JUDGMENT Hon’ble Dinesh Gupta, J.—This second appeal is preferred against the judgement dated 8.5.1983 passed by IVth Additional District Judge, Ghaziabad in Civil Appeal No. 210 of 1982 arising out of judgment dated 14.10.1981 passed by Civil Judge, Ghaziabad in Original Suit No. 303 of 1977. 2. The brief facts, which give rise to this appeal are that the plaintiff-appellant (hereinafter called the “appellant”) filed Suit No. 303 of 1977 for the relief of specific performance of an agreement to sell against the defendant-respondent (hereinafter called the “respondent”). 3. As per the contention of the learned counsel for the appellant, the respondent had 1/4th share in the agricultural plot situated in Village-Bisobhar, Pargana-Jalalabad, District-Ghaziabad. The respondent agreed to sell his share in the above said plots to the appellant for a consideration of Rs. 9000/- and out of the above sale consideration, the respondent received Rs. 99/- as earnest money and Rs. 3901/- towards part payment of the sale. In addition to the above said amount, Rs. 4000/- were paid to the respondent before the Sub-Registrar on 6.10.1975 when the agreement to sell between the parties was executed and registered. It was further agreed that the balance of sale price i.e. Rs. 1000/- shall be paid at the time of registration of sale-deed, which was to be got executed by 5.10.1977. The appellant alleged that he was ready and willing to get the sale-deed executed in terms of agreement to sell and he send a notice to the respondent to execute the sale-deed but the respondent did not agreed to it. On the contrary, the respondent served a notice to the appellant denying the receipt of Rs. 4000/-. The plaintiff left with no option but to file the suit for the specific performance. 4. The suit was contested by the respondent. The respondent admitted that an agreement was arrived at between the parties to sell the land for a consideration of Rs. 9000/-. He, however, denied the payment of Rs. 4000/- to him prior to the execution of the agreement to sell. His contention was that on 6.10.1975, the parties came to the Sub-Registrar’s Office and the agreement was prepared. However, the scribe was in collusion with the appellant and did not read over the agreement to the respondent that he has been paid earlier Rs. 4000/-. Thus, the appellant alongwith witnesses and scribe played fraud upon the respondent. His contention was that on 6.10.1975, the parties came to the Sub-Registrar’s Office and the agreement was prepared. However, the scribe was in collusion with the appellant and did not read over the agreement to the respondent that he has been paid earlier Rs. 4000/-. Thus, the appellant alongwith witnesses and scribe played fraud upon the respondent. Respondent served a notice upon the appellant that he is not bound to execute the sale-deed. It was further pleaded that the respondent is a landless labourer and under the law, he is not bound to transfer the land in suit. 5. At the time of pleadings of the parties, the following issues were framed: 1. Whether the amount of Rs. 4000/- as earnest money was paid by the plaintiff prior to the execution and registration of the impugned agreement deed of so, its effect? 2. Whether any fraud was played by the plaintiff while getting the agreement executed, if so, its effect? 3. To what relief, if any, is the plaintiff entitled? 6. The learned trial Court decided the issues in favour of the appellant and decreed the suit of the appellant vide its order dated 14.10.1981, which read as under: “The suit is decreed with costs. The defendants Jagat Singh is directed to execute sale-deed of his 1/4th share in the disputed plots after receiving Rs. 1000/- from the plaintiff within a period of 2 months from the date of decree, failing which it shall be open to the plaintiff to get it executed through Court in the alternative the suit is further decreed for recovery of Rs. 8000/- with pendentilite and further interest @ 6% per annum of this amount.” 7. Feeling aggrieved, the defendant preferred Civil Appeal before the learned Additional District Judge, which was registered as Civil Appeal No. 210 of 1982 and was allowed, which reads as under: “Plaintiff’s suit for specific performance of the agreement to sell is dismissed. In the alternative the defendant appellant is directed to pay the plaintiff-respondent a sum of Rs. 4000/- with interests thereon 12% per annum from 6.10.1975 till today and further interest on the gross amount (Rs.4000/- plus interest upto date) @ 6% per annum till payment. The parties shall bear their own costs throughout.” 8. Feeling aggrieved, the appellant preferred this appeal before this Court. 9. 4000/- with interests thereon 12% per annum from 6.10.1975 till today and further interest on the gross amount (Rs.4000/- plus interest upto date) @ 6% per annum till payment. The parties shall bear their own costs throughout.” 8. Feeling aggrieved, the appellant preferred this appeal before this Court. 9. While admitting the appeal, this Court formulated the substantial question of law, which reads as under: “Whether the decision arrived at by the lower appellate Court is vitiated due to being based on the surmise that the transaction was that of loan, even through there was no such pleading contained in the plaint?” 10. Notices were issued and the lower Court record was also summoned. 11. Heard Shri Vishnu Sahai, learned counsel for the appellant and Shri S.K. Tyagi, learned counsel for the respondent. 12. Learned counsel for the appellant submitted that the lower appellate Court erred in law in considering and relying upon a new case of transaction of loan put up by the defendant in his statement when admittedly no such case was pleaded in the written statement or in the statement under Order 10, Rule 2 and there was no issue to that effect. The defendant even in his statement, has not put up the case that earlier payment of Rs. 4000/- was entered into the agreement to put pressure regarding loan and the Court below was not legally entitled to make out altogether a new case himself. 13. The appellate Court recorded its own finding to this effect that the respondent case regarding the non payment of Rs. 4000/- was not correct and no fraud was played upon the respondent and he was the consenting party to execution of the agreement, then the Court below acted illegally in dismissing the suit of the appellant for specific performance. 14. The respondent admitted the execution of agreement in his statement and also in his statement under Order 10, Rule 2 C.P.C. Since the agreement was admitted by the respondent with the endorsement of Sub-Registrar, fully proved the payment of Rs. 8000/- and the appellate Court failed to consider the correct legal position arising out of the presumption under Section 60 of the Registration Act. 15. The respondent has completely failed to rebut the presumption of Rs. 4000/- and there is no evidence by the endorsement of Sub-Registrar. 16. 8000/- and the appellate Court failed to consider the correct legal position arising out of the presumption under Section 60 of the Registration Act. 15. The respondent has completely failed to rebut the presumption of Rs. 4000/- and there is no evidence by the endorsement of Sub-Registrar. 16. The finding of the appellate Court on Issue No. 1 was manifestly illegal and in any case contradictory to the finding recorded on Issue No. 2. 17. The finding of the Courts below are perverse and against the evidence available on record. The appellate Court has taken a new third case, which was not the case either of the parties, and thus, the appellant is entitled to the decree of specific performance and appeal deserves to be allowed. 18. Learned counsel for the respondent submitted that the judgement passed by the first appellate Court is legal and order has been passed after appreciation of evidence and conduct of the parties on record and there is no reason for this Court to interfere in the finding recorded by the first appellate Court. 19. Learned counsel for the respondent further submitted that the suit of the appellant was hit by Section 20 and Section 34 of the Specific Relief Act. 20. Learned counsel for the respondent further submitted that respondent was landless labourer and the disputed land is the only land available to him and the suit could be decreed only for the refund of earnest money and in view of Section 16 (1) and (b) of the Specific Relief Act, the suit has been rightly decreed by the appellate Court. 21. The appellate Court has recorded a categorical finding that the agreement in question was in fact not an agreement to sell but it was only executed to cover the amount of loan or to secure the loan. 22. The learned counsel for the respondent further submitted that the trial Court has also recorded a categorical finding that the agreement in question was to cover the loan transaction and in order to put pressure upon the respondent, the respondent is entitled of Rs. 4000/- and additional Rs. 4000/- also shown to be paid. In fact in the agreement, no such amount was paid to the respondent by the appellant. This finding of the Court is based on the evidence available on record. The appellant has miserably failed to prove the payment of Rs. 4000/- and additional Rs. 4000/- also shown to be paid. In fact in the agreement, no such amount was paid to the respondent by the appellant. This finding of the Court is based on the evidence available on record. The appellant has miserably failed to prove the payment of Rs. 4000/- prior to the execution of agreement by any reliable evidence. The appellate Court has rightly held that no such amount paid to the respondent, and thus, rightly dismissed the suit only for the refund of Rs. 4000/- alongwith interests. 23. Learned counsel for the respondent further submitted that the appellate Court has given a finding based on evidence regarding the readiness and willingness of plaintiff. The trial Court failed to prove the case on this legal plea and the appellate Court has rightly held that the suit of appellant is also bared by Section 16 (c) of the Specific Relief Act. 24. Learned counsel for the respondent further submitted that the appellate Court has rightly exercised the discretion in refusing to grant decree for specific performance dealing the aid of Section 20 of the Specific Relief Act. 25. Learned counsel for the respondent further submitted that there is no illegality in the judgement rendered by the appellate Court and appeal is liable to be dismissed. 26. I am unable to accept the contention raised by the learned counsel for the appellant. 27. Before entering into the factual aspect of this case, it will be necessary to examine the legal position in this regard. 28. Section 20 of the Specific Relief Act gives a discretion to the Court to decree the specific relief, which is reproduced below: “Section 20 - Discretion as to decreeing specific performance (1) 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; but the discretion of the Court is not arbitrary but sound and reasonable, guide by judicial principles and capable of correction by a Court of appeal. (2) The following are cases in which the Court may properly exercise discretion not to decree specific performance : (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. (3) The Court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The Court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.” 29. It is well-settled that the circumstances referred to in said Clauses 2 to 4 in regard to exercise of discretion for granting the decree for specific performance are not exhaustive. The relief of specific performance is discretionary and is not given merely because it is legal but it is governed by sound judicial principles. 30. It is again well-settled that in a suit for specific performance, if it is proved and agreement must be absolutely clear and it is also clear that a greater amount or decree of certainty is required in terms of an agreement to sell, which is to be specifically executed in equity. It is also well-settled that the grant of this relief is the discretion of the Court and cannot be claimed as a matter of right the Court exercise a discretion and bring a specific performance unless it is what is called unreasonable to do so. 31. The question as to what instance or consequence shall be deemed highly unreasonable must dependent on the circumstances of the particular case. Specific performance can be refused although the contract is binding at law although the damages are not inadequate remedy; but the discretion is not arbitrary, and is governed by rules and principles. 32. 31. The question as to what instance or consequence shall be deemed highly unreasonable must dependent on the circumstances of the particular case. Specific performance can be refused although the contract is binding at law although the damages are not inadequate remedy; but the discretion is not arbitrary, and is governed by rules and principles. 32. In exercising the discretion, the Court should take into account the circumstances of the case, the conduct of the parties, and the respective interest under the contract. An agreement, which inflicts more injury upon the defendant then confers the benefit on the plaintiff will not be enforced. 33. It is also well-settled that a discretion exercised by the trial Court will not be interfered in appeal unless it has been exercised perversely, arbitrarily, capriciously, unreasonably or against judicial principles. 34. As stated above, the circumstances as mentioned in the Section itself are not exhaustive. It is not possible to lay down the circumstances and the Court can exercise its discretion against the plaintiff. However, they must be such that the representation by or the conduct or neglect of the plaintiff is directly responsible for including the defendant to change his position to his prejudice or such as to bring about situation when it would be inequitable to give such a relief. 35. It is also settled that under the specific performance of a contract, it is not vitiated by fraud or misrepresentation, cannot be granted if it could give an unfair advantage to the plaintiffs, and where the purpose of the contract would involve some hardship to the defendant, which he did not foresee. 36. It is also a Court’s discretion to grant specific performance, which is not exercised if the contract is not ‘equal and fair’. Even where the contract is not voidable because the conduct of the defendant falls short of fraud, coercion or undue influence such as to justify rescission is shown, the Court may still not enforce the contract if it would not be consistent with equity and good conscience to do so. 37. The conduct of the plaintiff is always an important element to be considered. The conduct of a person to the other parties in a disadvantageous position may in certain cases preclude him from obtaining a decree of specific performance. 37. The conduct of the plaintiff is always an important element to be considered. The conduct of a person to the other parties in a disadvantageous position may in certain cases preclude him from obtaining a decree of specific performance. In every case the plaintiffs must come to the Court with clean hands when the plaintiff does not come with clean hands or where he is guilty of fraud or some other practice he may ordinarily get no relief by way of specific performance. 38. In Ganesh Shet v. Dr. C.S. J. K. Shetty and others, 1998 (33) ALR 512: 1998 (3) AWC 2 .152 (SC) (NOC), the Apex Court has clearly observed that the relief for specific performance is discretionary in nature and is not given merely because it is legal to do so. It further lays down that in a suit for specific performance the evidence and proof of the agreement must be absolutely clear and certain. 39. In the case of Kanshi Ram v. Om Prakash Jawal and others, also a suit for specific performance was filed and alternatively a damages of Rs. 12,000/- with interest was also asked. The Court below granted the decree for specific performance however the appeal filed by the special leave by the defendant the Court observed as under: “Having regards to the facts of this case and the arguments addressed by the learned counsel, 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, 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. 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.” 40. The Court further allowed the appeal and defendants were asked to pay the same on Rs. 10 lacs although this is a case of exceptional nature where by the lapse of time the prices increased exorbitantly however this will be taken into consideration while deciding question in hand. 41. In the case of Smt. Jamila Khatoon v. Ram Niwas Gupta, the appellate Court granted the relief of refund of earnest money with damages only on the ground when the suit was filed with inordinate delay. 42. In the case of Ajgar v. Raj Money, the Apex Court also granted alternative relief of return of earnest money. 43. In the Case of K. Narendra v. Riviera Apartments Private Ltd., JT 1999 (4) SC 428 : 1999 (3) AWC 2 .104 (SC) (NOC), it has been held by the Supreme Court 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 and that the discretion of the Court ought not to be arbitrary in nature but must be based upon sound and reasonable judicial principles, which may be capable of correction by the superior Court. In short, grant of decree of specific performance is not automatic even if the agreement is found to be duly executed and the Plaintiff ready and willing to perform his part of the agreement but such grant of decree is dependent upon principles of justice, equity and good conscience. 44. In the case of A.C. Arulappan v. Ahalya Naik, the Court while dealing the case of specific performance of the contract observed as follows: “7. The jurisdiction to decree specific relief is discretionary and the Court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the Court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. The jurisdiction to decree specific relief is discretionary and the Court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the Court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the Court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the Court would desist from granting a decree to the plaintiff.” 45. In this case, the Apex Court also relied upon a judgement of Parakunnan Veetill Joseph’s Son v. Nadumbara Kuruvlla’s Son and others, the Court observed as under: “9. In Parakunnan Veetill Joseph’s Son Mathew v. Nedumbara Kuruvila’s Son and others, this Court cautioned and observed as under: “Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter in the judicial verdict. 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”. 46. In the case of A.C. Arulappan v. Ahalya Naik, relying upon another judgement of Gobind Ram v. Gian Chand, the Court observed : “11. In Gobind Ram v. Gian Chand (JT 2000(5) SC 101 : (2000)7 SCC 548 , it was observed in paragraph 7 of the judgement that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the Court and the Court has consider whether it would be fair, just and equitable. The Court is guided by the principles of justice, equity and good conscience.” 47. While dealing the case in question, the Apex Court also observed: “15. The Court is guided by the principles of justice, equity and good conscience.” 47. While dealing the case in question, the Apex Court also observed: “15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the Court. The trial Court which had the added advantage of recording the evidence and seeing the demeanour of the witnesses considered the relevant facts and reached a conclusion. The appellate Court should not have reversed that decision disregarding these facts and, in our view, the appellate Court seriously flawed in its decision. Therefore, we hold that the respondent is not entitled to a decree of specific performance of the contract.” 48. In the case of Hon’ble Single Judge of this Court in Ram Singh and others v. Sughar Singh, 2011 Alld Civil Journal, the Court observed: “In the instant case none of the Courts below have exercised discretion under Section 20 of the Specific Relief Act. The suit has been decreed after holding that there existed an agreement where under the Defendant was enjoined upon to execute the sale-deed on performance of certain conditions by the Plaintiff which he was always ready and willing to perform. Such an approach of the Courts below is contrary to the mandate of Section 20 of the Specific Relief Act and cannot be approved of.” 49. Now in the light of the legal position as discussed above, I take-up the matter. 50. In the present case, admittedly, an agreement was executed between the parties for sale consideration of Rs. 9000/- in the agreement and Rs. 8000/- were shown to be paid at the time of registration of agreement in which Rs. 4000/- shown to be paid at the time of settlement and Rs. 4000/- before the Sub-Registrar. The respondent admitted only the receipt of Rs. 4000/- before the Sub-Registrar and there is specific denial regarding receipt of Rs. 4000/- earlier in the home at village. 51. The trial Court decreed the suit for specific performance as well as in the alternative relief for refund of Rs. 8000/-. 4000/- before the Sub-Registrar. The respondent admitted only the receipt of Rs. 4000/- before the Sub-Registrar and there is specific denial regarding receipt of Rs. 4000/- earlier in the home at village. 51. The trial Court decreed the suit for specific performance as well as in the alternative relief for refund of Rs. 8000/-. The appellate Court while partly allowed the appeal, gave a categorical finding that in fact an agreement in question was only a security cover to the loan taken by the respondent of Rs. 4000/- and Rs. 4000/- added extra to put pressure upon the respondent. 52. The appellate Court also discussed the evidence adduced by the parties in this regard and recorded a categorical finding that in fact no amount of Rs. 99/- and Rs. 3901/- were paid to the respondent and reversed the finding recorded by the trial Court. 53. It is also settled law that the plaintiff’s suit for specific performance only succeed when the appellant proved his readiness and willingness to perform his part of the contract. The trial Court has completely failed to consider this legal position as envisaged in Section 16 (1) and (b) as well as Section 16 (c) of the Specific Relief Act and the finding on this legal position was not found in the judgement of the trial Court. However, the appellate Court while gave its categorical finding on the payment of Rs. 4000/-. Earlier to the execution of agreement also recorded a finding regarding readiness and willingness and after discussing the evidence of the parties and legal position, the Court held that the appellant has failed to ever prove his readiness and willingness to perform his part of the contract and also recorded a finding that the suit of the appellant for specific performance of contract is liable to be dismissed on this ground also. 54. Further, the appellate Court has also given a categorical finding that though the grant of relief of specific performance is a discretionary one and the discretion should be exercised judicially and not arbitrary manner. However, the Court is not bound to grant the relief of specific performance merely because it is lawful to do so. 55. The Court further held that it is an equitable relief and in the circumstances of the case and in the alternative relief, only payment of refund of earnest money alongwith interest is an adequate relief. However, the Court is not bound to grant the relief of specific performance merely because it is lawful to do so. 55. The Court further held that it is an equitable relief and in the circumstances of the case and in the alternative relief, only payment of refund of earnest money alongwith interest is an adequate relief. 56. Learned counsel for the appellant has failed to demonstrate me that the finding recorded by the first appellate Court in respect of readiness and willingness of the appellant to perform his part was perverse in any manner and also that given benefit of Section 20 by the appellate Court was illegal or not equitable. 57. During the course of the argument, the learned counsel for the respondent further submitted that in case this Court is also not inclined to grant the relief of specific performance of the agreement and the Court inclined to grant alternative relief of payment of earnest money. The Court may impose a reasonable amount of compensation in addition to the refund of earnest money and they are ready to pay the same. 58. The Apex Court also observed in some cases that when there is considerable time lost in the litigation and the prices of the land raised exorbitantly, the plaintiff can be compensated with compensation alongwith the refund of earnest money. It is also admitted that even the trial Court while decreeing the suit of the appellant for specific performance also decreed the suit alternatively for refund of earnest money. 59. Considering the facts and circumstances of the case, I am also of the view that the appellate Court has rightly refused to grant the relief of specific performance of the contract considering it that it is not lawfull to do so. 60. In view of the above discussion, the Court is of the opinion that in case the respondent is directed to enforce the agreement in question, it will put him under undue hardship while it will not be much advantageous to the appellant. However, the appellant can be compensated with some more compensation in addition to the refund of earnest money. 61. The appeal deserves to be allowed with certain modifications in the decree passed by the first appellate Court and the plaintiff’s suit for the relief of specific performance stands dismissed and the suit for the refund of Rs. However, the appellant can be compensated with some more compensation in addition to the refund of earnest money. 61. The appeal deserves to be allowed with certain modifications in the decree passed by the first appellate Court and the plaintiff’s suit for the relief of specific performance stands dismissed and the suit for the refund of Rs. 4000/- with interest thereon @ 12% per annum from the date of filing of suit till the judgement and further interest on the gross amount (Rs.4000/- plus interest upto date) @ 6% per annum till the date of actual payment is maintained. In addition to the refund of amount, the appellant is also entitled of Rs. 75000/-, which shall be paid to the appellant by the respondent byway of compensation. This amount of compensation shall also carry the interest @ 9% per annum from the date of this judgement till the date of actual payment. 62. In view of the above, the appeal is allowed with the above modifications. Substantial question of law is answered accordingly. —————