Vemula Shanker vs Nakod Pandarinath and Others

This second appeal u/s 100 of the CPC has been preferred against the Judgment and decree dated 4-12-1989 passed in AS No.10 of 1989 on the file of the District Judge, Adilabad, confirming the judgment and decree dated 18-4-1989 passed in OS No.55 of 1984 on the file of the District Munsif, Adilabad. The appellant herein is the defendant and the respondent herein is the plaintiff in the said suit OS No.55 of 1984.

The respondent-plaintiff filed that suit for specific performance of the agreement of sale dated 17-1-1981 (Ex.A1) against the appellant-defendant and in the alternative for return of the advance money paid by him at the time of execution of the said agreement of sale. The trial Court decreed the suit for specific performance of the agreement of sale. The first appellate Court confirmed the said judgment and decree of the trial Court. Aggrieved of that, the defendant has come up with this second appeal.

The only substantial question of law raised by Sri P.S. Murthy, learned Counsel appearing on behalf of the appellant, is that under the provisions of Section 20(2)(b) of the Specific Relief Act, 1963 (hereinafter referred to as ''the Act'') the trial Court as well as the first appellate Court ought not to have granted the relief of specific performance of the agreement of sale in favour of the plaintiff as such a relief causes great hardship to the defendant and refusal to grant such a relief does not cause any hardship to the plaintiff.

Before taking up this point I will refer to the necessary facts in this case. The appellant-defendant is the owner of the house bearing No.2-1-320/1 (hereinafter referred to as ''the suit house'') with three temporary houses in the compound situated in Adilabad Town. The defendant entered into an agreement to sell the said house for Rs.14,500/- and after receiving Rs.9,500/- as earnest money he executed the agreement of sale dated 17-1-1981 (Ex.Al) in favour of the plaintiff. It was agreed under the said agreement that the defendant should execute registered sale deed by December, 1981, after receiving the balance of sale consideration of Rs.5,000/-. Though it is is averred in the agreement of sale that the possession of the suit house was delivered to the plaintiff, but, iii fact no such possession was effected on the date of agreement. The plaintiff got issued notice dated 29-3-1982 (Ex.A6) calling upon the defendant to receive the balance of sale consideration and execute the sale deed but the defendant neither gave a reply nor complied with the request of the plaintiff. Hence, the plaintiff filed the suit for specific performance of the agreement of sale and in the alternative for refund of advance money of Rs.9,500/-paid by him with interest.

The defendant resisted the claim of the plaintiff It is his positive plea that he never agreed to sell the suit house to the plaintiff, but, the agreement was executed as security for the amount of Rs.9,500/- fell due by him to the plaintiff in the business transactions between them and that the plaintiff agreed to give two years time to him to repay the said sum of Rs.9,500/. As regards the demand notice dated 29-3-1982 (Ex.A6) the defendant contends that after receipt of the said notice, he met the plaintiff and reminded him of the promise made by him before the elders-Mahajan Ramulu, Mohd. Bhai and others that he will receive the amount of Rs.9,500/- and, therefore, he did not give any written reply. The defendant also pleaded that he is prepared to pay the said amount of Rs.9,500/-.

The trial Court settled the necessary issues during the trial. The plaintiff got himself examined as PW1 and he also examined the attestor of the agreement of sale as PW2. The plaintiff also filed the documents Exs.A1 to A7. The defendant got himself examined as DW1 and he also examined one elder by name Mohd. Bin Ahmed As DW2, but he did not support his case. The defendant marked Exs.B1 to B6 on his behalf On a consideration of the oral and documentary evidence placed before him, the learned District Munsif held that the defendant failed to substantiate his plea that the suit agreement of sale (Ex.A1) was executed as security for repayment of Rs.9,500/-, that the agreement of sale is true and consequently the plaintiffs suit was decreed with costs for specific performance of the contract of sale. On appeal, the learned District Judge, Adilabad, on reappreciation of the entire evidence on record confirmed the findings of the trial Court and dismissed the appeal. Hence, the defendant has come with this second appeal against the concurrent findings by the two Courts below.

The teamed Counsel for the appellant submits that the appellant-defendant has no other house except the suit house, that if the relief of specific performance is granted to the plaintiff it will result in great hardship to the defendant and its non-performance would involve no such hardship to the plaintiff and that die plaintiff himself has prayed for, in the alternative relief, for refund of the advance amount of Rs.9,500/- and the appellant-defendant is prepared to repay the said amount. The learned Counsel for the appellant further submits that u/s 20 of the Act, this Court can refuse to exercise its discretion to grant the relief of specific performance if the the performance of the contract would cause great hardship to the transferor and no hardship to the transferee under the said contract.

The learned Counsel for the respondent-plaintiff relying on the decision of the Supreme Court in Prakash Chandra Vs. Angadlal and Others, and the decision of our High Court in Sha Peerchand Vs. Jandhyala Venkata Subramanya Jyosyulu and Others, , submits that the ordinary rule is that specific performance of agreement of sale should be granted and the mere fact that the plaintiff sought for refund of the earnest money as an alternative remedy would not disentitle the plaintiff for the relief of specific performance. There is much force in the submissions made by the learned Counsel for the respondent plaintiff.

For proper appreciation, I will quote Section 20 of the Act and it reads as under:

"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 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 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;

(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 I :-- 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 case 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 contract merely on the ground that the contract is not enforceable at the instance of the other party."

The learned Counsel for the appellant laid great emphasis on clause (b) of subsection (2) of Section 20 of the Act wherein it is observed that the Court need not exercise discretion and grant specific performance of agreement of sale where the performance of such contract of sale would involve some hardship on the defendant and its non-performance would involve no such hardship on the plaintiff. Relying on this provision, the learned Counsel Sri P.S. Murthy appearing on behalf of the appellant submits that the defendant has got the suit house only and in case the relief of specific performance is granted to the plaintiff, the defendant will be thrown out of the house into the streets and this causes great hardship to him and, therefore, the alternative relief as prayed for by the plaintiff may be granted to him . It is significant to note that the hardship referred to in clause (b) of sub-section (2) of Section 20 of the Act is the hardship which the defendant did not foresee at the time of entering into the agreement of sale. Further, under 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 case 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 contract. In the instance case, it has been held by both the Courts below that the defendant failed to establish that he executed the suit agreement by way of security for the amount of Rs.9,500/- due by him to the plaintiff, and that the agreement of sale is true, valid and binding on the defendant. Thus, it follows that the defendant had agreed to sell the suit house to the plaintiff for a valid consideration of Rs. 14,500/- and after receiving Rs.9,500/- as earnest money he executed the suit agreement. Thus, the defendant knew about the consequences in entering into the said agreement of sale that he had to vacate the suit house after executing the registered sale deed in favour of the plaintiff. Thus, the hardship which the learned Counsel for the appellant now pleads is not an liardship which the defendant did not foresee at the time when he entered into the agreement of sale. There is also no substance in the contention of the learned Counsel for the appellant, that the defendant never intended to sell the suit house to anybody including the plaintiff. On the other hand, the defendant admitted in his evidence as DV/1 that he handed over the title deeds Exs.A2 to A4 to the plaintiff some time after he executed the agreement of sale(Ex.Al) when the plaintiff brought a prospective purchaser for the. suit house. This very admission made by the defendant discloses his intention to sell the suif house. Therefore, the defendant was fully conscious of the hardship that he may have to undergo if the agreement of sale is acted upon. The evidence and other circumstances in this case do not indicate tliat the plaintiff is interested only in getting back the earnest money which he paid to the defendant under the agreement of sale (Ex. A1). On the other hand, the plaintiff is more particular for the relief of specific performance. In a given case merely because the plaintiff has prayed for alternative relief of damages, in the event of not granting the relief of specific performance, it does not mean that the alternative prayer alone can be granted in order to maintain the balance of convenience even though the plaintiff had successfully proved that he did not violate any of the conditions of the agreement of sale (Ex.Al).

It has been held by the Supreme Court in Prakash Chandra''s case (supra) that "The ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief. The same view was also taken by the learned single Judge of this Court in Sha Peerchand ''s case (supra) stating tliat "Granting the relief of specific performance is the ordinary rule, unless there is any compelling reason to deny the same." hi the instant case, the defendant failed to establish his plea that the agreement of sale (Ex.Al) was executed as a security for the amount due by him to the plaintiff. It has also come on record that the plaintiff did not violate any of the conditions of the agreement of sale (Ex.Al) and that he was always willing and ready to perform his part of the contract. Hence, I do not find any reason not to exercise the discretion of granting the relief of specific performance of agreement of sale in favour of the plaintiff.

The learned Counsel for the appellant also relied on the decision of the Kamataka High Court in Ranganayakamma Vs. N. Govinda Narayan, , wherein the relief of specific performance of the agreement of sale was refused. But tliat decision has no application to the facts in this case. In that case the agreement was entered into with respect to the suit house by the husband of the defendant and the defendant was depending upon the rent that the suit house fetches. In those circumstances the Karnataka High Court held that the discretionary relief of specific performance need not be granted as it deprives the defendant of her maintenance from the income which the suit house fetches. The facts in the present case are entirely different. Hence, the said decision has no application.

There is also no substance in the contention raised by the learned Counsel for the appellant that flic market value of the suit house is more than Rs.35,000/- to Rs.40,000/-. and that the defendant would not have agreed to sell it for a paltry sum of Rs.14,500/- under the agreement of sale (Ex.A1). It is significant to note that the defendant has not taken such a plea in his written statement. Hence, it is not open for the defendant to raise such a plea in this second appeal.

In the light of my above discussion, I do not find any reason to interfere with the well considered Judgment of the first appellate Court confirming the Judgment of the trial Court and decreeing the suit of the respondent-plaintiff for the relief of specific performance of agreement of sale (Ex.Al).

In the result, this second appeal is dismissed with costs.