Ors. Vs. Bhagwandas S.Patel & Ors.  INSC 2242 (19 December 2008)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4451 OF 2008 G.
JAYASHREE & ORS. ... APPELLANTS Versus [WITH CIVIL APPEAL NO. 4452 OF 2008]
S.B. SINHA, J.
in a suit for grant of decree for specific performance of contract are before
us aggrieved by and dissatisfied with the judgment and decree dated 13.11.2007
passed by a Division Bench of the Andhra Pradesh High Court reversing a
judgment and decree dated 25.10.1995 of the Additional Subordinate Judge, Ranga
Reddy district at Saroornagar, Hyderabad in Original Suit No. 191 of 1987
dismissing the said suit.
basic facts of the matter are not in dispute.
Respondents No. 1 to
3 are owners of the land measuring 11 Acres and 39 Gunthas in Survey No. 36
situated at village Satamrai of Shamshabad Mandal in the district of Ranga
Reddy. The said land abuts National Highway No. 7 between Hyderabad and
Bangalore. The said respondents entered into an agreement for sale with
Mohammed Kasim Ali and G. Srinivas Reddy, whose heirs and legal representatives
are the appellants, for sale of the said property for a sum of Rs. 18,00,000/-,
out of which a sum of Rs. 1,00,000/- was paid as earnest money.
Some of the important
clauses contained in the said agreement for sale read as under:
"1. The total
consideration being Rs. 18 lakhs, the Vendees have paid a sum of Rs.1,00,000/-
(Rupees One lakh only) to the Vendor as the earnest money. The balance sum of
Rs.17 lakhs shall be paid within 6 months of release of tentative layout HUDA.
2. The sale shall
take effect within 6 months from the release of tentative layout from B.U.D.A.
(Bhagyanagar Urban Development Authority).
3. The actual
physical possession of the property shall remain with the Vendors 3 only.
However, the Vendors hereby give permission to the Vendees to go over the
property and divide the property into different plots. The expenses for
dividing plots and leaving roads shall also be borne by the Vendees. The
Vendees are entitled at their own expenses to obtain the layout permission from
Competent Authority. The Vendees are also hereby permitted to use the Telephone
however they shall be liable to pay Telephone bills.
xxx xxx xxx
5. The above
stipulated time for sale to take effect may be extended by the Vendor. But
unless the stipulated time is extended in writing by the Vendors, the Vendees
shall be liable to pay Bank interest (the interest at which bank lands to its
customers) to the Vendors on the unpaid purchase money after two months of
xxx xxx xxx
7. The Vendors are
owners of 11 acres 39 gunthas falling in S. No. 36. However, the Vendors have
fenced the property giving set back from the Road. The Vendees shall be
entitled to obtain compensation for the unfenced land from the concerned
8. As the Vendees are
in the business of selling plots, the Vendees shall be liable to pay the sale
consideration of each plot proportionately on the same day to the Vendors when
the Vendors effect sale of that particular plot."
besides the above agreement of sale, the said two vendees had also entered into
an Agreement of sale with one S. Yadagiri, his sons and some others for sale of
land measuring 90 Acres in Survey No. 643 to 658, which is adjacent to the land
of the respondents.
to or in furtherance of the said agreements of sale, the said vendees had
applied for a joint layout for the entire land of 101.39 acres and a sum of
Rs.1,54,725/- was paid by the said vendees towards layout permit fee and
developmental charges vide undated receipt. The relevant portion of the said
receipt reads as under:
"It is not part
of sale consideration, for any reason, the amount is refunded, the same should
be returned without any delay to the PURCHASERS.
The Agreement period
will be 8 MONTHS after the release of TENTATIVE LAYOUT from HUDA for SURVEY No.
36 of SATMRAI Village and for SURVEY NUMBERS 645, 647, 653, 654, 655/1, 657,
658, 666/2 and PART SURVEY NUMBERS 644, 646, 651, 655 is 15 MONTHS after the
release of TENTATIVE LAYOUT from HUDA. After the above period for the unpaid
balance of sale consideration the Bank interest will be charged."
period of agreement in terms of the said receipt was eight months from the date
of release of the tentative layout by Hyderabad Urban Development Authority
(for short, "HUDA")
the owners filed an application for grant of layout not only in respect of
Survey No. 36 but also for grant of layout permission in respect of other
plots. By a communication dated 26.4.1985, the said Shri Yadagiri was informed
about the grant of layout not only in respect of the land of which he was the
owner but also in respect of Survey No. 36 subject to the following conditions:
"i) The Road
shall be formed as per the specifications (enclosed a copy of the
ii) No plot shall be
utilized, sold, leased or otherwise disposed of for the residential purpose
unless the layout is finally approved by Hyderabad Urban Development Authority.
iii) As regards to
amenities like water, drainage, electricity, etc; your own arrangement shall be
made as the public system is not available in this area."
It was furthermore
therefore requested to form the roads as stated above within a period of three
months from the date of receipt of the draft layout plan and to inform the same
to Hyderabad Urban 6 Development Authority. The final approval of the layout
plan will be considered only if you fulfill the above said conditions."
Admittedly, no road
was constructed. Plaintiffs wanted to have a fresh layout only in respect of
Survey No. 36.
is at that stage the owners of the land -- defendants Nos. 1 to 3 - by a notice
dated 3.7.1985 served upon the vendees through their Advocate requested them to
lay the roads as directed by HUDA by 31.7.1985 failing which the said agreement
of sale would be deemed to have been terminated and the earnest money of
Rs.1,00,000/- paid by the said vendees would stand forfeited. It was contended
therein that after the aforementioned draft layout plan was received, the
vendees developed "inter se misunderstandings and untrustworthiness
resulting in serious inimical attitude amongst themselves".
It was furthermore
"9. My clients
state that unless you continue to keep up and fulfill your obligations at every
stage as agreed in the Contract of sale, you will be consequently in trouble in
fulfilling the time scheduled with regard to the payments of the balance sale
consideration in installments to my 7 clients and ultimately you will be
failing in completing the sale transaction within the time scheduled if you do
not commence and complete the road formation work as per the approved draft
layout plan within the time fixed by HUDA.
10. My Clients state
that they are in no way concerned with your inter se mis-understandings and
disputes. My clients are only interested in completing the sale transaction of
the land covered by Contract of sale within the time fixed in the contract of
vendees responded to the said notice stating that the joint layout had resulted
in much inconvenience to develop the portion of the land belonging to the
owners as it was one of the conditions of the tentative layout that unless
entire land was developed, the final layout would not be released. Under these
circumstances, it was furthermore contended that the only alternative left was
that the owners had to take a separate layout for their lands. It was stated
that the vendees `were ready and prepared to develop the said land immediately
as and when the owners obtain a separate layout for the land held by them'.
Mohammed Kasim Ali did not want to involve himself in the matter of purchase of
the said land in terms of the said agreement of purchase. Alleging breach of
the terms of the said agreement on the part of 8 the defendant nos. 1 to 3, he
filed a suit bearing O.S. No. 19 of 1986 in the Court of V Addl Judge, City
Civil Court at Hyderabad praying, inter alia, for the following reliefs:
"(a) A decree
for Rs.90,000/- by way of refund may be passed in favour of the plaintiff and
against the persons and the properties of defendants 1 to 3.
(b) A decree may be
granted awarding future bank interest on Rs.90,000/- in favour of the plaintiff
and against the persons and the properties of defendants 1 to 3.
(c) A decree may be
passed for Rs.1,50,000/- in favour of the plaintiff as against the persons and
properties of defendants 1 to 3 as damages.
(d) A decree of
further interest on Rs.1,50,000/- may be granted in favour of plaintiff as
against the persons and properties of the defendants 1 to 3."
an interim order was passed therein. The matter was taken to the High Court.
The said Mohammed Kasim Ali died on 19.4.1987 and after his death his wife, the
legal representative, entered into a compromise with the owners of the land out
of the court.
G. Srinivas Reddy filed a suit bearing O.S. No. 171 of 1986 on the file of the
Munsif Magistrate, West and South, Ranga Reddy, for grant of mandatory
owners also filed a suit for damages being O.S. No. 679 of 1986.
G. Srinivas Reddy
filed a written statement therein, stating:
defendants further submits that there is no cause of action at all to file the
The suit itself as a
motivated and is a counter blast to the claim made by the defendants to secure
a separate layout for the land covered by agreement of sale dated 23.4.1984.
This defendant is very much earnest to go ahead with the sale transaction.
In that view only he
filed O.S. No.171 of 1986 on the file of the Munsif Magistrate, West and South,
Ranga Reddy seeking directions against the vendors herein for securing separate
layout from HUDA with regard to the land covered by agreement of sale dated
23.4.1984. And also filed O.S. No. 191 of 1987 on the file of Addl.
Ranga Reddy District for specific performance of the agreement. The plaintiffs
herein also have made their appearance in the said suit.
10. Under these
circumstances, it is submitted that this defendant is ready and willing to
perform his obligations under the agreement of sale at all times, and for the
reasons not known to this defendant the plaintiffs are avoiding purposely to
secure separate layout in respect of the land and thereby causing hurdles for
proceedings with the sale transaction."
10 The said suit
was, however, dismissed for default.
O.S. No. 171 of 1986 filed by G. Srinivas Reddy on the file of the Munsif
Magistrate, West and South, Ranga Reddy, for grant of mandatory injunction was
transferred to the Court of Additional Subordinate Judge, Ranga Reddy district
at Saroornagar and was renumbered as O.S. No. 21 of 1993.
Srinivas Reddy, thereafter filed another suit for specific performance of the
agreement of sale bearing O.S. No. 191 of 1987 in the Court of Additional
Subordinate Judge Ranga Reddy district at Saroornagar through his constituted
Issues were framed in
both the suits separately. Issue No. 2 framed in O.S. No. 21 of 1993 reads as
Defendants 1 to 3 are liable under the suit agreement of sale to obtain a
separate layout for the suit land from the Urban Development Authority
learned trial judge was of the opinion that there existed an enabling clause
being clause (3) in the Agreement of sale. According to the learned trial
judge, however, as the defendant Nos. 1 to 3 had signed the requisite documents
and also received the required fee and charges for the purpose of depositing
the same with HUDA with a view to obtain the provisional layout plan, they have
accepted their responsibility to obtain layout for the suit land from the Urban
Development Authority. It was furthermore held:
"No doubt it is
for the plaintiff and D4 to pay the necessary expenses and also make efforts to
obtain the sanction from HUDA being the vendees. The responsibility of D1 to D3
or their G.P.A. is to sign the necessary documents required for obtaining
layout sanction and also to deposit the amounts paid by the Plaintiff and D4
required for the fee and charges as they did in the instant case.
Since the Defendants
1 to 3 agreed to convey the suit property in favour of plaintiff and D4 or
their nominees, D1 to D3 are bound to obtain a separate layout for the suit
land, at the request of the Plaintiff and D4."
Opining that although
the agreement was indivisible, it was held:
cannot be said that each bit of the suit land got equal potentiality. The suit
land consists of more than 11 acres and it is revealed 12 that the suit land
is adjacent to the road.
Therefore, the piece
of land which is quite adjacent to the road will have more value than the land
beyond the land adjacent to the road.
Plaintiff can opt for the specific performance of the entire suit agreement and
the suit filed by the 4th Defendant vide O.S. No. 19 of 1986 on the file of the
5th Additional Judge, City Civil Court will not have any adverse effect on the
rights of the Plaintiff. At the most the plaintiff can be compelled to pay the
balance of sale consideration which remained to be paid after the amount paid
by the Plaintiff as earnest money."
regards the issue as to whether the appellants were ready and willing to
perform their part of the contract, it was opined that as plaintiffs could
purchase the land even without layout and keeping in view the fact that the
sale deed was to be executed within a period of eight months from the date of
grant of approval for tentative layout plan, the learned trial judge held that
there was not much delay in filing the suit for enforcement of the agreement on
the part of the plaintiff and he had all along been ready and willing to
perform his part of the contract. The learned judge, furthermore, opined that a
suit for specific performance of contract at the instance of the plaintiff
alone was maintainable although Mohammed Kasim Ali was not to be a party to the
deed of sale. The High Court, on the other hand, reversed the said findings of
the learned trial judge holding that: (1) in terms of 13 clause 3 of the
agreement, it was for the vendees to obtain the tentative layout plan; (2) in
view of the stand taken by Mohammed Kasim Ali resulting in entering into a
compromise between him and the owners of the land, the contract was not kept
alive and in view of the fact that the suit was instituted by the joint
purchaser, the plaintiff could not enforce agreement of sale against the wish
of the joint purchaser; and (3) the suit for specific performance of the
contract having been filed five days before expiry of three years from the date
of expiry of contract was a clear pointer to show that the plaintiff was not
ready and willing to perform his part of contract.
R.F. Nariman, learned Senior Counsel appearing on behalf of the appellants
raised the following contentions:
i. A suit for
specific performance can be instituted even at the instance of any of the joint
promisees as a common layout work was not contemplated under the agreement and,
thus, the High Court committed a serious error in arriving at a finding that
the appellants were not ready and willing to perform his part of the contract.
ii. The suit having
been filed within the prescribed period of limitation, the High Court committed
a serious error of law in 14 opining that time was of essence of the contract
and, thus, the suit for specific performance was not maintainable and it should
have been filed much earlier, although in fact the same had been filed within a
period of one and half years from the date of refusal on the part of the owners
- defendants 1 to 3, to abide by the terms of the contract.
iii. Order II Rule 2
of the Code of Civil Procedure being not applicable in a case of this nature,
the High Court committed a serious error in applying the principles thereof.
P.P. Rao, learned Senior Counsel appearing on behalf of the respondents, on the
other hand, urged:
i. The agreement in
question being a development agreement should be construed having regard to the
purport and object for which the same was executed.
ii. All parties
having proceeded on the basis that development agreement in respect of two
different plots of land would be given effect to jointly and a layout having
been obtained for both the plots together, the plaintiff could not have been
15 insisted at a later stage for individual or separate layout in respect of
the plot in Survey No. 36.
iii. In any event, in
a case of this nature, this Court should not exercise its discretionary
jurisdiction under Article 136 of the Constitution of India as the High Court
has refused to pass a decree of specific performance of contract.
Appellants' predecessor-in-interest Shri G. Srinivas Reddy and late Mohammed
Kasim Ali entered into an agreement jointly.
The parties proceeded
on the basis that not only plot in Survey No. 36 which was the subject matter
of the agreement but also other plots, notice whereof had been taken
heretobefore, were required to be developed together and permission for common
layout should be obtained from the competent authority therefor. Applications
for grant of layout could have been filed only by the owners. In terms of the
agreement, however, it was for the vendees to obtain the same. Concededly,
defendants 1 to 3 signed all papers in relation thereto. They had no doubt
received a sum of Rs.1,54,725/- from the vendees on that account, but it has
not been disputed that they deposited the amount with the competent authority
of HUDA for obtaining the said layout plan. In fact, the combined proposal was
placed 16 before the said authority which was granted as would appear from its
letter dated 26.4.1985 addressed to Shri S. Yadagiri. The said sanction was
granted subject to certain conditions, one of them being that a road was to be
formed as per the specifications.
at least for a period of three months no decision was taken. There is also
nothing on record to show that any decision was taken prior to or immediately
after the receipt of the said letter dated 26.4.1985;
that a proposal for a draft layout should be filed with the authority only in
respect of plot No. 36.
again not only the vendees and developers of the neighbouring plot fell apart,
disputes and differences having arisen amongst the vendees inter se.
stand which had been taken before us, admittedly, was taken by the said G.
Srinivas Reddy only in reply to the defendant No.1's legal notice dated
3.7.1985. The said notice was responded to by the Advocate appointed by G.
Srinivas Reddy alone. No such demand was, thus, raised by Mohammed Kasim Ali.
the matter of performance of the said agreement, the appellants did not raise
the same contentions, as has been raised before us as regards the performance
of contract on the part of the vendors. At that point of time they did not say
that the vendors committed any breach of the condition of the agreement for
sale. Even in the said reply dated 25.7.1985, it had not been pointed out that
said G. Srinivas Reddy alone was ready and willing to develop the plot being
Survey No. 36, irrespective of the stand taken by the Mohammed Kasim Ali.
the agreement was entered into on 23.4.1984. The contract was to be performed within
a period of eight months. A joint tentative layout plan for both the lands was
granted on 26.4.1984. Nothing has been placed on record to show as to when the
disputes and differences between the vendees inter se began or when the
disputes and differences between the developers of two plots started. It may be
true that in terms of the agreement, draft layout was to be obtained in respect
of Plot No. 36 but the very fact that the parties proceeded on the basis that
all the lands would be developed together and steps having been taken in this
behalf; it was too late for G. Srinivas Reddy to raise a fresh demand.
learned trial judge applied the principle of novation of contract having regard
to the subsequent conduct of the parties. The said principle, in our opinion,
is applicable as against the said G. Srinivas Reddy. The agreement in question
is not an agreement for sale simplicitor. The parties thereto were aware that
only for the purpose of development of the said plot the agreement had been
entered into. If that be so, the vendors were right in enforcing the terms of
the said agreement/contract keeping in view the aforementioned purpose in mind.
The joint promisee might not have rescinded the contract prior to the filing of
the suit for damages against the defendants 1 to 3 but then when he filed the
suit claiming refund of the amount of advance which he had paid by way of his
share as also the damages, the contract stood rescinded so far as he was
concerned. His claim might have been based on the purported breach of the terms
of the contract on part of defendants No. 1 to 3, but they had arrived at a
compromise. True it is that G. Srinivas Reddy filed a written statement in the
suit filed by the Mohammed Kasim Ali. He expressed his intention to pay the
amount of consideration for the entire land but evidently the suit did not go
to trial. He did not insist therefor. When an application for settlement
arrived at between Mohammed Kasim Ali and the defendant Nos.1 to 3 was filed,
he did not object thereto. As he had appeared even 19 before the High Court
through counsel, it was obligatory on his part to oppose the said compromise
between the vendors and his co-vendee.
Nariman may be right that a suit for enforcement of a contract on the part of
the joint promisee is maintainable. Reliance has been placed by Mr. Nariman on
a decision of Jagdeo Singh & ors. v. Bisambhar & ors.
[AIR 1937 Nagpur
186], wherein the learned judge laid down the law thus:
certainly appear to cover a case where one or more co-contractors want to
enforce the contract against the will of the others. The wording is not `either
side thereto' or even `either party thereto', but any party thereto'. The word
`any' indicates one out of a number of persons more than two. If only two
parties are contemplated the correct adjective would be `either' or at the most
`both'. The argument advanced was that the contract cannot be enforced piecemeal
and that the Courts cannot make a new contract for the parties. Of course not;
but the plaintiffs are not doing that. They want the original contract enforced
just as it was made.
They want to buy the
property and want the Court to compel their co-contractors Anantram to buy it
along with them just as he had promised to do, and ask the Court to compel the
defendants to sell it to all four in exact accordance with the agreement.
So long as the
plaintiffs are willing to pay the vendors the full price bargained for and ask
them to sell to the very persons with whom they had contracted I am unable to
see how there is any variation. Any quarrel the purchasers may have among
themselves is not being introduced into this 20 suit. Each party is getting
exactly what he bargained for and it is no concern of the vendors how these
purchasers choose to arrange about the payment of the purchase price as between
themselves. That is not a part of the agreement.
All that the
purchasers undertook to do was to pay the money to their vendors and that is
There is no section
in the Act which prohibits this.
Therefore I am clear
that the plaintiffs have a right to sue for specific performance even though
one of their co-contractors now refuses to join them. Of course, it is
essential in such a case that all the parties to the contract should be before
If any are omitted
then I can understand difficulties arising. But when as here they have all been
joined on one side or the other I am of opinion the suit can proceed."
It may, however,
immediately be noticed that the court therein proceeded on the basis that the
original contract was required to be enforced just as it was made even though
one of their co-vendees refused to join them then and only on that basis the
said principle was evolved.
has also been placed by Mr. Nariman on Jahar Roy (Dead through L.Rs.) &
Anr. v. Premji Bhimji Mansata & Anr. [(1978) 1 SCR 770] wherein, in terms
of the agreement, defendants were to be entitled to all box-office collections,
but they were to contribute a sum of Rs. 5275/- every month towards the
expenses and was also to pay the same within the 21 time prescribed. This
Court, having regard to the provisions contained in Section 45 of the Indian
Contract Act, held as under:
thus deals with devolution of joint rights in the case of joint promises, but
it does not deal with a case where, a joint promise, does not want to joint as
a co-plaintiff and is arrayed as a proforma-defendant with the specific plea
that no relief is claimed against him. The judgment and the decree in this case
have in fact enured to his benefit also."
Court, furthermore, while opining that a person cannot be compelled to be a
plaintiff, for as is obvious, he cannot be compelled to bring an action at law
if he does not want to do so, held:
"At the same
time, it is equally true that a person cannot be prevented from bringing an
action, by any rule of law or practice, merely because he is a joint promisee
and the other promisee refuses to join as a co-plaintiff. The proper and the
only course in such cases is to join him as a proforma- defendant."
dicta laid down in Jahar Roy (Dead through L.Rs.) & Anr. v. Premji Bhimji
Mansata & Anr. (supra) was followed by the Madras High Court in Ponnuswami
Gounder v. Boyan & ors. [AIR 1979 MADRAS 130].
The Madras High Court
held that the decision of the Calcutta High Court in 22 Safiur Rahman v.
Maharumunnissa Bibi [(1897) ILR 24 Calcutta 832] was not good law opining that
as both the vendees had different rights, one can purchase the right of the
"In my opinion,
the ratio of the judgment is that where the plaintiff is entitled to the
relief, merely because some of them have refused to join him as plaintiffs or even
where they do not want the specific performance of the agreement, his right
could not be jeopardised by such refusal by the other parties. In such a case,
I am of the view that if the defendants do not want to pay the money, the
plaintiffs would have to pay the entirety of the consideration payable under
the agreement to convey or reconvey, as the case may be and on such deposit of
the entire money, he would be entitled to get a conveyance of the entirety of
the property though it should normally be in favour of the plaintiff and the
defendants in whose favour the agreement was executed. After the conveyance is
executed as such, the rights of the plaintiff and the other defendants in whose
favour the agreement was executed will have to be worked out. The specific
performance as such therefore could not be denied to the plaintiff merely on
the ground that defendants 2 and 3 have refused to join as plaintiffs or that
they do not want the conveyance. It may also be pointed out that in a case of
this nature, it will not be possible for one co-promisee to give up his rights
so as to prejudice the rights of the other co-promisees. Therefore, the first
defendant also would not be entitled to claim that he will execute only with
reference to half of the suit properties on the ground that if the conveyance
is executed in favour of the plaintiffs and defendants 2 and 3, defendants 2
and 3 would be entitled to half of the properties conveyed. The 23 rights as
between the plaintiffs and the defendants would have to be worked out with
reference to the agreements between them and it is not open to the first
defendant to plead that the second and third defendant's right should be
separated from that of the plaintiffs."
would proceed on the basis that the ratio has correctly been laid down in the
aforementioned decisions. The question, however is, is it applicable to the
fact of the present case? The answer thereto must, in our opinion, be rendered
in the negative.
Keeping in view the
consent decree passed by a competent court of law in terms of consent entered
into by and between Mohd. Kasim Ali and defendants 1 and 3, the agreement of
sale in the same form could not have been enforced. The matter might have been
different had the compromise not been recorded. A part of the contract stood
rescinded; it has been worked out. We, however, must place on record that the
terms of the compromise are not placed before us.
proportionate amount of advance taken must have been refunded; some damages
also must have been paid. G. Srinivas Reddy 24 not being a party thereto may
not be bound thereby but at least being a party to the suit he, keeping in view
the interest he had in the matter, should have opposed recording of the said
compromise. He without any further delay should have also filed a suit for
specific performance of contract. He even did not file a suit for specific
performance immediately thereafter. He first filed a suit for mandatory
injunction. We are not concerned with the maintainability thereof. We would
assume that the said suit was maintainable. But the fact that he did not choose
to file a suit for specific performance of contract at the first instance
speaks volumes about his conduct. The civil courts, in the matter of enforcement
of an agreement to sell, exercise a discretionary jurisdiction. Discretionary
jurisdiction albeit must be exercised judiciously and not arbitrarily or
capriciously. A plaintiff is expected to approach the court with clean hands.
His conduct plays an important role in the matter of exercise of discretionary
jurisdiction by a court of law. In Mohammadia Cooperative Building Society
Cooperative Building Society Limited & ors. [(2008) 7 SCC 310], this Court
"71. Grant of a
decree for specific performance of contract is a discretionary relief. There
cannot be any doubt whatsoever that the discretion has to be exercised
judiciously and not arbitrarily. But for the said purpose, the conduct of the
plaintiff 25 plays an important role. The courts ordinarily would not grant
any relief in favour of the person who approaches the court with a pair of
Sanjana M. Wig (Ms.) v. Hindustan Petroleum Corpn. Ltd. [2005) 8 SCC 242] in
regard to exercise of the discretionary jurisdiction, this Court held that the
same depends upon the facts and circumstances of each case wherefor no hard and
fast rule can be laid down.
may notice that B.P. Jeevan Reddy, J. in K.S. Vidyanadam & ors. v. Vairavan
[(1997) 3 SCC 1] held that a new look is required to be given and the rigour of
the rule is required to be relaxed by courts as regards the principle that time
is not of the essence of the contract in case of immovable properties as when
the said principle was evolved the prices and values were stable and inflation
was unknown, stating:
Counsel for the plaintiff says that when the parties entered into the contract,
they knew that prices are rising; hence, he says, rise in prices cannot be a
ground for denying specific performance. May be, the parties knew of the said circumstance
but they have also specified six months as the period within which the
transaction should be completed. The said time-limit may not amount to making
time the essence of the contract but it must yet have some meaning. Not for 26
nothing could such time-limit would have been prescribed. Can it be stated as a
rule of law or rule of prudence that where time is not made the essence of the
contract, all stipulations of time provided in the contract have no
significance or meaning or that they are as good as nonexistent? All this only
means that while exercising its discretion, the court should also bear in mind
that when the parties prescribes certain time-limit(s) for taking steps by one
or the other party, it must have some significance and that the said time-limit
(s) cannot be ignored altogether on the ground that time has not been made the
essence of the contract [relating to immovable properties]."
This court therein
noticed the decision rendered in Mademsetty Satyanarayana v. G. Yellogi Rao
[(1965) 2 SCR 221] where Subba Rao, J.
(As His Lordship then
was) made a distinction between Indian law and the English law on the subject
to hold that some delay may not be a bar in granting a relief of specific
performance as the limitation for filing such suit is prescribed under the
Limitation Act, 1963, stating:
"13. In the case
before us, it is not mere delay. It is a case of total inaction on the part of
the plaintiff for 2 1/2 years in clear violation of the terms of agreement
which required him to pay the balance, purchase the stamp papers and then ask
for execution of sale deed within six months. Further, the delay is coupled
with substantial rise in prices - according to the defendants, three times -
between the date of agreement and the date of suit notice. The delay has
brought about a situation 27 where it would be inequitable to give the relief
of specific performance to the plaintiff."
Nariman, however, would contend that somewhat different view has been taken by
this Court in Nirmala Anand v. Advent Corporation (P) Ltd. & ors. [(2002) 8
SCC 146], wherein this Court in a situation of this nature had directed payment
of a higher price. Each case is, thus, required to be considered on its own
facts. No hard and fast rule, therefore, can be laid down. While determining
the lis in a suit for specific performance of contract, no legal principle in
absolute terms can be laid down. Relief in a matter of this nature has to be
granted keeping in view a large number of facts.
Our attention has
also been drawn to a decision of this Court in Rame Gowda (dead) by LRs. v. M.
Varadappa Naidu (dead) by LRs. & anr. (2004) 1 SCC 769, which, in our
opinion, has no application in this case.
in view the facts and circumstances of this case, we think, it is not a case
where we should exercise our discretionary jurisdiction under Article 136 of
the Constitution of India. We refuse to interfere with the 28 discretionary
jurisdiction exercised by the High Court particularly when the learned trial
court had not adverted to this aspect of the matter at all.
the views we have taken, we do not think it necessary to deal with other
contentions raised by Mr. Rao including the applicability of the provisions of
Order II Rule 2 of the Code of Civil Procedure. The appeals are dismissed with
costs. Counsel fee assessed at Rs. 25,000/-.
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