Curiously enough, although it was pleaded by defendant
no.1 that the power of attorney was given to defendant no.2 for
limited purpose of managing the property, the said power of
attorney was not produced in the Court.
DW-1 did not
produce the original power of attorney to prove his case that
the second defendant, his elder brother, was only authorized
to manage the property. It is the plaintiff, who produced the
xerox copy of the registered power of attorney, which was
shown to the DW-1 during cross-examination, who admitted
the signature in the power of attorney.
All these relevant
pieces of evidence have not been appreciated by the High
Court in its right perspective. Instead of drawing adverse
inference against the defendant, in not producing the original
power of attorney, which was in their power and possession,
the High court has committed grave error in holding that the
power of attorney has not been proved as required under
Sections 65 and 66 of the Evidence Act. In our view, when the
xerox copy of power of attorney produced by the plaintiff in
evidence and the signature and the contents of the said power
of attorney were admitted by the defendant, there was no
question of proving the said document as required under the
Evidence Act. The judgment of reversal passed by the High
Court by coming to the aforesaid conclusion is wholly perverse
and contrary to law.
is
now
on
record
A certified copy of the power of attorney
and
it
falsifies
the
case
of
the
defendants/respondent undisputedly.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9947 OF
2014
(Arising out of Special Leave Petition (C) No. 19555 of 2012)
Zarina Siddiqui
versus
A. Ramalingam alias R. Amarnathan
Citation;AIR 2015SC580
This appeal by special leave is directed against the
judgment and order dated 1.3.2012 passed by the High Court
of Karnataka whereby Regular First Appeal No.265 of 1999
filed by the defendant-respondent was allowed and the
judgment and decree passed by the trial court in the suit of
the appellant-plaintiff was set aside.
3.
The facts giving rise to the present appeal are that the
respondent-first defendant is the absolute owner of 1/3 rd
undivided share in the property bearing no.43, Mission Road,
Bangalore (hereinafter referred to as the ‘suit schedule
property’) and his elder brother-second defendant is his power
of attorney holder.
It is the case of the plaintiff that on
25.6.1979, the second defendant-respondent as registered
power of attorney holder entered into an agreement to sell
1/3rd share in the suit property to the appellant-plaintiff for
consideration
of
Rs.40,000/-
and
received
advance
of
Rs.5,000/-. As per the aforesaid registered agreement, the
balance consideration was to be paid on or before 30.12.1980
and the parties to the agreement had to take necessary steps
for obtaining permission from the competent authority under
the Urban Land (Ceiling and Regulation) Act.
Plaintiff’s
further case is that he paid the entire sale consideration to the
second defendant who received the same on behalf of the first
defendant. It is contended that the plaintiff had been always
ready and willing to perform his part of the contract and that
the plaintiff has been requesting the defendants to take
necessary steps to obtain permission from the Urban Land
Ceiling Authority.
Since the defendants failed to take
necessary steps, the plaintiff issued legal notice to the
defendants on 5.3.1980 and 25.5.1980 calling upon the
defendants to complete the sale in favour of the plaintiff and to
perform their part of the contract. The defendants sent reply
to notice on 4.10.1980 wherein they repudiated the agreement
in question. As averred, the plaintiff has been in possession of
the undivided share of the defendants in the schedule property
in pursuance of the above agreement for sale.
Since the
defendants failed to execute the sale deed, the plaintiff filed a
suit for specific performance praying for a direction to the
defendants to execute the sale deed in respect of 1/3 rd share in
the suit property.
4.
In the suit, the defendants 1 and 2 have filed separate
written statements.
In the written statement filed by first
defendant he has admitted that he is the owner of 1/3 rd share
in the suit property.
He has also admitted that the 2 nd
defendant is the brother and registered power of attorney
holder of the first defendant. But he pleaded that the power of
attorney was given by him to the second defendant only for the
limited purpose of looking after and managing the suit
property. He denied that there was an agreement to sell the
suit property in favour of the plaintiff and also denied of
having received advance amount of Rs. 5000/-. Respondent-
first defendant alleged that the said agreement was prepared
by his elder brother by misusing the power of attorney and
second defendant had acted on the ill-advise of the plaintiff, to
play fraud on him. He contended that the suit property was
worth more than Rs.3,00,000/- on the date of the said
agreement and he had sent a registered notice to the plaintiff
on 1.10.1983 denying the execution of the said agreement.
5.
It has been further alleged by the respondent-first
defendant that one D. Narendra had filed a suit O.S.
No.767/78, re-numbered as O.S.2762/80, seeking partition of
1/3rd share in the suit scheduled property. Appellant-plaintiff
herein was the 4th defendant in the said suit and he had filed
his written statement on 27.2.1979, wherein he pleaded that
he had agreed to purchase the suit property. He contended
that the same goes to show that the plaintiff had planned to
snatch the property and that the agreement in question came
into existence in collusion with the second defendant.
6.
The respondent-defendant has further pleaded that the
plaintiff occupied the premises in question as a tenant by
virtue of allotment order in HRC(ACC) 306/1970 and that
thereafter he has sublet the portion of the suit property to
various persons. It is further stated that the plaintiff has not
been paying rent to the defendant in proportionate to the
income that he derives by such sub letting.
The defendant
alleged that he had no intention to sell the full property to any
person much less to the plaintiff, and he wants to retain the
suit property.
7.
The second defendant, elder brother of the respondent
and his power of attorney holder, by way of separate written
statement denied that the agreement for sale in question was
executed with the consent of the first defendant. According to
him, the plaintiff obtained the said agreement by playing fraud
and giving assurance that he would get certain benefits. He
also pleaded in his written statement that one D. Narendra,
who had alleged to have purchased 1/3rd share in the suit
property from Thyagarajan, had filed a suit being O.S.767/78
seeking decree of partition and separate possession.
In the
said suit, the plaintiff stated that he is holding agreement from
Thyagarajan to purchase the property. Thyagarajan is the son
of the second defendant, who in good faith that his son would
retain his 1/3rd share and to save the property obliged the
plaintiff to execute the sale agreement and not with an
intention to sell the property. It is pleaded that the plaintiff
had promised that he would not enforce the sale agreement
and it is only to see that the suit filed by D. Narendra is
dismissed. The second defendant contended that the receipts
issued by him to the plaintiff were not towards payment of
consideration, but the same was towards payment of rents.
Moreover he had not issued any receipt for having received
money towards sale consideration.
8.
On consideration of entire facts and evidence brought on
record, the trial court decreed the suit directing the first
defendant to execute the sale-deed in favour of the plaintiff in
respect of 1/3rd share in the suit schedule property. The trial
court held that defendant no.1 has admitted to have executed
the power of attorney (Ex.P22) and it clearly states that the
second defendant was authorized to sell the suit property.
Further, defendant has utterly failed to prove that the plaintiff
had obtained the agreement for sale in question by playing
fraud. On the contrary, the evidence clearly proves that the
first defendant had authorized the second defendant to sell the
suit property to the plaintiff and that the second defendant
has agreed to sell the suit property to the plaintiff having full
authority to do so.
Defendant no.1, who was examined as
DW-1, has admitted the signatures of defendant no.2 in the
receipts produced by the plaintiff, which are at Ex.P8(a) to
P8(g).
The trial court came to the conclusion that the
defendants have received the amount of consideration and the
plaintiff performed his part of the agreement by paying full
consideration and was always ready and willing to get the sale
deed executed. However, the defendants have not performed
their part of the agreement and have evaded to execute the
sale deed in favour of the plaintiff. Therefore, trial court came
to the conclusion that it is a fit case to grant specific
performance of agreement and to direct defendant no.1 to
execute the sale deed in favour of the plaintiff.
9.
Aggrieved by the judgment and decree, the respondent-
defendant preferred appeal before the High Court.
10.
By judgment dated 3.2.2004, learned Single Judge of the
High Court partly allowed the appeal modifying the judgment
and decree of the trial court by refusing to grant specific
performance and directing the first defendant to pay back the
consideration amount with interest at 12% from the date of
agreement till the date of payment after deducting rent
payable to him by the plaintiff in respect of 1/3 rd share.
11.
Aggrieved by the aforesaid decision of the High Court,
petitioner approached this Court preferring an appeal by
special leave being Civil Apeal No.6956 of 2004. This Court by
judgment dated 4.3.2011 in that appeal titled as H. Siddiqui
vs. A. Ramalingam, (2011) 4 SCC 240, set aside the
judgment and order of the High Court and remanded back the
9
Page 9
matter to the High Court to decide the same afresh in
accordance with law.
This Court in the remand order
observed as under:
“20. The High Court failed to realise that it was
deciding the first appeal and that it had to be
decided strictly in adherence with the provisions
contained in Order 41 Rule 31 of the Code of Civil
Procedure, 1908 (hereinafter called “CPC”) and once
the issue of the alleged power of attorney was also
raised as is evident from Point (a) formulated by the
High Court, the Court should not have proceeded to
Point (b) without dealing with the relevant issues
involved in the case, particularly, as to whether the
power of attorney had been executed by the
respondent in favour of his brother enabling him to
alienate his share in the property.
21. The said provisions provide guidelines for the
appellate court as to how the court has to proceed
and decide the case. The provisions should be read
in such a way as to require that the various
particulars mentioned therein should be taken into
consideration. Thus, it must be evident from the
judgment of the appellate court that the court has
properly appreciated the facts/evidence, applied its
mind and decided the case considering the material
on record. It would amount to substantial
compliance with the said provisions if the appellate
court’s judgment is based on the independent
assessment of the relevant evidence on all important
aspects of the matter and the findings of the
appellate court are well founded and quite
convincing. It is mandatory for the appellate court to
independently assess the evidence of the parties and
consider the relevant points which arise for
adjudication and the bearing of the evidence on
those points. Being the final court of fact, the first
appellate court must not record mere general
expression of concurrence with the trial court
10
Page 10
judgment rather it must give reasons for its decision
on each point independently to that of the trial
court. Thus, the entire evidence must be considered
and discussed in detail. Such exercise should be
done after formulating the points for consideration
in terms of the said provisions and the court must
proceed in adherence to the requirements of the said
statutory provisions.
23. More so, none of the courts below had taken into
consideration Clause 11 of the agreement dated
30.6.1979 which reads as under:
“11. In the event of any default on the part of
the vendors in completing the sale the
earnest money paid herewith shall be
refunded to the purchasers together with a
like amount of Rs.5,000/- (Rupees five
thousand only) as liquidated damages for
breach of contract.”
Thus, in case of non-execution of the sale deed, the
appellant could get the earnest money with
damages.
24. So far as the issues of inadequate consideration
and rise in price are concerned, both the parties
have argued the same at length and placed reliance
on a large number of judgments of this Court,
including: Chand Rani (Smt.) (dead) by Lrs. v. Kamal
Rani (Smt.)(dead) by Lrs., AIR 1993 SC 1742;
Nirmala Anand v. Advent Corporation (P) Ltd. &
Ors., (2002) 8 SCC 146; P. 1D’Souza v. Shondrilo
Naidu, (2004) 6 SCC 649; Jai Narain Parasrampuria
(dead) & Ors. v. Pushpa Devi Saraf & Ors., (2006) 7
SCC 756; Pratap Lakshman Muchandi & Ors. v.
Shamlal Uddavadas Wadhwa & Ors., (2008) 12 SCC
67.
25. In view of the above, as we are of the considered
opinion that the courts below have not proceeded to
adjudicate upon the case strictly in accordance with
law, we are not inclined to enter into the issue of
inadequate consideration and rise in price. However,
the judgment impugned cannot be sustained in the
eyes of law.”
12.
On remand, High Court considered the matter afresh and
allowed the appeal of first defendant and set aside the
judgment and decree of the trial court, dismissing the suit of
the plaintiff. Hence, this appeal by wife of the plaintiff (since
deceased).
13.
Mr. K.K. Mani, learned counsel appearing for the
plaintiff-appellant, assailed the impugned judgment passed by
the High Court as being contrary to law and facts and
evidence on record. Learned counsel firstly contended that the
learned Single Judge gravely erred in law in holding that the
Power of Attorney was not proved as required under Sections
65 and 66 of the Evidence Act.
Learned counsel submitted
that the learned Single Judge of the High Court completely
misdirected himself in reversing the findings recorded by the
trial court which is based on evidence.
Learned counsel
contended that the reasoning given by the High Court in
refusing to grant specific performance merely because the part
of the consideration amount was paid by the plaintiff-
appellant prior to the date of the execution of the agreement is
wholly unjustified and not tenable.
14.
Per contra, Mr. V. Prakash, learned senior counsel
appearing for the defendant-respondent, at the very outset
contended that the agreement in question (PW-1) is not a
genuine transaction and fraud has been played with the
defendant-respondent by getting
the agreement to sell
executed through his elder brother-cum-power of attorney
holder.
Learned counsel submitted that as per evidence
adduced by the plaintiff, the entire consideration amount was
paid but as a matter of fact those payments were admittedly
prior to the date of execution of agreement. Learned counsel
contended that D. Narendra, claiming 1/3 rd share in the said
property from one Thyagarajan had filed a suit for partition.
The
present
plaintiff-appellant,
who
was
one
of
the
defendants, vide written statement, contended that he is
holding an agreement from Thyagarajan for purchase of the
property.
Learned counsel submitted that the second
defendant-cum-power of attorney holder in good faith executed
agreement for the 1/3rd share to save the property and not
with an intention to sell the property. Learned counsel further
contended that there is a specific clause in the agreement i.e.
clause (11) providing that in the event of any default on the
part of the vendors in completing the sale, the earnest money
shall be refunded to the purchaser together with Rs.5,000/- as
liquidated damage.
15.
Mr.
V.
Prakash,
learned
senior
counsel,
further
contended that at the time of execution of the agreement, the
market price of the property was Rs. 3,00,000/- and as
against the said price a sum of Rs.40,000/- was shown in the
agreement as full consideration for the suit property. Learned
counsel submitted that by the passing of time, the price of the
suit property has increased more than 10-15 times, and in
that view of the matter, the court should not exercise
discretion
in
granting
decree
for
specific
performance.
14
Page 14
Learned counsel relied upon the decision in Rajinder Kumar
vs. Kuldeep Singh & Ors., (2014) 2 SCC 135, Vimaleshwar
Nagappa Shetty vs. Noor Ahmed Sheriff & Ors., (2011) 12
SCC 658, K.S. Vidyanadam & Ors. vs. Vairavan, (1997) 3
SCC 1.
16.
We have perused the judgment passed by the trial Court
and also the judgment of reversal passed by the High Court.
Firstly, we would like to consider the pleading of the parties in
the suit.
17.
The first defendant through his power of attorney holder
entered into an agreement on 25 th June, 1979 agreeing to sell
his 1/3rd undivided share in the suit property for a sum of Rs.
40,000/- and out of the said consideration a sum of Rs.
5,000/- was paid in advance. Under the terms of registered
agreement the sale was to be completed before 30 th December,
1980 on payment of balance consideration of Rs.35,000/- and,
in the meantime, all necessary steps had to be taken to obtain
permission from the competent authority under the Urban
Land Regulation Act. The plaintiff further pleaded that he was
always ready and willing to perform his part of the contract
and in furtherance of that entire sale consideration was paid
long before 30.12.1980.
18.
Both, the first defendant viz. owner of the property and
his elder brother, who is a power of attorney holder, have filed
separate written statement. Defendant No.1 admitted in his
written statement that he is the owner of 1/3 rd share in the
suit property and that the second defendant is his elder
brother and the power of attorney holder. But the case of the
defendant No.1 is that the power of attorney was given to the
second defendant only for the limited purpose for managing
the suit property. He denied that there was an agreement to
sell in favour of the plaintiff and also denied the payment of
advance consideration. The first defendant made out a case
that the agreement in question is a vexed agreement which
was prepared by his elder brother by misusing the power of
attorney. The defendant further pleaded that the property was
worth more than three lakhs on the date of said agreement
and that he has not received any part of the consideration
amount from the plaintiff.
19.
The second defendant in his separate written statement
pleaded that he is the power of attorney holder for the limited
purpose for safeguarding the interest of the first defendant.
According to his pleading, a sale agreement was obtained by
the plaintiff by playing fraud and by giving assurance that the
second defendant would get certain benefits.
20.
We have noticed that both the power of attorney and the
agreement to sale are registered documents.
Perusal of
registered power of attorney would show that the first
defendant authorized his elder brother- second defendant to
sell the suit property at any price which he may deem fit and
collect the sale proceeds. Clauses (i) to (iii) of the registered
power of attorney read as under:-
“(i) That my attorney is authorized to sell the above
property to any person or persons at any price which
he may deem fit and collect the sale proceeds.
(ii)
My attorney is also athorised to get necessary
permission from the competent authority for the sale
of above property or from any other government
machinery required under law.
(iii)
that my attorney is also authorized to execute
and sign document of sale/mortgage and any other
legal transfer and get the same registered in the
proper office of registration complete in all respect.”
21.
Similarly
by
registered
agreement
of
sale
dated
25.6.1979, executed by the second defendant, he specifically
agreed to sell the property for a sum of Rs. 40,000/- and out
of that he received a sum of Rs. 5,000/- as advance
consideration.
22.
Although
defendant
no.2
filed
a
separate
written
statement, but he did not examine himself as a witness in
order to prove the case pleaded by him. The first defendant
examined himself as DW-1 and deposed in the Court. In his
evidence, he admitted that he discussed about the sale of the
suit property with the plaintiff, but he wanted to sell at a price
of Rs. 3,00,000/-.
He admitted the signature of his elder
brother as power of attorney holder in the agreement and also
in the receipt of payment of consideration amount. Certain
correspondences made by plaintiff with DW-1 and exhibited in
the suits would show that by one letter (exhibit P-14) DW-1
confirmed that he authorized his elder brother to negotiate
and sell the suit property.
By another letter (exhibit P-15),
DW-1 further confirmed that his brother was authorized to
negotiate for sale of the property and receive consideration.
Another letter (Exhibit P-20) would show that he was aware
about the sale agreement executed by his brother, who had
received some advance consideration.
23.
Curiously enough, although it was pleaded by defendant
no.1 that the power of attorney was given to defendant no.2 for
limited purpose of managing the property, the said power of
attorney was not produced in the Court.
DW-1 did not
produce the original power of attorney to prove his case that
the second defendant, his elder brother, was only authorized
to manage the property. It is the plaintiff, who produced the
xerox copy of the registered power of attorney, which was
shown to the DW-1 during cross-examination, who admitted
the signature in the power of attorney.
All these relevant
pieces of evidence have not been appreciated by the High
Court in its right perspective. Instead of drawing adverse
inference against the defendant, in not producing the original
power of attorney, which was in their power and possession,
the High court has committed grave error in holding that the
power of attorney has not been proved as required under
Sections 65 and 66 of the Evidence Act. In our view, when the
xerox copy of power of attorney produced by the plaintiff in
evidence and the signature and the contents of the said power
of attorney were admitted by the defendant, there was no
question of proving the said document as required under the
Evidence Act. The judgment of reversal passed by the High
Court by coming to the aforesaid conclusion is wholly perverse
and contrary to law.
is
now
on
record
A certified copy of the power of attorney
and
it
falsifies
the
case
of
the
defendants/respondent undisputedly.
20
Page 20
24.
The last contention of Mr. Prakash, learned senior
counsel appearing for the respondent is that having regard to
the increasing market price of the suit property, the discretion
to grant specific performance should not be exercised in favour
of
the
plaintiff-appellant
and
against
the
defendant-
respondent.
25.
It is well settled that remedy for specific performance is
an equitable remedy.
The Court while granting decree of
specific performance exercises its discretionary jurisdiction.
Section 20 of the Specific Relief Act specifically provides that
Court’s discretion to grant decree of specific performance is
discretionary but not arbitrary. Discretion must be exercised
in accordance with sound and reasonable judicial principles.
26. The King’s Bench in Rookey’s Case [77 ER 209; (1597) 5
Co.Rep.99] it is said :
“Discretion is a science, not to act arbitrarily
according to men’s will and private affection: so the
21
Page 21
discretion which is exercised here, is to be governed
by rules of law and equity, which are to oppose, but
each, in its turn, to be subservient to the other. This
discretion, in some cases follows the law implicitly,
in others or allays the rigour of it, but in no case
does it contradict or overturn the grounds or
principles thereof, as has been sometimes ignorantly
imputed to this Court. That is a discretionary power,
which neither this nor any other Court, not even the
highest, acting in a judicial capacity is by the
constitution entrusted with”
27.
The Court of Chancery in Attorney General vs. Wheat
[(1759) 1 Eden 177; 28 ER 652] followed the Rookey’s case and
observed :
“The law is clear and courts of equity ought to follow
it in their judgments concerning titles to equitable
estates; otherwise great uncertainty and confusion
would ensue. And though proceedings in equity are
said to be secundum discretionem boni vin, yet when it
is asked, vir bonus est quis? The answer is, qui
consulta partum, qui leges juraq servat. And as it is
said in Rooke’s case, 5 Rep. 99 b, that discretion is a
science not to act arbitrarily according to men’s will
and private affection: so the discretion which is
exercised here, is to be governed by rules of law and
equity, which are to oppose, but each, in its turn, to
be subservient to the other. This discretion, in some
cases follows the law implicitly, in others or allays the
rigour of it, but in no case does it contradict or
overturn the grounds or principles thereof, as has
been sometimes ignorantly imputed to this Court.
That is a discretionary power, which neither this nor
any other Court, not even the highest, acting in a
judicial capacity is by the constitution entrusted with.
22
Page 22
This description is full and judicious, and what ought
to be imprinted on the mind of every judge.”
28.
In Satya Jain vs. Anis Ahmed Rushdie, (2013) 8 SCC
131, at page 145, this Court observed:-
“40. The discretion to direct specific performance of
an agreement and that too after elapse of a long
period of time, undoubtedly, has to be exercised on
sound, reasonable, rational and acceptable principles.
The parameters for the exercise of discretion vested
by Section 20 of the Specific Relief Act, 1963 cannot
be entrapped within any precise expression of
language and the contours thereof will always depend
on the facts and circumstances of each case. The
ultimate guiding test would be the principles of
fairness and reasonableness as may be dictated by
the peculiar facts of any given case, which features
the experienced judicial mind can perceive without
any real difficulty. It must however be emphasised
that efflux of time and escalation of price of property,
by itself, cannot be a valid ground to deny the relief of
specific performance. Such a view has been
consistently adopted by this Court. By way of
illustration opinions rendered in P.S. Ranakrishna
Reddy v. M.K. Bhagyalakshmi (2007) 10 SCC 231 and
more recently in Narinderjit Singh v. North Star
Estate Promoters Ltd.(2012) 5 SCC 712
usefully recapitulated.”
29.
may be
In Nirmala Anand vs. Advent Corpn. (P) Ltd., (2002) 8
SCC 146, at page 150, a three Judge Bench of this Court on a
similar issue held as under :-
“6. It is true that grant of decree of specific
performance lies in the discretion of the court and it
is also well settled that it is not always necessary to
23
Page 23
grant specific performance simply for the reason that
it is legal to do so. It is further well settled that the
court in its discretion can impose any reasonable
condition including payment of an additional amount
by one party to the other while granting or refusing
decree of specific performance. Whether the
purchaser shall be directed to pay an additional
amount to the seller or converse would depend upon
the facts and circumstances of a case. Ordinarily, the
plaintiff is not to be denied the relief of specific
performance only on account of the phenomenal
increase of price during the pendency of litigation.
That may be, in a given case, one of the
considerations besides many others to be taken into
consideration for refusing the decree of specific
performance. As a general rule, it cannot be held that
ordinarily the plaintiff cannot be allowed to have, for
her alone, the entire benefit of phenomenal increase
of the value of the property during the pendency of
the litigation. While balancing the equities, one of the
considerations to be kept in view is as to who is the
defaulting party. It is also to be borne in mind
whether a party is trying to take undue advantage
over the other as also the hardship that may be
caused to the defendant by directing specific
performance. There may be other circumstances on
which parties may not have any control. The totality
of the circumstances is required to be seen.”
30.
In V. Pechimuthu vs. Gowrammal, (2001) 7 SCC 617,
at page 629 this court held as under:-
“25. Counsel for the respondent finally urged that
specific performance should not be granted to the
appellant now because the price of land had risen
astronomically in the last few years and it would do
injustice to the respondent to compel her to reconvey
property at prices fixed in 1978.
26. The argument is specious. Where the court is
considering whether or not to grant a decree for
specific performance for the first time, the rise in the
price of the land agreed to be conveyed may be a
24
Page 24
relevant factor in denying the relief of specific
performance. (See K.S. Vidyanadam v. Vairavan). But
in this case, the decree for specific performance has
already been passed by the trial court and affirmed by
the first appellate court. The only question before us
is whether the High Court in second appeal was
correct in reversing the decree. Consequently the
principle enunciated in K.S. Vidyanadam (1997) 3
SCC 1 will not apply.”
31.
In a recent judgment dated 22.9.2014 in Civil Appeal No.
9047 of 2014 entitled K. Prakash vs. B.R. Sampath Kumar,
this Court observed that:
“17. The principles which can be enunciated is that where
the plaintiff brings a suit for specific performance of contract
for sale, the law insists a condition precedent to the grant of
decree for specific performance that the plaintiff must show
his continued readiness and willingness to perform his part
of the contract in accordance with its terms from the date of
contract to the date of hearing. Normally, when the trial
court exercises its discretion in one way or other after
appreciation of entire evidence and materials on record, the
appellate court should not interfere unless it is established
that the discretion has been exercised perversely, arbitrarily
or against judicial principles. The appellate court should
also not exercise its discretion against the grant of specific
performance on extraneous considerations or sympathetic
considerations. It is true, as contemplated under Section 20
of the Specific Relief Act, that a party is not entitled to get a
decree for specific performance merely because it is lawful to
do so. Nevertheless once an agreement to sell is legal and
validly proved and further requirements for getting such a
decree is established then the Court has to exercise its
discretion in favour of granting relief for specific
performance.
19.
Subsequent rise in price will not be treated as a
hardship entailing refusal of the decree for specific
performance. Rise in price is a normal change of
circumstances and, therefore, on that ground a decree for
specific performance cannot be reversed.
20.
However, the court may take notice of the fact that
there has been an increase in the price of the property and
considering the other facts and circumstances of the case,
this Court while granting decree for specific performance can
impose such condition which may to some extent
compensate the defendant-owner of the property.
This
aspect of the matter is considered by a three Judge Bench of
this Court in Nirmala Anand vs. Advent Corporation (P)
Ltd. and Others, (2002) 8 SCC 146.”
32.
In the case of Vimaleshwar Nagappa Shet vs. Noor
Ahmed Shariff and others, (2011) 12 SCC 658, an
agreement to sell a dwelling house was entered into by some of
the co-sharers and the matter was ultimately compromised on
payment of higher price. On those facts the Court held that
since the value of the property escalates in urban areas very
fast, it would not be equitable to grant relief of specific
performance after the lapse of a long period of time. The said
decision has no application in the present case.
33.
Similarly, in the case of K.S. Vidyanadam (supra), this
Court on facts found that there was a total lapse and
negligence for a period of more than 21⁄2 years from the side of
the plaintiff in taking any step to perform his part of contract
under the agreement and there was gross violation of the
terms of the agreement which required him to pay the balance,
purchase the stamp paper and then seek for execution of the
sale deed. Further the delay was coupled with substantial rise
in price, which brought about a situation where it would not
be equitable to give the relief of specific performance to the
plaintiff. With due respect, this decision is also not applicable
in the facts of the present case.
34.
The equitable discretion to grant or not to grant a relief
for specific performance also depends upon the conduct of the
parties.
The necessary ingredient has to be proved and
established by the plaintiff so that discretion would be
exercised judiciously in favour of the plaintiff.
At the same
time, if the defendant does not come with clean hands and
suppresses material facts and evidence and misled the Court
27
Page 27
then such discretion should not be exercised by refusing to
grant specific performance.
35.
In the instant case, as noticed above, although defendant
no.2 held a registered power of attorney on behalf of defendant
no.1 to sell and dispose of the property, but the defendants
not only made a false statement on affidavit that the power of
attorney had authorized the second defendant only to look
after and manage the property but also withheld the said
power of attorney from the Court in order to misguide the
Court from truth of the facts.
Further, by registered
agreement the defendants agreed to sell the suit premises after
receiving advance consideration but they denied the existence
of the agreement in their pleading.
Such conduct of the
defendants in our opinion, disentitle them to ask the Court for
exercising discretion in their favour by refusing to grant a
decree for specific performance.
Further, if a party to a lis
does not disclose all material facts truly and fairly but states
them in distorted manner and mislead the Court, the Court
has inherent power to exercise its discretionary jurisdiction in
order to prevent abuse of the process of law.
36.
However, it is noticed from the facts that the registered
agreement to sell was executed between the parties on
25.6.1979 and the suit for specific performance was filed by
the plaintiff-appellant in January, 1981. The suit was decreed
by the trial court in November, 1998.
The defendant-
respondent challenged the said decree before the High Court
in April, 1999. The High Court allowed the appeal by terms of
judgment dated 3.2.2004 and set aside the trial court’s
judgment and decree. The plaintiff-appellant preferred special
leave petition, which was numbered as Civil Appeal No.6956 of
2004. The Civil Appeal was finally decided on 4.2.2011 setting
aside the High Court’s judgment and remanding the matter
back to the High Court to decide the appeal afresh.
On
remand, the learned Single Judge in terms of order dated
1.3.2012 allowed the appeal and set aside the judgment and
decree of the trial court.
In this way, the matter remained
pending before the High Court and this Court for a number of
years.
37.
As held by this Court time and again, efflux of time and
escalation of price of the property by itself cannot be a valid
ground to deny the relief of specific performance.
But the
Court in its discretion may impose reasonable conditions
including payment of additional amount to the vendor. It is
equally well settled that the plaintiff is not to be denied
specific performance only on account of phenomenal increase
of price during the pendency of litigation.
38.
The defendant-respondent alternatively pleaded in the
written statement that even at the relevant time the price of
the suit property was Rs.3,00,000/- when the said agreement
was executed for Rs.40,000/- only. But on the other hand it
has come in evidence that against Rs.40,000/-, the plaintiff-
appellant has paid a total amount of Rs.65,000/-.
39.
Be that as it may, in the facts and circumstances of the
case and considering the phenomenal increase in price during
the period the matter remained pending in different courts, we
are of the considered opinion that impugned order under
appeal be set aside but with a condition imposed upon the
appellant (plaintiff) to pay a sum of Rs.15,00,000/- (Rupees
Fifteen Lacs) in addition to the amount already paid by the
appellant to the respondent.
On deposit in trial court of
aforesaid amount by the appellant, for payment to the
respondent, within three months from today, the respondent
shall execute and register the sale deed in favour of the
plaintiff in respect of the suit property.
In the event the
aforesaid condition of deposit of Rs.15 lacs is fulfilled within
the time stipulated hereinabove but the defendant fails to
comply with the direction, then the appellant shall be entitled
to execute the decree in accordance with the procedure
provided in law.
40.
In the result, this appeal is allowed.
The impugned
judgment passed by the High Court is set aside and decree of
the trial court is affirmed with the conditions imposed as
indicated hereinabove. There shall be no order as to costs.
..................................J.
[ M.Y. Eqbal ]
...................................J
[Shiva Kirti Singh]
New Delhi
October 29, 2014
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