.6.2010 will not assist this Court in adjudicating the real dispute between the parties, hence CMP No. 549 of 2010 is dismissed. 12. The Section 13 (1) (c) of the Act provides where a person contracts to sell having no title or only an imperfect title, the purchaser subject to the provisions of Chapter-II of the Act has right where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee. 13. The cumulative effect of findings of the two Courts below on issues No. 1 to 5 is that the suit land was mortgaged for a total sum of Rs.36,000/- under agreements and appellant had paid Rs.20,000/- earnest money to Karam Singh. The suit land stood mortgaged with the bank for a sum of Rs.51,000/- which amount is more than the purchase money under the agreements. The purchaser under Section 13 (1) (c) of the Act has a right to compel the vendor to redeem the mortgage if the mortgage money does not exceed the purchase money. In the present case, since the mortgage amount is more than the purchase money, therefore, under Section 13 (1) (c) of the Act, the purchaser cannot compel the vendor to redeem the mortgage and to obtain a valid discharge. 14. The learned counsel for the appellant has relied Motilal Jain vs. Ramdasi Devi and others 2000 (3) CCC 610 (SC) on the point that claim of damages as an alternative relief does not disentitle the appellant to main relief of specific performance and the Courts below have erred in allowing alternative relief for recovery of Rs.40,000/- as damages alongwith interest at the rate of 6% per annum instead of decree of specific performance of land. 15. In Kanshi Ram vs. Om Prakash Jawal and others AIR 1996 SC 2150 , it has been held the question that arises for consideration is: whether it would be just, fair and equitable to grant the decree for specific performance? 15. In Kanshi Ram vs. Om Prakash Jawal and others AIR 1996 SC 2150 , it has been held the question that arises for consideration is: whether it would be just, fair and equitable to grant the decree for specific performance? 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, 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, it was held that the decree for specific performance is inequitable and unjust to the appellant. 16. In K.Narendra vs. Riviera Apartments (P) Ltd. (1999) 5 SCC 77 , it has been held as follows:- “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 and capable of correction by a court of appeal. Performance of the contract involving 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. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy (1996) 5 SCC 589 by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court.” 17. In V. Pechimuthu vs. Gowrammal (2001) 7 SCC 617 , it has been held where the Court is considering whether or not to grant a decree for specific performance for the first time, the rise in the price of the land agreed to be conveyed may be a relevant factor in denying the relief of specific performance. In Manohar Lal alias Manohar Singh vs. Maya (2003) 9 SCC 478 , the agreement to sell was of the year 1987, the High Court instead of passing decree for specific performance of an agreement to sell the suit land, decreed the suit for refund of earnest money with reasonable interest. The Supreme Court approved the correctness of the factual aspect of the finding arrived at by the High Court and held that the view taken by the High Court that a just, legal and proper exercise of judicial discretion would be not to direct specific performance but to direct the refund of such consideration as was paid. However, the plaintiff-appellant should not be denied his costs to the extent of his success. 18. In Bal Krishna and another vs. Bhagwan Das (dead) by LRs and others (2008) 12 SCC 145, it has been held as follows:- “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.” 19. The two Courts below have exercised judicial discretion in granting alternative relief of damages to appellant on the basis of agreements instead of decree of specific performance. The relief of specific performance is a discretionary relief and the plaintiff is not entitled to decree of specific performance as a matter of course. It depends upon the facts and circumstances of each case. Karam Singh had raised loan from the bank and mortgaged his land. It can be safely inferred that financial condition of Karam Singh was not very good and therefore, he took loan from the bank. In these circumstances, it is quite possible that Karam Singh entered into agreements to sell the suit land but gradually his financial condition improved. 20. The agreements are about 24 years old during this period there is phenomenal increase in land prices. The two Courts below on the basis of agreements exercising judicial discretion allowed the alternative relief of damages of Rs.40,000/- alongwith 6% interest to appellant instead of decree of specific performance of the suit land. Now it will not be equitable to direct the respondents to execute sale deed in favour of the appellant of the suit land after 24 years of the agreements. Karam Singh had received total Rs.20,000/- under the agreements, the suit has been decreed for damages for Rs.40,000/- alongwith 6% interest. In my view, equities have been suitably balanced by decreeing the suit for Rs.40,000/- alongwith 6% simple interest from the date of institution of the suit till realisation. The two Courts below have rightly appreciated the evidence and legal position. In my view, equities have been suitably balanced by decreeing the suit for Rs.40,000/- alongwith 6% simple interest from the date of institution of the suit till realisation. The two Courts below have rightly appreciated the evidence and legal position. There is no merit in the appeal. The substantial question of law, noticed above, is decided against the appellant. 21. In CMP No. 493 of 2012 it has been stated that on 31.3.2001 in CMP No. 180 of 2001 the Court had directed the parties to maintain status quo qua the possession of the suit land. On 22.5.2001 the respondents disobeyed the order dated 31.3.2001. The respondents have filed reply. It has been stated that appellant was not in possession of the suit land. As per the revenue record also, the appellant is not in possession of the suit land, Karam Singh was in possession of suit land during his life time and after his death, the respondents No. 1 to 7 who are the legal heirs of Karam Singh are in physical possession of the suit land. It has been denied that on 22.5.2001 the respondents entered into the suit land alongwith three tractors as alleged. The respondents have filed revenue record alongwith reply wherein the possession of Karam Chand has been recorded. The appellant has filed rejoinder and reiterated his stand. 22. The stand taken by the appellant in the application has been denied by the respondents in the reply. The reply is supported by revenue record. There is no material on record except bald assertions of appellant that on 31.3.2001 and thereafter the appellant was in possession of the suit land. In these circumstances, the appellant has failed to prove disobedience of order dated 31.3.2001 by the respondents, CMP No. 493 of 2012 is dismissed. 23. In view of above discussion, the appeal fails and is accordingly dismissed, however, the appellant shall be entitled to his costs throughout from the respondents.