case law digest on specific performance cases

8/20/2019 Case Law Digest on Specific Performance Cases

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READINESS AND WILLINGNESS IN SPECIFIC

PERFORMANCE SUIT

In Manjunath v. Tammanasa, AIR 2003 SC 1391 : 2003 (2) Cur

CC 177 : 2003 (10) SCC 390 and Rameshwar Prasad v. Basanti

Lal, AIR 2008 SC 2050, in specific terms it is laid down that

specific performance of contract cannot be enforced in favour of

a person who fails to aver and prove that he has performed or

has always been ready and willing to perform the essential

terms of the contract. The requirement of law is two folds: (i)

that the plaintiff must aver in the plaint and (ii) that he must

prove by evidence that he was always been ready and willing to

perform his part of the contract. The plaintiff cannot be allowed

to succeed if he fails to fulfil any of the two obligations enjoined

by law.

Supreme Court in Pramod Buildings and Developers Private

Limited vs. Shanta Chopra, (2011) 4 SCC 741. In this case it is

held that: “In a suit for specific performance, burden lies on

plaintiff to prove readiness and willingness to perform his

obligations in terms of contract. If plaintiff was not willing to

pay balance amount at the time of sale as agreed, he could not

claim that he was ready and willing to perform his obligations.”

In the earlier decision viz. Pramod Buildings and Developers

Private Limited vs. Shanta Chopra, (2011) 4 SCC 741, the

decision in Man Kaur (Dead) by Lrs. vs. Hartar Singh

Sangha,(2010) 10 SCC 512 was cited to support the contention

of the appellant that the defendant did not state into the

witness box and evidence was given only by her husband and


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that was insufficient. The said contention was considered and

negatived by both the Single Judge and the division Bench. Man

Kaur (Dead) by Lrs. vs. Hartar Singh Sangha, (2010) 10 SCC

512. In this connection, the Division Bench has held that the

decision viz.Man Kaur (Dead) by Lrs's case has no bearing on

the facts of the case. While dealing with Section 16(c) of the

Specific Relief Act, 1963 and Section 101 of the Evidence Act,

1872, the Hon'ble Mr. JUSTICE R.V.RAVEENDRAN speaks on

behalf of the Division Bench that the suit in a specific

performance the plaintiff should not only plead and prove the

terms of the agreement and also should plead and prove his

readiness and willingness to perform his obligations under the

contract in terms of the contract. In Paragraph No.40 of the

Judgment His Lordship has held as follows: “40........There are

two distinct issues. The first issue is the breach by the

defendant - vendor which gives a cause of action to the plaintiff

to file a suit for specific performance. The second issue relates

to the personal bar to enforcement of a specific performance by

persons enumerated in section 16 of the Act. A person who fails

to aver and prove that he has performed or has always been

ready and willing to perform the essential terms of the contract

which are to be performed by him (other than the terms the

performance of which has been prevented or waived by the

defendant) is barred from claiming specific performance.

Therefore, even assuming that the defendant had committed

breach, if the plaintiff fails to aver in the plaint or prove that he

was always ready and willing to perform the essential terms of

contract which are required to be performed by him (other than

the terms the performance of which has been prevented or


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waived by the plaintiff), there is a bar to specific performance in

his favour. Therefore, the assumption of the respondent that

readiness and willingness on the part of plaintiff is something

which need not be proved, if the plaintiff is able to establish that

defendant refused to execute the sale deed and thereby

committed breach, is not correct. Let us give an example. Take a

case where there is a contract for sale for a consideration of

Rs.10 lakhs and earnest money of Rs.1 lakh was paid and the

vendor wrongly refuses to execute the sale deed unless the

purchaser is ready to pay Rs.15 lakhs. In such a case there is a

clear breach by defendant. But in that case, if plaintiff did not

have the balance Rs.9 lakhs (and the money required for stamp

duty and registration) or the capacity to arrange and pay such

money, when the contract had to be performed, the plaintiff will

not be entitled to specific performance, even if he proves breach

by defendant, as he was not `ready and willing' to perform his

obligations.”

K.S.Vidyanadam vs. Vairavan, (1997) 3 SCC 1 and held as

follows: “In an agreement for sale of immovable properties, the

readiness and willingness of the parties to perform their part of

the contract is essential. Hence, we are of the view that the

concurrent findings of fact arrived at by the High Court and the

trial court on the question of readiness and willingness to

perform their part of obligation, so far as the appellants are

concerned, cannot at all be interfered with. Accordingly, we are

of the view that the High Court has rightly confirmed the

concurrent findings of fact arrived at by the courts below on the

question of readiness and willingness on the part of the

appellants to complete the agreement for sale.”


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SPECIFIC PERFORMANCE BEING EQUITABLE RELIEF -

CANNOT BE SOUGHT WITH UNCLEAN HANDS

It is settled law that the party who seeks to avail of the equitable

jurisdiction of a Court and specific performance being equitable

relief, must come to the Court with clean hands. In other words

the party who makes false allegations does not come with clean

hands and is not entitled to the equitable relief. This principle islaid down in Lourdu Mari David and others v. Louis Chinnaya

Arogiaswamy and others, AIR 1996 SC 2814(1).

TIME IS THE ESSENCE OF THE CONTRACT

As observed in A.K.Lakshmipathy (Dead) and Others vs. Rai

Saheb Pannalal H.Lahoti Charitable Trust and Others (2010) 1

SCC 287, the surrounding circumstances arising from the

nature of the case lead the Court to presume the time is the

essence of the contract and therefore this Court is also of view

that the plaintiff having failed to perform his part of contract, he

cannot be allowed to take advantage of his own mistake and

conveniently passes the blame on the defendant.

STAMP DUTY SHOULD BE PAID AS ON THE DATE OF

REGISTRATION NOT AS PER THE DECREE VALUATION IN

SPECIFIC PERFORMANCE 2008 and 2010 SC

State of Rajasthan v. M/s.Khandaka Jain Jewellers (AIR 2008

SC 509) 2007 (12 ) SCR 105 = 2007 (14 ) SCC 339 The


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Collector shall determine was the valuation of the instrument on

the basis of the market value of the property at the date when

the document was tendered by the respondent for registration,

and the respondent shall pay the stamp duty charges and

surcharge, if any, as assessed by the Collector as per the

provisions of the Act.

There is a difference between an agreement to sell and a sale.

An agreement to sell is not a sale. An agreement to sell becomes

a sale after both the parties signed the sale deed. What is

relevant in fact is the actual valuation of the property at the

time of the sale. The crucial expression used in Section 17 of the

Stamp Act, 1899 is "at the time of execution". Therefore, stamp

duty on a sale has to be assessed on the market value of the

property at the time of execution of sale deed, and not at the

time of the prior agreement to sell, nor at the time of filing of the

suit. The Stamp Act, 1899 is in the nature of a taxing statute,

and it has to be construed strictly; and considerations of

hardship or equity have no role to play in its construction. It is

true that no one should suffer on account of the pendency of

the matter in court but this consideration does not affect the

principles of interpretation of a taxing statute. A taxing statute

has to be construed as it is. The contingencies that the matter

was under litigation and the value of the property by that time

shot up cannot be taken into account for interpreting the

provisions of a taxing statute.


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STATE OF HARYANA & ORS. VS MANOJ KUMAR AIR

2010 SC 1779 = 2010 (3 ) SCR 175 = 2010 (4

) SCC 350 This was a case where a decree for specific

performance of an agreement to sell was granted in favour of the

plaintiff and registration was done on the basis of the sale price

given in the transfer deed (carried forward from the agreement

for sale). Question arose whether stamp duty paid was proper.

The Supreme court observed in paragraph 29 that the view of

the High Court that stamp duty paid was proper is wrong, If

genuineness of the sale price entered into by the buyer and

seller cannot be questioned, then in majority of the cases it is

likely that the State would ever receive stamp duty according to

the circle rate or the Collector rate. The Supreme Court held

that no sale deed can be registered for an amount less than the

amount notified by the Collector. “In order to ensure that there

is no evasion of stamp duty, circle rates are fixed from time to

time and the notification issued to that effect. The issuance of

such notification has become imperative to arrest the tendency

of evading the payment of actual stamp duty. It is a matter of

common knowledge that usually the circle rate or the collector

rate is lower than the prevalent actual market rate but to

ensure registration of sale deeds at least at the circle rates or

the collector rates such notifications are issued from time to

time. It is not disputed that in the instant case the commercial

plot of 788 sq. yards was valued by the circle rate at Rs.4,200

per sq. yard fixed by the Collector, meaning thereby that after

the notification, no sale deed could be registered for an amount

lesser than Rs.4,200/- per sq.yard. The High Court has not

properly construed the observations of the District Collector to


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the effect that the suit was filed in the civil court with the

intention to avoid tax and stamp duty inasmuch as the value of

the property as per the circle rate was Rs.33,09,600, on which

stamp duty to be paid was Rs.5,13,050/- whereas the stamp

duty actually paid was only Rs.31,000/-, therefore stamp duty

to the tune of Rs.4,82,050 was payable. This order was upheld

by the Commissioner. The High Court while exercising its

jurisdiction under Article 227 has set aside the orders passed

by the authorities below without any basis or rationale. Apart

from the jurisdiction, even what is factually stated in the order

of the District Collector as upheld by the Commissioner, is

unexceptionable and any interference was totally unwarranted.”

CONTRACT WHOSE PERFORMANCE IS NOT POSSIBLE

WITHOUT DISOBEDIENCE TO LAW IS VOID 1965 KAR

NEMINATH APPAYYA HANAMANNAVAR v. JAMBURAO

SATAPPA KOCHERI, 1965(1) Mys.LJ. 442 if an agreement to sell

land which if enforced would leave the purchaser with lands in

excess of ceiling area and therefore the contract is

unenforceable as it by Section 23 of the Act, in view of

prohibition contained under Section 34 of the Bombay Tenancy

and Agricultural Lands Act, and also Sections 35 and 73(m) and

85 of that Act. Somanath Iyer J, (as his Lordship then was),

speaking for the Bench observed that Section 23 of the Contract

Act, and the other seven Sections following it incorporate among

others three well settled principles. The first is that an

agreement or contract whose purpose is the commission of an

illegal act is void; second is that an agreement or contract


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expressly or impliedly prohibited by law is similarly void; and

the third is that an agreement or contract whose performance is

not possible without disobedience to law is again void.

WHEN THERE WAS NO AGREEMENT BETWEEN THE

PARTIES REGARDING ESSENTIAL TERMS OF THE

AGREEMENT – NO CONSENSUS AD-IDEM AS SUCH NO

VALID CONTRACT TO BE ENFORCED 1990 SC

JUSTICE SAIKIA, K.N. and JUSTICE RANGNATHAN, S. of

Supreme Court in the case of Smt. Mayawanti vs Smt.

Kaushalya Devi Reported in 1990 SCR (2) 350, 1990 SCC (3)

1 :- The specific performance of a contract is the actual

execution of the contract according to its stipulations and

terms, and the courts direct the party in default to do the very

thing which he contracted to do. The stipulations and terms of

the contract have, therefore, to be certain and the parties must

have been consensus ad idem. The burden of showing the

stipulations and terms of the contract and that the minds were

ad idem is, of Course, on the plaintiff. If the stipulations and

terms are uncertain and the parties are not ad idem there can

be no specific performance, for there was no contract at all.

Where there are negotiations, the Court has to determine at

what point, if at all, the parties have reached agreement.

Negotiations thereafter would also be material if the agreement

is rescinded. In the instant case the defence of there having not

been a contract for lack of consensus ad idem was available to

the defendant. The jurisdiction of the Court in specific

performance is discretionary. When a promise is made in an


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alternative form and one alternative is impossible to perform,

the question whether the promiser' is bound to perform the

other or is altogether excused depends on the intention of the

parties to he ascertained from the nature and terms of the

contract and the circumstances of the particular case. The

expression 'otherwise pay back the advance and compensation

in the same amount' is capable of being inter- preted as

payment of the amount as alternative to performance. Of

course the amount advanced and the compensation was

stipulated to he the same amount. That, however, would not

effect the real character of the promise.

In Laxminarayanachar v. Narayana 1969(2) My.L.J 299 this

Court has held that when the document is produced before the

Court for being used in evidence, the first jurisdiction of

determining the duty and penalty is that of the Court. It is only

when that stage is crossed and the document is not tendered in

evidence, the provisions of Sub-section (2) of Section 37 of the

Act are attracted. Therefore, the court below is justified in

determining duty and penalty on the document in question.

TIME IS AN ESSENCE OF CONTRACT

A Five Judges Bench of Supreme Court in the case Smt. Chand

Rani (dead) by LRs. v. Smt. Kamal Rani (dead) by LRs., AIR

1993 SC 1742, in Para 24 has held as under :-- From an

analysis of the above case law it is clear that in the case of sale

of immovable property there is no presumption as to time being


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the essence of the contract. Even, if it is not of the essence of

the contract the Court may infer that it is to be performed in a

reasonable time if the condition are :

1. from the express terms of the contract;

2. from the nature of the property; and

3. from the surrounding circumstances, for example : the object

of making the contract :

WHEN THERE IS GREATER HARDSHIP TO OTHER PARTY

COURT CANNOT ENFORCE SPECIFIC PERFORMANCE

Justice K Jagannatha Shetty, and Justice P Kulkarni. In the

case of Ranganayakamma vs N. Govinda Narayan Reported

in AIR 1982 Kant 264, ILR 1982 KAR 121, 1982 (1) KarLJ

485:-

It is a well established doctrine that the Court will not enforce

specific performance of a contract, the result of which would be

to impose great hardship on either of the parties to it. 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 however, should be exercised on

reasonable principles capable of correction by a Court of appeal.

When the Section states that "the jurisdiction to decree specific

performance is discretionary" to it only means that the mere


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existence of a legal right is not sufficient to attract the remedy.

An agreement may be valid in law and there may not be

sufficient grounds for its cancellation; yet, upon a fair and just

consideration of the attendant circumstances, the Court may

abstain from its enforcement. Sub-section (2) of Section 20 sets

forth the cases in which the Court may properly -exercise such

discretion to refuse specific performance. It broadly divides

those cases into three categories, namely:-

(1) where- (i) the terms of -the contract, or (ii) the conduct of the

parties at the time of entering into the contract or (iii) other

circumstances. under which the contract was entered into, are

such that the contract gives the plaintiff an unfair advantage

over the defendant, or

(2) Where the performance of the contract would - (i) involve

some hardship on the defendant, which he did not foresee; and

(ii) its non-performance would not involve any such hardship on

the plaintiff, or

(3) Where although the contract is not viodable at the instance

of the defendant, yet it is inequitable to enforce specific

performance.

DEFENDANT PLEADING THAT MONEY WAS RECEIVED

AS LOAN--PLAINTIFF'S CASE NOT PROVED-WHETHER


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DECREE CAN BE GIVEN FOR RECOVERY OF MONEY AS

LOAN ON DEFENDANT'S PLEA

SRINIVAS RAM KUMAR VS MAHABIR PRASAD AND OTHERS.

1951 AIR 177 Pleadings--Inconsistent pleas--Plaintiff suing

for specific performance alleging that money was paid

as price--Defendant pleading that money was received as

loan--Plaintiff's case not proved-Whether decree can be given

for recovery of money as loan on defendant's plea. Though the

court would not grant relief to the plaintiff on a case for which

there was no foundation in the pleadings and which the

other side was not called upon or had no opportunity to meet,

yet, when the alternative case which the plaintiff could

have made was not only admitted by the defendant in his

written statement but was expressly put forward as

an answer to the claim which the plaintiff made in the suit.

there would be nothing improper in giving the plaintiff a decree

upon the case which the defendant himself makes. In such

circumstances, when no injustice can possibly result to the

defendant, it may not be proper to drive the plaintiff to a

separate suit.

EXECUTING COURT CAN GRANT DELIVERY OF

POSSESSION OF PROPERTY EVEN WHERE NO SUCH

RELIEF IS GRANTED BY A DECREE FOR SPECIFIC

PERFORMANCE


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In Venkatesh v. Parappa, (1966) 1 Mys LJ 799, Mysore High

Court sustained the order of delivery of possession though the

decree for specific performance was passed In general terms. All

these decisions Were referred to and relied on by single Judge of

Kerala High Court in Narayana Pillai v. Ponnuswami Chettiar/ ,

where the learned Judge held : "The executing Court can grant

delivery of possession of property even where no such relief is

granted by a decree for specific performance of the contract of

sale."

K. Venkoji Rao vs M. Abdul Khuddur Kureshi AIR 1991

Kant 119, 1991 (1) KarLJ 1 Then again, it is necessary to

remember that mere rise in price subsequent to the date of the

contract or inadequacy of price is not to be treated as a

hardship entailing refusal of specific performance of the

contract. Further, the hardship involved should be one notforeseen by the party and should be collateral to the contract. In

sum it is not just one factor two, that is relevant for

consideration. But it is the some (sum) total on various factors

which is required to enter into the judicial verdict. At this

juncture it is necessary to remember that defendant has not

made out a case alleging hardship muchless has he proved to

substantiate the same. He has not been able to show as howhe would be put to any hardship in the event of the grant of

specific performance. It is needless to say that every decree for

specific performance may entail some inconvenience to the

parties against whom such a decree is passed. However, that is

not a circumstance constituting hardship within the meaning of

that expression employed in S. 20 of the Specific Relief Act. In


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the instant case, defendant has not even made clear in the

course of his evidence as to what was the price which he had

paid for the property in question. His evidence if read in a

proper perspective would indeed go to show that he was not

prepared to lay bare the facts within his knowledge for one

reason or the other. …………. It is also necessary to note here

that the defendant has agreed to sell the property in question to

the plaintiff for Rs. 14,000/-, and had actually received an

advance of Rs.2,000/-. The evidence on record does not go to

show that the consideration is inadequate, notwithstanding the

fact that inadequacy of consideration by itself cannot constitute

a factor warranting the refusal of the decree for specific

performance. On the other hand, the circumstances, would

indeed go to show that the price agreed to be paid by the

plaintiff to the defendant was fair. Further, there are no

circumstances to indicate that the parties namely, plaintiff's

and defendants were on unequal terms. Further, there is

nothing to show that the plaintiff had taken any undue or

unfair advantage of the position in which the defendant was

placed. Having regard to these materials I am indeed of the view

that the plea of hardship sought to he made at this stage by the

learned Advocate for the appellant does not find support from

the materials on record.

RELIEF OF CLAIMING RECTIFICATION OF INSTRUMENT IN A

SUIT CAN BE CLAIMED BY WAY OF AMENDMENT 2010 SC


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JUSTICE DR. B.S. CHAUHAN and JUSTICE SWATANTER

KUMAR in SUBHADRA & ORS. .Vs. THANKAM Reported in AIR

2010 SC 3031, “The relief of rectification can be claimed where

it is through fraud or a mutual mistake of the parties that real

intention of the parties is not expressed in relation to an

instrument. Even then the party claiming will have to make

specific pleadings and claim an issue in that behalf……………

The plea of the appellant that since no relief for rectification has

been prayed, the decree for specific performance ought not to be

granted is not tenable. Section 26(4) of the Act only says that no

relief for the rectification of an instrument shall be granted to

any party under this section unless it has been specifically

claimed. However, proviso to Section 26(4) of the Act makes it

clear that when such a relief has not been claimed by the

concerned parties, the Court shall, at any stage of the

proceedings allow him to amend the pleadings on such terms,

as may be just, for including such a claim and it would be

necessary for the party to file a separate suit. The legislative

intent in incorporating this provision, therefore, is unambiguous

and clear. The purpose is not to generate multiplicity of

litigation but to decide all issues in relation thereto in the same

suit provided the provisions of Section 26 of the Act are

attracted in the facts of a given case.”

DISCRETIONARY RELIEF OF SPECIFIC PERFORMANCE

EXPLAINED:-

Section 20 of the Act states that the jurisdiction to decree

specific performance is discretionary. It says that the Court is


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not bound to grant such relief merely because it is lawful to do

so. Such a discretion, however, is not to be exercised arbitrarily,

but must be based on sound and reasonable judicial principles.

The Section also specifies the circumstances in which the Court

may properly exercise the discretion not to decree specific

performance and it also specifies when, in an appropriate case,

a decree could be given by proper exercise of discretion.

Section 20 is not an exhaustive provision, but merely illustrative

as it is not possible to define the circumstances in which

equitable relief could or could not be granted. If, therefore, on a

consideration of all the circumstances of the case, the Court

thinks that it will be inequitable to grant the relief asked for, it

should not give the relief. In this context, it is necessary to refer

to explanation to Section 10 of the Act provides that, unless and

until the contrary is proved, the Court shall presume that the

breach of a contract to transfer immovable property cannot be

adequately relieved by compensation in money. But the said

presumption is a rebuttable presumption.

Sub-section (2) of Section 20 specifies certain circumstances

when discretion may be exercised not to decree specific

performance. These circumstances are illustrative and they can

be defined as follows:

(i) when the terms of the contract or the conduct of the parties

at the time of entering into contract or the circumstances under

which the contract was entered into are such that they give the

plaintiff an unfair advantage over the defendant.


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(ii) where the performance of the contract would involve some

hardship to the defendant whereas, its non-performance would

involve no such hardship on the plaintiff.

(iii) that it makes it inequitable to enforce specific performance.

While explaining these circumstances,

Explanation-I speaks about unfair disadvantage.

Explanation-II relates to hardship which is a circumstance in

favour of the defendant, while Explanations-Ill and IV are in

favour of the plaintiff when in a case where the plaintiff has

done substantial acts in consequence of a contract capable of

specific performance or refused specific performance, merely

because the contract is not enforceable at the instance of the

defendant.

The decision of the Supreme Court in the case Parakunnan

Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son and

Ors., AIR 1987 SC 2328 is relied upon by the respondent to

contend that it is the duty of the Court to see that litigation is

not used as an instrument of oppression to have an unfair

advantage to the plaintiff. In the said decision, the Hon'ble

Supreme Court, while considering Section 20 of the Specific

Relief Act, stated that Section 20 preserves judicial discretion to

Courts as to decreeing specific performance. The Court should

meticulously consider all facts and circumstances of the case

and the Court is not bound to grant specific performance merely


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because it is lawful to do so. The motive behind the litigation

should also enter into the judicial verdict.

In 1999(3) Kar.L.J. 677 (Y.N. Gopala RAO v. D.R.

Laxminarayana and Ors.) it has been held by this Court that the

presumption in a suit for specific performance is that a breach

of contract cannot be adequately relieved by compensation in

money and that contract can be satisfied only by conveyance of

particular estate contracted for sale and the said presumption is

rebuttable, and the burden of rebutting is on the party opposing

enforcement of contract and where such party has failed to

rebut presumption, suit for specific performance is to be

decreed against such party. This principle is also stated in

Explanation (i) to Sub-section (b) of Section 10 of the Specific

Relief Act.

While adverting to Section 20 of the Act, it is stated in this

decision that rise in price is no ground to refuse specific

performance and the refusal may also have tendency to cause

hardship in the plaintiff in acquiring such property or other

property at such time.

In AIR 2004 SC 909 (M.S. Madhusoodhanan and Anr. v. Kerala

Kaumudi Pvt. Ltd. and Ors.) it is observed that the guidelines

for the exercise of the Court's discretion to decree specific

performance of an agreement have been statutorily laid down in

Sub-section (2) of Section 20 of the Act and that, in Explanation

1 to Section 20, it is stated that mere inadequacy of


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consideration, or the mere fact that the contract is onerous to

the defendant or improvident in its nature shall not be deemed

to constitute an unfair advantage within the meaning of Clause

(a) or hardship within the meaning of Clause (b).

ILR 1992 Kar 717 (Yogambika v. Narsingh) is relied upon by the

respondent to contend that the mere fact that a person is a

retired Government servant cannot at all be considered to be a

valid ground to refuse to enforce the contract he had voluntarily

agreed to and that, under Section 20 of the Act, the grounds

which enable the Court to refuse to grant a decree must be such

which were not in the contemplation of the parties when they

entered into an agreement of sale and also that the defendant

had no control over those grounds and as a result of those

grounds, it has become impossible for him to get on without the

property agreed to be sold.

PERMISSION OF AUTHORITIES IS NO BAR TO SPECIFIC

PERFORMANCE DECREE:-

In this context it would be of relevance to refer to a decision of

the Apex Court in the case of Ranjibhai v. Narotham Das

reported in AIR 1986 SC 1912. In the said case there was an

agreement for sale of flat which had to be finalized after

obtaining permission of authorities to use as village site was a

pre-condition for the execution of the sale deed. The suit for

specific performance was filed within three years after obtaining


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permission, it was held to be not barred by limitation. The said

decision is applicable to the facts of the present case also.

Consequently, the other decisions which have been cited by the

learned Counsel for the appellants namely ILR 1992 Karnataka

429 and ILR 1992 Karnataka 644 are not applicable to the

facts of the present case.

Gahesa Naicken v. Arumugha Naicken AIR 1954 Mad 811 has

been cited to contend that where the darkhast grant was in the

nature of a gift by the Government with a specific provision that

the property shall not be alienated without the consent of the

Tahsildar, any contract which has the effect of circumventing

this policy of the Government would be opposed to public policy

and the agreement to sell the property would be void. The said

decision is not applicable to the facts of the present case since

the sale agreement had to be executed by the appellants after

the period of non-alienation and it is only on the lapse of the

said period that the respondent filed the suit for specific

performance. Similarly, the decision in Ramachandraiah v.

Nagappa Naidu, ILR 1995 Kar 570 is also not applicable.

Pujari Narasappa and Anr. v. Shaik Hazrat and Ors. AIR 1960

Mys 59 has been cited on behalf of the appellant to contend

that where permission of the collector is a condition precedent

for alienation under the Act and the plaintiffs sought before the

Civil Court specific performance of the agreement to sell and if

the said suit is decreed, it would defeat the pre-condition of


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obtaining permission which would be in contravention of the

grant or law regarding alienation of such grant and Section 23

of the Contract Act and would be a bar to such a suit. However,

another Division Bench of this Court in the case of Yogambika

v. Narsingh, ILR 1992 Kar 717 has held that even in the

presence of a period of non-alienation clause for ten years in a

document of allotment is not a bar to decree a suit for specific

performance as the object of the law is to enforce contract which

is applicable to the facts of the present case.

In the case of Nirmala Anand v. Advent Corporation Put Ltd.

and Ors., AIR 2002 SC 2290 it has been held that when the

construction company refused construction on the ground that

the original lease of plot was terminated by the municipality and

the facts showed that there was a possibility of renewal of lease

and revalidation of building plan and the purchaser was ready

to perform her part of the contract, then specific performance

cannot be refused. The said decision is applicable to the facts of

the present case.

In the case of Andanur Rajashekar v. Vasavi Industrial

Enterprises and Ors. AIR 2007 Kar 497 this Court considered

Section 80 of the Karnataka Land Reforms Act in the context of

Section 23 of the Contract Act and Section 20 of the Specific

Relief Act and held that what is prohibited under Section 80 is a

non-agriculturist purchasing agricultural land and if a

permission can be obtained from the statutory authority, then


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proviso to Section 80 would not be a bar. It was also stated that

Section 80 did not bar an agreement to sell agricultural land to

a non-agriculturist, but what is prohibited is a sale. The said

decision is in fact applicable to the facts of the present case as

no sale has taken place in contravention of the terms of the

grant in the instant case and the agreement of sale specifically

mentions that the sale deed would be executed after the period

of non-alienation is completed. Therefore, the agreement in

question cannot be held to be null and void or hit by Section 23

of the contract. To the same effect is the decision in another

decision of this Court in the case of Ningappa Durgappa v.

Hanumantappa Balappa and Anr. L.J. 1982(1) 419. In fact

even in the case of Manasa Housing Co-operative Society Ltd. v.

Marikellaiah and Ors. AIR 2006 Kant 273 it has been held that

the mere filing of a suit for specific performance of contract for

grant of a decree in the same would not amount to violation of

Section 80 of the Karnataka Land Reforms Act and that the said

Section will not create any bar in the Civil Court to decide

whether the plaintiff would be entitled to a decree for specific

performance or not.

In the case of Balu Babu Rao v. Shaik Akbar, AIR 2001

Bombay 364 in the context of Section 43 of the Bombay

Tenancy and Agricultural Lands Act and Section 20 of the

Specific Relief Act it has been held that when the suit property

was not transferable, without prior permission of the collector a


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decree of specific performance granted subject to sanction of

collector cannot be held to be improper.

READINESS AND WILLINGNESS INFERRED FROM

EVIDENCE:- In Manzoor Ahmed Magray v. Gulam Hassan Aram

and Ors., AIR 2000 SC 191 it is held that readiness and

willingness can be inferred from evidence led by the parties and

if there is no delay on the part of the plaintiff, equitable relief

cannot be denied.

SYED ZAHEER VS. C.V. SIDDAVEERAPPA DECIDED ON

DEC 18 2009 REPORTED IN ILR 2010 KAR 765,

HON’BLE JUSTICES: K.L. MANJUNATH AND B.V.

NAGARATHNA,

WHEN NO TIME IS FIXED UNDER CONTRACT AND

SORROUNDING CIRCUMSTANCES TO DECIDE CAUSE OF

ACTION:-

Article 54 of the Limitation Act specifies two points of time from

which time begins to run for the purpose of computing the

period of three years limitation with regard to filing suits for

specific performance of contract. One, is the date fixed for the

performance of the contract and two, if no such date Is fixed


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then when the plaintiff has notice of the performance being

refused. Much reliance has been placed on the decision of the

Apex Court in the case of Ahamed Saheb Abidulla Mulla v.

Bibijan reported in (2009) 5 SCC 462, by the counsel for the

appellants to contend that in the instant case, the suit filed for

specific performance was beyond the prescribed period of

limitation and therefore, the suit filed by the respondent herein

was not maintainable by placing reliance on the second limb of

Article 54 of the limitation Act. While considering time from

which period begins to run under Article 54 of the Limitation

Act, the Apex Court in the aforesaid decision held that 'fixed'

used in the said article in essence means having final or

crystallized form or not stopped to change or fluctuation and the

inevitable conclusion is that the expression "date fixed for the

performance" is a crystallized notion which is clear from the fact

that the second part of Article 54 states "time from which period

begins to run" which refers to a case where no such date is

fixed. In other words, the Apex Court held that when date is

fixed, it means that there is a definite date fixed for doing a

particular act and when there is no date fixed then when the

plaintiff has notice that performance is refused is also a definite

point of time when the plaintiff notices the refusal and in that

sense both the particulars refer to definite dates. The same has

been relied upon to contend that in the instant case the legal

notice was issued by the appellants in the year 1995 with

regard to refusal to perform the contract, In as much as it was

stated that the agreement was unenforceable on account of non-

alienation clause, but the suit has been filed only in the year

1999. The facts of the present case have to be considered in the


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light of the decision of the Apex Court. It is seen that the land

grant which Is the subject matter of the agreement in question

was made in the year 1983 and there was a fifteen year period

of non-alienation which would have come to an end only In the

year 1998. However, three years prior to that date i.e., in the

year 1995 Itself legal notice was sent to the respondent stating

that on account of the non-alienation clause, the contract could

not be performed by the appellants on account of permission

not been obtained from the concerned authority by them. At

that point of time there were still three more years for the non-

alienation period to come to an end and therefore, it was

premature on the part of the appellants to contend that in the

year 1995 itself that on account of the non-alienation clause the

contract could not be performed on account of permission not

being obtained. However, a declaration with regard to

unenforceability of the contract was sought by the appellants by

filing a suit in the year 1995 itself. But, what has to be noticed

is the fact that on account of the non-alienation clause it was

specifically mentioned in the contract that the sale deed would

be registered only after coming to an end of the non-alienation

period, which would have been in the year 1998. Therefore,

until the non-alienation period came to an end the respondent

also could not have asked for performance of the contract by the

appellants. Only after the end of the non-alienation period i.e.,

in the year 1998 the cause of action to seek specific

performance of the contract arose for the respondent.


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AIR 2008 SC 1267, B.K. SRI HARSHA (D) BY L.R. & ANR VS

M/S BHARATH HEAVY ELECTRICALS LTD BENCH: DR.

ARIJIT PASAYAT & P. SATHASIVAM

Specific Relief Act, 1963; Ss.16 & 20 The suit was for specific

performance and the Trial Court recorded findings about

adverse possession. That being so, triable issues are involved.

When triable issues are involved, the appeals should not be

summarily dismissed or disposed of in the manner done. A

bare reading of the High Court's judgment shows that there was

no serious effort made by it to analyse the various points raised.

The High Court has given a finding regarding adverse

possession in a suit for specific performance. There is total non-

application of mind by the High Court. The manner in which the

appeals were dismissed cannot be said to be proper. Hence, the

matter is remitted to the High Court to consider the same afresh

The nature of suit for specific performance of contract has been

highlighted by Supreme Court in several cases. In Rajeshwari v.

Puran Indoria (2005 (7) SCC 60), it was inter- alia observed as

under: "Normally, a suit for specific performance of an

agreement for sale of immovable property involves the question

whether the plaintiff was ready and willing to perform his part of

the contract in terms of Section 16 of the Specific Relief Act,

whether it was a case for exercise of discretion by the court to

decree specific performance in terms of Section 20 of the

Specific Relief Act and whether there were laches on the part of

the plaintiff in approaching the court to enforce specific

performance of the contract. In some cases, a question of


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limitation may also arise in the context of Article 54 of the

Limitation Act on the terms of the agreement for sale. Other

questions like the genuineness of the agreement, abandoning of

the right to specific performance, a novation and so on, may

also arise in some cases. No doubt, a finding on the three

primary aspects indicated earlier would depend upon the

appreciation of the pleadings and the evidence in the case in the

light of the surrounding circumstances. The right to specific

performance of an agreement for sale of immovable property,

when filed, raises questions of substantial importance between

the parties as to whether the plaintiff has satisfied the

requirements of Section 16 of the Specific Relief Act, whether it

is a case in which specific performance of the contract is

enforceable in terms of Section 10, whether in terms of Section

20 of the Act, the discretion to decree specific performance

should be exercised by the court and in some cases, whether

the suit was barred by limitation and even if not, whether the

plaintiff has been guilty of negligence or laches disentitling him

to a decree for specific performance. These questions, by and

large, may not be questions of law of general importance. But

they cannot also be considered to be pure questions of fact

based on an appreciation of the evidence in the case. They are

questions which have to be adjudicated upon, in the context of

the relevant provisions of the Specific Relief Act and the

Limitation Act (if the question of limitation is involved). Though

an order in exercise of discretion may not involve a substantial

question of law, the question whether a court could, in law,

exercise a discretion at all for decreeing specific performance,


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could be a question of law that substantially affects the rights of

parties in that suit."

S. Brahmanand and Others v. K.R. Muthugopal (Dead) and

Others [(2005) 12 SCC 764] wherein this Court laid down the

law: "Thus, this was a situation where the original agreement of

10-3-1989 had a "fixed date" for performance, but by the

subsequent letter of 18-6- 1992 the defendants made a request

for postponing the performance to a future date without fixing

any further date for performance. This was accepted by the

plaintiffs by their act of forbearance and not insisting on

performance forthwith. There is nothing strange in time for

performance being extended, even though originally the

agreement had a fixed date. Section 63 of the Contract Act,

1872 provides that every promisee may extend time for the

performance of the contract. Such an agreement to extend time

need not necessarily be reduced to writing, but may be proved

by oral evidence or, in some cases, even by evidence of conduct

including forbearance on the part of the other party.

"In R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy [(2006) 2

SCALE 156], wherein, it was observed: " In terms of the said

Article, a suit for specific performance of a contract is required

to be filed within three years; in the event no date is fixed for the

performance, within a period of three years from the date when

the plaintiff has notice that performance is refused.."


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The said decision has again been noticed in Gunwantbhai

Mulchand Shah & Ors. v. Anton Elis Farel & Ors. [(2006) 3

SCALE 82] wherein it has been held: "We may straightaway say

that the manner in which the question of limitation has been

dealt with by the courts below is highly unsatisfactory. It was

rightly noticed that the suit was governed by Article 54 of the

Limitation Act, 1963. Then, the enquiry should have been, first,

whether any time was fixed for performance in the agreement

for sale, and if it was so fixed, to hold that a suit filed beyond

three years of the date was barred by limitation unless any case

of extension was pleaded and established. But in a case where

no time for performance was fixed, the court had to find the

date on which the plaintiff had notice that the performance was

refused and on finding that date, to see whether the suit was

filed within three years thereof. We have explained the position

in the recent decision in R.K. Parvatharaj Gupta v. K.C.

Jayadeva Reddy 2006 (2) Scale 156.

In Chairman, Life Insurance Corpn. and Others v. Rajiv

Kumar Bhasker [(2005) 6 SCC 188], Court held: "Agency as is

well settled, is a legal concept which is employed by the Court

when it becomes necessary to explain and resolve the problems

created by certain fact situations. In other words, when the

existence of an agency relationship would help to decide an

individual problem, and the facts permits a court to conclude

that such a relationship existed at a material time, then

whether or not any express or implied consent to the creation of

an agency may have been given by one party to another, the


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Court is entitled to conclude that such relationship was in

existence at the time, and for the purpose in question.”

In Veerayee Ammal v. Seeni Ammal [(2002) 1 SCC 134] it

was observed : "When, concededly, the time was not of the

essence of the contract, the appellant-plaintiff was required to

approach the court of law within a reasonable time. A

Constitution Bench of this Hon'ble Court in Chand Rani v.

Kamal Rani held that in case of sale of immovable property

there is no presumption as to time being of the essence of the

contract. Even if it is not of the essence of contract, the court

may infer that it is to be performed in a reasonable time if the

conditions are (i) from the express terms of the contract; (ii)

from the nature of the property; and (iii) from the surrounding

circumstances, for example, the object of making the contract.

For the purposes of granting relief, the reasonable time has to

be ascertained from all the facts and circumstances of the case."

It was furthermore observed : "The word "reasonable" has in law

prima facie meaning of reasonable in regard to those

circumstances of which the person concerned is called upon to

act reasonably knows or ought to know as to what was

reasonable. It may be unreasonable to give an exact definition of

the word "reasonable". The reason varies in its conclusion

according to idiosyncrasy of the individual and the time and

circumstances in which he thinks. The dictionary meaning of

the "reasonable time" is to be so much time as is necessary,

under the circumstances, to do conveniently what the contract

or duty requires should be done in a particular case. In other

words it means, as soon as circumstances permit. In P.


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Ramanatha Aiyar's The Law Lexicon it is defined to mean: `A

reasonable time, looking at all the circumstances of the case; a

reasonable time under ordinary circumstances; as soon as

circumstances will permit; so much time as is necessary under

the circumstances, conveniently to do what the contract

requires should be done; some more protracted space than

`directly'; such length of time as may fairly, and properly, and

reasonably be allowed or required, having regard to the nature

of the act or duty and to the attending circumstances; all these

convey more or less the same idea.' " It is also a well settled

principle of law that not only the original vendor but also a

subsequent purchaser would be entitled to raise a contention

that the plaintiff was not ready and willing to perform his part of

contract.

CONTRACT

ALKA BOSE VS PARMATMA DEVI & ORS. 2008(16) SCALE

281 ,

Contract Act, 1872: s.10 - Agreement to sell signed only by

vendor and not by purchaser - Suit for specific performance -

Maintainability of, challenged on the ground that agreement

was not valid/concluded - Held: Agreement to sell signed by

vendor alone and delivered to purchaser, and accepted by

purchaser was a valid contract - Moreover, vendor

acknowledged receipt of earnest money and further receipt of

part of consideration amount - Evidence of witnesses also show

that it was concluded contract - Notice by purchaser conveying


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willingness and readiness to pay balance sale consideration -

Plaintiff entitled to decree for specific performance.

Dismissing the appeal, the Court HELD:

1. There was no valid reason to disturb the factual finding based

on acceptable materials. The Single Judge of the High Court

committed an error in taking a contrary view.

2. All agreements of sale are bilateral contracts as promises are

made by both - the vendor agreeing to sell and the purchaser

agreeing to purchase. An agreement of sale comes into existence

when the vendor agrees to sell and the purchaser agrees to

purchase, for an agreed consideration on agreed terms. It can

be oral. It can be by exchange of communications which may or

may not be signed. It may be by a single document signed by

both parties. It can also be by a document in two parts, each

party signing one copy and then exchanging the signed copy as

a consequence of which the purchaser has the copy signed by

the vendor and a vendor has a copy signed by the purchaser. Or

it can be by the vendor executing the document and delivering it

to the purchaser who accepts it. S.10 of the Contract Act, 1872

provides all agreements are contracts if they are made by the

free consent by the parties competent to contract, for a lawful

consideration and with a lawful object, and are not expressly

declared to be void. The proviso to s.10 of the Act makes it clear

that the section will not apply to contracts which are required to

be made in writing or in the presence of witnesses or any law

relating to registration of documents. Even an oral agreement to


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sell is valid. If so, a written agreement signed by one of the

parties, if it evidences such an oral agreement will also be valid.

In any agreement of sale, the terms are always negotiated and

thereafter reduced in the form of an agreement of sale and

signed by both parties or the vendor alone (unless it is by a

series of offers and counter-offers by letters or other modes of

recognized communication). In India, an agreement of sale

signed by the vendor alone and delivered to the purchaser, and

accepted by the purchaser, has always been considered to be a

valid contract. In the event of breach by the vendor, it can be

specifically enforced by the purchaser. There is, however, no

practice of purchaser alone signing an agreement of sale.

In Bismillah Begum (Smt.) v. Rahmatullah Khan (dead) by

Lrs. (AIR 1998 SC 970) it was held as follows: "We may also

add that in contracts relating to re-conveyance of property, time

is always the essence of the contract as laid down by the

Federal Court in the case of Shanmugam Pillai v. Analakshmi

Ammal (AIR 1950 FC 38) and also laid down by this Court in

Caltex (India) Ltd. V. Bhagwan Devi Marodia (AIR 1969 SC 405).

The relevant passage in the judgment of Supreme Court in

Caltex (India) Ltd. reads as follows: "At common law

stipulations as to time in a contract giving an option for renewal

of a lease of land were considered to be the essence of the

contract even if they were not expressed to be so and were

construed as conditions precedent. Equity followed the common

law rule in respect of such contracts and did not regard the

stipulation as to time as not of the essence of the bargain. An

option for the renewal of a lease, or for the purchase or re-


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purchase of property must in all cases be exercised strictly

within the time limited for the purpose otherwise it will lapse."

In Chunchun's case it was observed by Supreme Court as

follows: "If the sale and agreement to repurchase are embodied

in separate documents, then the transaction cannot be a

mortgage, whether the documents, are contemporaneously

executed or not. In the case of agreement of re-purchase, the

conditions of repurchase must be construed strictly against the

original vendor and the stipulation with regard to time of

performance of the agreement must be strictly complied with as

the time must be treated as being of the essence of the contract

in the case of an agreement of reconveyance."

SPECIFIC RELIEF ACT

Azhar Sultana .Vs B. Rajamani & Ors. ...February 17, 2009

Supreme Court HELD:

1. In view of the fact that approval was required to be obtained

from the competent authority, the plaintiff could not have

proceeded on the assumption that the suit could be filed within

a period of three years from the date of refusal on the part of the

original defendant to execute the said deed of sale in terms of

the agreement.

2. It may be true that the name of the purchaser was not

disclosed but then it was open to the plaintiff to ask for other


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and better particulars of the said statements. Why she had to

wait for a period of more than three years for impleading the

subsequent purchasers as parties has not been explained. Even

an application for injunction was filed only in September 1985.

According to her husband, she came to learn about the sale of

property in the name of defendant No.5 only on 29.9.1986. Why

an inquiry was not made in the Registration Office although the

deed of sale was a registered one again defies anybody's

comprehension. Readiness and willingness on the part of the

plaintiff, therefore, is required to be considered from the

aforementioned backdrop of events.

3. It was not necessary that the entire amount of consideration

should be kept ready and the plaintiff must file proof in respect

thereof. It may also be correct to contend that only because the

plaintiff who is a Muslim lady, did not examine herself and got

examined on her behalf, her husband, the same by itself would

lead to a conclusion that she was not ready and willing to

perform her part of contract.

4. If the plaintiff has failed to establish that she had all along

been ready and willing to perform her part of contract, it would

not be necessary to enter into the question as to whether the

defendant Nos.5 and 6 were bona fide subsequent purchasers

for value without notice or not. Furthermore, grant of decree for

specific performance of contract is discretionary. The contesting

respondents herein are living in the property since 1981 in their

own right. There is absolutely no reason as to why they should

be forced to vacate the said property at this juncture.


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5. The conduct of the respondent was not good but, similarly,

one cannot lose sight of the conduct of the appellants as well.

She had also not brought any evidence to show that she did not

have the notice of the said deed of sale. Thus, the interest of

justice would be subserved if this Court refuses to exercise its

discretionary jurisdiction in terms of Section 20 of the Act,

directing the defendant to pay a sum of Rs.60,000/- to the

plaintiff which sum would include the amount of advance paid

by her.

6. It is also a well settled principle of law that not only the

original vendor but also a subsequent purchaser would be

entitled to raise a contention that the plaintiff was not ready

and willing to perform his part of contract. [See Ram Awadh

(Dead) by LRs. & Ors. v. Achhaibar Dubey & Anr. [(2000) 2 SCC

428 para 6]

7. In Veerayee Ammal v. Seeni Ammal [(2002) 1 SCC 134] it was

observed : "When, concededly, the time was not of the essence

of the contract, the appellant-plaintiff was required to approach

the court of law within a reasonable time. A Constitution

Bench of Hon'ble Supreme Court in Chand Rani v. Kamal Rani

held that in case of sale of immovable property there is no

presumption as to time being of the essence of the contract.

Even if it is not of the essence of contract, the court may infer

that it is to be performed in a reasonable time if the conditions

are (i) from the express terms of the contract; (ii) from the

nature of the property; and (iii) from the surrounding


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circumstances, for example, the object of making the contract.

For the purposes of granting relief, the reasonable time has to

be ascertained from all the facts and circumstances of the case."

8. It was furthermore observed : "The word "reasonable" has in

law prima facie meaning of reasonable in regard to those

circumstances of which the person concerned is called upon to

act reasonably knows or ought to know as to what was

reasonable. It may be unreasonable to give an exact definition of

the word "reasonable". The reason varies in its conclusion

according to idiosyncrasy of the individual and the time and

circumstances in which he thinks. The dictionary meaning of

the "reasonable time" is to be so much time as is necessary,

under the circumstances, to do conveniently what the contract

or duty requires should be done in a particular case. In other

words it means, as soon as circumstances permit. In P.

Ramanatha Aiyar's The Law Lexicon it is defined to mean: `A

reasonable time, looking at all the circumstances of the case; a

reasonable time under ordinary circumstances; as soon as

circumstances will permit; so much time as is necessary under

the circumstances, conveniently to do what the contract

requires should be done; some more protracted space than

`directly'; such length of time as may fairly, and properly, and

reasonably be allowed or required, having regard to the nature

of the act or duty and to the attending circumstances; all these

convey more or less the same idea."


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2008 (6) SCR 726 WAHEED BAIG VS BANGI LAKSHMAMMA

& ORS BENCH: DR. ARIJIT PASAYAT & P. SATHASIVAM:-

Specific Relief Act, 1963 - s. 13 - Suit for specific performance of

agreement of sale - In respect of the property allotted to the

alleged vendor by Government - Suit decreed - Set aside by first

appellate court - In second appeal, High Court confirming the

decree and directing the Government Department to transfer the

property in favour of the alleged vendor and then to transfer the

same to the vendee as per the agreement - On appeal, held : The

agreement was null and void - The property vested with the

Government and the allottee thereof had no alienable right

thereto - Direction of the High Court is not correct

The High Court could not have directed transfer of the property

in favour of the appellant and thereafter directing him to

transfer the property by giving full effect to the agreement for

sale. Such a course is unknown in law.

Section 13 of Specific Relief Act, 1963 deals with rights of a

purchaser in certain cases, where a person contracts to sell or

let certain immovable property having no title or only an

imperfect title. These rights enable the purchaser to take action

when title of vender is bettered in the circumstances given in

this Section. The vender is under a duty to prove his title and to

convey what he has contracted to convey. The Section gives

right to purchaser in the event there is a defect in title as

enumerated in Clauses (a) to (d) to compel the vender to convey


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the title or to secure the concurrence or conveyance or to

redeem the mortgage etc. as the case may be.

In the instant case the Labour Department was not a party to

the agreement. It was not bound to sell the property to the

appellant. The land belonged to the Government and the land in

question was given on lease cum sale agreement basis by the

Labour Department. There was a clear stipulation that the

lessee is not the owner of the property and did not have any

right to sell or mortgage or otherwise to dispose of the property

until sale price finally determined by the Commissioner of

Labour in his sole discretion is paid in full. At the time alleged

agreement of sale was entered into, the appellant was not the

owner of the property.

The alleged agreement between the first plaintiff and the first

defendant was without the knowledge of the defendant No.2, it

was null and void and it was not binding upon the Government

even if certain payments were made by the plaintiff. The title in

the property still vests in the Government and was not

registered in favour of the first defendant. The first defendant

had no right to sell or alienate the property to any other person.

In terms of the agreement, notice was given to the first

defendant to reside in the property immediately, otherwise

allotment of the same would be cancelled more particularly

when there was sub letting. The Government has constructed

the quarters for the industrial workers on rental basis and

subsequently there was a decision to sell those to the industrial

workers. The arrangement was for the benefit of the industrial


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workers and therefore the defendant No.1 had no alienable right

in the property.

The agreement for sale does not refer to any condition that after

payment of installment, the lessee can become the owner and

the agreement for sale was to take effect. Since the appellant

was not the owner of the property, he could not have entered

into an agreement to sell a property of which admittedly he was

not the owner.

AIR 2008 SC 2019, GURDIAL KAUR (D) THROUGH LRS VS

PIARA SINGH (D) THROUGH LRS BENCH: S.B. SINHA & V.S.

SIRPURKAR

Specific Relief Act, 1963 - ss. 12, 16 ( c ), 20 and 28 - Agreement

of sale - Failure to execute sale deed - Suit for specific

performance of contract - Subsequent change in the revenue

survey numbers in respect of the land in question - Trial court

denying decree of specific performance holding that vendee

failed to comply with requirements of s. 16 (c ) having failed to

state that he was always ready and willing - However directed

refund of the advance amount paid by the vendee - First

appellate court denying the decree of specific performance on

the ground that there was failure to show readiness and

willingness in respect of the changed revenue survey numbers -

High Court in second appeal decreeing the suit - On appeal,

held: Decree of specific performance is liable to be passed in

respect of the land which formed subject matter of the original


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agreement - Change in revenue survey numbers in respect of

those lands would not bring the contract of sale to an end as

the subject matter of the agreement substantially remained the

same - In the facts of the case vendee has fulfilled the critirea of

readiness and willingness - Further averment/proof regarding

readiness and willingness after change in survey numbers not

required, to the extent subject matter was same.

Partly allowing the appeal, the Supreme Court HELD:

A suit for specific performance of contract provides for a

discretionary remedy. The Court in terms of Section 20 of

Specific Relief Act, 1963, may for sufficient and cogent reasons

refuse to grant a decree for specific performance of contract.

Like any other suit, the Court in terms of Order 7 Rule 7 CPC

may, however, take into consideration the subsequent events

including the change in the revenue survey numbers in respect

of a particular land. In other words, if the land in suit remains

the same which was the subject matter of an Agreement of Sale,

a decree for specific performance can be granted. The matter,

however, would be different where having regard to the

consolidation or any other proceedings, the subject matter of

land itself changes resulting in substantive change in the

original agreement.

The appellants did not spell out as to what were his objections

in regard to amendment of plaint. When the second application

for amendment of plaint was filed, no objection thereto was

raised. Allegedly, in the suit for recovery of possession, the


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appellants mentioned the same description of land. How despite

alteration in the description of the land in respect of a part of

the suit premises, the respondent came into possession, if at all,

is not known. The plaintiff/respondent did not bring on records

any material to show that owing to consolidation proceedings or

otherwise, there had been a change in the suit land in the sense

that some other lands had been allotted to the predecessor of

the appellant instead and in place of the lands in suits. The

plaintiff/respondent was categorical in his statement as to why

the amendment had to be brought about, but neither the same

was opposed nor any amended written statement/additional

written statement was filed. Except the two plots, identity of the

rest of the plots remained the same.

The rigours of Section 16(c) of the Act, however, are not such

which would for all intent and purport to be strictly construed.

It is, however, trite that, even for the said purpose, the entirety

of the plaint must be taken into consideration. If upon reading

the plaint in its entirety, the Court comes to the conclusion that

for all intent and purport, the requirements of Section 16(c)

stood complied with, no exception thereto can be taken.

In the instant case, the plaintiff has not only expressed his

readiness to purchase the land, his willingness to do so can be

culled out from other averments made in the plaint as and in

particular the one where he had stated that he had gone to the

Registration Office for getting the deed of sale executed and

registered but it was the defendant, who did not turn up

thereafter. He has also fulfilled the criteria of his readiness and


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willingness to perform his part of the contract as not only he

had paid half of the consideration amount on the date of the

execution of the agreement, he had deposited a balance sum on

the date of presentation of the plaint. Thus, the Court of First

Appeal was right in holding that he was ready and willing to

perform his part of the contract.

The Court of First Appeal, however, committed a serious error

insofar as it failed to take into consideration that the identity of

a part of the land being the same, it was not necessary to make

any further averment or proof that he had been ready and

willing to perform his part of the contract in respect of the

subject matter of the agreement. Readiness and willingness to

perform one's part of the contract must be confined to the

subject matter thereof. If subject matter of the suit remained the

same only because Khewat Nos. or Khatauni Nos. changed, the

same ipso facto would not change. To the extent the subject

matter of the agreement remains the same, a suit for specific

performance of the contract can be decreed.

Proper substantial question which should have been framed

having regard to the admitted position is as to whether the

contract of sale came to an end only on account of change of

Khasra Nos., although the subject matter of the agreement

substantially remained the same. If on the admitted fact, it is

found that at least substantial portion of the land remained the

same, there does not exist any bar in granting a decree in

respect of a part of the suit property. For the said purpose, even

Section 12 of the Specific Relief Act would not stand as a bar. If


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a decree for specific performance cannot be granted in respect of

the entirety, an option in terms thereof has to be exercised.

Respondent, furthermore has all along been in possession of the

major portion of the land since a long time. He is said to have

made improvements on the land. It would be not, thus,

equitable to deprive him from possession at least from that

portion of the land which was the subject matter of the original

agreement.

However, having regard to the fact that the plaintiff/respondent

No. 1 was denied the decree for specific performance of contract

by two courts, although he had been in possession of the lands,

in question from 1964, this Court in exercise of its discretionary

jurisdiction under Article 142 of the Constitution of India as

also Section 28 of the Specific Relief Act directs him to pay a

further sum of Rs. 30,000/- to the appellant.

AIR 2008 SC 1960, PURAN RAM VS BHAGURAM & ANR

BENCH: TARUN CHATTERJEE & HARJIT SINGH BEDI

Specific Relief Act, 1963: s.26 - Rectification of instrument -

Suit for specific performance of agreement for sale - Part of suit

property wrongly described by mutual mistake in the agreement

for sale and in the plaint - Prayer for amendment of plaint and

agreement for sale to correct a part of description of suit

property - Permissibility of - Held: Permissible by virtue of

proviso to s.26 - The relief claimed in the suit would remain


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same and would not change the nature of suit from suit for

specific performance to suit for declaration - Code of Civil

Procedure, 1908 - Order 6 r.17. Code of Civil Procedure, 1908:

Order 6 r.17 - Amendment application - Held: Can be allowed by

court in its discretion even where the relief sought to be added

by amendment is barred by limitation.

When the description of a part of the suit property was found to

be a mutual mistake, appellant filed an application under Order

6 Rule 17 CPC seeking the amendment of the plaint and for

giving the description of the suit property……. The trial Court

rejected the prayer for amendment of the plaint on the ground

that plaint was filed on the basis of agreement to sell and since

no prayer was made for amending the agreement, the

application for amendment of the plaint could not be allowed.

The appellant filed another application for amendment of the

plaint seeking amendment this time not only of the plaint but

also of the agreement to sell. The First Appellate Court allowed

the said application. Aggrieved respondent No.2, who was

purchaser of suit property, from respondent no.1 filed a petition

under Article 227 of the Constitution of India. High Court

allowed the petition on the ground that relief sought for by the

appellant by way of amendment of the plaint could not be

allowed in view of the expiry of the period of limitation; and that

if such amendment was allowed, the nature of the suit would

change from a suit for specific performance of contract for sale

to a suit for declaration which was not permissible. Hence the

present appeal.


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Partly allowing the appeal, the Supreme Court HELD:

In a suit for specific performance of contract for sale, it is

permissible to amend a part of the description of the suit

property not only in the plaint but also in the agreement in

terms of s.26 of the Specific Relief Act, 1963. A reading of the

two conditions made under s.26 of the Act show that either

party may institute a suit to have the instrument rectified or a

party who has already filed a suit in which any right arising

under the instrument is in issue may claim in his pleading that

the instrument be rectified. The main issue in the instant suit

for specific performance of the contract for sale was relating to

the agreement for sale in which a part of the description of the

suit property was wrongly given by mutual mistake and

therefore, needed to be amended. S.26, of course, says that it

would be open to a party to institute a suit for correcting the

description of the suit property, but the proviso to s.26 clearly

permits that where a party has not claimed any such relief in

his pleading, the court shall at any stage of the proceeding allow

him to amend the plaint on such terms as may be just for

including such claim. From a plain reading of the provisions

under s.26 of the Act, there is no reason why the prayer for

amendment of the agreement to correct a part of the description

of the suit property …. could not be granted. It is only a

correction or rectification of a part of the description of the suit

property, which cannot involve either the question of limitation

or the change of nature of suit. The relief claimed in the suit

remained the same i.e. a decree for specific performance of the


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contract for sale and by amendment, no declaration has been

sought for in respect of the instrument. So far as the question of

limitation is concerned, the suit, admittedly, was filed within the

period of limitation. Therefore, even if the amendment of plaint

or agreement is allowed, that will relate back to the filing of the

suit which was filed within the period of limitation.

The High Court ought not to have interfered with the order of

the trial court when the order of the trial court was passed on

sound consideration of law and facts and when it cannot be said

that the order of the trial court was either without jurisdiction

or perverse or arbitrary.

The court may, in its discretion, allow an application for

amendment of the plaint even where the relief sought to be

added by amendment is allegedly barred by limitation. It is well

settled that allowing and rejecting an application for

amendment of a plaint is really the discretion of the Court and

amendment of the plaint also should not be refused on

technical grounds.

The question of limitation would not arise when mis-description

of the name of the original plaintiff or mis-description of the suit

property arose in a particular case. Apart from that in the

present case, although, the relief claimed before as well as after

the amendment remained the same i.e. a decree for specific

performance of the contract for sale, even then, in the facts and

circumstances of the case, the High Court should not have


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interfered with the discretion used by the trial court in allowing

the application for amendment of the plaint.

Submission’s that the application for amendment could not be

allowed inasmuch as the same was barred by limitation was

repelled by Supreme court in the above case holding that: “We

are unable to accept this contention …….. In this regard, we

may observe that the court may, in its discretion, allow an

application for amendment of the plaint even where the relief

sought to be added by amendment is allegedly barred by

limitation. This view was also expressed by this Court in

Pankaja & Anr. Vs. Yellappa (Dead) by LRs. & Ors. [(2004) 6

SCC 415]. In that decision, it was held that there is no absolute

rule that in such a case, the amendment should not be allowed

and the discretion of the court in that regard depends on the

facts and circumstances of the case and such discretion has to

be exercised on a judicious evaluation thereof. It was further

held in that decision that an amendment, which subserves the

ultimate cause of justice and avoids further litigation, should be

allowed. It is well settled by a catena of decisions of this Court

that allowing and rejecting an application for amendment of a

plaint is really the discretion of the Court and amendment of the

plaint also should not be refused on technical grounds. In this

connection reliance can be placed on a decision of this court in

Jai Jai Ram Manohar Lal Vs. National Building Material Supply,

Gurgaon [ AIR 1969 SC 1267 ]. In paragraph 8 of the said

decision this Court observed that "since the name in which the

action was instituted was merely a misdescription of the original

plaintiff, no question of limitation arises; the plaint must be


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deemed on amendment to have been instituted in the name of

the real plaintiff on the date on which it was originally

instituted."

The requirement to comply with the mandatory provisions of

Section 16(c) of the Specific Relief Act came up for consideration

of Court in Ouseph Varghese vs. Joseph Aley & Ors. (1969) 2

SCC 539 wherein it was held: "The plaintiff did not plead either

in the plaint or at any subsequent stage that he was ready and

willing to perform the agreement pleaded in the written

statement of defendant. A suit for specific performance has to

conform to the requirements prescribed in Forms 47 and 48 of

the 1st Schedule in the Civil Procedure Code. In a suit for

specific performance it is incumbent on the plaintiff not only to

set out agreement on the basis of which he sues in all its

details, he must go further and plead that he has applied to the

defendant specifically to perform the agreement pleaded by him

but the defendant has not done so. He must further plead that

he has been and is still ready and willing to specifically perform

his part of the agreement. Neither in the plaint nor at any

subsequent stage of the suit the plaintiff has taken those pleas.

As observed by Court in Pt. Prem Raj vs. D.L.F. Housing and

Construction (Private) (Ltd.) and Another, [reported in 1968 (3)

SCR 648] that it is well settled that in a suit for specific

performance the plaintiff should allege that he is ready and

willing to perform his part of the contract and in the absence of

such an allegation the suit is not maintainable."


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R.C. Chandiok and Anr. vs. Chuni Lal Sabharwal and Ors.

reported in (1970) 3 SCC 140 stated: "6.Readiness and

willingness cannot be treated as a straight jacket formula. These

have to be determined from the entirety of facts and

circumstances relevant to the intention and conduct of the

party concerned. In our judgment there was nothing to indicate

that the appellants at any stage were

not ready and willing to perform their part of the contract."

In Abdul Khader Rowther vs. P.K. Sara Bai and Ors. reported in

AIR 1990 SC 682

this Court followed Ouseph Varghese (supra) holding: "His

plaint does not contain the requisite pleadings necessary to

obtain a decree for specific performance. This equitable remedy

recognized by the Specific Rel

case law digest on specific performance cases

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