Narayana Vs. Ponthala Parvathamma & Anr  Insc 412 (23 August 2001)
Khare & Shivaraj V. Patil V.N. Khare, J.
is a plaintiffs appeal. On 12th of December, 1975 defendant No.1 executed an
agreement to sell two plots of land plot A comprising 2 acres patta land and
plot B comprising Ac.1.30 Cents Sivaijama land for a sum of Rs. 17,900/- in favour
of the plaintiff. Under the agreement to sell, a sum of Rs. 2,900/- was paid to
defendant No.1 as earnest money.
one Bhima Naik issued a registered notice to the appellant stating therein that
he is the owner of the land comprising in plot B measuring Ac.1.30 Cents and
that the defendant No. 1 has no right to sell the same to the appellant herein.
The appellant sent notice to defendant No.1 for executing the sale deed.
However, the defendant evaded to perform his part of the contract. It is under
such circumstances, on 15.3.76, the appellant herein brought a suit for
specific performance being OS 19/76 in the court of Subordinate Judge, Madanapalle.
The plaintiffs case was that the appellant always was and is ready and willing
to perform his part of the contract.
the title of defendant No. 1 was found to be defective as one Bhima Naik set up
title on Sivaijama land, hence the plaintiff prayed for specific performance of
agreement to sell of two acres of patta land only after proportionate deduction
of the price for the land or in the alternative, substitute the patta land for
the price agreed upon between the parties.
No.1 contested the suit by filing a written statement. The defendant took the
plea that the plaintiff cannot seek to enforce a new contract and that the
plaintiff under the pretext of notice having received by him from Bhima Naik,
did not come forward to perform his part of the contract and his plea for
proportionate deduction of the price or in the alternative, substitute the
property is untenable and the suit is liable to be dismissed. The trial court
held that the plaintiff is not entitled to seek enforcement of new contract
either by way of substitution of the patta land or for proportionate deduction
of the agreed price of the land. The trial court further found that the title
set up by Bhima Naik in respect of one item of the land did not entitle the
plaintiff to vary the contract. With the aforesaid finding, the plaintiffs suit
plaintiff thereafter filed an appeal before the first appellate court. Before
the first appellate court for the first time it was stated by defendant No. 1
that he has no title in respect of plot B land and the same belonged to his
wife and she has refused to assign the said land in his favour.
such circumstances, the plaintiff moved an application for amendment of the
plaint to the effect that the plaintiff is ready and willing to purchase Ac. 2
acres of land in plot A by paying the entire sale consideration of Rs. 17,900/-
and further he is relinquishing his claim in respect of the land contained in
plot B and that he would not claim any compensation. The said amendment was
allowed by the appellate court. The first appellate court having found that
defendant No. 1 has no title in respect of land comprising in plot B, and the
plaintiff is ready and willing to pay up the whole of the agreed consideration
amount, after relinquishing his claim in respect of plot B land and the
compensation, the plaintiff is entitled to decree for specific performance. In
that view of the matter, the appeal was allowed and the suit was decreed in
respect of land comprised in plot A measuring two acres of patta land.
the defendant preferred a second appeal before the High Court. The High Court
was of the view that since the plaintiff did not come with the suit claiming
the benefit of sub-section (3) of Section 12 of the Specific Relief Act, 1963
(hereinafter referred to as the Act), and claimed performance of only part of
the whole agreement, and therefore he was not ready and willing to perform his
part of the whole contract and thus not entitled for decree for specific
performance of the agreement to sell.
the second appeal was allowed and the suit stood dismissed.
against the said judgment of the High Court, the plaintiff has preferred this
appeal by way of special leave petition.
counsel for the appellant urged that the relief under sub- section (3) of
Section 12 of the Act can be claimed even at the appellate stage and the High
Court committed serious mistake of law in holding that such relief ought to
have been claimed when the suit was filed. Learned counsel appearing for the
respondents contended that in view of Section 16 (c) of the Act, the plaintiff
is to aver and establish that he has performed or has been ready and willing to
perform the essential terms of the contract.
averment has to come in the plaint itself. An amendment to the pleading at a
later point of time to bring in the statement is to be refused after the
parties have gone into evidence.
arguments of the parties, the question that arises for consideration is whether
the relief under sub-section (3) of Section 12 of the Act can be claimed at the
appellate stage by amendment in the plaint. We would first examine whether the
plaintiff was entitled to relinquish a portion of his claim under the agreement
at the appellate stage and seek performance of remaining part of the contract
in conformity with Section 12 (3) of the Act when the plaintiff for the first
time came to know that defendant no.1 has no title in respect of Sivaijama
on Specific Performance stated thus :
the vendors title proves to be defective in some particulars, or his estate is
different from that which he agreed to convey, or is subject to encumbrances or
outstanding rights to third persons, or the subject-matter generally the land
is deficient in quantity, quality or value, it is plain that the contract
cannot be specifically performed, according to its exact terms, at the suit of
either party. In such a case there are only three possible alternatives for a
court of equity to pursue, either to refuse this remedy entirely; or to enforce
the contract without any regard to the partial failure, compelling the
purchaser to take what there is to give and to pay the full price as agreed; or
to decree the conveyance of the vendors actual interest and allow to the vendee
pecuniary compensation or abatement from the price, proportional to the amount
and value of the defect in title or deficiency in the subject matter.
(3) of Section 12 of the Specific Relief Act, 1963 runs as under:
Where a party to a contract is unable to perform the whole of his part of it,
and the part which must be left unperformed either (a) forms a considerable
part of the whole, though admitting of compensation in money; or (b) does not
admit of compensation in money;
not entitled to obtain a decree for specific performance; but the court may, at
the suit of other party, direct the party in default to perform specifically so
much of his part of the contract as he can perform, if the other party
a case falling under clause (a), pays or has paid the agreed consideration for
the whole of the contract reduced by the consideration for the part which must
be left unperformed and a case falling under clause (b), [pays or had paid] the
consideration for the whole of the contract without any abatement; and
either case, relinquishes all claims to the performance of the remaining part
of the contract and all right to compensation, either for the deficiency or for
the loss or damage sustained by him through the default of the defendant.
perusal of sub-section (3) of Section 12 shows that the first part of the said
provisions mandates refusal of specific performance of a contract on certain
conditions. However, latter part of the provisions permits a Court to direct
the party in default to perform specifically so much of his part of the
contract as he can perform if the other party pays or has paid the agreed
consideration for the whole of the contract and relinquishes all claims to the
performance of the remaining part of the contract and all the rights to
compensation for the loss sustained by him. If a suit is laid by the other
party, the court may direct the defaulting party to perform that part of the
contract which is performable on satisfying two preconditions, i.e.,
plaintiff pays or has already paid the whole of the consideration amount under
the agreement and that
relinquishes all claims to the performance of other part of the contract which
defaulting party is incapable to perform and all rights to compensation for
loss sustained by him. Thus, the ingredients which would attract specific
performance of the part of the contract, are :
a party to an agreement is unable to perform a part of the contract, he is to
be treated as defaulting party to that extent and
the other party to an agreement must, in a suit for such specific performance,
either pays or has paid the whole of the agreed amount, for that part of the
contract which is capable of being performed by the defaulting party and also
relinquish his claim in respect of other part of contract which defaulting
party is not capable to perform and relinquishes the claim of compensation in
respect of loss sustained by him. If such ingredients are satisfied, the
discretionary relief of specific performance is ordinarily granted unless there
is delay or latches or any other disability on the part of other party.
the question is whether relief under Section 12(3) of the Act is required to be
pleaded in the plaint when the suit is laid or it can also be taken at the
appellate stage. The view taken by the High Court is the readiness and
willingness to perform the terms of the contract by the plaintiff based on
latter part of sub-section (3) of Section 12 must be pleaded in the plaint
itself when the suit is laid and in its absence the relief being discretionary
cannot be granted by amendment of the plaint at the appellate stage. In Kalyanpur
Lime Works Ltd. vs. State of Bihar and another 1954 SCR 958, identical question
came up for consideration before the Supreme Court. In the said case, the apex
court held that relief based on Sections 13, 14, 15 and 17 of the Specific
Relief Act, 1877 can be granted at any stage of the litigation.
A.L. Parthasarathi Mudaliar vs. Venkata Kondiah Chettiar AIR 1965 Madras 188,
it is held that it is open to plaintiff to relinquish the part of the
performance of the contract after paying the entire consideration of the
contracted amount at the appellate stage of the proceedings if the defaulting
party is not capable to perform the whole of the contract.
in agreement with the statement of law expressed in the aforesaid decisions. In
the present case what we find is that it was for the first time at the
appellate stage, the defendant no.1 stated that he had no title in respect of
Plot B Sivaijama land which belonged to his first wife and his wife has refused
to assign the said plot of land in his favour. It is on account of the said
statement the plaintiff filed an application for amendment of the plaint
relinquishing his claim in respect of B plot of land as well as compensation
for the loss he sustained for non-performance of part of the contract while
agreeing to pay the entire contracted amount. An appeal is a continuation of
the suit. When an appellate Court hears an appeal, the whole matter is at
large. The appellate Court can go into any question relating to rights of the
parties which a trial Court was entitled to dispose of provided the plaintiff
possesses that right on the date of filing of the suit. Defendant no.1 prior to
filing of appeal by the plaintiff never informed the plaintiff that his wife
has refused to assign B plot of land in his favour and he having no title over
the said plot of land is incapable to perform the whole part of the contract.
Under such circumstances it was open to the plaintiff to move for amendment of
the plaint pleading therein the ingredients for part performance of the
contract as provided under sub-section (3) of Section12 of the Act. It is not
disputed that the plaintiff had deposited the entire contracted amount in the
trial Court. He further relinquished his claim in respect of B plot of land as
well as claim for compensation. Under such circumstances the first appellate Court
was justified in allowing the amendment of the plaint and thereafter decreeing
the suit of the plaintiff.
therefore, find that view taken by the High Court in holding that the plea
taken by the plaintiff at the appellate stage having been not taken at the time
of filing of suit, the suit would fail, is erroneous. For the aforesaid reasons
appeal deserves to be allowed.
accordingly, set aside the judgment under appeal. The appeal is allowed. There
shall be no order as to costs.