NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7282 OF 2009
LEELADHAR (D) THR. LRS. …APPELLANT(S)
VERSUS
VIJAY KUMAR (D) THR. LRS. & ORS. …RESPONDENT(S)
J U D G M E N T
DEEPAK GUPTA, J.
One Leeladhar, the original appellant herein, entered into
an agreement to sell 18 bighas of land for a sum of Rs.40,000/
with Deshraj, father of the plaintiffsrespondents herein on
15.02.1985. Admittedly, an amount of Rs.35,000/ was paid in
advance. This agreement to sell was registered on 18.02.1985.
On 26.03.1985 another document (Exhibit P14) was entered into
between the parties. Leeladhar was paid balance Rs.5,000/ and
the subsequent agreement notes that he gave possession of the
1
land to Deshraj. On 20.01.1988, Deshraj issued a legal notice to
Leeladhar asking him to get the sale deed executed. According to
the plaintiffs, they and their father went to the office of the SubRegistrar on 15.02.1988 for this purpose. But Leeladhar did not
turn up. Deshraj expired on 16.05.1988 and, thereafter, the
respondents herein filed a suit in the Court of Civil Judge,
Nainital praying for specific performance of the contract and also
prayed that if any part of the disputed land is not found in their
possession, then possession be given to them. In the alternative,
they prayed for refund of Rs.40,000/ along with interest.
2. In the written statement, Leeladhar took the plea that the
agreement in question was a sham document. Deshraj was a
moneylender but did not have a licence to do money lending.
Therefore, he used to get such documents executed to secure the
loans advanced by him. It was also pleaded that Leeladhar had
returned the entire amount along with interest to Deshraj on
03.03.1987. This suit was decreed by the trial court. Leeladhar
filed an appeal, which was partly allowed by the first appellate
court holding that the plaintiffs were not entitled to the
discretionary relief of specific performance. This judgment was
2
challenged before the High Court. The second appeal was
allowed and the matter was remanded to the first appellate court
to decide the case afresh in light of the provisions of Section 20(2)
(c) of the Specific Relief Act, 1963. After remand, the Additional
District Judge dismissed the appeal of Leeladhar and upheld the
order of the trial court. The second appeal filed by Leeladhar
before the High Court was dismissed and, hence, this appeal.
3. The main ground raised by Shri Vikas Singh, learned senior
counsel appearing for the appellants is that in terms of Section
20(2)(c), the decree of specific performance could not have been
granted in favour of the plaintiffsrespondents herein. It is
submitted that the document was a sham document. It was
further urged that possession is not with the plaintiffs and the
fact that Deshraj had executed various documents but had not
filed suit for specific performance with regard to those contracts
indicated that this document (Exhibit P13) was also executed
only to secure the repayment of the loan. It is also prayed that in
the peculiar facts and circumstances of the case, discretion
should be exercised in favour of appellants. On the other hand,
Shri P.K. Jain, learned counsel appearing for the respondents
3
submits that all the courts below have given a concurrent finding
of fact that the document executed was an agreement to sell and
Leeladhar had received the full amount, transferred possession
and, therefore, is not entitled to urge that the decree of specific
performance should not be granted.
4. We may note a few salient facts. The agreement to sell
(Exhibit P13) is registered on 18.02.1985. Rs.35,000/ out of
Rs.40,000/ was paid. The balance Rs.5,000/ was paid when
the document (Exhibit P14) was executed on 26.03.1985. As far
as delay is concerned, we are of the considered view that there is
no delay in filing the suit. The suit is within limitation. Further,
in this case, even as per the appellants, the possession of the
land was with the plaintiffsrespondents. Therefore, they were in
no hurry to get the sale deed executed and this does not
disentitle them from getting the relief of specific performance.
5. As far as the issue of Deshraj being a moneylender and
having got this document executed only to secure repayment of
amount is concerned, all the courts below have found as a fact
that this is not the case. The finding is that an agreement to sell
was executed. Shri Singh has made reference to the order
4
passed by the first appellate court in the first round. That order
having been set aside by the High Court, cannot help the
appellants. After remand, the first appellate court clearly held
that the documents in question relied upon by Leeladhar could
not be used by him because they were only copies and if actually,
he had repaid those loans then he would have got originals back
from Deshraj. Though various judgments have been cited before
us, we do not feel it necessary to refer to the same because once
we come to the conclusion that the agreement was an agreement
to sell and after entering into the agreement to sell, Leeladhar
received the full sale consideration and handed over the
possession to Deshraj, the question of exercising any
discretionary favour to the appellant does not arise.
6. Section 20(2)(c) of the Specific Relief Act reads as follows:
“20. Discretion as to decreeing specific performance.
—
(1) 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; but 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.
5
(2) The following are cases in which the court may
properly exercise discretion not to decree specific
performance:—
(a) xxx xxx xxx
(b) xxx xxx xxx
(c) where the defendant entered into the contract under
circumstances which though not rendering the contract
voidable, makes it inequitable to enforce specific
performance.
Explanation 1.—Mere inadequacy of consideration, or the
mere fact that the contract is onerous to the defendant or
improvident in its nature, shall not be deemed to
constitute an unfair advantage within the meaning of
clause (a) or hardship within the meaning of clause (b).
Explanation 2.— The question whether the performance
of a contract would involve hardship on the defendant
within the meaning of clause (b) shall, except in cases
where the hardship has resulted from any act of the
plaintiff subsequent to the contract, be determined with
reference to the circumstances existing at the time of the
contract.”
7. To take benefit of clause (c) of subsection (2) of Section 20
of the Specific Relief Act, the defendant in a suit for specific
performance must show that he entered into the contract under
the circumstances which though rendering the contract voidable,
make it inequitable. In the present case, once we hold that the
document entered was an agreement to sell and not a sham
transaction, the appellants can take no benefit of this provision.
6
8. In view of the above, we find no merit in the appeal which is
accordingly dismissed. Pending application(s), if any, stand(s)
disposed of.
…………………………J.
(Deepak Gupta)
…………………………J.
(Aniruddha Bose)
New Delhi
September 26, 2019
7
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7282 OF 2009
LEELADHAR (D) THR. LRS. …APPELLANT(S)
VERSUS
VIJAY KUMAR (D) THR. LRS. & ORS. …RESPONDENT(S)
J U D G M E N T
DEEPAK GUPTA, J.
One Leeladhar, the original appellant herein, entered into
an agreement to sell 18 bighas of land for a sum of Rs.40,000/
with Deshraj, father of the plaintiffsrespondents herein on
15.02.1985. Admittedly, an amount of Rs.35,000/ was paid in
advance. This agreement to sell was registered on 18.02.1985.
On 26.03.1985 another document (Exhibit P14) was entered into
between the parties. Leeladhar was paid balance Rs.5,000/ and
the subsequent agreement notes that he gave possession of the
1
land to Deshraj. On 20.01.1988, Deshraj issued a legal notice to
Leeladhar asking him to get the sale deed executed. According to
the plaintiffs, they and their father went to the office of the SubRegistrar on 15.02.1988 for this purpose. But Leeladhar did not
turn up. Deshraj expired on 16.05.1988 and, thereafter, the
respondents herein filed a suit in the Court of Civil Judge,
Nainital praying for specific performance of the contract and also
prayed that if any part of the disputed land is not found in their
possession, then possession be given to them. In the alternative,
they prayed for refund of Rs.40,000/ along with interest.
2. In the written statement, Leeladhar took the plea that the
agreement in question was a sham document. Deshraj was a
moneylender but did not have a licence to do money lending.
Therefore, he used to get such documents executed to secure the
loans advanced by him. It was also pleaded that Leeladhar had
returned the entire amount along with interest to Deshraj on
03.03.1987. This suit was decreed by the trial court. Leeladhar
filed an appeal, which was partly allowed by the first appellate
court holding that the plaintiffs were not entitled to the
discretionary relief of specific performance. This judgment was
2
challenged before the High Court. The second appeal was
allowed and the matter was remanded to the first appellate court
to decide the case afresh in light of the provisions of Section 20(2)
(c) of the Specific Relief Act, 1963. After remand, the Additional
District Judge dismissed the appeal of Leeladhar and upheld the
order of the trial court. The second appeal filed by Leeladhar
before the High Court was dismissed and, hence, this appeal.
3. The main ground raised by Shri Vikas Singh, learned senior
counsel appearing for the appellants is that in terms of Section
20(2)(c), the decree of specific performance could not have been
granted in favour of the plaintiffsrespondents herein. It is
submitted that the document was a sham document. It was
further urged that possession is not with the plaintiffs and the
fact that Deshraj had executed various documents but had not
filed suit for specific performance with regard to those contracts
indicated that this document (Exhibit P13) was also executed
only to secure the repayment of the loan. It is also prayed that in
the peculiar facts and circumstances of the case, discretion
should be exercised in favour of appellants. On the other hand,
Shri P.K. Jain, learned counsel appearing for the respondents
3
submits that all the courts below have given a concurrent finding
of fact that the document executed was an agreement to sell and
Leeladhar had received the full amount, transferred possession
and, therefore, is not entitled to urge that the decree of specific
performance should not be granted.
4. We may note a few salient facts. The agreement to sell
(Exhibit P13) is registered on 18.02.1985. Rs.35,000/ out of
Rs.40,000/ was paid. The balance Rs.5,000/ was paid when
the document (Exhibit P14) was executed on 26.03.1985. As far
as delay is concerned, we are of the considered view that there is
no delay in filing the suit. The suit is within limitation. Further,
in this case, even as per the appellants, the possession of the
land was with the plaintiffsrespondents. Therefore, they were in
no hurry to get the sale deed executed and this does not
disentitle them from getting the relief of specific performance.
5. As far as the issue of Deshraj being a moneylender and
having got this document executed only to secure repayment of
amount is concerned, all the courts below have found as a fact
that this is not the case. The finding is that an agreement to sell
was executed. Shri Singh has made reference to the order
4
passed by the first appellate court in the first round. That order
having been set aside by the High Court, cannot help the
appellants. After remand, the first appellate court clearly held
that the documents in question relied upon by Leeladhar could
not be used by him because they were only copies and if actually,
he had repaid those loans then he would have got originals back
from Deshraj. Though various judgments have been cited before
us, we do not feel it necessary to refer to the same because once
we come to the conclusion that the agreement was an agreement
to sell and after entering into the agreement to sell, Leeladhar
received the full sale consideration and handed over the
possession to Deshraj, the question of exercising any
discretionary favour to the appellant does not arise.
6. Section 20(2)(c) of the Specific Relief Act reads as follows:
“20. Discretion as to decreeing specific performance.
—
(1) 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; but 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.
5
(2) The following are cases in which the court may
properly exercise discretion not to decree specific
performance:—
(a) xxx xxx xxx
(b) xxx xxx xxx
(c) where the defendant entered into the contract under
circumstances which though not rendering the contract
voidable, makes it inequitable to enforce specific
performance.
Explanation 1.—Mere inadequacy of consideration, or the
mere fact that the contract is onerous to the defendant or
improvident in its nature, shall not be deemed to
constitute an unfair advantage within the meaning of
clause (a) or hardship within the meaning of clause (b).
Explanation 2.— The question whether the performance
of a contract would involve hardship on the defendant
within the meaning of clause (b) shall, except in cases
where the hardship has resulted from any act of the
plaintiff subsequent to the contract, be determined with
reference to the circumstances existing at the time of the
contract.”
7. To take benefit of clause (c) of subsection (2) of Section 20
of the Specific Relief Act, the defendant in a suit for specific
performance must show that he entered into the contract under
the circumstances which though rendering the contract voidable,
make it inequitable. In the present case, once we hold that the
document entered was an agreement to sell and not a sham
transaction, the appellants can take no benefit of this provision.
6
8. In view of the above, we find no merit in the appeal which is
accordingly dismissed. Pending application(s), if any, stand(s)
disposed of.
…………………………J.
(Deepak Gupta)
…………………………J.
(Aniruddha Bose)
New Delhi
September 26, 2019
7
