Bhupinder Kaur and Others vs Surinder Singh

Surinder Gupta, J.—This is second appeal by plaintiffs Bhupinder Kaur and Jaspal Singh against judgment and decree passed by the First Appellate Court whereby the appeal of the defendant-respondent was partly accepted, denying the relief of specific performance of the agreement to sell dated 09.02.2001 and allowing the alternate relief of recovery of Rs. 2,45,000/- along with interest @ 9% per annum from the date of execution of agreement till filing of suit and pendente lite future interest @ 6% per annum.

Briefly stated, the case of the plaintiffs-appellants (hereinafter referred as plaintiffs) is that defendant-Surinder Singh vide agreement dated 09.02.2001 agreed to sell his land measuring 15 kanal 3 marlas situated in village Mullanpur Khurd, Tehsil and District Fatehgarh Sahib bearing khasra No. 12//2/1 (1-0), 9/3 (2-3) 10 (8-0) 11 min (4-0) as per jamabandi for the year 1994-95. The land was agreed to be sold along with share of defendant-respondent (hereinafter referred as defendant) in the water tubewell, bore, kotha, khal, pahi, passage, taur, pucca nala etc. Out of total sale consideration of Rs. 3,50,000/-, Rs. 1,85,000/- was paid as earnest money and the date for execution and registration of sale deed was fixed as 08.02.2002. It was mentioned in agreement that possession of land had been delivered to plaintiffs but, in fact, the possession was to be delivered at the time of execution of sale deed.

As per terms of the agreement, sale deed could not be executed on 08.02.2002 due to some domestic problems. The defendant vide writing dated 29.07.2002 extended the date for execution and registration of sale deed till 30.08.2002 and also received Rs. 60,000/- more. On 30.08.2002 the defendant did not turn up for execution of the sale deed. As it was holiday on 30.08.2002, 31.08.2002 and 01.09.2002, the plaintiffs remained present in the office of Tehsildar Fatehgarh Sahib on 02.09.2002 with balance sale-consideration and other allied expenses but defendant did not turn up. They got their presence marked by swearing in an affidavit before Sub-Registrar/Executive Magistrate, Fatehgarh Sahib.

The plaintiffs have always been ready and willing to perform their part of the contract and requested the defendant many times to execute and get registered the sale deed but of no avail resulting in filing of the suit seeking specific performance of agreement to sell dated 09.02.2001.

In the written statement defendant-respondent denied execution of agreement dated 29.07.2002 and receipt dated 29.07.2002 by him in favour of plaintiffs-appellant and extending period of execution of sale deed till 30.08.2002. It was further averred that the agreement propounded by the plaintiff was forged and fabricated and result of fraud to grab the property of defendant in collusion with alleged marginal witnesses. All other averments in plaint were contested and controverted.

Plaintiffs-appellants reasserted their case in replication and pleadings of parties led to the framing of issues as follows:

"1. Whether plaintiffs are entitled to be possession of suit land by way of specific performance as prayed for ? OPP

Whether plaintiffs are entitled to recovery Rs. 3,50,000/- along with interest as prayed for ? OPP.

Whether plaintiffs are entitled for permanent injunction as prayed for ? OPP

Whether the suit is not maintainable in the present form? OPD

Whether the plaintiffs have concealed true and material facts from the Court? OPD

Whether plaintiffs have no cause of action and locus standi to file the present suit? OPD

Whether this court has no jurisdiction to try this suit? OPD

Relief ?"

The Court of Additional Civil Judge (Senior Division), Fatehgarh Sahib decreed suit of plaintiffs vide judgment dated 27.02.2008 in following terms:

"In view of my above findings on issues above, suit of plaintiff is decreed for possession by way of specific performance of agreement to sell dated 9.2.2001 regarding the land fully detailed at letter X in head note of plaint as mentioned in agreement to sell on payment of balance sale price and by deducting Rs. 2,45,000/- paid as earnest money and defendant is restrained from alienating the suit property as mentioned at letter X in head note of plaint by way of sale, mortgage, or in any other manner to any body else except the plaintiff. Decree sheet be prepared. File be consigned to record room."

On appeal being preferred by defendant against judgment and decree dated 27.02.2008, learned Additional District Judge partly accepted appeal and modified the decree awarded by Lower Court in following terms:

"The appeal is accepted partly with costs and plaintiffs are held entitled to recovery of Rs. 2,45,000/- alongwith interest at the rate of 9% per annum from the date of execution of agreement to sell till the filing of suit and pendente lite and future interest at the rate of 6% per annum."

Learned counsel for appellants has argued that defendant has not come up with any appeal against judgment and decree of the first Appellate Court whereby the execution of the agreement dated 09.02.2001 and writing dated 29.07.2002 were held as proved. The only question which arises in this case is as to whether the first Appellate Court had any reason to decline relief of specific performance of agreement executed by defendant. The facts which weighed before the appellate Court while declining the relief of specific performance, were that agreement to sell was in fact a security for loan transaction and the writing dated 29.07.2002 extending the time for execution of the sale deed on payment of Rs. 60,000/- was in fact a calculation of interest on the loan amount which was added in the earnest money. The plea on which the relief of specific performance of agreement was declined, was never put-forth by respondent and the first Appellate Court could not make out a new case. The fact that appellant had not gone to the Sub-Registrar on the date fixed for execution of sale deed dated i.e. 08.02.2002 has been explained when writing dated 29.07.2002 was executed. The first Appellate Court has not exercised its discretion while declining the relief of specific performance on sound and reasonable grounds.

Learned counsel for defendant has argued that agreement in this case on the face of it smack of transaction other than the agreement for sale of land. Had it been an agreement to sell and plaintiffs were ready and willing to perform their part of the contract they would have appeared before the Sub-Registrar to seek the execution and registration of the sale deed on 08.02.2002. As it was not a sale transaction neither the plaintiffs-appellants nor respondent appeared before the Sub-Registrar on the alleged stipulated date i.e. 08.02.2002. The non-serious nature of the document is further depicted from the fact that in the agreement it is mentioned that possession was delivered to plaintiffs but admittedly it was not delivered and is still with the defendant. It is not believable that major part of sale consideration i.e. Rs. 2,45,000/- out of total amount of Rs. 3,50,000/- was paid but the possession was not obtained by the vendee. In the space meant for signature by second marginal witness nobody had signed the agreement. Bhupinder Kaur other vendee was stated to be present at the time of agreement but she had also not signed the agreement. Despite the fact that evidence of defendant was closed by order without any evidence being produced, the above factors are sufficient in itself to decline the relief of specific performance of agreement to the plaintiffs.

Following substantial questions of law were framed in this case vide order dated 21.02.2012 for determination:

"(i) Whether the learned Courts can decline the equitable relief of specific performance when the agreement to sell has been proved and no evidence has been led by defendant?

(ii) Whether first appellate Court can make out a new case for the defendant not pleaded in defence nor any evidence led on it?"

Admittedly, defendant has not led any evidence in this case. It is also admitted that defendant has not come up with the plea that agreement dated 09.02.2001 was towards any loan transaction and the writing dated 29.07.2002 was executed towards interest accrued on loan amount.

Now the question which still survives to answer is as to whether in view of above two facts going in favour of appellants, they could be allowed the equitable relief of specific performance on the basis of evidence led by plaintiffs.

Plaintiffs had examined marginal witness of the agreement namely Joginder Singh as PW-1. He is also marginal witness of writing dated 29.07.2002. Despite the space left by Deed Writer for second witness, nobody has signed either the agreement Ex. P-1 or the writing Ex. P-2 as marginal witness. Joginder Singh witness has stated that Bhupinder Kaur plaintiff-appellant No. 1 was present at the time of agreement but she did not sign it. He has further stated that the rate of land at the time of agreement was 3,50,000/- per acre. The possession of land was delivered to plaintiffs and they are in possession at the spot. However, plaintiff-Jaspal, when appearing as PW-2, has specifically stated that he was not delivered possession at the spot despite mention of this fact in agreement.

Section 20 of Specific Relief Act, 1963 gives discretion to the Court to allow or decline the relief of specific performance. Section 20 reads as follows:

"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."

In this case defendant had denied execution of the agreement. However, certain facts on file reflect that it was certainly not an agreement to sell but was got executed for some other reason.

The first such circumstance to draw above inference is that in the agreement it is specifically mentioned that after receipt of earned money of Rs. 1,85,000/- out of total sale consideration of Rs. 3,50,000/-, possession had been delivered to the proposed vendee. The marginal witness Joginder Singh has also stated that possession at the spot is of Jaspal Singh-plaintiff and the land is lying vacant. It is evident that more than 50% of the sale consideration was paid as per this agreement. When the sale consideration to this tune was paid and this fact had been mentioned in the agreement that the possession of land had been delivered, there was no reason for proposed vendee not to take the possession.

Secondly, even in writing dated 29.07.2002, whereby the period for registration of the sale deed was extended to 30.08.2002, this fact is again mentioned that possession of the land had already been taken by the proposed vendee and further amount of Rs. 60,000/- was paid. It again appears quite strange and unreliable that even after the payment of Rs. 2,45,000/- out of total sale consideration of Rs. 3,50,000/-, appellants despite recital in the agreement dated 29.07.2002 and then in writing dated 20.07.2002 did not take possession of the suit land.

The third circumstance is non-appearance of appellants or respondent-defendant before the sub-Registrar on 08.02.2002 the date settled vide agreement dated 09.02.2001 for execution and registration of sale deed to get the sale deed executed or taking any step whatsoever in that direction. This reflect that parties were not serious about agreement dated 09.02.2001 or were eager to get the sale deed executed. This is why nothing happened from 08.02.2002 to 29.07.2002. During this period neither the plaintiffs served any notice on the defendant nor took any step seeking the specific performance of the agreement. This also reflects the mindset of parties who were not eager to either get the sale deed executed and registered or to take any further step in this regard. Had it been the agreement to sell and the plaintiffs were serious about their transaction under agreement dated 09.02.2001 they would not have remained silent and docile after the date fixed for execution and registration of the sale deed.

The above facts and circumstances are strong indicators that the nature of the transaction between the parties was not of sale transaction but was for some other purpose.

Now the question is as to whether in the absence of any evidence on the part of defendant-respondent the relief of specific performance of agreement can be declined to the appellants. In all fairness the answer in view of the facts and circumstances discussed above, would be that despite the fact that defendant had not produced evidence, it will be inequitable to allow the relief of specific performance to the plaintiffs/appellants.

The arguments of learned counsel for the appellants that Appellate Court could not make out new case, not pleaded by defendant-respondent cannot be disputed. In this regard he has placed reliance on the observation of the Hon''ble Supreme Court in the case of Siddu Venkappa Devadiga Vs. Smt. Rangu S. Devadiga and Others, , of coordinate Bench of this Court in case of Azad Singh and Others Vs. Tarif Singh and Others, and of Privy Council in the case of Siddik Mahomed Shah vs. Mt. Saran and OthersAIR 1930 57 (Privy Council) . In view of the observations in above referred cases, it cannot be disputed that the Court cannot set up a case for either party to a suit beyond its pleadings. But, while exercising its discretion for grant of relief of specific performance it has to look into the entire set of facts and circumstances arising in a case, nature of the agreement and conduct of the parties. In this case, the facts and circumstances discussed above, nature of agreement and conduct of parties are pointer for exercise of court''s discretion in declining relief of specific performance and even while discarding plea set up by first Appellate Court to decline the relief of specific performance to the appellant, for reasons discussed above the judgment and decree of first appellate Court is affirmed.

In view of my above discussion the first substantial question of law is answered against the appellants while the second substantial question of law is answered in favour of the appellant.

As a sequel of my above discussion this appeal has no merits and is dismissed.