It is an undisputed fact that the suit
schedule property is self acquired property by late
Pemmada Venkateswara Rao as he had purchased the
said property vide Sale-Deed Document No.5174 of
1970 dated 24.11.1970 from his vendors. It is also
an undisputed fact that the said property is
intestate property. He is survived by his wife, 3
sons and 3 daughters. The said property devolved
upon them in view of Section 8 of Chapter 2 of the
Hindu Succession Act as the defendants are class I
legal heirs in the suit schedule property.
Undisputedly, the Agreement of Sale-Ex.-A1 is
executed only by defendant Nos. 1 and 2. The 3rd
son, mother and 3 sisters who have got equal
shares in the property have not executed the
Agreement of Sale. In view of the matter, the
Agreement of Sale executed by defendant Nos. 1 and
2 who have no absolute right to property in
question cannot confer any right whatsoever upon
the plaintiffs for grant of decree of specific
performance of Agreement of Sale in their favour.
The said agreement is not enforceable in law in
view of Section 17 of the Specific Relief Act in
view of right accrued in favour of defendant Nos. 3
to 6 under Section 8 of the Hindu Succession Act.
The provisions of Section 17 of the Specific Relief
Act in categorical term expressly state that a
Contract to sell or let any immovable property
cannot be specifically enforced in favour of a
vendor or lessor who does not have absolute title
and right upon the party. It is worthwhile to
extract Section 17 of the Specific Relief Act,1963
here :-
“17.-Contract to sell or let property by
one who has no title, not specifically
enforceable.- A contract to sell or let
any immovable property cannot be
specifically enforced in favour of a
vendor or lessor;
(a) who, knowing not to have any
title to the property, has
contracted to sell or let the
property
(b) who, though he entered into
the contract believing that he
had a good title to the
property, cannot at the time
fixed by the parties or by the
court for the completion of the
sale or letting, give the
purchaser or lessee a title free
from reasonable doubt.”
In view of the aforesaid provisions of the Specific
Relief Act, the Agreement of Sale entered between the
plaintiffs and some of the co-sharers who do not have
the absolute title to the suit schedule property is
not enforceable in law. This aspect of the matter has
not been properly appreciated and considered by both
the First Appellate Court and the Second Appellate
Court. Therefore, the impugned judgment is vitiated
in law.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7835 OF 2014
(Arising out of SLP(C) NO. 24653 OF 2012)
PEMMADA PRABHAKAR & ORS. Vs. YOUNGMEN’S VYSYA ASSOCIATION & ORS.
Citation;2014(5)ALLMR921 SC
V.GOPALA GOWDA, J.
Leave granted.
2. This appeal has been filed against the judgment
and final order dated 04.11.2011 passed in the Second
Appeal No. 815 of 2011 by the High Court of
Judicature of Andhra Pradesh at Hyderabad, whereby
the High Court has dismissed the Second Appeal.
3. Certain relevant facts are stated for the purpose
of appreciating the rival legal contentions urged on
behalf of the parties with a view to examine the
correctness of the findings and reasons recorded by
the High Court in the impugned judgment.
For the sake of brevity and convenience, the
parties are referred to in this judgment as per the
rank assigned to them in the original suit
proceedings.
4. The property bearing Door No. 20/42-1-9 with land
measuring about 657-1/3rd sq. yards situated to the
west of Vallabhai Street, Cinema Road, Kakinada
(hereinafter, referred to as the ‘suit schedule
property’) was the self acquired property of one
Pemmada Venkateswara Rao. He died intestate and
survived by wife Syama Sundari, three sons and three
daughters (the defendant Nos. 1 to 6).
5. The plaintiffs-the Youngmen’s Vyasa Association
(who are the respondents herein), instituted
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O.S.No.267 of 1995 for the specific performance of
Agreement of Sale dated 03.05.1993 against the
defendants (the appellants herein). The plaintiffs
alleged that the defendant Nos. 1 and 2, who are
managing the suit schedule property, agreed to sell
the same to plaintiff No. 1.
6. According to the plaintiffs, the defendant Nos. 1
and 2 executed the Agreement of Sale dated 03.05.1993
in favour of plaintiff No. 1 agreeing to sell the
suit schedule property at the rate of Rs.575/- per
sq. yard, the total consideration of which was to be
fixed later after taking the actual measurement.
Later on, the total land value was fixed at
Rs.3,77,967/- for 657-1/3 sq. yards. The defendant
Nos. 1 and 2 received advance amount of Rs.5000/- and
Rs.10,000/- also. Under the Agreement the plaintiff
No. 1 agreed to pay Rs.1,70,000/- to the defendants
within 10 days from the day of vacating the tenants
from the suit schedule property. Rs.50,000/- was to
be paid on 30.11.1993 and that the balance amount of
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Rs.1,50,000/- was to be paid by 30.3.1994. The
defendant Nos. 1 and 2 agreed that they would obtain
the signatures of their 3rd brother-the defendant
No. 3 by 9.05.1993. Defendant Nos. 7 and 8 are the
tenants in the sheds situated in the suit schedule
property. The defendant Nos.1 & 2 stated that their
sisters were married long ago therefore, they had no
interest in the suit schedule property, and that they
would also get the sisters’ signatures on the
agreement.
7. The 2nd Addl. Senior Civil Judge, Kakinada (the
Trial Court) by his judgment dated 12.7.2006
dismissed O.S. No 267/95, in so far as the main
relief for the specific performance of sale is
concerned. The Trial Court has directed the
defendants to refund Rs.5000/- with interest at the
rate of 12% p.a. from 5.03.1993 till the date of
realization and Rs.10,000/- with the interest rate at
12% p.a. from 6.08.1993 till the date of realization.
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8. The Trial Court after considering the oral and
documentary evidence on record, observed that as the
suit schedule property is adjacent to the plaintiff’s
property, taking advantage of the financial
difficulties of defendant Nos. 1 and 2, the
plaintiffs attempted to grab the suit schedule
property and dragged the defendants to the court of
law.
9. The Trial Court further held that the Agreement
of Sale was not valid as the defendant Nos.3 to 6 and
their mother did not give consent to sell the suit
schedule property to the plaintiffs. Accordingly, the
main relief for specific performance was rejected and
the defendants were directed to refund the amount of
advance sale consideration to the plaintiffs with
interest at the rate of 12% p.a.
10. Being aggrieved by the judgment and decree dated
12.7.2006 of the Trial Court, the plaintiffs filed an
appeal being A.S. No. 269 of 2006 before the Court of
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3rd Additional District Judge, Kakinada, the First
Appellate Court.
11. On 28.04.2010 the First Appellate Court allowed
the appeal partly, directing the defendant Nos. 1, 2,
4 and 5 to execute the registered sale deed in favour
of the plaintiff’s Association in respect of their
1/6th share each i.e. 4/6th share by receiving their
respective shares of the balance sale consideration
from the plaintiffs and modified the decree for
specific performance of Agreement of Sale.
12. The First Appellate Court vide its order dated
28.4.2010 held that the transaction between the
parties is real sale transaction and not mere money
transaction and the sale agreement is valid and
binding between the parties and the plaintiffs are
entitled for the first main relief of specific
performance and directed defendant Nos. 1, 2, 4 and 5
to execute sale deed in respect of their 4 shares of
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the suit schedule property after receiving
proportionate sale price.
13. Being aggrieved by the judgment and decree dated
28.04.2010 of the First Appellate Court, the
defendants preferred Second Appeal being S.A. No. 815
of 2011 before the High Court of Judicature of Andhra
Pradesh at Hyderabad whereby the High Court vide
order dated 4.11.2011 dismissed the Second Appeal
which is impugned in this appeal.
14. The High Court held that the approach of the
First Appellate Court in granting the relief of
specific performance directing defendants 1, 2, 4 and
5 to execute sale deed in respect of their shares,
i.e. 4/6th share of the suit schedule property in
favour of the plaintiffs on receipt of their
respective balance consideration which stood
deposited in the court, cannot be faulted with.
15. It was further held by the High Court that the
mother of the defendants was alive when the suit was
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instituted in 1995 and she died on 29.09.2005. She
had one share and after her death, the property would
be divided into 6 shares and the agreement was held
as binding on the defendants 1, 2, 4 and 5.
Therefore, the High Court upheld the decision of the
First Appellate Court and moulded the relief in the
above terms while granting decree of specific
performance of the Agreement of Sale by executing the
sale deed of their share in the property in favour of
the plaintiffs.
16. The following submissions were made by the
learned counsel for both the parties in support of
their claim and counter claim.
17. On behalf of the defendant Nos.1 & 2, it is
contended that their father Pemmada Venkateswara Rao
was engaged in lathe works which incurred heavy loss
and he was allegedly indebted to various creditors.
They approached one Murali Krishna (who had
acquaintance with them) who was the Secretary of the
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plaintiff Association to borrow some money. Taking
advantage of their situation, the Secretary and the
President of the Plaintiff Association obtained the
signatures of defendant Nos. 1 and 2 on a blank sheet
of paper and gave Rs.5000/- on 3.5.1993 and
Rs.10,000/- on 6.8.1993 to them.
18. It was further contended by the learned counsel
that the defendants never intended to sell the suit
schedule property and the transaction with the
plaintiffs Association was only money transaction and
was not a sale transaction with it. A separate
written statement was filed by the 4th defendant to
the same effect.
19. It was further contended by defendant Nos. 1 to 6
that even on the date of execution of Agreement of
Sale their mother was very much alive and, therefore
in the absence of execution of Agreement of Sale by
all the seven co-sharers of the suit schedule
property the suit for specific performance does not
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lie. The learned counsel for the defendants placed
reliance on the decisions of Andhra Pradesh High
Court and this Court in the cases of Kommisetti
Venkatasubbayya v. Karamestti Venkateswarlu1 and
Lourdu Mari David & Ors. v. Louis Chinnaya
Arogiaswamy & Ors.2 in support of their claim.
20. Further, they placed reliance upon the case of
this Court in Rameshwar & Ors. v. Jot Ram & Anr.3.
In the said authority it has been held as follows:
“9…First, its bearing on the right of
action, second, on the nature of the
relief and third, on its impotence to
create or destroy substantive rights.
Where the nature of the relief, as
originally sought, has become obsolete or
unserviceable or a new form of relief will
be more efficacious on account of
developments subsequent to the suit or
even during the appellate stage, it is but
fair that the relief is moulded, varied or
reshaped in the light of updated facts.
Patterson illustrates this position. It is
important that the party claiming the
relief or change of relief must have the
same right from which either the first or
the modified remedy may flow. Subsequent
events in the course of the case cannot be
1 A.I.R. 1971 AP 279
2 (1996) 5 SCC 589
3 (1976) 1 SCC 194
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constitutive of substantive rights
enforceable in that very litigation except
in a narrow category (later spelt out) but
may influence the equitable jurisdiction
to mould reliefs. Conversely, where rights
have already vested in a party, they
cannot be nullified or negated by
subsequent events save where there is a
change in the law and it is made
applicable at any stage. Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri
falls in this category. Courts of justice
may, when the compelling equities of a
case oblige them, shape reliefs — cannot
deny rights — to make them justly relevant
in the updated circumstances. Where the
relief is discretionary, courts may
exercise this jurisdiction to avoid
injustice. Likewise, where the right to
the remedy depends, under the statute
itself, on the presence or absence of
certain basic facts at the time the relief
is to be ultimately granted, the Court,
even in appeal, can take note of such
supervening facts with fundamental
impact…”
(Emphasis supplied)
21. The High court held that defendants pleaded
falsehood at the time of execution of the Agreement
of Sale by stating that their mother had predeceased
their father. The agreement and the endorsement
thereon made by defendant Nos.1 and 2 had swayed
discretion of the High Court in favour of the
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plaintiffs which is an Association engaged in the
welfare of the community.
22. The High Court further held that the suit
schedule property was not purchased for unlawful gain
of an individual and that the First Appellate Court
considered the entire evidence on record and
exercised its sound jurisdiction and modified the
judgment of the Trial Court by granting a decree of
specific performance as per the terms stipulated
therein.
23. The High Court dismissed the second appeal
without adverting to the substantial questions of law
that were framed in the second appeal at the
admission stage itself stating that there is no
substantial question of law for its adjudication. The
First Appellate Court and the Second Appellate Court
committed serious error in law in not noticing the
relevant important findings of fact recorded by the
Trial Court on the contentious issues on proper
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appreciation of pleadings and evidence on record
with reference to the legal submission made on behalf
of the parties. The Trial Court after proper
appreciation of evidence on record, particularly,
Ex.-A1, the Agreement of Sale, has held that it is
not a valid agreement and no rights can flow from it
in favour of the plaintiffs in the light of the fact
that the signatures of defendant Nos. 1 and 2 were
obtained on different dates on blank papers as they
were in financial crisis and that fact is proved by
producing Exs.-B1 to B-8 to show that the entire
family (defendant Nos. 1 to 6) were in financial
crisis and they were forced to pay the debts to their
creditors. Therefore, they were in urgent need of
money and they approached the PW-1 for financial
help, who obtained the signatures of defendant Nos. 1
and 2 on blank paper and the same was fabricated as a
receipt. The said receipt was not signed by defendant
Nos. 3 to 6. The mother of the defendant Nos. 1 and 2
is one of the co-sharers of the suit schedule
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property as a class-I legal heir to succeed to the
intestate property of her deceased husband, which
was his self acquired property left by him, as he had
purchased the same vide Sale-Deed document No.
5174/1970 dated 24.11.1970 from his vendors. In fact,
there is a reference made in this regard in the
Agreement of Sale executed by defendant Nos. 1 and 2
to the effect that after demise of Pemmada
Venkateswara Rao, the father of defendant Nos. 1 to
6, the property devolved upon them jointly and they
are enjoying with absolute rights. As per Section 8
of the Hindu Succession Act, 1956 the general rules
of succession would be applicable in the case of a
male Hindu dying intestate, relevant portion of which
reads as under :-
“8. General rules of succession in the
case of males.- The property of a male
Hindu dying intestate shall devolve
according to the provisions of this
Chapter-
(a) Firstly, upon the heirs, being the
relatives specified in class I of the
Schedule;
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XXX XXX XXX”
In the Schedule of the said Act, class I heirs are
son, daughter, widow, mother and others. In view of
the enumeration of the class I heirs in the Schedule,
the mother and sisters of the defendant Nos. 1 and 2
are also co-sharers of the property left intestate
by the deceased Pemmada Venkateswara Rao. As could be
seen from the Agreement of Sale-Ex.-A1 undisputedly,
the third brother and 3 sisters, (defendant Nos. 3 to
6) and their mother have not executed the Agreement
of Sale in favour of the plaintiffs. Therefore, the
same is not enforceable under Section 17 of the
Specific Relief Act, 1963. The mother lived upto
September, 2005, the aforesaid legal heirs of
deceased Pemmada Venkateswara Rao got equal shares in
the suit schedule property.
24. It is further contended on behalf of the
defendants that the First Appellate Court and the
High Court have failed in not applying the legal
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principle laid down by this Court in the case of
Lourdu Mari David & Ors. (supra), wherein this Court
held that the party who seeks to avail of the
equitable jurisdiction of a court and specific
performance decree being equitable relief must come
to the court with clean hands. In other words, the
party who makes false allegations against the
defendants does not come with clean hands and
therefore, it is not entitled to the equitable relief
of specific performance decree from the court.
25. Another legal contention urged on behalf of the
defendants is that the High Court has erroneously
come to the conclusion on facts and evidence on
record and it has affirmed the divergent findings of
fact recorded by the First Appellate Court without
examining and answering the substantial questions
of law framed in the Second Appeal and it has
erroneously dismissed the appeal holding that the
suit schedule property was not purchased by the
plaintiffs for unlawful gain of an individual. The
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said property is probably purchased by the plaintiffs
to put it to use for the purpose of the community.
The High Court without considering the legal
submissions urged on behalf of the defendants
adjudicated the rights of the parties ignoring
certain facts, evidence on record and legal
contentions urged. It has erroneously held that the
plaintiffs are entitled for the relief of specific
performance while the Agreement of Sale is not
enforceable under Section 17 of the Specific Relief
Act, 1963, in view of the fact that all the legal
heirs of the deceased Pemmada Venkateswara Rao are
not parties to the Agreement of Sale and the
defendant Nos. 1 and 2 do not have absolute title
and right upon the entire suit schedule property.
Even assuming for the sake of argument that the
Agreement of Sale is valid, the same could not have
been enforced against the defendants as the
plaintiffs have committed breach of the contract as
agreed upon by them as per clause 2 of the
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penultimate paragraph Nos. 2 and 3 of the Agreement
of Sale. The plaintiffs gave a sum of Rs.5,000/- &
Rs. 10,000/- as an advance amount towards sale
consideration and the remaining sale consideration,
i.e.(i)an amount of Rs.1,70,000/- which was to be
paid within 10 days from the day of vacating the
tenants in the property, (ii) Rs.50,000/- to be paid
on 30.11.1993 and the remaining sale consideration of
Rs.1,50,000/- to be paid on or before 30.3.1994 was
not paid to the defendant Nos. 1 and 2.
26. It is also contended by the learned counsel that
the First Appellate Court and the Second Appellate
Court have not exercised their discretionary powers
as required under Section 20(2) of the Specific
Relief Act for decreeing the specific performance in
favour of the plaintiffs, even though, the
defendants have made out a case before the Trial
Court that the plaintiffs are not entitled for the
decree for specific performance. Therefore, the
First Appellate Court and the Second Appellate Court
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have gravely erred in not exercising their
discretionary power under Section 20(2) of the
Specific Relief Act at the time of passing decree for
specific performance in favour of the plaintiffs,
which is not only erroneous in law but also vitiated
in law and therefore, the same is liable to be set
aside.
27. On the contrary, the learned counsel for
the plaintiffs has sought to justify the impugned
judgment contending that the Second Appellate Court
in exercise of its appellate jurisdiction after
examining the facts and evidence on record has held
that the substantial questions of law framed by the
defendants in the second appeal, on the divergent
findings of fact recorded by the First Appellate
Court would not arise. Decreeing the suit by the
First Appellate Court as prayed by the plaintiffs is
correct as it has set aside the decree of the Trial
Court. It is further urged that the High Court is
right in dismissing the second appeal and therefore,
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the same does not call for interference by this Court
as there is no substantial question of law which
would arise for consideration. Therefore, the learned
counsel for the respondent-plaintiffs prayed for
dismissal of this civil appeal as the same is devoid
of merit.
28. With reference to the above said rival
contentions, the following points would arise for our
consideration :-
(1) Whether the plaintiffs are entitled
for the decree for specific performance
of the Agreement of Sale (Ex.-A1)
when Agreement of Sale entered between
the plaintiffs and defendant Nos. 1 and
2 who do not have absolute title to the
property?
(2) Whether in the absence of execution of
the Agreement of Sale-Ex.-A1 by the
other defendants/co-sharers is it valid,
even assuming that Agreement of Sale is
valid, there is breach of terms and
conditions of the Contract on the part
of the plaintiffs in not paying the sale
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consideration amount of Rs. 1,70,000/-
within 10 days from the day of vacating
the tenants, Rs.50,000/- on 30.11.1993
and an amount of Rs.1,50,000/- on or
before 30.3.1994 to the defendants and
plaintiffs are entitled for decree of
specific performance of the Agreement of
Sale?
(3) Whether the plaintiffs are entitled for
discretionary relief of specific
performance under Section 20(2) of the
Specific Relief Act when it has not
approached the court with clean hands?
(4) What relief?
Answer to Point No. 1
29. It is an undisputed fact that the suit
schedule property is self acquired property by late
Pemmada Venkateswara Rao as he had purchased the
said property vide Sale-Deed Document No.5174 of
1970 dated 24.11.1970 from his vendors. It is also
an undisputed fact that the said property is
intestate property. He is survived by his wife, 3
sons and 3 daughters. The said property devolved
upon them in view of Section 8 of Chapter 2 of the
Hindu Succession Act as the defendants are class I
legal heirs in the suit schedule property.
Undisputedly, the Agreement of Sale-Ex.-A1 is
executed only by defendant Nos. 1 and 2. The 3rd
son, mother and 3 sisters who have got equal
shares in the property have not executed the
Agreement of Sale. In view of the matter, the
Agreement of Sale executed by defendant Nos. 1 and
2 who have no absolute right to property in
question cannot confer any right whatsoever upon
the plaintiffs for grant of decree of specific
performance of Agreement of Sale in their favour.
The said agreement is not enforceable in law in
view of Section 17 of the Specific Relief Act in
view of right accrued in favour of defendant Nos. 3
to 6 under Section 8 of the Hindu Succession Act.
The provisions of Section 17 of the Specific Relief
Act in categorical term expressly state that a
Contract to sell or let any immovable property
cannot be specifically enforced in favour of a
vendor or lessor who does not have absolute title
and right upon the party. It is worthwhile to
extract Section 17 of the Specific Relief Act,1963
here :-
“17.-Contract to sell or let property by
one who has no title, not specifically
enforceable.- A contract to sell or let
any immovable property cannot be
specifically enforced in favour of a
vendor or lessor;
(a) who, knowing not to have any
title to the property, has
contracted to sell or let the
property
(b) who, though he entered into
the contract believing that he
had a good title to the
property, cannot at the time
fixed by the parties or by the
court for the completion of the
sale or letting, give the
purchaser or lessee a title free
from reasonable doubt.”
In view of the aforesaid provisions of the Specific
Relief Act, the Agreement of Sale entered between the
plaintiffs and some of the co-sharers who do not have
the absolute title to the suit schedule property is
not enforceable in law. This aspect of the matter has
not been properly appreciated and considered by both
the First Appellate Court and the Second Appellate
Court. Therefore, the impugned judgment is vitiated
in law.
30. Even assuming for the sake of argument that the
agreement is valid, the names of three sons are
mentioned in Agreement of Sale, out of whom the
agreement is executed by defendant Nos. 1 and 2 and
they assured that they would get the signatures of
the 3rd brother namely, Srinivasa Rao and also the
remaining 3 sisters. At the time of execution of this
agreement signatures were not obtained. Therefore,
the agreement is not executed by all the co-sharers
of the property which fact is evident from the
recitals of the document itself. Hence, the
plaintiffs are not entitled for specific performance
decree. This vital factual and legal aspect has been
ignored by both the First Appellate Court and the
Second Appellate Court. Therefore, the impugned
judgment is vitiated both on facts and law.
Accordingly, the point No. 1 is answered in favour of
the defendants.
Answer to Point No. 2
31. The second point is also required to be answered
against the plaintiffs for the following reasons:-
As could be seen from the Agreement of Sale
document marked as Ex.-A1 and the pleadings of the
parties payment of sale consideration was agreed to
be paid to the defendant Nos. 1 and 2 as per
following terms of the agreement :-
“… (i) an amount of Rs.1,70,000/- shall
be paid by Vendee to Vendors within 10
days from the day of vacating the
tenants in the property, (ii) Rs.
50,000/- shall be paid on 30.11.1993.,
(iii) the remaining sale consideration
of Rs.1,50,000/- shall be paid on or
before 30.3.1994.”
32. It is an undisputed fact that except payment of
Rs.5,000/- and Rs.10,000/- paid by the purchaserPage
plaintiff No.1 to the defendant Nos. 1 and 2
according to the Agreement of Sale, the remaining
installment i.e. an amount of Rs.1,70,000/- which was
to be paid to the Vendors within 10 days from the day
of vacating the tenants in the property was not paid.
Even assuming that the amount could have been paid
had the tenants vacated the schedule property then
the remaining part of the sale consideration agreed
to be paid as notified under clauses (ii) and (iii)
as per aforesaid paragraph of the Agreement of Sale
undisputedly not paid to the defendant Nos. 1 and 2.
Therefore, there is breach of contract on the part of
the plaintiffs as could be seen from the agreement of
sale regarding the payment of part sale consideration
amount. For this reason itself plaintiffs are not
entitled for a decree of specific performance.
Answer to the Point Nos. 3
33. Point No. 3 is also answered in favour of the
defendants for the following reasons:-
It is an undisputed fact that the plaintiffs have
not approached the Trial Court with clean hands. It
is evident from the pleadings of the Agreement of
Sale which is produced for the decree for specific
performance of Agreement of Sale as the plaintiffs
did not obtain the signatures of all the co-sharers
of the property namely, the mother of the defendants,
the third brother and 3 sisters. Therefore, the
agreement is not enforceable in law as the persons
who have executed the sale deed, did not have the
absolute title of the property. Apart from the said
legal lacuna, the terms and conditions of the
Agreement of Sale for payment of sale consideration
agreed to be paid by the first plaintiff in
installments within the period stipulated as
indicated above were not paid. The First Appellate
Court and the High Court have not exercised their
power under Section 20(2) of the Specific Relief Act
which by itself is the substantial question of law
which fell for consideration before the High Court as
the First Appellate Court failed to consider this
important aspect of the matter and exercised its
power while determining the rights of the party,
particularly, in the light of the unenforceable
contract between the plaintiffs against the
defendants as all of them are not parties to the
Agreement of Sale document (Ex.-A1) and the
executants viz. defendant Nos. 1 and 2 have not
acquired absolute title to the property in question.
Therefore, the impugned judgment is vitiated and
liable to be set aside.
Answer to Point No. 4
34. Though we have answered the questions of law
framed in this appeal in favour of the defendants,
the learned counsel for the defendants during the
course of arguments, has offered some monetary
compensation in favour of the plaintiffs if this
Court set aside the impugned judgment and decree of
specific performance granted in their favour. Though,
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the defendants on merits have succeeded in this case
for the reasons recorded by us on the substantial
questions of law that have been framed by us on
appreciation of facts and legal evidence on record,
having regard to the peculiar facts and circumstances
of the case particularly, the execution of Agreement
of Sale, Ex. A-1 by defendant Nos. 1 and 2 on
3.5.1993, after receiving part consideration of
Rs.15,000/-, and the submission made by the learned
counsel for the defendants, it would be just and
proper for this Court to award a sum of Rs.6,00,000/-
by lump-sum amount of compensation to the plaintiffs
within 3 months from the date of receipt of a copy of
this judgment as provided under Section 22 of the
Specific Relief Act.
35. Since, we have answered point Nos. 1 to 4 in
favour of the defendants and against the plaintiffs,
the appeal of the defendants must succeed.
Accordingly, the impugned judgment and decree passed
by the High Court in affirming the judgment and
decree of the First Appellate Court, is set aside.
The judgment and decree of the Trial Court is
restored with modification that the defendants shall
pay a sum of Rs.6,00,000/- to the plaintiffs as lumpsum
compensation within 3 months from the date of
receipt of copy of this order. The appeal is allowed
in the above said terms. No costs.
……………………………………………………………………J.
[DIPAK MISRA]
……………………………………………………………………J.
[V. GOPALA GOWDA]
New Delhi,
August 20,2014
Print Page
schedule property is self acquired property by late
Pemmada Venkateswara Rao as he had purchased the
said property vide Sale-Deed Document No.5174 of
1970 dated 24.11.1970 from his vendors. It is also
an undisputed fact that the said property is
intestate property. He is survived by his wife, 3
sons and 3 daughters. The said property devolved
upon them in view of Section 8 of Chapter 2 of the
Hindu Succession Act as the defendants are class I
legal heirs in the suit schedule property.
Undisputedly, the Agreement of Sale-Ex.-A1 is
executed only by defendant Nos. 1 and 2. The 3rd
son, mother and 3 sisters who have got equal
shares in the property have not executed the
Agreement of Sale. In view of the matter, the
Agreement of Sale executed by defendant Nos. 1 and
2 who have no absolute right to property in
question cannot confer any right whatsoever upon
the plaintiffs for grant of decree of specific
performance of Agreement of Sale in their favour.
The said agreement is not enforceable in law in
view of Section 17 of the Specific Relief Act in
view of right accrued in favour of defendant Nos. 3
to 6 under Section 8 of the Hindu Succession Act.
The provisions of Section 17 of the Specific Relief
Act in categorical term expressly state that a
Contract to sell or let any immovable property
cannot be specifically enforced in favour of a
vendor or lessor who does not have absolute title
and right upon the party. It is worthwhile to
extract Section 17 of the Specific Relief Act,1963
here :-
“17.-Contract to sell or let property by
one who has no title, not specifically
enforceable.- A contract to sell or let
any immovable property cannot be
specifically enforced in favour of a
vendor or lessor;
(a) who, knowing not to have any
title to the property, has
contracted to sell or let the
property
(b) who, though he entered into
the contract believing that he
had a good title to the
property, cannot at the time
fixed by the parties or by the
court for the completion of the
sale or letting, give the
purchaser or lessee a title free
from reasonable doubt.”
In view of the aforesaid provisions of the Specific
Relief Act, the Agreement of Sale entered between the
plaintiffs and some of the co-sharers who do not have
the absolute title to the suit schedule property is
not enforceable in law. This aspect of the matter has
not been properly appreciated and considered by both
the First Appellate Court and the Second Appellate
Court. Therefore, the impugned judgment is vitiated
in law.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7835 OF 2014
(Arising out of SLP(C) NO. 24653 OF 2012)
PEMMADA PRABHAKAR & ORS. Vs. YOUNGMEN’S VYSYA ASSOCIATION & ORS.
Citation;2014(5)ALLMR921 SC
V.GOPALA GOWDA, J.
Leave granted.
2. This appeal has been filed against the judgment
and final order dated 04.11.2011 passed in the Second
Appeal No. 815 of 2011 by the High Court of
Judicature of Andhra Pradesh at Hyderabad, whereby
the High Court has dismissed the Second Appeal.
3. Certain relevant facts are stated for the purpose
of appreciating the rival legal contentions urged on
behalf of the parties with a view to examine the
correctness of the findings and reasons recorded by
the High Court in the impugned judgment.
For the sake of brevity and convenience, the
parties are referred to in this judgment as per the
rank assigned to them in the original suit
proceedings.
4. The property bearing Door No. 20/42-1-9 with land
measuring about 657-1/3rd sq. yards situated to the
west of Vallabhai Street, Cinema Road, Kakinada
(hereinafter, referred to as the ‘suit schedule
property’) was the self acquired property of one
Pemmada Venkateswara Rao. He died intestate and
survived by wife Syama Sundari, three sons and three
daughters (the defendant Nos. 1 to 6).
5. The plaintiffs-the Youngmen’s Vyasa Association
(who are the respondents herein), instituted
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O.S.No.267 of 1995 for the specific performance of
Agreement of Sale dated 03.05.1993 against the
defendants (the appellants herein). The plaintiffs
alleged that the defendant Nos. 1 and 2, who are
managing the suit schedule property, agreed to sell
the same to plaintiff No. 1.
6. According to the plaintiffs, the defendant Nos. 1
and 2 executed the Agreement of Sale dated 03.05.1993
in favour of plaintiff No. 1 agreeing to sell the
suit schedule property at the rate of Rs.575/- per
sq. yard, the total consideration of which was to be
fixed later after taking the actual measurement.
Later on, the total land value was fixed at
Rs.3,77,967/- for 657-1/3 sq. yards. The defendant
Nos. 1 and 2 received advance amount of Rs.5000/- and
Rs.10,000/- also. Under the Agreement the plaintiff
No. 1 agreed to pay Rs.1,70,000/- to the defendants
within 10 days from the day of vacating the tenants
from the suit schedule property. Rs.50,000/- was to
be paid on 30.11.1993 and that the balance amount of
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Rs.1,50,000/- was to be paid by 30.3.1994. The
defendant Nos. 1 and 2 agreed that they would obtain
the signatures of their 3rd brother-the defendant
No. 3 by 9.05.1993. Defendant Nos. 7 and 8 are the
tenants in the sheds situated in the suit schedule
property. The defendant Nos.1 & 2 stated that their
sisters were married long ago therefore, they had no
interest in the suit schedule property, and that they
would also get the sisters’ signatures on the
agreement.
7. The 2nd Addl. Senior Civil Judge, Kakinada (the
Trial Court) by his judgment dated 12.7.2006
dismissed O.S. No 267/95, in so far as the main
relief for the specific performance of sale is
concerned. The Trial Court has directed the
defendants to refund Rs.5000/- with interest at the
rate of 12% p.a. from 5.03.1993 till the date of
realization and Rs.10,000/- with the interest rate at
12% p.a. from 6.08.1993 till the date of realization.
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8. The Trial Court after considering the oral and
documentary evidence on record, observed that as the
suit schedule property is adjacent to the plaintiff’s
property, taking advantage of the financial
difficulties of defendant Nos. 1 and 2, the
plaintiffs attempted to grab the suit schedule
property and dragged the defendants to the court of
law.
9. The Trial Court further held that the Agreement
of Sale was not valid as the defendant Nos.3 to 6 and
their mother did not give consent to sell the suit
schedule property to the plaintiffs. Accordingly, the
main relief for specific performance was rejected and
the defendants were directed to refund the amount of
advance sale consideration to the plaintiffs with
interest at the rate of 12% p.a.
10. Being aggrieved by the judgment and decree dated
12.7.2006 of the Trial Court, the plaintiffs filed an
appeal being A.S. No. 269 of 2006 before the Court of
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3rd Additional District Judge, Kakinada, the First
Appellate Court.
11. On 28.04.2010 the First Appellate Court allowed
the appeal partly, directing the defendant Nos. 1, 2,
4 and 5 to execute the registered sale deed in favour
of the plaintiff’s Association in respect of their
1/6th share each i.e. 4/6th share by receiving their
respective shares of the balance sale consideration
from the plaintiffs and modified the decree for
specific performance of Agreement of Sale.
12. The First Appellate Court vide its order dated
28.4.2010 held that the transaction between the
parties is real sale transaction and not mere money
transaction and the sale agreement is valid and
binding between the parties and the plaintiffs are
entitled for the first main relief of specific
performance and directed defendant Nos. 1, 2, 4 and 5
to execute sale deed in respect of their 4 shares of
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the suit schedule property after receiving
proportionate sale price.
13. Being aggrieved by the judgment and decree dated
28.04.2010 of the First Appellate Court, the
defendants preferred Second Appeal being S.A. No. 815
of 2011 before the High Court of Judicature of Andhra
Pradesh at Hyderabad whereby the High Court vide
order dated 4.11.2011 dismissed the Second Appeal
which is impugned in this appeal.
14. The High Court held that the approach of the
First Appellate Court in granting the relief of
specific performance directing defendants 1, 2, 4 and
5 to execute sale deed in respect of their shares,
i.e. 4/6th share of the suit schedule property in
favour of the plaintiffs on receipt of their
respective balance consideration which stood
deposited in the court, cannot be faulted with.
15. It was further held by the High Court that the
mother of the defendants was alive when the suit was
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instituted in 1995 and she died on 29.09.2005. She
had one share and after her death, the property would
be divided into 6 shares and the agreement was held
as binding on the defendants 1, 2, 4 and 5.
Therefore, the High Court upheld the decision of the
First Appellate Court and moulded the relief in the
above terms while granting decree of specific
performance of the Agreement of Sale by executing the
sale deed of their share in the property in favour of
the plaintiffs.
16. The following submissions were made by the
learned counsel for both the parties in support of
their claim and counter claim.
17. On behalf of the defendant Nos.1 & 2, it is
contended that their father Pemmada Venkateswara Rao
was engaged in lathe works which incurred heavy loss
and he was allegedly indebted to various creditors.
They approached one Murali Krishna (who had
acquaintance with them) who was the Secretary of the
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plaintiff Association to borrow some money. Taking
advantage of their situation, the Secretary and the
President of the Plaintiff Association obtained the
signatures of defendant Nos. 1 and 2 on a blank sheet
of paper and gave Rs.5000/- on 3.5.1993 and
Rs.10,000/- on 6.8.1993 to them.
18. It was further contended by the learned counsel
that the defendants never intended to sell the suit
schedule property and the transaction with the
plaintiffs Association was only money transaction and
was not a sale transaction with it. A separate
written statement was filed by the 4th defendant to
the same effect.
19. It was further contended by defendant Nos. 1 to 6
that even on the date of execution of Agreement of
Sale their mother was very much alive and, therefore
in the absence of execution of Agreement of Sale by
all the seven co-sharers of the suit schedule
property the suit for specific performance does not
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lie. The learned counsel for the defendants placed
reliance on the decisions of Andhra Pradesh High
Court and this Court in the cases of Kommisetti
Venkatasubbayya v. Karamestti Venkateswarlu1 and
Lourdu Mari David & Ors. v. Louis Chinnaya
Arogiaswamy & Ors.2 in support of their claim.
20. Further, they placed reliance upon the case of
this Court in Rameshwar & Ors. v. Jot Ram & Anr.3.
In the said authority it has been held as follows:
“9…First, its bearing on the right of
action, second, on the nature of the
relief and third, on its impotence to
create or destroy substantive rights.
Where the nature of the relief, as
originally sought, has become obsolete or
unserviceable or a new form of relief will
be more efficacious on account of
developments subsequent to the suit or
even during the appellate stage, it is but
fair that the relief is moulded, varied or
reshaped in the light of updated facts.
Patterson illustrates this position. It is
important that the party claiming the
relief or change of relief must have the
same right from which either the first or
the modified remedy may flow. Subsequent
events in the course of the case cannot be
1 A.I.R. 1971 AP 279
2 (1996) 5 SCC 589
3 (1976) 1 SCC 194
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constitutive of substantive rights
enforceable in that very litigation except
in a narrow category (later spelt out) but
may influence the equitable jurisdiction
to mould reliefs. Conversely, where rights
have already vested in a party, they
cannot be nullified or negated by
subsequent events save where there is a
change in the law and it is made
applicable at any stage. Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri
falls in this category. Courts of justice
may, when the compelling equities of a
case oblige them, shape reliefs — cannot
deny rights — to make them justly relevant
in the updated circumstances. Where the
relief is discretionary, courts may
exercise this jurisdiction to avoid
injustice. Likewise, where the right to
the remedy depends, under the statute
itself, on the presence or absence of
certain basic facts at the time the relief
is to be ultimately granted, the Court,
even in appeal, can take note of such
supervening facts with fundamental
impact…”
(Emphasis supplied)
21. The High court held that defendants pleaded
falsehood at the time of execution of the Agreement
of Sale by stating that their mother had predeceased
their father. The agreement and the endorsement
thereon made by defendant Nos.1 and 2 had swayed
discretion of the High Court in favour of the
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plaintiffs which is an Association engaged in the
welfare of the community.
22. The High Court further held that the suit
schedule property was not purchased for unlawful gain
of an individual and that the First Appellate Court
considered the entire evidence on record and
exercised its sound jurisdiction and modified the
judgment of the Trial Court by granting a decree of
specific performance as per the terms stipulated
therein.
23. The High Court dismissed the second appeal
without adverting to the substantial questions of law
that were framed in the second appeal at the
admission stage itself stating that there is no
substantial question of law for its adjudication. The
First Appellate Court and the Second Appellate Court
committed serious error in law in not noticing the
relevant important findings of fact recorded by the
Trial Court on the contentious issues on proper
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appreciation of pleadings and evidence on record
with reference to the legal submission made on behalf
of the parties. The Trial Court after proper
appreciation of evidence on record, particularly,
Ex.-A1, the Agreement of Sale, has held that it is
not a valid agreement and no rights can flow from it
in favour of the plaintiffs in the light of the fact
that the signatures of defendant Nos. 1 and 2 were
obtained on different dates on blank papers as they
were in financial crisis and that fact is proved by
producing Exs.-B1 to B-8 to show that the entire
family (defendant Nos. 1 to 6) were in financial
crisis and they were forced to pay the debts to their
creditors. Therefore, they were in urgent need of
money and they approached the PW-1 for financial
help, who obtained the signatures of defendant Nos. 1
and 2 on blank paper and the same was fabricated as a
receipt. The said receipt was not signed by defendant
Nos. 3 to 6. The mother of the defendant Nos. 1 and 2
is one of the co-sharers of the suit schedule
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property as a class-I legal heir to succeed to the
intestate property of her deceased husband, which
was his self acquired property left by him, as he had
purchased the same vide Sale-Deed document No.
5174/1970 dated 24.11.1970 from his vendors. In fact,
there is a reference made in this regard in the
Agreement of Sale executed by defendant Nos. 1 and 2
to the effect that after demise of Pemmada
Venkateswara Rao, the father of defendant Nos. 1 to
6, the property devolved upon them jointly and they
are enjoying with absolute rights. As per Section 8
of the Hindu Succession Act, 1956 the general rules
of succession would be applicable in the case of a
male Hindu dying intestate, relevant portion of which
reads as under :-
“8. General rules of succession in the
case of males.- The property of a male
Hindu dying intestate shall devolve
according to the provisions of this
Chapter-
(a) Firstly, upon the heirs, being the
relatives specified in class I of the
Schedule;
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XXX XXX XXX”
In the Schedule of the said Act, class I heirs are
son, daughter, widow, mother and others. In view of
the enumeration of the class I heirs in the Schedule,
the mother and sisters of the defendant Nos. 1 and 2
are also co-sharers of the property left intestate
by the deceased Pemmada Venkateswara Rao. As could be
seen from the Agreement of Sale-Ex.-A1 undisputedly,
the third brother and 3 sisters, (defendant Nos. 3 to
6) and their mother have not executed the Agreement
of Sale in favour of the plaintiffs. Therefore, the
same is not enforceable under Section 17 of the
Specific Relief Act, 1963. The mother lived upto
September, 2005, the aforesaid legal heirs of
deceased Pemmada Venkateswara Rao got equal shares in
the suit schedule property.
24. It is further contended on behalf of the
defendants that the First Appellate Court and the
High Court have failed in not applying the legal
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principle laid down by this Court in the case of
Lourdu Mari David & Ors. (supra), wherein this Court
held that the party who seeks to avail of the
equitable jurisdiction of a court and specific
performance decree being equitable relief must come
to the court with clean hands. In other words, the
party who makes false allegations against the
defendants does not come with clean hands and
therefore, it is not entitled to the equitable relief
of specific performance decree from the court.
25. Another legal contention urged on behalf of the
defendants is that the High Court has erroneously
come to the conclusion on facts and evidence on
record and it has affirmed the divergent findings of
fact recorded by the First Appellate Court without
examining and answering the substantial questions
of law framed in the Second Appeal and it has
erroneously dismissed the appeal holding that the
suit schedule property was not purchased by the
plaintiffs for unlawful gain of an individual. The
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said property is probably purchased by the plaintiffs
to put it to use for the purpose of the community.
The High Court without considering the legal
submissions urged on behalf of the defendants
adjudicated the rights of the parties ignoring
certain facts, evidence on record and legal
contentions urged. It has erroneously held that the
plaintiffs are entitled for the relief of specific
performance while the Agreement of Sale is not
enforceable under Section 17 of the Specific Relief
Act, 1963, in view of the fact that all the legal
heirs of the deceased Pemmada Venkateswara Rao are
not parties to the Agreement of Sale and the
defendant Nos. 1 and 2 do not have absolute title
and right upon the entire suit schedule property.
Even assuming for the sake of argument that the
Agreement of Sale is valid, the same could not have
been enforced against the defendants as the
plaintiffs have committed breach of the contract as
agreed upon by them as per clause 2 of the
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penultimate paragraph Nos. 2 and 3 of the Agreement
of Sale. The plaintiffs gave a sum of Rs.5,000/- &
Rs. 10,000/- as an advance amount towards sale
consideration and the remaining sale consideration,
i.e.(i)an amount of Rs.1,70,000/- which was to be
paid within 10 days from the day of vacating the
tenants in the property, (ii) Rs.50,000/- to be paid
on 30.11.1993 and the remaining sale consideration of
Rs.1,50,000/- to be paid on or before 30.3.1994 was
not paid to the defendant Nos. 1 and 2.
26. It is also contended by the learned counsel that
the First Appellate Court and the Second Appellate
Court have not exercised their discretionary powers
as required under Section 20(2) of the Specific
Relief Act for decreeing the specific performance in
favour of the plaintiffs, even though, the
defendants have made out a case before the Trial
Court that the plaintiffs are not entitled for the
decree for specific performance. Therefore, the
First Appellate Court and the Second Appellate Court
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have gravely erred in not exercising their
discretionary power under Section 20(2) of the
Specific Relief Act at the time of passing decree for
specific performance in favour of the plaintiffs,
which is not only erroneous in law but also vitiated
in law and therefore, the same is liable to be set
aside.
27. On the contrary, the learned counsel for
the plaintiffs has sought to justify the impugned
judgment contending that the Second Appellate Court
in exercise of its appellate jurisdiction after
examining the facts and evidence on record has held
that the substantial questions of law framed by the
defendants in the second appeal, on the divergent
findings of fact recorded by the First Appellate
Court would not arise. Decreeing the suit by the
First Appellate Court as prayed by the plaintiffs is
correct as it has set aside the decree of the Trial
Court. It is further urged that the High Court is
right in dismissing the second appeal and therefore,
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the same does not call for interference by this Court
as there is no substantial question of law which
would arise for consideration. Therefore, the learned
counsel for the respondent-plaintiffs prayed for
dismissal of this civil appeal as the same is devoid
of merit.
28. With reference to the above said rival
contentions, the following points would arise for our
consideration :-
(1) Whether the plaintiffs are entitled
for the decree for specific performance
of the Agreement of Sale (Ex.-A1)
when Agreement of Sale entered between
the plaintiffs and defendant Nos. 1 and
2 who do not have absolute title to the
property?
(2) Whether in the absence of execution of
the Agreement of Sale-Ex.-A1 by the
other defendants/co-sharers is it valid,
even assuming that Agreement of Sale is
valid, there is breach of terms and
conditions of the Contract on the part
of the plaintiffs in not paying the sale
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consideration amount of Rs. 1,70,000/-
within 10 days from the day of vacating
the tenants, Rs.50,000/- on 30.11.1993
and an amount of Rs.1,50,000/- on or
before 30.3.1994 to the defendants and
plaintiffs are entitled for decree of
specific performance of the Agreement of
Sale?
(3) Whether the plaintiffs are entitled for
discretionary relief of specific
performance under Section 20(2) of the
Specific Relief Act when it has not
approached the court with clean hands?
(4) What relief?
Answer to Point No. 1
29. It is an undisputed fact that the suit
schedule property is self acquired property by late
Pemmada Venkateswara Rao as he had purchased the
said property vide Sale-Deed Document No.5174 of
1970 dated 24.11.1970 from his vendors. It is also
an undisputed fact that the said property is
intestate property. He is survived by his wife, 3
sons and 3 daughters. The said property devolved
upon them in view of Section 8 of Chapter 2 of the
Hindu Succession Act as the defendants are class I
legal heirs in the suit schedule property.
Undisputedly, the Agreement of Sale-Ex.-A1 is
executed only by defendant Nos. 1 and 2. The 3rd
son, mother and 3 sisters who have got equal
shares in the property have not executed the
Agreement of Sale. In view of the matter, the
Agreement of Sale executed by defendant Nos. 1 and
2 who have no absolute right to property in
question cannot confer any right whatsoever upon
the plaintiffs for grant of decree of specific
performance of Agreement of Sale in their favour.
The said agreement is not enforceable in law in
view of Section 17 of the Specific Relief Act in
view of right accrued in favour of defendant Nos. 3
to 6 under Section 8 of the Hindu Succession Act.
The provisions of Section 17 of the Specific Relief
Act in categorical term expressly state that a
Contract to sell or let any immovable property
cannot be specifically enforced in favour of a
vendor or lessor who does not have absolute title
and right upon the party. It is worthwhile to
extract Section 17 of the Specific Relief Act,1963
here :-
“17.-Contract to sell or let property by
one who has no title, not specifically
enforceable.- A contract to sell or let
any immovable property cannot be
specifically enforced in favour of a
vendor or lessor;
(a) who, knowing not to have any
title to the property, has
contracted to sell or let the
property
(b) who, though he entered into
the contract believing that he
had a good title to the
property, cannot at the time
fixed by the parties or by the
court for the completion of the
sale or letting, give the
purchaser or lessee a title free
from reasonable doubt.”
In view of the aforesaid provisions of the Specific
Relief Act, the Agreement of Sale entered between the
plaintiffs and some of the co-sharers who do not have
the absolute title to the suit schedule property is
not enforceable in law. This aspect of the matter has
not been properly appreciated and considered by both
the First Appellate Court and the Second Appellate
Court. Therefore, the impugned judgment is vitiated
in law.
30. Even assuming for the sake of argument that the
agreement is valid, the names of three sons are
mentioned in Agreement of Sale, out of whom the
agreement is executed by defendant Nos. 1 and 2 and
they assured that they would get the signatures of
the 3rd brother namely, Srinivasa Rao and also the
remaining 3 sisters. At the time of execution of this
agreement signatures were not obtained. Therefore,
the agreement is not executed by all the co-sharers
of the property which fact is evident from the
recitals of the document itself. Hence, the
plaintiffs are not entitled for specific performance
decree. This vital factual and legal aspect has been
ignored by both the First Appellate Court and the
Second Appellate Court. Therefore, the impugned
judgment is vitiated both on facts and law.
Accordingly, the point No. 1 is answered in favour of
the defendants.
Answer to Point No. 2
31. The second point is also required to be answered
against the plaintiffs for the following reasons:-
As could be seen from the Agreement of Sale
document marked as Ex.-A1 and the pleadings of the
parties payment of sale consideration was agreed to
be paid to the defendant Nos. 1 and 2 as per
following terms of the agreement :-
“… (i) an amount of Rs.1,70,000/- shall
be paid by Vendee to Vendors within 10
days from the day of vacating the
tenants in the property, (ii) Rs.
50,000/- shall be paid on 30.11.1993.,
(iii) the remaining sale consideration
of Rs.1,50,000/- shall be paid on or
before 30.3.1994.”
32. It is an undisputed fact that except payment of
Rs.5,000/- and Rs.10,000/- paid by the purchaserPage
plaintiff No.1 to the defendant Nos. 1 and 2
according to the Agreement of Sale, the remaining
installment i.e. an amount of Rs.1,70,000/- which was
to be paid to the Vendors within 10 days from the day
of vacating the tenants in the property was not paid.
Even assuming that the amount could have been paid
had the tenants vacated the schedule property then
the remaining part of the sale consideration agreed
to be paid as notified under clauses (ii) and (iii)
as per aforesaid paragraph of the Agreement of Sale
undisputedly not paid to the defendant Nos. 1 and 2.
Therefore, there is breach of contract on the part of
the plaintiffs as could be seen from the agreement of
sale regarding the payment of part sale consideration
amount. For this reason itself plaintiffs are not
entitled for a decree of specific performance.
Answer to the Point Nos. 3
33. Point No. 3 is also answered in favour of the
defendants for the following reasons:-
It is an undisputed fact that the plaintiffs have
not approached the Trial Court with clean hands. It
is evident from the pleadings of the Agreement of
Sale which is produced for the decree for specific
performance of Agreement of Sale as the plaintiffs
did not obtain the signatures of all the co-sharers
of the property namely, the mother of the defendants,
the third brother and 3 sisters. Therefore, the
agreement is not enforceable in law as the persons
who have executed the sale deed, did not have the
absolute title of the property. Apart from the said
legal lacuna, the terms and conditions of the
Agreement of Sale for payment of sale consideration
agreed to be paid by the first plaintiff in
installments within the period stipulated as
indicated above were not paid. The First Appellate
Court and the High Court have not exercised their
power under Section 20(2) of the Specific Relief Act
which by itself is the substantial question of law
which fell for consideration before the High Court as
the First Appellate Court failed to consider this
important aspect of the matter and exercised its
power while determining the rights of the party,
particularly, in the light of the unenforceable
contract between the plaintiffs against the
defendants as all of them are not parties to the
Agreement of Sale document (Ex.-A1) and the
executants viz. defendant Nos. 1 and 2 have not
acquired absolute title to the property in question.
Therefore, the impugned judgment is vitiated and
liable to be set aside.
Answer to Point No. 4
34. Though we have answered the questions of law
framed in this appeal in favour of the defendants,
the learned counsel for the defendants during the
course of arguments, has offered some monetary
compensation in favour of the plaintiffs if this
Court set aside the impugned judgment and decree of
specific performance granted in their favour. Though,
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C.A. @ SLP© No.24653 of 2012 - 29 -
the defendants on merits have succeeded in this case
for the reasons recorded by us on the substantial
questions of law that have been framed by us on
appreciation of facts and legal evidence on record,
having regard to the peculiar facts and circumstances
of the case particularly, the execution of Agreement
of Sale, Ex. A-1 by defendant Nos. 1 and 2 on
3.5.1993, after receiving part consideration of
Rs.15,000/-, and the submission made by the learned
counsel for the defendants, it would be just and
proper for this Court to award a sum of Rs.6,00,000/-
by lump-sum amount of compensation to the plaintiffs
within 3 months from the date of receipt of a copy of
this judgment as provided under Section 22 of the
Specific Relief Act.
35. Since, we have answered point Nos. 1 to 4 in
favour of the defendants and against the plaintiffs,
the appeal of the defendants must succeed.
Accordingly, the impugned judgment and decree passed
by the High Court in affirming the judgment and
decree of the First Appellate Court, is set aside.
The judgment and decree of the Trial Court is
restored with modification that the defendants shall
pay a sum of Rs.6,00,000/- to the plaintiffs as lumpsum
compensation within 3 months from the date of
receipt of copy of this order. The appeal is allowed
in the above said terms. No costs.
……………………………………………………………………J.
[DIPAK MISRA]
……………………………………………………………………J.
[V. GOPALA GOWDA]
New Delhi,
August 20,2014
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