Narinderjit Singh Vs.
North Star Estate Promoters Limited
[Civil Appeal No.
4306 of 2012 arising out of SLP (C) No.15730 of 2011]
[Civil Appeal No.
4307 of 2012 arising out of SLP (C) No.15051 of 2011]
J U D G M E N T
G.S. SINGHVI, J.
failed to convince the learned Single Judge of the Punjab and Haryana High
Court to reverse the judgment and decree passed by the lower appellate Court for
specific performance of Agreement for Sale dated22.10.1996 executed by his father-cum-General
Power of Attorney Col. Gurcharan Singh in favour of the respondent and to review
the judgment passed in the second appeal, the appellant has filed these appeals.
For the sake of convenience, the parties shall herein after be referred to as the
appellant and the respondent.
respondent filed suit for possession by way of specific performance of the
agreement for sale impleading the appellant and his father as the defendants. The
case set up by the respondent was that at the time of execution of agreement,
its authorised representative had paidRs.1,00,000; that on 22.11.1996, Rs.9,00,000
were offered to the appellant’s father but he avoided to accept the amount despite
telephonic message and phonogram sent on 23.11.1996 and personal visit to his office
and residence. It was further pleaded that even though the respondent was always
ready and willing and is still ready and willing to perform its part of the
agreement, the appellant intentionally committed breach of the terms and conditions
thereof and failed to perform his obligation by not extending cooperation in
obtaining colonization licence from Punjab Urban Development Authority and ITC
Certificate under Section 34-A of the Income Tax Act.
the joint written statement filed by the appellant and his father, the locus
standi of the respondent to file the suit was questioned on the premise that it
had been incorporated on 1.11.1996, i.e. after execution of the agreement. On
merits, it was pleaded that the appellant’s father, who was about 88 years old
and was sick had not executed the agreement and the same was a fictitious
document prepared by the respondent in collusion with Col. Gurcharan Singh and
Vijay Bhardwaj. The appellant and his father denied the receipt of the earnest
money and the offer allegedly made by the respondent’s representative to pay
Rs.9 lacs. On the pleadings of the parties, the trial Court framed the following
a. Whether plaintiff is entitled
for decree for possession by way of specific performance of agreement to sell dated
b. Whether plaintiffs
are not entitled to relief claimed for? OPD.
c. Relief”6. After
considering the evidence produced by the parties, the trial Court recorded the
respondent has succeeded in proving execution of the Agreement for Sale.
appellant and his father could not prove that the Agreement was a forged and fabricated
respondent succeeded in proving that its representative had paid a sum of Rs.1,00,000
as earnest money and offered to pay Rs.9,00,000which defendant No.2 did not
the plaintiff was ready and willing to perform its part of the agreement.
the trial Court declined the relief of specific performance by observing that
the price of the land had considerably increased and it would be unfair to
compel the appellant to execute the sale deed at the rate agreed to by the
arriving at this conclusion, the trial Court relied upon the judgments of this
Court in Sargunam (Dead) by L.R. v. Chidambaram (2005) 1 SCC 162 and
Janardhanam Prasad v. Ramdas (2007) 15 SCC174 and of the Division Bench of the
Punjab and Haryana High Court in Mohan Singh v. Kulwinder Singh 2006 (2) P.L.J.
748 and of the Allahabad High Court in Ramawati Devi v. Idris Ahmad 2008 (2)
Civil Court Cases 332. The trial Court finally held that the respondent is
entitled to refund of the earnest money with interest at the rate of 12% per
respondent challenged the judgment and decree of the trial Court by filing an
appeal. The appellant and his father did not file appeal or cross objection to
challenge the findings recorded by the trial Court on the issues of execution
of the agreement and readiness and willingness on the respondent’s part to
perform its part of the agreement.
lower appellate Court independently analysed the pleadings and evidence of the
parties and agreed with the trial Court that the respondent had succeeded in
proving execution of the agreement and its readiness and willingness to pay the
balance amount and perform its part of the obligation. The lower appellate
Court further held that even though the respondent’s representative had offered
to pay Rs.9,00,000, defendant No.2avoided to accept the same and deliver
possession of the suit property as per clause (5) of the agreement for sale. The
lower appellate Court disagreed with the trial Court that the respondent is not
entitled to decree of specific performance because cost of the suit property had
increased and observed that there was no justification to relieve the appellant
of his obligation to execute the sale deed in terms of theagreement.
second appeal filed by the appellant was dismissed by the learned Single Judge
of the Punjab and Haryana High Court who concurred with the lower appellate
Court that the trial Court was not justified in invoking the provisions of
Section 20 (2) (c) of the Specific Relief Act, 1963 (for short, ‘the Act’) for
the purpose of declining substantive relief to the respondent. The learned
Single Judge relied upon the judgments of this Court in K. Narendra v. Riviera Apartments
(P) Ltd. (1999) 5 SCC 77,Sargunam (Dead) by LRs. v. Chidambaram (supra) 1 SCC
162 and Gobind Ram v.Gian Chand 2000 (7) SCC 548, and held that inadequacy of consideration
or the fact that the contract is onerous to the defendant is not sufficient to deny
the relief of specific performance.
J. L. Gupta, learned senior counsel for the appellant argued that even though
the finding recorded by the trial Court and the lower appellate Court on the
issue of readiness and willingness of the respondent was concurrent, the learned
Single Judge of the High Court committed serious error by approving the same ignoring
that the respondent had neither pleaded nor any evidence was produced to prove that
it had sufficient financial resources to pay the balance price.
Learned senior counsel
emphasised that the respondent was not only required to specifically plead but
also prove its readiness and willingness to pay the balance price and the lower
appellate Court was not justified in granting the decree of specific performance
merely because the respondent had produced evidence to show that its
representative had offered Rs.9 lacs to the appellant’s father. Shri Gupta further
argued that the so called refusal of the appellant’s father to receive the
amount of Rs.9,00,000 and hand over possession of the suit property was inconsequential
because the application made by the respondent for grant of licence to develop residential
colony had been rejected by the Punjab Urban Development Authority.
counsel submitted that the delay of three years in filing of the suit was an
important factor which ought to have been considered by the High Court for
restoring the judgment and decree passed by the trial Court. In support of his arguments,
the learned senior counsel relied upon the judgments of this Court in K. S. Vidyanadam
v.Vairavan (1997) 3 SCC 1 and J. P. Builders v. A. Ramadas Rao (2011) 1 SCC429.
In the end, Shri Gupta referred to the provisions of the Punjab Apartment and Property
Regulation Act, 1995 and submitted that the appellant did not hand over possession
of the suit property to the respondent for the purpose of development of
residential colony because the latter failed to get the requisite licence and any
violation of the provisions of the Act would have amounted to an offence.
Dushyant Dave, learned senior counsel for the respondent supported the impugned
judgment and argued that the High Court did not commit any error by dismissing
the second appeal and approving the judgment of the lower appellate Court which
had set aside the trial Court’s verdict on the issue of the applicability of
Section 20(2)(c) of the Act because the respondent was always ready and willing
to perform its part of the agreement and the escalation, if any, in the price
of the land could not, by itself, be made a ground for denying the relief of
counsel submitted that the finding recorded by the trial Court on the issue of
the respondent’s readiness and willingness will be deemed to have become final
because the appellant did not challenge the same by filing an appeal against
the judgment of the trial Court or cross-objection in the appeal preferred by
have considered the respective submissions. A reading of the agreement executed
by the appellant’s father in favour of the respondent shows that he had agreed
to sell 51 Bighas 9 Biswas land situated in village Dhakauli, Tehsil Rajpura, District
Patiala at the rate ofRs.14,00,000 per Killa, i.e. 4 Bighas. Clauses 1, 2, 3,
4, 5 and 7 of the Agreement read as under: “
the total sale price of the above said land has been fixed at Rs.14,00,000/-
(Fourteen Lac Only) per Killa i.e. (4-0) (Bighas).
the said purchaser Company has paid to the said Seller a sum of Rs.1,00,000/-
(Rupees One Lac Only) in cash in the shape of currency Notes as earnest money for
which amount the said Seller hereby acknowledges the receipt in the presence of
the purchaser company will develop the land for residential colony and the said
purchaser company will pay further advance of Rs.9,00,000/- (Rupees Nine Lac
Only) as part payment on or before 23rd Nov., of 1996, further part payment of
Rs. 10,00,000/- (Rupees Ten Lac Only) on or before 24.12.1996, further part
payment of Rs.28,00,000/- (Rupees Twenty Eight Lac Only) on or before 23.4.1997
i.e. equivalent to the registration value of two acres of land and the balance
payment of Rs.42,00,000/- (Rupees Forty Two Lac Only) will be made on or before
23.7.1997 equivalent to the value of three acres and the final payment will be
made to the Seller on or before 23.10.1997.
the Seller and purchaser parties will be bound to execute one or more sale
deeds in favour of the purchaser company or its nominees as per schedule
mentioned in para no.3 without any delay and hesitation and registration will
be made from one end of the land in continuous manner and the earnest money and
part payment of Rs.20,00,000/-(Rupees Twenty Lac Only) will be adjusted in the last
and final sale deeds. The Seller party will present personally for execution of
sale deed in favour of the nominees in the office of Joint Sub Registrar, Dera
Bassi as per time and date fixed between both the parties.
the said Seller will handover the vacant physical possession of the said land
for the purpose of development activities to the purchaser company at the time of
after receiving the part payment of Rs.9,00,000/-(Rupees Nine Lac Only).
xx xx xx
the Seller party will fully cooperate with the purchaser company to apply and
obtain the colonization licence from the PUDA, Chandigarh. The Seller party
will give a Special Power of Attorney for this purpose to the nominee of the
The question whether the respondent was ready and willing to perform its part
of the agreement is required to be decided in the light of the pleadings of the
parties, evidence produced by them and their conduct. In paragraph 5 of the
plaint, the respondent categorically pleaded that it was always ready and
willing and is still ready and willing to perform its part of the contract and
on 22.11.1996 Rs. 9,00,000/- had been offered to the appellant’s father but the
latter refused to accept the amount.
The thrust of the
case set up by the appellant was that his father had neither executed the
agreement nor received the earnest money. According to him, the agreement was
an end product of criminal conspiracy hatched by the respondent with the help of
Col. Harjit Singh and Vijay Bhardwaj for defrauding him. The appellant also
pleaded that the agreement relied upon by the respondent was a fake and fabricated
document. In reply to the averments contained in para 5 of the plaint that the
respondent was always ready and willing and is still ready and willing to
perform its part of the contract, the following statement was made in the
“5. Para no.5 of the
plaint is wrong and therefore denied. The question of readiness and willingness
on the part of the defendants does not arise at all. Question of receiving of Rs.
nine lac also does not arise at all.”
14. The trial Court
comprehensively analysed the pleadings and evidence of the parties and held that
the respondent has succeeded in proving execution of the agreement by the appellant’s
father and receipt ofRs.1,00,000/- by him. The trial Court then considered the question
whether the respondent was ready and willing to pay the balance price and
observed: “……………Perusal of the terms and conditions of the agreement to sell in
question reveals that the plaintiff had to pay an amount of Rs.9 lacs as part
payment amount on or before 23.11.1996 and the defendant No.2 in turn was
schedule to deliver the vacant physical possession of the property in dispute
to the plaintiff i.e. on 23.11.1996.
The specific stand
taken by the plaintiff is that he remained ready with the said amount of Rs.9
lacs to be paid to the defendants on 23.11.1996, but, the defendants refused to
accept the said amount on pretext or the other. The plaintiff sent a telephonic
message through STD to the defendant No.2 besides sending the other phonogram message
to the defendant No.2 on the same day at 11.00 a.m. More significantly, the plaintiff
had prepared a draft of Rs.9 lacs bearing No.BC/F322341 dated 23.11.1996 in
this regard. Had the plaintiff not been having ready cash amount of Rs.9 lacs
and not ready and willing to pay the amount of Rs.9 lacs to the defendants,
then, he would have prepared the said draft.
have denied the execution of any such agreement dated 22.10.1996 and therefore,
defendants cannot take the plea that plaintiff never offered an amount of Rs.9 lacs.
The defendants are also estopped from taking the plea that plaintiff was not
ready and willing to perform his part of the contract and that the plaintiff
did not have the capacity to make the payment when the defendants have denied the
very execution of the agreement in question. It may be pertinent to mention
here that plaintiff had also served a legal notice upon the defendants through his
counsel Sh. G.K. Verma, Advocate on 24.11.1996, but, the defendants refused to accept
the said notice.
The plaintiff was
scheduled to make further payment on different dates to the defendants after 23.10.1996,
but, since the defendants have denied the execution of the agreement, therefore,
the question where, the plaintiff was ready with the subsequent payment of
Rs.10 lacs, Rs.18 lacs and Rs.42 lacs to be paid on subsequent dates becomes
meaningless and loses its significance. DW1 Narinderjit Singh has himself
stated that document was forged and fabricated, but, he has failed to prove this
averment on record.
defendants have examined an expert witness namely DW3 Navdeep Gupta, who has
stated that agreement to sell dated 22.10.1996 did not contain the signatures
of defendant No.2 Gurcharan Singh, but, his testimony cannot be given much weightage
in the wake of the positive oral as well as documentary evidence led by the plaintiff.
Rather, the plaintiff
has also examined PW6 Jassy Anand, Finger Prints and Handwriting Expert, who
has specifically stated on oath before the Court that in the present case, she has
examined the disputed signatures of defendant No.2 on the agreement in question
with the standard signatures and he was of the opinion that signatures of Col. Gurcharan
Singh, defendant No.2 tallied with the disputed signatures of Col. Gurcharan
Singh, defendant No.2 on the agreement in question which means that signatures on
the disputed agreement and the signatures on the authentic documents were done
by one and the same person. ………………………………. So, the agreement in question dated 22.10.1996
EX.PW3/A duly stands proved in accordance with provisions of law.
sufficiently proved on record that defendants on 22.10.1996 had executed an
agreement to sell in favour of the plaintiff after receiving earnest amount of
Rs. one lacs from the plaintiff in the presence of marginal witnesses.”
15. The appellant did not
question the aforesaid findings of the trial Court by filing an appeal. Not
only this, he did not file cross-objection in the appeal filed by the
respondent. Therefore, the lower appellate Court was not required to consider
whether execution of the agreement for sale has been proved and whether
respondent was ready and willing to perform itspart of the agreement, but it
considered both the questions and observed: “The learned trial Court has
specifically held that due execution of the agreement in question has been
proved and there is no defect in the findings recorded by the learned trial
Court in this regard.
The version of the appellant/plaintiff
in this regard has been proved by PW3 Vijay Bhardwaj who is marginal witness of
the agreement in question. So far as readiness and willingness on the part of the
appellant/plaintiff to perform its contract is concerned, the learned trial
Court has recorded findings in favour of the appellant/plaintiff and the said
findings are based on proper appreciation of evidence.
The evidence produced
by the appellant/plaintiff shows that the appellant/ plaintiff had got issued a
demand draft of Rs.9,00,000/- on 23.11.1996 for payment of the said amount to the
defendants/respondents but they did not receive the said amount.
plaintiff had sent message and also phonogram Ex.PW3/1 to the
defendants/respondents on 23.11.1996 vide receipt ex.PW3/H. Even a notice
Ex.PW3/D was sent to the defendants/respondents through courier vide receipt
Ex.PW3/C and even a legal notice had been sent to the defendants/respondents by
the appellant/plaintiff through its counsel. Further the statement of M.K.Jain
Director of the appellant/plaintiff in this regard finds corroboration from the
testimony of Vijay Bhardwaj. On the other hand, the defendants/respondents have
denied the agreement in question and it is not their plea that appellant/plaintiff
was not ready and willing to perform its contract.
Under these circumstances,
the evidence produced by the appellant/plaintiff to prove their readiness and willingness
to perform their part of contract can be accepted without any hesitation and in
this regard I find support from the judgment of Hon'ble Punjab and Haryana High
Court in Santa Singh Vs. Binder Singh and Ors 2006(4) Civil Court Cases-608
wherein it was held as under:-
"Since the case
of the defendant is that of one of denial, therefore, the statement of the
plaintiff that he was ready and willing to perform his part of the contract is sufficient
to infer that plaintiffs were ready and willing to perform their part of
It was a meager amount
of Rs.2000/- alone which was required to be paid at the time of registration of
the sale deed. The substantial amount was paid at the time of execution of the
agreement. More than Rs.12000/- was kept for payment to the mortgagee.
Therefore, the argument raised by the learned counsel for the appellant that the
plaintiffs have led evidence to prove his ready and willingness to perform the contract
is not tenable.
16. ”16. The learned
Single Judge also considered the issue of readiness and willingness of the
respondent to perform its part of the agreement and observed: “The factum of
readiness and willingness to perform the plaintiff’s part of the contract is to
be adjudged with the conduct of the parties and the attending circumstances. In
the present case, it may be noticed that according to the terms and conditions
of the agreement in question, the plaintiff-respondent was to make a payment of
Rs.9,00,000/- to the appellant on 23.11.1996 and on receipt of the aforesaid
payment, the appellant was to allow the plaintiff-respondent to carry out the development
However, it has been established
on record that the appellant refused to receive the aforesaid amount of
Rs.9,00,000/- on 23.11.1996. There is no evidence on record that the appellant
ever allowed the plaintiff-respondent to carry out development activities in the
land in question. Thus, thereafter, there was no occasion for the plaintiff-respondent
to further perform its part of the contract on subsequent dates as argued.
Still there is no evidence on record placed by the appellant to prove the fact
that the plaintiff-respondent was not ready to get the sale deed executed on subsequent
dates as per the terms and conditions of the agreement in question.
There is a distinction
between readiness to perform the contract and willingness to perform the
contract. By readiness, may be meant the capacity of the plaintiff to perform
the contract which includes his financial position to pay the purchase price
whereas determining the willingness to perform his part of the contract, the conduct
of the parties has to be scrutinized. In the present case, there is no evidence
placed on record to show that the plaintiff-respondent was not having the capacity
to pay the purchase price for execution of the subsequent sale deeds.
plaintiff-respondent had demonstrated his willingness to pay Rs.9,00,000/- on
23.11.1996 by placing on record the demand draft of Rs.9,00,000/- in favour of
the appellant. However, as noticed above, since the appellant refused to accept
the same, the plaintiff- respondent was prevented from performing its part of
the agreement by offering money for execution of the sale deeds on subsequent
17. ”17. In our view, the
concurrent findings recorded by the trial Court and the lower appellate Court
on the issues of execution of the agreement by the appellant’s father and the
respondent’s readiness and willingness to perform its part of the agreement
were based on correct evaluation of the pleadings and evidence of the parties
and the learned Single Judge of the High Court did not commit any error by
refusing to upset those findings.
The argument of the
learned senior counsel for the appellant that in the absence of specific
pleading about continued readiness and willingness of the respondent to perform
its part of the agreement and availability of funds necessary for payment of the
sale consideration, the High Court should have set aside the concurrent finding
recorded by the Courts below sounds attractive but on a careful scrutiny of the
record we do not find any valid ground to entertain the same.
In R.C. Chandiok v. Chuni
Lal Sabharwal (1970) 3 SCC 140, this Court observed that “readiness and willingness
cannot be treated as a straitjacket formula and the issue has to be decided
keeping in view the facts and circumstances relevant to the intention and
conduct of the party concerned”. The same view was reiterated in D'Souza v.
Shondrilo Naidu, (2004) 6 SCC 649. In N.P. Thirugnanam v. R. Jagan Mohan Rao
(Dr) (1995) 5 SCC 115, the Court found that the appellant was dabbling in real estate
transaction without means to purchase the property and observed: “Section 16(c)
of the Act envisages that plaintiff must plead and prove that he had performed
or has always been ready and willing to perform the essential terms of the
contract which are to be performed by him, other than those terms the performance
of which has been prevented or waived by the defendant.
The continuous readiness
and willingness on the part of the plaintiff is a condition precedent to grant the
relief of specific performance. This circumstance is material and relevant and
is required to be considered by the court while granting or refusing to grant
the relief. If the plaintiff fails to either aver or prove the same, he must
fail. To adjudge whether the plaintiff is ready and willing to perform his part
of the contract, the court must take into consideration the conduct of the plaintiff
prior and subsequent to the filing of the suit along with other attending
The amount of
consideration which he has to pay to the defendant must of necessity be proved to
be available. Right from the date of the execution till date of the decree he must
prove that he is ready and has always been willing to perform his part of the contract.
As stated, the factum of his readiness and willingness to perform his part of
the contract is to be adjudged with reference to the conduct of the party and
the attending circumstances. The court may infer from the facts and circumstances
whether the plaintiff was ready and was always ready and willing to perform his
part of the contract.
18. ”18. In J. P.
Builders v. A. Ramadas Rao (supra), the Court has merely reiterated the
principles already laid down and no new proposition has been laid down which
may help the cause of the appellant.
19. It is significant to
note that the appellant and his father had setup the case of total denial. They
repeatedly pleaded that the agreement for sale was a fictitious document and
the respondent had fabricated the same in connivance with Col. Harjit Singh and
Vijay Bhardwaj. However, no evidence was adduced by the appellant to
substantiate his assertion. That apart, he did not challenge the finding
recorded by the trial Court on the issue of readiness and willingness of the
respondent to perform its part of the agreement.
Therefore, we do not find
any valid ground much less justification for exercise of power by this Court
under Article 136 of the Constitution of India to interfere with the judgment
of the lower appellate Court which was approved by the High Court.
20. We are also inclined
to agree with the lower appellate Court that escalation in the price of the
land cannot, by itself, be a ground for denying relief of specific performance.
In K. Narendra v. Riviera Apartments (P) Ltd. (supra), this Court interpreted
Section 20 of the Act and laid down the following propositions: “Section 20 of the
Specific Relief Act, 1963 provides that the jurisdiction to decree specific
performance is discretionary and the court is not bound to grant such relief
merely because it is lawful to do so; the discretion of the court is not arbitrary
but sound and reasonable, guided by judicial principles and capable of
correction by a court of appeal.
Performance of the
contract involving some hardship on the defendant which he did not foresee while
non-performance involving no such hardship on the plaintiff, is one of the circumstances
in which the court may properly exercise discretion not to decree specific
performance. The doctrine of comparative hardship has been thus statutorily recognized
in India. However, mere inadequacy of consideration or the mere fact that the contract
is onerous to the defendant or improvident in its nature, shall not constitute
an unfair advantage to the plaintiff over the defendant or unforeseeable
hardship on the defendant.” (emphasis supplied)
21. In the present case,
the appellant had neither pleaded hardship nor produced any evidence to show
that it will be inequitable to order specific performance of the agreement. Rather,
the important plea taken by the appellant was that the agreement was fictitious
and fabricated and his father had neither executed the same nor received the
earnest money and, as mentioned above, all the Courts have found this plea to be
22. In the result, the
appeals are dismissed and the following directions are given:
three months from today the respondent shall pay Rs.5 crores to the appellant.
This direction is being given keeping in view the statement made by Shri
Dushyant Dave, learned senior counsel for the respondent on 03.05.2012 that his
client would be willing to pay Rs.5 crores in all to the appellant as the price
of the land.
next three months the appellant shall execute and get the sale deed registered
in favour of the respondent and hand over possession of the suit property.
[SUDHANSU JYOTI MUKHOPADHAYA]