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Monday, January 22, 2018

This Court in Kanshi Ram vs. Om Prakash Jawal and others, 1996 (4) SCC 593, has again in context of suit for specific performance of the contract held that granting decree for specific performance of contract is one of the discretion to be exercised on sound principles. When the court gets into equity jurisdiction, it would be guided by justice, equity, good conscience and fairness to both the parties. - we are of the view that ends of justice be served in awarding compensation of Rs.10 lakh in favour of the plaintiff­appellants out of the compensation received consequent to the acquisition of the suit land. The rest of the compensation, if any, received towards land and shops in question has to be paid to the land owner that is defendant Nos.1 to 5 (respondent Nos.2 to 6 to this appeal) after deducting an amount of Rs.10 lakh out of the said compensation. We further direct in event compensation has not yet been disbursed, the compensation be disbursed to the appellants (legal heirs of the plaintiff) and respondent Nos.2 to 6 in the above manner and in the event the compensation has been received by defendant No.6 (respondent No.1), respondent No.1 shall return the compensation to the extent of Rs.10 lakh to the appellants and the rest of the amount to defendant Nos.1 to 5 (respondent Nos.2 to 6). - URMILA DEVI AND OTHERS    ... APPELLANTS VERSUS THE DEITY, MANDIR SHREE CHAMUNDA DEVI, THROUGH TEMPLE COMMISSIONER AND OTHERS    ... RESPONDENTS

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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 462 OF 2018
(arising out of SLP(C) No.25771 of 2013)
URMILA DEVI AND OTHERS    ... APPELLANTS
VERSUS
THE DEITY, MANDIR SHREE CHAMUNDA DEVI,
THROUGH TEMPLE COMMISSIONER AND
OTHERS    ... RESPONDENTS
J U D G M E N T
ASHOK BHUSHAN, J.
Leave granted.
2. This   appeal   has   been   filed   by   the   plaintiff
through   legal   heirs   questioning   the   judgment   of   the
High Court of Himachal Pradesh in Regular Second Appeal
No.117   of   2002   which   appeal   was   filed   by   respondent
No.1 (defendant No.6 in the suit). The High Court by
the   impugned   judgment   has   modified   the   decree   of
specific performance of contract granted by two courts
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below into a decree ordering respondent Nos.2 to 6 to
pay a sum of Rs.90,000/­ with interest @ 9% per annum
from the date of filing of the suit.
3. The brief facts of the case which are necessary to
notice for deciding the appeal are:
Respondent   Nos.2   to   6   executed   an   agreement   to
sell dated 19.04.1989 in favour of of Krishan Lal, the
predecessor­in­interest of the appellants for sale of
their 5/16th  share in Khasra Nos.430 and 431 equal to
0­22­57   hectares   for   consideration   of   Rs.90,000/­.
Respondent   Nos.2   to   6   received   full   consideration   of
Rs.90,000/­   and   handed   over   possession   to   the
plaintiff.   The   plaintiff   after   getting   possession
constructed   three   shops   in   the   suit   land.   Respondent
Nos.2 to 6 executed a gift deed in favour of respondent
No.1 of the suit land on 08.07.1991. When in spite of
respondents   having   received   the   entire   sale
consideration the sale deed was not executed and  with
mala   fide  intention   the   gift   deed   was   executed   in
favour  of respondent No.1. Civil Suit No.148 of 1991
was filed by Krishan Lal. Written statements were filed
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by  defendant  Nos.1  to 5 jointly and separate  written
statement was filed by defendant No.6 who is respondent
No.1   in   the   present   appeal.   It   was   admitted   to   all
defendants that the suit land has been gifted in favour
of  defendant  No.6 by  gift deed dated 08.07.1991.  The
execution of agreement to sell was not disputed and the
receipt   of   total   sale   consideration   was   also   not
denied.   The   trial   court   decreed   the   suit   vide   its
judgment   and   order   dated   31.03.1999.   The   trial   court
declared that gift deed executed by defendant Nos.1 to
5 in favour of  defendant No.6 is null and void to the
extent they relate to the doner's 5/16th  share in the
suit land that was agreed to be sold by them to the
plaintiff, decree of specific performance was granted
in favour of the plaintiff against defendant Nos.1 to
5. The appeal was filed by defendant No.6 only against
the   judgment   of   the   trial   court   which   was   also
dismissed   by   the   First   Appellate   Court   vide   its
judgment   dated   17.12.2001.   Defendant   No.6   filed
Regular   Second   Appeal   in   the   High   Court   being   RSA
No.117 of 2002. During pendency of the second appeal in
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the High Court notification under Section 4 of the Land
Acquisition   Act   dated   22.12.2005   was   issued   for
acquisition of suit land. An award dated 10.06.2008 was
also given for the land as well as three shops which
were   constructed   in   the   suit   land.   The   name   of
defendant   No.6   being   recorded   in   the   Revenue   records
compensation was awarded in favour of defendant No.6.
4. Before the High Court a submission was raised on
behalf   of   defendant   No.6   that   the   land   has   been
acquired during the pendency of Regular Second Appeal,
the   decree   of   the   specific   performance   cannot   be
maintained.     The   High   Court   agreeing   with   the
submission   of   defendant   No.6   modified   the   decree   by
ordering   respondent   Nos.2   to   6   to   pay   a   sum   of
Rs.90,000/­   to   the   plaintiff   with   interest   @   9%   per
annum   from   the   date   of   filing   of   the   suit.   The
plaintiff   through   legal   heirs   aggrieved   by   the   said
judgment has come up in this appeal.
5. Learned counsel for the appellants in support of
the appeal contends that the High Court erred in law in
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ordering   the   refund   of   Rs.90,000/­   in   favour   of
plaintiff   whereas   the   plaintiff(appellants)   was
entitled to receive the amount of compensation of land
which was received by defendant No.6 consequent to the
acquisition of land. Defendant No.6 had no right in the
land   in   dispute   as   the   gift   deed   had   been   declared
null and  void.  It was the plaintiff (appellants)  who
was   entitled   to   receive   the   compensation.   The   High
Court   having   not   interfered   with   the   finding   of   the
courts   below   that   gift   deed   was   void   as   well   as
plaintiff   was   entitled   for   decree   of   specific
performance   of   the   contract,   it   was   plaintiff
(appellants)  who was entitled to receive compensation
consequent to the acquisition of the suit land.
6. Learned counsel appearing for respondent Nos.2 to
6 supports the judgment and decree of the High Court
and   he,   however,   does   not   dispute   that   judgment   and
decree   of   the   Courts   below   declaring   the   gift   deed
dated   08.07.1991   as   void   having   not   been   interfered
with, the defendant No.6 has no right in the suit land.
Learned   counsel   for   respondent   Nos.2   to   6,   however,
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submits that compensation determined consequent to the
land   acquisition   be   appropriated   equally   between   the
plaintiff as well as defendant Nos.1 to 5.
7. No one has appeared on behalf of respondent No.1
(defendant No.6).
8.  We have considered the submissions of the parties
and perused the records.
9. From   the   facts   and   material   on   record,   it   is
undisputed   that   agreement   to   sell   was   executed   by
defendant   Nos.1   t   5   in   favour   of   the   plaintiff   and
entire sale consideration of Rs.90,000/­ was received
and possession was delivered in the year 1989 itself.
Plaintiff   constructed   three   shops   on   the   suit   land.
Plaintiff's   case   that   to   defeat   the   rights   of   the
plaintiff a gift deed dated 08.07.1991 was executed by
defendant Nos.1 to 5 in favour of defendant No.6 has
been accepted by courts below which have declared the
gift   deed   as   null   and   void.   The   decree   for   specific
performance   was   granted   by   the   trial   court,
it   was   confirmed     by     the     First     Appellate
Court.   The   suit   land   was   acquired   and
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compensation was determined in favour of defendant No.6
whose   name   was   recorded   in   the   Revenue   records.   No
objection can be taken to the view of the High Court
that consequent of the acquisition of suit land under
the   land   acquisition   proceedings   decree   of   specific
performance   granted   in   favour   of   plaintiff   could   not
have been maintained.
10. The limited question which needs to be answered in
the   present   appeal   is   as   to   what   relief   the
(plaintiff)appellants   were   entitled   in   the   event   the
decree   of   specific   performance   was   required   to   be
modified by an alternate decree.
11. Section 21 of the Specific Relief Act empowers the
Court to award compensation in certain cases. Section
21 of the Specific Relief Act is as follows:
“21.   Power   to   award   compensation   in   certain
cases.—
(1) In a suit for specific performance of a
contract,   the   plaintiff   may   also   claim
compensation   for   its   breach,   either   in
addition   to,   or   in   substitution   of,   such
performance.
(2) If, in any such suit, the court decides
that   specific   performance   ought   not   to   be
granted, but that there is a contract between
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the   parties   which   has   been   broken   by   the
defendant, and that the plaintiff is entitled
to   compensation   for   that   breach,   it   shall
award him such compensation accordingly.
(3) If, in any such suit, the court decides
that   specific   performance   ought   to   be
granted,   but   that   it   is   not   sufficient   to
satisfy   the   justice   of   the   case,   and   that
some compensation for breach of the contract
should   also   be   made   to   the   plaintiff,   it
shall   award   him   such   compensation
accordingly.
(4)   In   determining   the   amount   of   any
compensation awarded under this section, the
court   shall   be   guided   by   the   principles
specified   in   section   73   of   the   Indian
Contract Act, 1872 (9 of 1872).
(5)   No   compensation   shall   be   awarded   under
this section unless the plaintiff has claimed
such compensation in his plaint:
Provided that where the plaintiff has not
claimed any such compensation in the plaint,
the   court   shall,   at   any   stage   of   the
proceeding, allow him to amend the plaint on
such   terms   as   may   be   just,   for   including   a
claim for such compensation.
Explanation.—The   circumstances   that   the
contract   has   become   incapable   of   specific
performance does not preclude the court from
exercising the jurisdiction conferred by this
section.”
12. This Court had occasion to consider Section 21 of
the   Specific   Relief   Act   in   context   of   a   case   which
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arose   almost   on   similar   facts   in  Jagdish   Singh   vs.
Nathu Singh, 1992 (1) SCC 647.  In the above case also
suit was filed for specific performance on the basis of
a   contract   to   sell   dated   July   3,   1973,   the   suit  was
dismissed by the trial court as well as First Appellate
Court.   However,   the   High   Court   in   second   appeal
reversed the finding of the courts below and held that
plaintiff was ready and willing to perform the contract
and was entitled for   decree. In the above case also
during   the   pendency   of   the   second   appeal   before   the
High Court, proceedings for compulsory acquisition of
the   land   was   initiated   and   the   land   was   acquired.
Question arose as to whether plaintiff was entitled for
the   amount   of   compensation   received   in   the   land
acquisition   proceedings   or   was   entitled   only   to   the
refund   of   the   earnest   money.   The   High   Court   in   the
above   case   has   modified   the   decree   of   the   specific
performance   of   the   contract   with   decree   for   a
realisation   of   compensation   payable   in   lieu   of
acquisition.   In   paragraph   13   of   the   judgment   the
directions of the High Court were extracted   which is
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to the following effect:
“13.  The   High   Court   issued   these
consequential directions:
“If   the   decree   for   specific
performance of contract in question is
found incapable of being executed due
to   acquisition   of   subject   land,   the
decree   shall   stand   suitably
substituted   by   a   decree   for
realisation of compensation payable in
lieu   thereof   as   may   be   or   have   been
determined under the relevant Act and
the   plaintiff   shall   have   a   right   to
recover   such   compensation   together
with   solatium   and   interest   due
thereon.   The   plaintiff   shall   have   a
right to recover it from the defendant
if the defendant has already realised
these   amounts   and   in   that   event   the
defendant   shall   be   further   liable   to
pay   interest   at   the   rate   of   12   per
cent   from   the   date   of   realisation   by
him   to   the   date   of   payment   on   the
entire   amount   realised   in   respect   of
the disputed land.”
13. In   the   above   context,   this   Court   proceeded   to
examine   the   ambit   and   scope   of   Section   21   of   the
Specific   Relief   Act.   This   Court   came   to   the   opinion
that when the contract has  become impossible with no
fault of the plaintiff, Section 21 enables the Court to
award compensation in lieu of the specific performance.
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Paragraphs 24, 29 and 30 are extracted below:
“24. When the plaintiff by his option has
made   specific   performance   impossible,
Section   21   does   not   entitle   him   to   seek
damages. That position is common to both
Section   2   of   Lord   Cairn’s   Act,   1858   and
Section   21   of   the   Specific   Relief   Act,
1963.   But   in   Indian   law   where   the
contract, for no fault of the plaintiff,
becomes impossible of performance Section
21 enables award of compensation in lieu
and substitution of specific performance.
29.  In   the   present   case   there   is   no
difficulty in assessing the quantum of the
compensation.   That   is   ascertainable   with
reference   to   the   determination   of   the
market   value   in   the   land   acquisition
proceedings. The compensation awarded may
safely   be   taken   to   be   the   measure   of
damages   subject,   of   course,   to   the
deduction therefrom of money value of the
services, time and energy expended by the
appellant   in   pursuing   the   claims   of
compensation and the expenditure incurred
by   him   in   the   litigation   culminating   in
the award.
30.  We accordingly confirm the finding of
the High Court that respondent was willing
and ready to perform the contract and that
it   was   the   appellant   who   was   in   breach.
However, in substitution of the decree for
specific performance, we make a decree for
compensation, equivalent to the amount of
the land acquisition compensation awarded
for the suit lands together with solatium
and   accrued   interest,   less   a   sum   of   Rs
1,50,000   (one   lakh   fifty   thousand   only)
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which, by a rough and ready estimate, we
quantify as the amount to be paid to the
appellant in respect of his services, time
and money expended in pursuing the legal
claims for compensation.”
14. This Court in Kanshi Ram vs. Om Prakash Jawal and
others, 1996 (4) SCC 593, has again in context of suit
for   specific   performance   of   the   contract   held   that
granting decree for specific performance of contract is
one   of   the   discretion   to   be   exercised   on   sound
principles.   When   the   court   gets   into   equity
jurisdiction,   it   would   be   guided   by   justice,   equity,
good conscience and fairness to both the parties.
15. From materials brought on record, it does appear
compensation   was   determined     in   favour   of   defendant
No.6 to the extent of amount of Rs.10,03,743/­. It also
appears   that   compensation   towards   shops   was   also
determined. The name of defendant No.6 being recorded
in the Revenue records, compensation was determined in
its   favour.   In   view   of   the   judgment   and   decree   of
courts below whereby the gift deed dated 08.07.1991 has
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been   declared   void,   defendant   No.6   is   left   with   no
right in the suit land and is clearly not entitled to
receive any amount consequent to the acquisition of the
suit land. It has not come on the record as to whether
compensation consequent to the acquisition of the suit
land   has   been   received   by   defendant   No.6(respondent
No.1 to the appeal) or not.
16. Taking   into   consideration   overall   facts   of   the
present case, we are of the view that ends of justice
be   served   in   awarding   compensation   of   Rs.10   lakh   in
favour   of   the   plaintiff­appellants   out   of   the
compensation received consequent to the acquisition of
the suit land. The rest of the compensation, if any,
received towards land and shops in question has to be
paid   to  the  land   owner   that  is   defendant   Nos.1   to   5
(respondent Nos.2 to 6 to this appeal) after deducting
an amount of Rs.10 lakh out of the said compensation.
We   further   direct   in   event   compensation   has   not   yet
been   disbursed,   the   compensation   be   disbursed   to   the
appellants   (legal   heirs   of   the   plaintiff)   and
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respondent Nos.2 to 6 in the above manner and in the
event the compensation has been received by defendant
No.6   (respondent   No.1),   respondent   No.1   shall   return
the   compensation   to   the   extent   of   Rs.10   lakh   to   the
appellants   and   the   rest   of   the   amount   to   defendant
Nos.1 to 5 (respondent Nos.2 to 6). The judgment and
decree of the High Court dated 02.11.2012is modified to
the above extent.
17. The appeal is allowed accordingly.
...............................J.
( A.K. SIKRI )
...............................J.
( ASHOK BHUSHAN )
NEW DELHI,
JANUARY 10, 2018.

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