Afzar Pasha vs Syed Ashraff

A.N. Venugopal Gowda, J.—1. This appeal is by the defendant. The respondent was the plaintiff. O.S. No. 41/2006 having been dismissed by the Senior Civil Judge, Doddaballapur on 22.06.2010, R.A. No. 150/2010 was filed by the plaintiff. By a judgment dated 28.09.2012, the said appeal was allowed and the decree passed by the Trial Court was set aside and consequently suit was decreed as prayed for. Assailing the said decree, this second appeal was filed.

The suit filed was for passing decree of specific performance of an agreement of sale. Suit was contested by filing written statement raising several defences. The Trial Court raised the following issues:

"1) Whether the plaintiff proves that, the defendant had agreed to sell the suit schedule property for Rs. 2,00,000/- on 09.11.2001?

2) Whether the plaintiff proves that the defendant had executed an agreement to sell on 09.11.2001, after receiving an advance amount of Rs. 1,50,000/-?

3) Whether the plaintiff proves that he is always ready and willing to perform his part of the contract?

4) Whether the defendant proves that the said agreement to sell is created by the plaintiff by forging the signature of the defendant?

5) What order or decree?"

The plaintiff got examined himself as P.W. 1 and examined 3 witnesses as PWs. 2 to 4 and marked the documents as Exs. P-1 to P-17. The defendant got examined himself as D.W. 1 and examined 2 witnesses as D.Ws. 2 and 3 and marked the documents as Exs. D-1 to D-11. The Trial Court having answered issue Nos. 1 to 3 in the negative and issue No. 4 in the affirmative, passed the decree dismissing the suit.

In the appeal filed under Section 96 CPC, the following points were raised for determination:

"1) Whether the appellant proves that the judgment and decree passed by the Trial Court is perverse, arbitrary and this court interference is necessary?

2) What Order?"

Point No. 1 was answered in the affirmative and the suit was decreed as prayed for.

This second appeal was admitted on 22.11.2012, to consider the following substantial question of law:

"Whether the First Appellate Court is justified in granting the decree for specific performance ignoring the provisions of Section 20 of Specific Relief Act, 1963, as also the judgments of the Supreme Court on the said point?"

Heard learned advocates on both sides and perused the record. Main ground urged by Sri M. Shivaprakash, learned advocate, is that the court below has not applied its mind to the material aspect required under law by virtue of Section 20 of Specific Relief Act, 1963 (for short ''the Ac'') and thus, the impugned judgment and decree being vitiated, calls for interference.

Sri Kesthur N. Chendra Shekher, learned advocate for the respondent, on the other hand made submissions in support of the decree passed by the court below and sought dismissal of the appeal.

Normally, a suit for specific performance of agreement for sale of immovable property, when filed, raises questions like, 1) Whether the plaintiff has satisfied the requirements of Section 16 of the Act, 2) whether it is a case in which specific performance of the contract is enforceable in terms of Section 10, 3) whether in terms of Section 20 of the Act, the discretion to decree specific performance should be exercised by the court, 4) in case the defence has been raised with regard to the suit being barred by limitation with reference to Article 54 of the Limitation Act, whether the suit is barred by limitation, and 5) whether the plaintiff has been guilty of negligence or laches which disentitles for a decree for specific performance.

To answer the substantial question of law raised, Section 20 of the Act being relevant is extracted herein below for ready reference:

"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, guided 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.

Explanation 1.--Mere inadequacy of 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).

Explanation 2.--The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

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 party."

Section 20 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. Sub-section (2) of Section 20 of the Act provides the three situations in which the court may exercise discretion not to decree specific performance. The discretion should not be arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.

In PARAKUNNAN VEETILL JOSEPH''S SON MATHEW v. NEDUMBARA KURUVILA''S SON AND OTHERS, , 1987 (Supp) SCC 340, Apex Court having examined the scope and ambit of Section 20 of the Act has held as follows:

"14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of 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 into 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."

In GOBIND RAM v. GIAN CHAND, , (2000) 7 SCC 548, Apex Court has held as follows:

"7. It is the settled position of law 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 to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience. As stated in P.V. Joseph''s Son Mathew (, 1987 Supp SCC 340) the court should meticulously consider all facts and circumstances of the case and motive behind the litigation should also be considered."

In BAL KRISHNA AND ANOTHER v. BHAGWAN DAS (DEAD) BY LRS. AND OTHERS, , (2008) 12 SCC 145, Apex Court has held as follows:

"14. It is also settled by various decisions of this Court that by virtue of Section 20 of the Act, the relief for specific performance lies in the discretion of the court and the court is not bound to grant such relief merely because it is lawful to do so. The exercise of the discretion to order specific performance would require the court to satisfy itself that the circumstances are such that it is equitable to grant decree for specific performance of the contract. While exercising the discretion, the court would take into consideration the circumstances of the case, the conduct of parties, and their respective interests under the contract. No specific performance of a contract, though it is not vitiated by fraud or misrepresentation, can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee. In other words, the court''s discretion to grant specific performance is not exercised if the contract is not equal and fair, although the contract is not void."

In the present case, the court below has not examined whether by reference to Section 20 of the Act, it is a fit case for exercising the discretion to decree the specific performance or not. Material point with reference to Section 20 of the Act was not raised, considered and the case decided. Hence, the appeal deserves to be allowed.

Since the important legal aspect has not received consideration by the court below, the substantial question of law raised, reproduced supra, is answered in the affirmative.

In the result, the appeal is allowed and the impugned judgment and decree is set aside. The case is remanded to the District Court, Bengaluru Rural District, Bengaluru - First Appellate Court for decision afresh.

In order to expedite the hearing, both parties are directed to appear before the Lower Appellate Court on 23.04.2016 and receive further orders.

The court below shall decide the appeal by keeping in view the observations made supra and in accordance with law, with as much expedition as is possible and before 30.07.2016.

The appellant is entitled to refund of court fee, in accordance with law.