High Court vide its impugned finding in the instant matter set aside the order of trial court rejecting the plea of grant of specific performance. The relief was sought on the basis of agreement to sell written on a quarter size piece of paper, which also included a mention of earlier execution of another agreement, which however was not filed on record. High Court reversed the finding on the premise that document in question was filed before the Criminal Court and evidence was led and based thereupon decreed the suit for specific performance.
The Court while hearing appeal against the impugned High Court finding made an observation that a decree for specific performance can be granted even on the basis of oral contract. However, an oral agreement with a reference to a future formal contract will not prevent a binding bargain between the parties. In a case where plaintiff comes forward to seek a decree for specific performance of contract of sale of immoveable property on the basis of an oral agreement or a written contract, heavy burden lies on the him to prove that there was consensus between the parties for the concluded agreement for sale of immoveable property.
Whether there was such a concluded contract or not would be a question of fact to be determined on the facts and circumstances of each individual case. In a suit for specific performance of a contract, the Court cannot ignore Section 20 of the Specific Reliefs Act giving judicial discretion to grant decree for Specific performance. However, the Court is not bound to grant specific performance merely because it is lawful to do so. It should meticulously consider facts and circumstances of the case to see that it is not used as an instrument of oppression to have an unfair advantage not only to the plaintiff but also to the defendant. The relief of specific performance is discretionary but not arbitrary which must be exercised in accordance with sound and reasonably judicial principles.
Where the plaintiff brings a suit for specific performance of contract for sale, the law insists upon 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 the 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. Under Section 20 of the Specific Relief Act, 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 are established then the court has to exercise its discretion in favour of granting relief for specific performance.
In the instant case the issue related to as to whether the agreement (in question) of 1967 allegedly executed by the defendants, could be enforced. In the agreement there was reference of earlier agreement where some sum of money was paid to the defendant-appellant which was denied and disputed. As mentioned above, the previous agreement was neither filed nor exhibited to substantiate the case of the plaintiff. The High Court placed reliance on the said agreement written in a quarter sheet of paper merely because of the fact that said quarter sheet of paper was produced before the Magistrate in a criminal proceeding.
The view taken by High Court was held to be incorrect to the effect that there was no reason to disbelieve the execution of the document although it was executed on a quarter sheet of paper and not on a proper stamp and also written in small letter. The High Court also misdirected itself in law in holding that there was no need for the plaintiff to have sought for the opinion of an expert regarding the execution of the document.
Various documents including order-sheets in the earlier proceedings including execution case were filed to nullify the claim of the plaintiff regarding possession of the suit property but these documents were not been considered by the High Court.
The evidence and the finding recorded by the criminal courts in a criminal proceeding cannot be the conclusive proof of existence of any fact, particularly, the existence of agreement to grant a decree for specific performance without independent finding recorded by the Civil Court.
It was accordingly held that the present was not the fit case where the discretionary relief for specific performance could be granted in favour of the plaintiff-respondent. The High Court in the impugned judgment failed to consider the scope of Section 20 of the Specific Relief Act and the precedents
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.8224 OF 2003
K. NANJAPPA (Dead) BY LRs.V R.A. HAMEED alias AMEERSAB (Dead)
BY LRs. AND ANOTHER
Dated;September 02, 2015
M.Y. EQBAL, J.:
Aggrieved by the judgment and orders dated 25.6.2003
passed by the High Court of Karnataka in Regular First
Appeal No. 201 of 1992, the appellants have preferred this
appeal by special leave. By impugned judgment, High Court
partly allowed the appeal, set aside the judgment of the trial
court and decreed the suit of the plaintiff-respondents herein
for specific performance as well as for recovery of possession
of suit items I, II and III.
2. The factual background as will appear from the trial
court judgment need to be highlighted and reproduced
hereunder.
3. The plaintiff-respondent claimed to be the son of Late
P. Abdul Rahiman Sab alias Jambusab. The late Jambusab
had three wives. The first wife’s son was Abdul Sakoorsab,
who died in the year 1967. The first plaintiff and his younger
brother R.A. Rasheed are the children of Jambusab from his
second wife Azizabi. Through the 3rd wife Mahajambi,
Jamusab had begotten 4 children namely, A. Abdul Subhan,
R. Abdul Majeed, Maqubal Jan and Aktharunnisa. The
children of late Jambusab could not agree to divide the
properties of late Jambusab. They litigated and ultimately in
R.A. 133/49-50 on the file of the High Court, a final decree
was passed and the properties described in the Schedule to
the plaint fell to the joint share of the first plaintiff and his
younger brother R.A. Rasheed. The date of the decree is
22.08.1950. The first plaintiff and his younger brother thus
2Page 3
became the exclusive joint owners of the suit schedule
property and from the date of the High Court decree namely
22.08.1950. The first item of the suit schedule which was
designed as a Cinema building was leased jointly by the first
plaintiff and his younger brother R.A. Rasheed to late N.K.
Subbaiah Shetty and one Rattanhalli Ramappa jointly by
means of a registered lease deed dated 26.02.1951 specifying
therein a period of 15 years for the running of the lease. The
said lease by the terms provided inter alia for a monthly rent
of Rs. 400/- to be paid in equal halves to the first plaintiff
and R.A. Rasheed. The lessees had to advance Rs.10,000/-
which will be treated as a charge on item no. 1 of suit
Schedule. All the equipments such as cinema projector,
electric generator, furniture and other accessories were
purchased by the said lessees which they had to provide
under the contract and the theatre was equipped for showing
films. It was also a term under the lease that these
equipments projector, generator etc., should become the
property of the first plaintiff and his brother R.A. Rasheed on
the termination of the lease. While only Rs. 5,000/- was
given as advance, the expenses of the balance of Rs. 5,000/-
which was retained by N.K. Subbaiah Shetty and Rattanhalli
Ramappa has been accounted for and thus only Rs. 5000/-
is the actual amount of advance.
4. But, N.K. Subbaiah Shetty and his joint tenant
Ratanhalli Ramappa who were astute businessmen found
later 2 years that they could not manage the theatre property
to earn profits. They both successfully induced the
inexperienced 1st plaintiff to enter into a contract dated
05.08.1953 with them which ostensibly appear to be a
sub-lease of their rights to the 1st plaintiff. Though the 1st
plaintiff and his younger brother had become entitled to be
rightfully to the equipments in the cinema theatre as per the
terms of the lease date 26.02.1951, they were not even under
any liability to pay the same on the termination of the lease.
N.K. Subbaiah Shetty astutely got a provision made in the
so-called sub-lease dated 05.08.1953 that he should get a
rent of Rs. 250/- for himself which was in reality interest for
sum of Rs. 5000/- given as advance, but which had been
recovered by N.K. Subbaiah Shetty during the period the
lease was subsisting in his favour. Besides nothing was due
to be paid to N.K. Subbaiah Shetty as it was voluntary
surrender to ease evidence by the so-called sub-lease. The
return of Rs. 250/- per month which could only be
demanded as interest on the sum of Rs. 5000/- advanced
was usurious Loans Act in force in Mysore. The so called
sub-lease dated 05.08.1953 was therefore illegal for want of
consideration. Since Rs. 5000/- could not be claimed legally
as it has been recovered and also the provisions for payment
of Rs. 250/- P.M. to N.K. Subbaiah Shetty, being usurious
interest was also not recoverable in law. The so called lease
dated 05.08.1953 operated in Law only as a surrender of
lease, as the fight of lessor as well as lessee became merged
in the plaintiff who was a joint owner of item No. 1 of the suit
schedule under Section 111(d) of the T.P. Act. He could not
be deemed to be a lessee of his own building and the
sub-lease was void to the extent that it provided Rs.250/- to
be paid as rent to N.K. Subbaiah Shetty, the possession
which accrued to the plaintiff on the execution of the deed
dated 05.08.1953 was, therefore, free from all liability to pay
any amount to N.K. Subbaiah Shettty. R.A. Rasheed, the
brother of the 1st Plaintiff executed a pronote dated
24.01.1953 benami in the name of C. Shambulingaiah the
real beneficiary being the 1st defendant. The defendant filed
a suit in O.S. 1/54 as Power of Attorney Holder of
C.Shambhulingaiah against R.A. Rasheed in the then Court
of Sub-Judge, Mandya and obtained ex parte decree and in
Execution No. 38/54 got the undivided half share of R.A.
Rasheed in the Suit schedule 1st item attached. Thereafter,
in Ex. No. 5/56 the 1st defendant as Power of Attorney holder
sued out further execution and brought to sale the half share
of R.A. Rasheed and purchased the same in the name of C.
Shambulingaiah in Court auction held on 12.07.1956, the
bid amount being Rs. 8359.37. Though the half share itself
was worth a lakh of rupees at lease R.A. Rasheed himself was
kept in dark throughout as services of all the processes were
made to appear, as though R.A. Rasheed had refused them.
Again in the name of Shambulingaiah who was the
brother-in-law of the 1st defendant delivery was sued out and
since actual delivery could not be obtained of the undivided
half share of R.A. Rasheed the 1st defendant maneuver to
take symbolic delivery of the said half share on 02.04.1958 in
Misc. 34/56. Thereafter, the first defendant arranged to get
a sale deed executed by C. Shambulingaiah in the name of
Amruthamma the 2nd defendant, wife of the 1st defendant.
There was no consideration paid for this deed. It means the
representative, a substitution of one benamidar for another,
the motive being that the properties should remain with the
1
st defendant in the name of his wife.
5. The first plaintiff had executed a demand pronote for
Rs.1335/- dated 10.05.1952 in the name of one Krishna
Shastry, who was also a benamidar for first defendant. It is
learnt that a suit was got filed in O.S.449 of 1953 on the file
of the Munisiff, Srirangapatna, and getting refusal
endorsement made on the summon keeping this 1st plaintiff
ignorant of the said proceedings. The first defendant got an
ex-parte decree behind the back of the plaintiff. It is learnt
that the said decree was got transferred to the name of 1st
defendant and the 1st defendant sued out execution in
Ex.No.217/61 on the file of the Munsiff, Srirangapatna and
got attached the half share of the first plaintiff in the suit
schedule items 1 to 3. Of course, all the processes of the
Court were got done in secret by the 1st defendant who has
vast experience in court work, and the 1st plaintiff was
throughout ignorant of the same. After attachment, the first
defendant induced N.K. Subramanya Shetty to lend his
name, thus gave an assignment to the name of N.K.
Subramanya Shetty with the conveyance of his brother N.K.
Subbaiah Shetty of the decree in O.S.449/52. This again
was maneuvered without any consideration to please the
multi-millionaire N.K. Subbaiah Shetty, who himself was
anxious to get a share in illegal gains. It is learnt that the 1st
defendant, however, got a general power of attorney from
N.K. Subbaiah Shetty and continued further execution
proceedings suppressing the facts that only half the share of
the first plaintiff at least worth Rs.1,50,000/- in items 1 to 3
could be brought to sale. The 1st defendant put up the entire
schedule item for sale and bid at the court auction on
14.02.1962 for a paltry sum of Rs.325/-. Thus stabbing at
the back of the 1st plaintiff and got the same confirmed on
06.04.1962. The sale and subsequent confirmation is
vitiated and void as only half share was attached, but against
the attachment itself the full properties including the
properties which were not subject matter of the attachment
were brought to sale and purchased.
6. Since the first defendant openly boasted that he had in
reality become the owner of the entire properties of the first
plaintiff, the first plaintiff made inquiries and came to know
about the treacherous and illegal acts of the 1st defendant
who through abuse of processes of court had maneuvered to
get the sale held and confirmed including the half share of
this first plaintiff, and the first plaintiff, therefore, got filed
Misc.No.49 of 1962 to set aside the sale on the ground of
fraud. There was protracted litigation which ended in a
compromise petition dated 17.02.1966 being filed whereby
the first plaintiff agreed to pay Rs.7000/- within three
months from the date of compromise and if such payment
was made within time the petition to stand allowed and in
default the petition to stand dismissed. The first plaintiff
thereafter paid the amount in 3 installments. The first
installment being Rs.2000/-, in all Rs.7000/- within three
months as per compromise petition, to the counsel for the
first defendant. The first defendant has acknowledged the
receipt of the above payments to his counsel in a letter dated
10.05.1966 written by him to the first plaintiff and again in
another letter of first defendant to first plaintiff dated
31.07.1967. However, it is learnt that the first defendant
treacherously kept quite without getting the payment in full
reported to court with ulterior motives. Also, the first
defendant who had got half the share of Abdul Rasheed
conveyed benami to the name of his wife Amruthamma, the
second defendant entered into an agreement with the first
plaintiff’s wife on 29.11.1965 executed by the 1st defendant
as power of attorney holder of the 2nd defendant whereby he
agreed to convey half the share of and another house which
is described as 4th item in suit schedule for a sum of
Rs.18,000/-. The consideration of Rs.18,000/- for this
agreement has been paid by the first plaintiff on behalf of 2nd
plaintiff as follows:-
(a) As per agreement dated 29.11.1965 as acknowledged
therein Rs.8000/- has been paid to the 1st defendant.
(b) As per receipt dated 09.02.1966 executed by 1st
defendant, Rs.5500/- has been paid thus totalling
Rs.13,500/- out of Rs.18,000/-.
7. Thereafter, the first defendant alleged to have executed
a fresh agreement dated 02.09.1967 for himself and as power
of attorney holder of both 2nd defendant and N.K.
Subramanya Shetty, agreeing to convey by a separate sale
deed also item 1 of suit schedule in full and also item 2 of
1Page 12
suit schedule (house in Gowligara Street) and item 3 land,
item 4 house for consideration of Rs.25,000/-which was fully
paid as detailed below:-
(a) Rs.7000/- paid to 1st defendant as recounted in para-9
supra and acknowledged in letters dated 10.05.1966 and
31.07.1967 towards compromise petition in Misc.49 of 1962.
(b) Rs.4500/- paid before witnesses on 02.09.1967 when the
agreement was executed.
(c) Rs. 8000/- paid to first Defendant as per agreement dated
29.11.1965.
(d) Rs.5500/- paid as per receipt dated 9.2.1966 wherein the
amount of Rs.8000/- as per (a) above have also been
acknowledged.
8. The first plaintiff allegedly running a cinema theatre
item No.1 of the suit schedule all along, as he was in
possession of the same ever since 01.08.1953. However, in
the morning of 05.09.1967, the first plaintiff was surprised to
find himself under arrest along with his sons and another
Pasha, a relative, by the police authorities. It was learnt that
the first defendant had lodged a complaint to the police that
he had been dispossessed of item No.1 of suit schedule
Cinema Building even though he had no possession. There
1Page 13
were account books and other important papers and several
materials forming part of the cinema building belonging to
the first plaintiff and kept within the premises of item No.1 of
the suit schedule. The first defendant with whom K.N.
Subramanya Shetty and N.K. Subbaiah Shetty were in
collusion with the help of police got the first plaintiff
dislodged from item No.1 of suit schedule with the cinema
equipment, furniture etc. The papers included among others
receipt executed by defendant No.1 and N.K. Subbaiah
Shetty for monies paid by the plaintiff from time to time and
the accounts books contained entries in respect of this
payment. The first and N.K. Subbaiah Shetty, thus, were
successful in laying their hands on valuable evidence and it
is believed that show of force by the police and subsequently
dispossession of the first plaintiff from item No.1 maneuvered
to get these valuable records into their custody for being
hushed up. The police did not even get the mahazar written
at the time of their forcible entry into item No.1. The
complaint of the first defendant became subject matter in
1Page 14
C.C. 1758/67 and C.C. 370/68 before the Special First Class
Magistrate, Srirangapatna and in the said cases the plaintiff
and other accused were also acquitted. The finding is that
the so called delivery taken by the 1st defendant in the civil
court is only a paper delivery and not amount to
dispossession of the plaintiff of the first item of the suit
schedule. The Magistrate also directed return of the key of
the first theatre for the lock which had been kept by the
police at the time of illegal seizure to the first plaintiff. This
was symbolical delivery of the actual possession to which the
1
st plaintiff was entitled in law. The 1st plaintiff has filed an
application for actual possession being delivered in
pursuance of the judgment before Special 1st Class
Magistrate, Srirangapatna, which was pending. The plaintiffs
have also included in this suit claim for damages, caused to
them by illegal arrest and distraint of their articles and
account books and papers and also mesne profit accruing
due to dispossession which has occurred on 05.09.67. Since
the defendant nos. 1 and 2 and N.K. Subramanya Shetty
1Page 15
have failed to execute a sale deed in accordance with the
terms of the agreement dated 02.09.67 entered into by the
first defendant for himself and on behalf of defendant no.2
and N.K. Subramanya Shetty in respect of item No.1 of suit
schedule, the suit was filed for specific performance of
contract dated 02.09.67. As some of the documents have
been produced by the first plaintiff in criminal cases before
the Special 1st Class Magistrate, Srirangapatna, certified
copies of the same were produced along with the original
documents in the custody of the plaintiff with document list
in triplicate for perusal of this Court. N.K. Subbaiah Shetty
has been included so as to give a binding decree against him
also.
9. The trial court formulated the following issues for
determination:-
1) Whether the 1st defendant was the Power of Attorney
Holder of the 2nd Defendant?
2) Whether the 1st defendant for himself and as Power of
Attorney Holder of 2nd defendant executed an agreement of
sale dated 2.9.1967 agreeing to convey the plaint schedule
properties in favour of the plaintiff?
1Page 16
3) Whether under the said agreement the plaintiff paid the
amount to the 1st defendant as mentioned in para 11(a) (b)
(c) (d) of the plaint?
4) Whether the plaintiffs are entitled to the specific
performance of the agreement of the sale and for possession
of the schedule properties?
5) Whether the plaintiffs are entitled to Rs.93,600/- towards
the mesne past profits?
6)(a) Whether the proceedings in Ex. No.217/61 and
Misc. No.34/69 and orders thereon are fraudulent and
without jurisdiction and as such they are void, illegal
and wrongful as stated in para ¼ of the plaint?
(b) Whether the defendants are estopped in challenging
the suit agreement dated 2.9.67 by their conduct for the
reasons stated in para 16 of the plaint?
(c) Whether the plaintiffs prove that they are ready and
willing to perform their part of contract of sale as per
agreement dated 2.9.1967?
(7) Whether the defendants are entitled to compensatory
costs under Section 35(a) of C.P.C.?
(8) To what reliefs are the parties entitled?
Issue No.1 has been answered in affirmative holding that
defendant-appellant no.1 was the P.O.A. holder of his wife
defendant no.2.
10. While deciding issue Nos. 2-4 together, the trial court
came to the conclusion that the plaintiff-respondent failed to
1Page 17
prove that the agreement of sale dated 2.9.1967 was
executed by the defendants-appellants and, therefore, got
entitled to the specific performance of agreement to sell. The
reasoning given in deciding the issues inter alia are that the
alleged agreement was executed in a quarter sheet of paper
written in small letters. No reason has been attributed as to
why a small piece of paper was used for writing the
agreement ExP-1. The relevant portion of the finding arrived
at by the trial court can be extracted hereunder :-
“If we carefully go through the document at Ex. P.4 it is clearly
stated that the defendant 1 as the power of attorney of the 2nd
defendant and Subramanya Shetty as executed Ex.P.1 in favour of
the first and the 2nd plaintiff, after taking Rs.4,500/- this
documents has been written on very old quarter sheet piece of
paper which is written in very small letters. Ex.P.1 is not at all
written in usual course. No reasons are assigned in the evidence
of the PW.1,2 and 5 as to why a small piece of paper is used for
writing Ex.P.1. Ex.P.1 is written in a city like Mysore. It is not
written in a remote small village, wherein the scarcity of paper can
be expected. It is further pertinent to note here that the shop
premises of the first defendant was situate admittedly in
Santhepete which is very near to Devaraja Market and Srirampet,
which are heart of business centers of Mysore. Further, Ex.P.1 is
admitted written before Noon. ….. time P.W.1 has stated that
between 9 a.m. to 1 p.m. he has written Ex.P.1. Further P.W.5
has stated by about 2-30 p.m. Ex. P.1 is written, P.W.2 has stated
by about 12 noon Ex.P.1 is written, that means Ex.P.1 is written
in a broad day light. If the handwriting contained in Ex.P.1 in
small letters reduced to writing atleast the same will cover 2 full
sheets of papers meaning thereby it may go to cover 4 pages of hill
size papers. No reasons are assigned as to why Ex.P.1 is written
1Page 18
in such a congested manner. Non availability of the paper to write
Ex.P.1 cannot at all be expected nor anticipated in a city of
Mysore, that too near the first defendants shop which is in the
business centre of Mysore City. It is admitted by all the witnesses
that there are several shops of stamps vendors and advocates
offices. If that be the case, that would not have been any difficulty
to secure the required paper to write Ex.P.1. Further, if we
carefully go through the contents of Ex.P.1, it goes to show that all
the suit properties are agreed to have been sold for Rs.25,000/-
and the amount of Rs.20,500/- has been paid to the defendant
earlier to 02-09-67. Further, it is also clear that the amount of
Rs.4,500/- was also paid to the defendant 1. That means only the
stamp papers to get the registered sale deed were required to be
obtained. No reasons are assigned the any of the plaintiffs
witnesses as to what was the difficulty in purchasing the stamp
paper to execute the reg. Sale deed regarding the sale mentioned
in Ex.P.1. It is not the case of the plaintiff, that they were unable
to purchase required stamp papers on the date of Ex.P.1 due to
paucity of the funds. If it was really a genuine sale or tried to be
depicted before Court, definitely the reg. Sale deed itself would
have been got executed since except appearing before the
sub-registrar the first defendant is not required to do anything else
but to sign the reg. Sale deed and if the sale was really a genuine
sale nothing prevented the plaintiff to take the first defendant to
the office of the Sub-Registrar and to get executed the reg.
Document in the office of the concerned/Sub-registrar
Pandavapura but no reasons assigned as to why the reg. Sale
deed is not got executed from the 1st defendant who is admittedly
the holder of the general power of attorney from the 1st defendant
and Subramanya Shetty, who were the owners of the suit
schedule properties on 02-09-67. Further, it is pertinent to note
here that though it is mentioned in Ex.P.1 that the plaintiffs were
required to make some arrangements regarding the amount to
purchase the stamp papers and the registration fees etc. but none
of the witnesses P.Ws. 1,2 and 5 speak about this aspect of the
case.”
11. On the question of payment of the consideration
amount, the trial court gave finding against the respondents.
1Page 19
Finally, the trial court held that since issue nos. 2 to 4 have
been decided against the plaintiffs, the relief for specific
performance cannot be granted.
12. High Court being the first appellate court,
re-appreciated the evidence and came to the conclusion that
the findings recorded by the trial court are perverse in law.
The appellant court discussed the evidence of PW-1, the
scribe of the document, who deposed that the agreement was
written as per instructions given by appellant No.1 and the
said document was signed by him. The appellate court
further discussed the evidence of other PWs who have
attested the document Ex.P1. The Appellate Court found
that in a criminal proceeding between the parties, the
witness gave evidence and produced the agreement Ex.P1
which was marked by the criminal Court as Ex.D.
1Page 20
13. The Appellate Court dealt with the relevancy of the
evidence and the judgment recorded by the Criminal Court
and held as under:
“17. The conclusion drawn by the Criminal Court with
regard to the document – Ex.P.1 in regard to its execution
etc. are certainly relevant and it can be relied upon as a
piece of evidence by the plaintiffs in support of their case.
The observations made by the Criminal Court regarding
execution of agreement – Ex.P.1 in its judgment – Ex. P.4
are certainly admissible U/s 13 of the Indian Evidence Act
in support of the claim of the plaintiffs regarding execution
of the document – Ex.P.1 by defendant No.1. Therefore, the
Trial Court was not at all justified in ignoring such evidence
on the ground that the judgment of the Criminal Court is
not binding on the Civil Court. May be, that the judgment
of the Criminal Court is not binding on the Civil Court.
But, the observations made by a competent Court with
reference to certain document would certainly be relevant
even in a civil case, where the very same document was a
subject matter of challenge.
18. In the instant case, it is not in dispute that the very
same document – Ex.P.1 was produced before the Criminal
Court wherein, plaintiff No.1 was prosecuted on the charge
of trespass and the Criminal Court having examined the
said document has made certain observations with
reference to such document and that being so, when the
very same document sought to be questioned in a civil case,
the observations by a Criminal Court will certainly have
relevance. In fact, the learned counsel for the respondents
had advanced a contention that this document was
created/concocted for the purpose of defence in the
criminal case. In view of such contention raised on behalf
of the respondents, the observations made with reference to
this document by the Criminal Court in its judgment – Ex.
P.4 will certainly have relevance in the present case. The
observations made by the Criminal Court in its judgment –
Ex.P.4 regarding the execution of the document – Ex.P.1
lends credence to the evidence of PWs 1,2 & 5. There could
2Page 21
be no serious dispute that the plaintiffs were the original
owners of the suit properties and that the same were lost in
a series of litigation and ultimately the said properties
which were once lost to the plaintiffs were sought to be
reconveyed to the plaintiffs by virtue of this agreement –
Ex.P.1, executed in their favour by defendant No.1. Under
the circumstances, there is no reason to disbelieve the
execution of the document – Ex.P.1 in favour of plaintiffs.
No doubt it was executed on a quarter sheet of paper and
not on a proper stamp paper and that further the contents
of the document – Ex.P.1 have been written in small letters.
But then it cannot be said, that is not a document. It has
to point out that the document is defined under the Indian
Evidence Act and it means, “any matter expressed or
described upon any substance by means of letters, figures
or marks or by more than one of those means intended to
be used or which may be used for the purpose of recording
that matter”. A writing is a document, whether writing is
made on a quarter sheet or paper or a full sheet, it is a
document within the meaning of the Evidence Act and that
merely because the writing is on a quarter sheet of paper, it
does not cease to be a document. The only requirement is
that the party relying upon a document must prove the
same in accordance with law. The mode of proving the
contents of a document has been dealt with, in Sections 61
to 66 of the Indian Evidence Act. The contents of a
document may be proved either by the primary or
secondary evidence. Primary evidence means, the
document itself produced for the inspection of the Court. In
the instant case, it is not in dispute that the original
agreement itself was produced for the inspection of the
Court as per Ex. P.1. The document in question being an
agreement of sale or a reconveyance agreement, it does not
require attestation. Section 67 of the Evidence Act refers to
document other the document required by Law to be
attested. It shows that the signature of the person alleged
to have signed a document i.e. execution must be proved by
the evidence with the signature purporting to be that of the
executants is in his handwriting and the other matter in the
document i.e. its body must also be proved by proof of
handwriting of a person purporting to have written the
document. In the instant case, the agreement – Ex.P.1 was
stated to have been written by its scribe – PW.1 at the
2Page 22
instructions of defendant No.1 and after the document was
written, it was signed by defendant No.1. Therefore, what
was required to be proved in the instant case by the
plaintiffs to prove the execution of document – Ex.P.1 was
that it contains the signature of defendant No.1.”
14. On the issue of execution of the agreement, the Court
came to the conclusion that there are consistent evidence of
all the three witnesses that the agreement was executed by
the 1st defendant. Accordingly, the appeal was allowed and
the judgment of trial court was set aside.
15. Hence, this appeal by special leave by the legal
representatives of defendant no.1.
16. Mr. K. Ramamurthy, learned senior counsel appearing
for the appellant, assailed the impugned judgment passed by
the High Court as being erroneous in law and
suffers from serious mis-appreciation of evidence. Learned
Counsel, firstly, submitted that issue nos. 6(a) to 6(c) framed
by the Trial Court relates to validity and effect of the orders
2Page 23
passed in execution proceeding and miscellaneous proceeding.
The Trial Court recorded the finding that in execution of
decree in execution case no. 216 of 1961 the
defendant-appellant was put in possession and objection
raised by the plaintiff-respondent herein were
rejected. These findings of issue nos. 6(a) to 6(c) were not
challenged in appeal before the High Court by the
respondents. Further, the High Court held that findings of
issue nos. 6(a) to 6(c) need no interference. Having held so,
the High Court ought not to have allowed the appeal and
decreed the suit. Mr. Ramamurthy, learned senior counsel,
submitted that although, the defendant-appellant denied and
disputed the existence of agreement, but the High Court, on
the basis of evidence recorded in a criminal proceeding
decided the suit for specific performance. Learned senior
counsel, therefore, submitted that, in the alleged agreement
dated 02.09.1967, there is a reference of earlier agreement
dated 29.11.1965, but the same was neither produced nor
proved in the case which itself is sufficient to disentitle the
2Page 24
plaintiff from seeking a decree for the specific performance. It
was contended that although, the alleged agreement in
question was executed in a quarter sheet of paper without
affixing any stamp, but the High Court has erroneously relied
upon the said agreement on the basis of the evidence given in
the criminal case. Learned senior counsel further submitted
that the High Court has committed grave error of law in
applying the provisions of Section 13 of the Evidence Act.
Learned senior counsel relied upon catena of decisions
including decisions rendered by this Court in Anil Behari vs.
Latika Bala Dassi & Others., AIR 1955 SC 566; Adi
Pherozshah vs. H.M. Seervai, AIR 1971 SC 385; Shanti
Kumar Panda vs. Shakuntala Devi, (2004) 1 SCC 438; and
State of Bihar vs. Radha Krishna Singh & Others (1983) 3
SCC 118.
17. Mr. Basava Prabhu S. Patil, learned senior counsel
appearing for the respondents, on the other hand, submitted
2Page 25
that the only issue that was to be decided by the High Court
was as to whether there was a binding agreement executed by
the defendants-appellants. Learned senior counsel submitted
that the High Court after considering the evidence of the scribe
and other witnesses and also considering the evidence
produced in a criminal proceeding and the finding recorded in
the said proceeding has come to the right conclusion that the
agreement was executed by the defendants. The High Court
further came to the finding that payment of consideration
amount to the defendants has been proved and that the
signature on the agreement was admitted by Nanjappa, who
was a signatory of the agreement. According to the learned
senior counsel, the finding recorded by the High Court is
based on appreciation of evidence and, therefore, such finding
of fact needs no interference by this Court.
18. Before we express our view on the findings recorded by
both the trial court and the High Court while passing a decree
2Page 26
for specific performance, we would like to discuss first the
settled proposition of law in this regard.
19. There is no dispute that even a decree for specific
performance can be granted on the basis of oral contract. Lord Du
Parcq in a case (AIR 1946 Privy Council) observed, while deciding a
suit for specific performance, that an oral contract is valid, binding
and enforceable. A decree for specific performance could be passed
on the basis of oral agreement. This view of a Privy Council was
followed by this Court in the case of Koillipara Sriramulu vs. T.
Aswatha Narayana, AIR 1968 SC 1028, and held that an oral
agreement with a reference to a future formal contract will not
prevent a binding bargain between the parties.
20. However, in a case where the plaintiff come forward to seek a
decree for specific performance of contract of sale of immoveable
property on the basis of an oral agreement or a written contract,
heavy burden lies on the plaintiff to prove that there was consensus
ad idem between the parties for the concluded agreement for sale of
immoveable property. Whether there was such a concluded
2Page 27
contract or not would be a question of fact to be determined in the
facts and circumstances of each individual case. It has to be
established by the plaintiffs that vital and fundamental terms for
sale of immoveable property were concluded between the parties.
21. In a suit for specific performance of a contract, the Court has
to keep in mind Section 20 of the Specific Reliefs Act. This Section
preserves judicial discretion to grant decree for Specific
performance. However, the Court is not bound to grant specific
performance merely because it is lawful to do so. The Court should
meticulously consider all facts and circumstances of the case and
to see that it is not used as an instrument of oppression to have an
unfair advantage not only to the plaintiff but also to the defendant.
22. In the case of Surya Narain Upadhyaya vs. Ram Roop
Pandey and others, 1995 Supp (4) SCC 542, this Court while
considering Section 20 of the Specific Relief Act held as under:-
“4. Though the decree for specific performance is a
discretionary power, yet the court is not bound to
grant such a relief merely because it is lawful to do so;
2Page 28
but the discretion of the court is not arbitrary, but
sound and reasonable, guided by judicial principles of
law and capable of correction by a court of appeal.
Therefore, the discretion should be properly exercised
keeping in view the settled principles of law as
envisaged in Section 20 of the Act. This case
demonstrates that the High Court took irrelevant
consideration into account to refuse to grant the
decree for specific performance. It also committed
manifest illegality in reversing the concurrent finding
of facts recorded by the trial court as well as the first
appellant court, namely the appellant has always been
ready and willing to perform his part of the contract.”
23. It is equally well settled that relief of specific performance is
discretionary but not arbitrary, hence, discretion must be
exercised in accordance with sound and reasonably judicial
principles. The cases providing for a guide to courts to
exercise discretion one way or other are only illustrative, they
are not intended to be exhaustive, In England, the relief of
specific performance pertains to the domain of equity, but in
India the exercise of discretion is governed by the statutory
provisions.
24. In the case of Mayawanti vs. Kaushalya Devi, (1990) 3
SCC 1, this Court observed as under:-
2Page 29
“8. In a case of specific performance it is settled law,
and indeed it cannot be doubted, that the jurisdiction
to order specific performance of a contract is based on
the existence of a valid and enforceable contract. The
Law of Contract is based on the ideal of freedom of
contract and it provides the limiting principles within
which the parties are free to make their own contracts.
Where a valid and enforceable contract has not been
made, the court will not make a contract for them.
Specific performance will not be ordered if the contract
itself suffers from some defect which makes the
contract invalid or unenforceable. The discretion of the
court will be there even though the contract is
otherwise valid and enforceable and it can pass a
decree of specific performance even before there has
been any breach of the contract. It is, therefore,
necessary first to see whether there has been a valid
and enforceable contract and then to see the nature
and obligation arising out of it. The contract being the
foundation of the obligation the order of specific
performance is to enforce that obligation.”
25. In the case of K. Prakash vs. B.R. Sampath Kumar,
(2015) 1 SCC 597, this Court held:
“13. Indisputably, remedy for specific performance is
an equitable remedy. The court while granting relief for
specific performance exercises discretionary jurisdiction.
Section 20 of the Act specifically provides that the court’s
jurisdiction to grant decree of specific performance is
discretionary but not arbitrary. Discretion must be
exercised in accordance with the sound and reasonable
judicial principles.
14. The King’s Bench in Rooke’s case said:
“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 not to oppose, but
each, in its turn, to be subservient to the other. This
2Page 30
discretion, in some cases follows the law implicitly, in
others, 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.”
15. The Court of Chancery in Attorney General v.
Wheate followed Rooke’s case and observed: (ER p. 666)
“… 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 viri,
yet, when it is asked, vir bonus est quis? The answer
is, qui consulta patrum, qui leges juraque servat. And
as it is said in Rooke’s case, that discretion is a
science not to act arbitrarily according to men’s wills
and private affections; so the discretion which is to be
executed here, is to be governed by the rules of law
and equity, which are not to oppose, but each in its
turn to be subservient to the other. This discretion, in
some cases follows the law implicitly; in others assists
it, and advances the remedy; in others, again, it
relieves against the abuse, 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. This
description is full and judicious, and what ought to be
imprinted on the mind of every Judge.”
16. The principle which can be enunciated is that
where the plaintiff brings a suit for specific performance
of contract for sale, the law insists upon 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
3Page 31
its discretion in one way or the 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 are established
then the court has to exercise its discretion in favour of
granting relief for specific performance.”
26. Reference may also be made by this Court in the case of
Zarina Siddiqui vs. A. Ramalingam, 2015 (1) SCC 705, this
Court observed as under:-
“33. 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 misleads
the court then such discretion should not be
exercised by refusing to grant specific performance.”
27. In the light of the principles laid down by this Court in
the number of decisions referred hereinabove, we have to
3Page 32
consider as to whether the decision arrived at by the High
Court can be sustained in law.
28. In the instant case while deciding the issue as to whether
the agreement of 1967, allegedly executed by the defendants,
can be enforced, the Court had to consider various
discrepancies and series of legal proceedings before the
agreement alleged to have been executed. In the agreement
dated 2.9.1967, there is reference of earlier agreement dated
29.11.1965 where under Rs. 18,000/- was paid to the
defendant-appellant which was denied and disputed.
Curiously enough that agreement dated 29.11.1965 was
neither filed nor exhibited to substantiate the case of the
plaintiff. The High Court put reliance on the agreement dated
2.9.1967 written in a quarter sheet of paper merely because of
the fact that said quarter sheet of paper was produced before
the Magistrate in a criminal proceeding. In our view, the High
Court is not correct in holding that there is no reason to
3Page 33
disbelieve the execution of the document although it was
executed on a quarter sheet of paper and not on a proper
stamp and also written in a small letter. The High Court also
misdirected itself in law in holding that there was no need of
the plaintiff to have sought for the opinion of an expert
regarding the execution of the document.
29. Indisputably, various documents including order-sheets
in the earlier proceedings including execution case were filed
to nullify the claim of the plaintiff regarding possession of the
suit property but these documents have not been considered
by the High Court. In our considered opinion the evidence and
the finding recorded by the criminal courts in a criminal
proceeding cannot be the conclusive proof of existence of any
fact, particularly, the existence of agreement to grant a decree
for specific performance without independent finding recorded
by the Civil Court.
3Page 34
30. After examining the entire facts of the case and the
evidence produced on record, we are of the definite opinion
that it is not a fit case where the discretionary relief for
specific performance is to be granted in favour of the
plaintiff-respondent. The High Court in the impugned
judgment has failed to consider the scope of Section 20 of the
Specific Relief Act and the law laid down by this Court.
31. For all these reasons, this appeal is allowed and the
impugned judgment passed by the High Court is set aside.
Consequently, the judgment of the learned trial court is
restored. Hence, the suit is liable to be dismissed.
……………………J.
(M.Y. Eqbal)
……………………J.
(C. Nagappan)
New Delhi
September 02, 2015
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