Suit for specific performance - after amendement of Sec.10 specific performance is not the discretion of the court - specific performance can be given for the rest of property if any difficult was arose for the agreed property under Sec,12 of SRA
A contractee who frustrates a contract deliberately by his own wrongful acts cannot be permitted to escape scot free. After having entered into an agreement for sale of 300 Sq. yards of land, with her eyes open, and accepted a major part of the consideration (Rs.45,000/- out of Rs.75,000/-) it does not lie in the mouth of the Vendor to contend that the contract should not have specifically been enforced in part, in respect of the balance 200 sq. yards meters of the suit land which the Vendor still owned.
After the amendment of Section 10 of the S.R.A., the words
“specific performance of any contract may, in the discretion of the
Court, be enforced” have been substituted with the words “specific
performance of a contract shall be enforced subject to ...”. The Court
is, now obliged to enforce the specific performance of a contract,
subject to the provisions of sub-section (2) of Section 11, Section 14
and Section 16 of the S.R.A. Relief of specific performance of a
contract is no longer discretionary, after the amendment.
The plea of bar under Order II Rule 2 of the CPC is a technical plea which has to be pleaded and satisfactorily established. In R. A. Oswal v. Deepak Jewellers and Ors. 3 , this Court held that if the plea of bar under Order II Rule 2 is not taken, the Court should not suo moto decide the plea.
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3574 OF 2009
B. SANTOSHAMMA & ANR. ….Appellants
Versus
D. SARALA & ANR. …..Respondents
WITH
CIVIL APPEAL NOS. 3575-3577 OF 2009
J U D G M E N T
Indira Banerjee, J.
These appeals are against a common judgment and order
passed by the High Court of Judicature of Andhra Pradesh at
Hyderabad dismissing the appeals being A.S. Nos.892 of 1994, 893 of
1994, 894 of 1994 and 1785 of 1994 and inter alia confirming the
judgment and decree of the Trial Court in O.S.No.20 of 1993 and OS
No. 91 of 1993 and the decree of dismissal by the Trial Court of the
Suit being O.S.No.92 of 1993.
2
2. The Appellant No.1, in Civil Appeal No. 3574 of 2009, B.
Santoshamma, hereinafter referred to as the ‘Vendor’, wife of the
Appellant No.2 in the said appeal, B. Darshan Reddy, purchased 300
square yards of land, in survey No. 262 of Hayathnagar Village and
Taluk in Ranga Reddy District, hereinafter referred to as the ‘suit
land’, from one D. Tanesha, under a registered sale deed dated 20th
August, 1982.
3. After about ten days, the Vendor allegedly entered into an oral
agreement with the proforma respondent in the said appeal, P. Pratap
Reddy, for sale of 100 sq. yards out of the suit land in his favour, for a
total consideration of Rs.3000/-, out of which Rs.2,500/- was paid in
advance. The Vendor claims to have delivered possession of the said
100 sq. yards to Pratap Reddy on the date of the oral agreement
itself.
4. On or about 20th January, 1984, the alleged oral agreement
between the Vendor and Pratap Reddy was allegedly reduced into
writing, upon payment of the balance consideration of Rs.500/-. The
Vendor and her husband allegedly agreed to execute the sale deed
on an auspicious day, after consulting the family priest.
5. On 21st March, 1984, the Vendor entered into an agreement
with the contesting respondent in Civil Appeal No. 3574 of 2009, Smt
D. Sarala, hereinafter referred to as the Vendee, for sale of the suit
3
land to the Vendee, for a total consideration of Rs.75,000/-, out of
which Rs.40,000/- was paid by the Vendee to the Vendor in advance.
The Vendor claims to have informed the Vendee of the oral
agreement with Pratap Reddy, which had been reduced to writing on
20th January, 1984. The Vendor and her husband Darshan Reddy
contend that the Vendor had also specifically informed the Vendee
that the Vendor had received the sale consideration for 100 sq. yards
from Pratap Reddy, and had delivered possession of 100 sq. yards of
land to him.
6. The Vendor has alleged that she specifically requested the
Vendee to incorporate a clause with regard to the earlier agreement
with Pratap Reddy in the sale agreement between the Vendor and the
Vendee. However, the Vendee assured the Vendor that she would get
the earlier agreement with Pratap Reddy cancelled as her husband
knew Pratap Reddy well and had already spoken to Pratap Reddy.
According to the Vendor, the Vendee represented to the Vendor, that
there was no need for the Vendor to get any clearance from Pratap
Reddy as the Vendee and her husband had been assured by Pratap
Reddy that no difficulty would be created by him.
7. On or about 25 May, 1984, that is, about two months after
execution of the sale agreement with the Vendee, the Vendor
executed a registered deed of conveyance transferring 100 sq. yards
of the suit land in favour of Pratap Reddy. The Vendor and her
4
husband Darshan Reddy, as also Pratap Reddy, have alleged that the
Vendee had tried to interfere with Pratap Reddy’s possession of 100
sq. yards of the suit land.
8. On or about 20th June, 1984, the Vendor allegedly issued
notice to the Vendee contending that the agreement of sale dated
21st March, 1984 was conditional upon clearance from Pratap Reddy
in view of the earlier agreement of the Vendor with Pratap Reddy for
sale of 100 sq. yards of the suit. The purported notice, if any, was
issued after execution of the registered deed of conveyance, for sale
of 100 sq. yards of the suit land in favour of Pratap Reddy.
9. On 22nd June, 1984, the Vendor’s husband, Darshan Reddy,
lodged a complaint with the Station House Officer, Hayathnagar,
alleging that the original sale deed of the suit land in favour of the
Vendor in respect of the suit land had been stolen from his residence,
alongwith other documents.
10. By a letter dated 28th June, 1984, the Vendee replied to the
notice, contending that the document had been handed over by the
Vendor to the Vendee. Sometime thereafter, the Vendee filed a suit
being O.S.No.222 of 1984 in the Court of the Principal Subordinate
Judge, Rangareddy District, for specific performance of the
agreement of sale dated 21st March, 1984. In the said suit, the
Vendee, being the plaintiff, claimed delivery of possession of 300 sq.
5
yards of land from the Vendor. Pratap Reddy was not impleaded
defendant in the said suit for specific performance of the Agreement
dated 21.3.1984. Later the Vendee filed an application being
I.A.No.44 of 1989 for impleading Pratap Reddy, pursuant to which an
order dated 5th April, 1989 was passed whereby Pratap Reddy was
added as defendant No.3 in the said suit.
11. In the meanwhile, in 1985, Pratap Reddy filed a suit being
O.S.No.190 of 1985 in the court of the Principal District Munsif,
Hyderabad East and North, seeking a decree of perpetual injunction
restraining the Vendee from interfering with his possession over 100
sq. yards of the suit land.
12. In the suit filed by Pratap Reddy, it was alleged that he was
not aware of any agreement of sale between the Vendor and the
Vendee in respect of the suit land or of payment of Rs.40,000/- to the
Vendee in terms thereof.
13. It is the case of Pratap Reddy, that even if the Vendee had
entered into any agreement as alleged with the Vendor, there could
be no question of sale of 100 sq. yards of the suit land earlier agreed
to be sold to Pratap Reddy, and actually sold to Pratap Reddy by a
registered deed of conveyance dated 25.5.1984.
6
14. The Vendee also filed a suit being O.S.No.401 of 1985 against
Pratap Reddy in the Court of Principal District Munsif, Hyderabad for a
declaration that the agreement between the Vendor and Pratap
Reddy with regard to 100 sq. yards was null and void. The Vendor
was not impleaded as party to the said suit.
15. On or about 19th July, 1989, the Vendor and her husband
Darshan Reddy filed their Written Statement in O.S.No.222 of 1984
subsequently renumbered as O.S.No.20 of 1993 being the suit for
specific performance of the sale agreement between the vendor and
the Vendee, which is hereinafter referred to as the suit for specific
performance. Pratap Reddy also filed his written statement in the
suit for specific performance. The three suits have, from time to
time, been renumbered.
16. The suit for specific performance, which had been transferred
to the Additional District Court of Rangareddy District and
renumbered O.S.No.20 of 1993, was clubbed for hearing along with
Suit No.190 of 1985, renumbered as O.S.No.91 of 1993 and
O.S.No.702 of 1991 renumbered as O.S.No.92 of 1993.
17. The Trial Court framed the following issues in the suit being
O.S No.20/1993, that is the suit for specific performance:
“1. Whether the plaintiff (sic the Vendee) was put in
possession of the suit plot admeasuring 300 sq. yards?
7
2. Whether the suit agreement of sale was subject to the
clearance of any agreement of sale of 100 sq. yards out of
the suit plot in favour of one Sri. P. Pratap Reddy?
3. Whether the sale of 100 sq. yards out of the suit plot to
Sri. P. Pratap Reddy is true and binding on the plaintiff.(sic
the Vendee)
4. Whether the suit is bad for non-joinder of necessary
parties?
5. Whether the defendants (Sic the Vendor) committed
breach of contract of sale?
6. Whether plaintiff is entitled to the specific performance of
the suit agreement of sale?
7. To what relief?”
An additional issue was framed as to whether 3rd defendant, that is
Pratap Reddy, was a bona fide purchaser of 100 square yards of the
suit land.
18. In O.S.No.91/1993, being the suit for injunction filed by Pratap
Reddy, the Trial Court framed the following issues:
“1.Whether the plaintiff (sic Pratap Reddy) is entitled to
perpetual injunction as prayed for?
2. To what relief?”
The following additional issue was also framed:
“Whether the plaintiff (sic Pratap Reddy) is entitled to the
declaration and possession sought?”
19. In Original Suit No.92 of 1993, being the suit for declaration,
filed by the Vendee against Pratap Reddy, the following issues were
8
framed:
“1. Whether the suit is bad for non-joinder of parties?
2. Whether the plaintiff (sic Vendee) is entitled to
declaration as prayed for?
3. Whether the defendants are entitled to exemplary costs
of Rs.3,000/-?
4. To what relief?”
20. By a common judgment and decree dated 30th March, 1994,
the learned District Judge, Rangareddy disposed of all the three suits.
The suit for specific performance was allowed, in part, holding that
the Vendee, was not entitled to seek specific performance of the
agreement in respect of 100 sq. yards covered by the sale deed
dated 25th May, 1984, but entitled to relief of specific performance in
respect of the remaining 200 sq. yards of the suit land. The Vendee’s
suit for declaration against Pratap Reddy was dismissed for nonjoinder of the Vendor.
21. Since Exhibit A-1, being the sale agreement dated 21st March,
1984 between the Vendor and the Vendee showed that the sale
consideration for 300 sq. yards land was fixed at Rs.75,000, which
meant that the price fixed per sq. yard was Rs.250/-, the Court held
that the Vendee had to pay Rs.50,000/- to the Vendor, towards sale
consideration. As the Vendee was found to have paid Rs.40,000/-
under Ex.A1 and a further Rs.5,000/- under the receipt being Ex.A3,
the Trial Court effectively held that the Vendee was liable to pay a
further sum of Rs.5,000/- to the Vendor. The Vendee was directed to
9
deposit Rs.5,000/- in Court towards the balance sale consideration
payable by her, on or before 15th April, 1994, whereupon the Vendee
would have to execute a sale deed in respect of 200 sq. yards from
out of the suit land, in favour of the Vendee. In case of failure to
deposit Rs.5,000/- in Court within the time stipulated, the suit would
stand dismissed.
22. Being aggrieved, by the judgment and order referred to
above, the Vendor filed an appeal in the High Court, against the
judgment and decree in the suit for specific performance being O.S. of
1993 which was numbered as A.S. 1785 of 1994. The Vendee also
filed three appeals being A.S. No.892 of 1994 against the judgment
and decree in O.S.No.91 of 1993, an appeal being A.S.No.893 of 1994
against the judgment and decree in O.S.No.20 of 1993 and an appeal
being A. S. No.894 of 1994 against the judgment and decree in
O.S.No.92 of 1993.
23. By a common judgment and order dated 7th September 2006,
which is under appeal in this Court, the High Court inter alia dismissed
all the appeals that is A.S. Nos.892, 893, 894 filed by the Vendee and
A.S. No.1785 of 1994 filed by the Vendor and confirmed the judgment
passed by the Trial Court. While the appeal being C.A. No.3574 of
2009 has been filed by the Vendor, the three appeals being C.A. Nos.
3575-3577, have been filed by the Vendee.
10
24. Mr. Gowtham appearing on behalf of the appellant in C.A.
3574 of 2009 being the Vendor submitted that the agreement dated
21st March, 1984 between the Vendor and Vendee was liable to be
cancelled as the Vendee had defaulted in making payment of the
balance amount within the time stipulated in the said agreement.
25. Mr. Gowtham argued that there was a clause in the agreement
dated 21.3.1984 executed by and between the Vendor and the
Vendee, in terms whereof the Vendor agreed to register the sale deed
in favour of the Vendee, within 45 days from the date of the said
agreement, subject to receipt of the full consideration amount within
4.5.1984. Mr. Gowtham submitted that full payment was not made
within the aforesaid date. The appellants after waiting for 20 more
days, executed and registered a sale deed in favour of Pratap Reddy
in respect of 100 square yards of land.
26. Mr. Gowtham argued that the sale agreement was conditional
upon cancellation of the prior agreement with Pratap Reddy. It was
argued that the Vendee, who knew of the pre-existing agreement
between the Vendor and Pratap Reddy, had assured the Vendor that
she and/or her husband had already spoken to Pratap Reddy, to get
the agreement between the Vendee and Pratap Reddy cancelled.
27. Mr. Gowtham emphatically argued that the agreement dated
21.3.1984 was a composite agreement for sale of 300 sq. yards of
land for a lump sum consideration of Rs.75,000/-. Since it was not
11
possible to sell 300 sq. yards to the Vendee as per the sale
agreement, the sale agreement became infructuous and incapable of
specific performance. There was no scope for sale of 200 sq. yards of
land at a reduced consideration.
28. Mr. Gowtham argued that there could be no question of any
decree of specific performance of the agreement dated 21.3.1984 in
favour of the Vendee, in the absence of readiness and willingness on
the part of the Vendee to perform her obligations under the
agreement.
29. The Vendor and her husband Darshan Reddy contended that
they had not refused to execute the registered sale deed as alleged.
It was the contesting respondent who had failed to bring about a
settlement with Pratap Reddy as agreed, and had also failed to pay
the balance consideration within the time stipulated in the
agreement. Time being of essence to the agreement, it could not be
specifically enforced.
30. The Vendor and her husband Darshan Reddy also asserted that
the Vendee was also not ready to pay the balance sale consideration
and had sought further time for payment on the ground that he did
not have the money. The suit for specific performance was thus, not
maintainable. In any case, the agreement for sale of 300 sq. yards of
land to the Vendee was incapable of performance, since the appellant
12
did not have 300 sq. yards of land.
31. The Vendor and her husband Darshan Reddy have
categorically denied that they had delivered possession of 300 sq.
yards of land to the Vendee. They have asserted that the Vendee had
taken possession of 200 sq. yards of land, 100 sq. yards having been
transferred to Pratap Reddy.
32. Mr. Radhakrishnan appearing on behalf of the Vendee argued
that the Vendee should have been granted specific performance of
the agreement dated 21.3.1984 in its entirety. The Court should have
set aside the purported sale deed in respect of 100 sq. yards of land
in favour of Pratap Reddy and directed the Vendor to sell the entire
suit property comprising 300 sq. yards to the Vendee.
33. Mr. Radhakrishnan argued that the purported sale agreement
of the Vendor with Pratap Reddy was not genuine. It is difficult to
believe that the Vendor would, within 11 days from purchase of 300
sq. yards of land (the suit land), enter into an agreement for sale of
100 sq. yards out of the suit land.
34. Mr. Radhakrishnan further argued that the execution and
registration of the sale deed in favour of Pratap Reddy in respect of
100 sq. yards of land, was in any case, subsequent to the Agreement
dated 21.3.1984 between the Vendor and the Vendee.
13
35. Mr. Radhakrishnan emphatically argued that the agreement
dated 21.3.1984 was for sale by the Vendor, to the Vendee of 300 sq.
yards for a consideration of Rs.75,000/-, pursuant to which possession
of the entire 300 sq. yards of land was delivered to the Vendee. This
has, of course, been denied by the Vendor.
36. Refuting the contention advanced by the Vendee, of want of
readiness and willingness on the part of the Vendee, to perform her
obligations under the Agreement dated 21.3.1984, Mr. Radhakrishnan
further argued that, the fact that the Vendee had paid Rs.40,000/- to
the Vendor on the date of execution of the sale agreement itself, apart
from Rs.5,000/- which the Vendee had admittedly paid to Darshan
Reddy (husband of the Vendor), demolishes the contention of the
Vendor. These payments towards part consideration were duly
acknowledged.
37. Mr. Radhakrishnan pointed out that on 30.4.1984 the Vendee
approached the Vendor and her husband with the balance amount of
Rs.30,000/- and requested them to register the sale deed, but the
Vendor and her husband refused to receive the amount and instead
requested the Vendee to make the payment by Demand Draft.
38. According to the Vendee, the Vendee obtained a Demand
Draft No.463961 dated 4.5.1984 for Rs.30,000/- from Canara Bank,
14
but the Vendor did not accept the same. On 25.5.1984 the Vendee
issued a legal notice. Receipt of the legal notice was duly
acknowledged by the Vendor and her husband. A further legal notice
was issued by the Vendee on 12.8.1984. In the meanwhile, by a letter
dated 20.6.1984 in reply to the legal notice of 25.5.1984, the Vendor
admitted receipt of Rs.45,000/-, but claimed that the agreement was
subject to the Vendee securing the approval of Pratap Reddy, to end
the earlier agreement between the Vendor and Pratap Reddy, for
transfer of 100 sq. yards of land to Pratap Reddy.
39. Mr. Radhakrishnan concluded his arguments with the
submission that the Vendee had not delayed performance of her
obligations under the agreement dated 21.3.1984. Within 30.4.1984
the entire consideration was tendered but unfortunately not accepted
by the Vendor with ulterior intent of resiling from her obligations
under the said argument to transfer the suit property to the Vendee.
By 4th May, 1984, that is within 47 days from the date of the
agreement dated 21.3.1984 the Vendee was ready with a Demand
Draft for the balance Rs.30,000.
40. Mr. Navare appearing on behalf of Pratap Reddy submitted
that the Appeals are all liable to be dismissed. First of all, on the date
on which the Vendee filed the suit for specific performance of the
agreement against the Vendor and her husband, she was aware of the
registered sale deed executed by the Vendor in favour of Pratap
15
Reddy, in respect of 100 sq. yards of land. Yet the Vendee filed a suit
against the Vendor and her husband, for specific performance of the
agreement in which Pratap Reddy was not impleaded defendant.
There was no challenge to the sale deed in favour of Pratap Reddy.
41. Mr. Navare argued that the Vendee filed a second suit against
Pratap Reddy for a declaration that the sale deed executed by the
Vendor in his favour was void, without impleading the Vendor.
42. Mr. Navare pointed out that as late as on 5.4.1989, the Vendee
filed an application for impleading Pratap Reddy as defendant in her
suit for specific performance filed in 1984. The Vendee only added
Pratap Reddy. There was no amendment either in the pleadings or in
the prayers. The reliefs claimed by the Vendor in the suit for specific
performance were thus barred by limitation, as against Pratap Reddy
in the absence of any clarification by the Trial Court, as required under
Section 21 of the Limitation Act, 1963.
43. Mr. Navare further submitted that, there being no prayer
against Pratap Reddy in the suit for specific performance, Pratap
Reddy would not be bound to join the original owner, in execution of
the deed of conveyance in favour of the Vendee. In support of his
submission Mr. Navare cited Durga Prasad and Anr. v. Deep
Chand and Ors.
1
.
1. AIR 1954 SC 75
16
44. Mr. Navare submitted that the Vendee chose not to challenge
the registered sale deed in favour of Pratap Reddy or to seek any
relief against Pratap Reddy in the Suit for Specific Performance.
Failure to make any such prayer amounted to relinquishment of the
claim to such relief, in view of Order II Rule 2 of the Code of Civil
Procedure (CPC).
45. Mr. Navare submitted that the second suit filed by the Vendee
is bad for non-joinder of the Vendor. A registered sale deed executed
by the Vendor cannot be declared void in her absence.
46. Mr. Navare concluded that the second suit was also hit by
Order II Rule 2, and was thus barred under the law. In any case, the
second suit filed by the Vendor was only for a declaration and there
was no prayer for any consequential relief. The second suit was thus
hit by Section 34 of the Specific Relief Act, 1963.
47. Mr. Navare finally referred to Section 50(1) of the Registration
Act, 1908 set out hereinbelow for convenience:
“(1) Every document of the kinds mentioned in clauses (a),
(b), (c), and (d) of section 17, sub-section (1), and clauses
(a) and (b) of section 18, shall, if duly registered, take effect
as regards the property comprised therein, against every
unregistered document relating to the same property, and
not being a decree or order, whether such unregistered
document be of the same nature as the registered
document or not.”
17
48. Referring to Section 50, Mr. Navare argued that a registered
sale deed with respect to a property will take effect over any
unregistered document, with respect to the same property.
49. Mr. Navare submitted that Pratap Reddy had also filed a suit
for declaration and possession being O.S. No.190/1985. All 3 suits
were clubbed together and heard together. However,
(i) consolidation of 3 suits does not convert 3 suits into one
action.
(ii) Consolidation of suits is for practical reasons such as,
saving costs, time and efforts of the parties,
convenience of the parties, avoiding repetitive
exercises in 3 suits and avoiding conflict of judgment in
the 3 suits. However, the 3 suits consolidated/clubbed
together retain their separate identity. In support of his
argument Mr. Navare cited Mahalaxmi Coop.
Housing Society Ltd. and Ors. v. Ashabhai
Atmaram Patel (D) thr. Lrs. and Ors.
2
.
50. Mr. Navare emphatically argued that the right which have
accrued to Pratap Reddy, as a result of defective suits filed by the
Vendee, cannot stand abrogated by consolidation of the suits. There
is no provision in the CPC which permits a party to be deprived of
such accrued, right because of defects in the suit.
51. Mr. Navare submitted that the bar of the second suit under
Order II Rule 2 of the CPC is not a defect of a technical nature. The
2. (2013) 4 SCC 404 [41]
18
mandate of Order II Rule 2 requiring the Vendor to claim all reliefs in
respect of the same cause of action arising out of one suit, is a
provision of a substantive nature, and not of a technical nature. It is
based on legislative policy.
52. Mr. Navare argued that although, no objection of bar under
Order 2 Rule 2 of CPC was raised in the suit, by Pratap Reddy, that
does not make any difference for the following reasons:
(i) Order II Rule 7 requires only objection as to mis-joinder
of causes of action, to be taken at the earliest
opportunity, before issues are settled, and otherwise
such objection is deemed to be waived.
(ii) Similarly, Section 21 of the CPC specifically provides
that, any objection as to the place of suing must be
raised at the earliest opportunity, before issues are
settled and the same cannot be raised in Appellate or
Original Court for the first time.
(iii) Legislature has specifically clarified the cases where the
raising of an objection is necessary. There is no
provision in the CPC with respect to objection under
Order II Rule 2. The maxim “Expressum
facitcessaretacitum” (Express mention of one thing
excludes the other) squarely applies here.
(iv) There is a bar of Law prescribed by Order II Rule 2
against the second suit. It is a kind of bar contemplated
19
under Order VII Rule 11 (d). The power of the Court
under Order VII Rule 11(d) is in the following words “the
Plaint shall be rejected...” Thus, it casts an obligation on
the Court to reject the same. Irrespective of whether an
objection is raised by the defendant in the suit or not,
the consequence must follow.
53. Mr. Navare concluded that this Court might decline to invoke
jurisdiction under Article 136 of the Constitution, even if an impugned
order is illegal. This Court should certainly not invoke its jurisdiction
under Article 136 to reverse the judgment, thereby effectively
validating the second suit, although it is barred by Order II Rule 2 of
CPC. The Appeal should therefore be dismissed.
54. It is not in dispute that the Vendor agreed to sell the entire
suit land comprising 300 square yards to the Vendee for a
consideration of Rs.75,000/-. The agreement dated 21.3.1984 is
admitted by the Vendor.
55. It is also not in dispute that the Vendee paid Rs.40,000/- to the
Vendor on the date of the agreement itself and also paid a sum of
Rs.5,000/- to the Vendor’s husband, which was duly acknowledged.
56. The defence of the Vendor that the Vendee was unable and/or
unwilling to perform her obligations under the agreement dated
20
21.3.1984 has been rejected by the Trial Court, as also the Appellate
Court, that is, the High Court.
57. The finding of the Trial Court, affirmed by the High Court that
the Vendee was ready and willing to perform her obligations under
the agreement dated 21.3.1984, which is based on evidence and
supported by cogent reasons, is unexceptionable as discussed
hereinafter.
58. The contention of the Vendor, that the agreement dated
21.3.1984 was subject to the condition that the Vendee would get the
earlier agreement between the Vendor and Pratap Reddy cancelled,
cannot be accepted for the following reasons:
(i) The agreement dated 21.3.1984, which is in writing does
not incorporate any such condition.
(ii) It is incredible that the Vendor, who knew Pratap Reddy, to
whom she had, as per her own assertion, agreed to sell
100 square yards of land, should proceed on the basis of
an alleged assurance of the Vendee, that Pratap Reddy
would relinquish his rights under the earlier agreement
between the Vendor and Pratap Reddy, without
ascertaining from Pratap Reddy, whether Pratap Reddy
was actually ready to relinquish his rights under the said
earlier agreement with her.
(iii) Pratap Reddy has denied knowledge of the agreement
21
between the Vendor and the Vendee.
(iv) Within a month and a few days from the date of execution
of the agreement between the Vendor and the Vendee,
after the Vendee tendered full consideration, the Vendor
executed a registered deed of conveyance in favour of
Pratap Reddy, without any prior intimation to the Vendee,
and without giving the Vendee any opportunity to
persuade Pratap Reddy to abrogate his earlier agreement
with the Vendor.
59. It is well settled that the onus of proof lies on the party who
makes an allegation. It was for the Vendor to establish that the
agreement dated 21.3.1984 was subject to the condition as alleged
by the Vendor, that the Vendee and/or her husband would negotiate
with Pratap Reddy to get his earlier agreement with the Vendor
cancelled. The Vendor failed to discharge her onus of proving that
there was such a condition in the agreement dated 21.3.1984. The
Trial Court and the High Court rightly did not believe the Vendor.
60. The effective concurrent finding of the High Court and the Trial
Court, that the Vendee had been ready and willing to perform and
had in fact performed her obligations under the Agreement dated
21.3.1984, is also unexceptionable for the following reasons:
(i) As observed above, the Vendee paid Rs.40,000/- out of the
total consideration of Rs.75,000/- on the date of execution
22
of the Agreement dated 21.3.1984 itself.
(ii) It is not disputed that the Vendee paid a further Rs.5,000/-
to the Vendor’s husband against a receipt.
(iii) It is the Vendor’s own case that in terms of the Agreement
dated 21.3.1984, the full consideration was to be paid
within 45 days. The Vendee’s claim that she tendered
Rs.30,000/- on 30.4.1984 was not disputed by the Vendor in
her legal notice/letter dated 20.6.1984.
(iv) In any case the Vendee obtained Demand Draft No.463961
dated 4.5.1984 for Rs.30,000/- in favour of the Vendor
towards balance consideration, within 47 days from the
execution of the Agreement dated 21.3.1984.
(v) It is well settled that time is not of essence to agreements
for sale of immovable property, unless the agreement
specifically and expressly incorporates the consequence of
cancellation of the agreement, upon failure to comply with a
term within the stipulated date.
61. The concurrent findings of the High Court and the Trial Court
that the Vendee was ready and willing to perform and had performed
her obligations under the Agreement dated 21.3.1984, which as
observed above, are based on evidence and sound reasons, do not
call for interference of this Court.
62. It is true that the Trial Court had directed the Vendor to pay
the balance of Rs.5,000/- on or before 15.4.1994, failing which the
23
suit for specific performance would stand dismissed. However, any
time granted by the Court at its discretion, can always be extended
by the Court.
63. In any case, the Vendor had filed an appeal against the decree
in the suit for specific performance. The Vendee, who had been
litigating for about 10 years by April, 1994 and had already paid
Rs.45,000/- over 10 years ago, but not got the suit land, could not be
expected to put in more money, until the decree assumed finality,
upon disposal of the appeal.
64. Since there was an appeal of the Vendor pending, the failure
of the Vendor to put in Rs.5,000/- within the time stipulated by Court,
wold not, in itself, disentitle the Vendor to the relief of specific
performance. It was for the Court to decide whether or not to extend
the time for payment of Rs.5,000/-. The Appellate Court rightly
expressed its discretion in favour of the Vendee.
65. The question is, whether as argued by Mr. Gowtham, the High
Court erred in affirming the common judgment of the Trial Court
under appeal before the High Court, whereby the Trial Court allowed
the suit for specific performance in part, holding that the Vendee was
entitled to relief of specific performance in respect of 200 square
yards of land covered by the Agreement dated 21.3.1984 (that is,
less 100 sq. yards sold to Pratap Reddy by a registered deed of
conveyance dated 25.4.1984), at a reduced consideration of
Rs.50,000/-, since the agreement dated 21.3.1984 was a composite
24
agreement for sale of 300 sq. yards of land at a lump sum
consideration of Rs.75,000/-.
66. While Mr. Gowtham has argued that the Courts should not at
all have allowed specific performance of the Agreement dated
21.3.1984, Mr. Radhakrishnan has argued that the conveyance in
favour of Pratap Reddy should have been adjudged and declared a
nullity, and the suit for specific performance allowed in full, by
directing the execution and registration of a Deed of Conveyance, in
respect of the entire suit land.
67. The relief of specific performance of an agreement, was at all
material times, equitable, discretionary relief, governed by the
provisions of the Specific Relief Act 1963, hereinafter referred to as
S.R.A. Even though the power of the Court to direct specific
performance of an agreement may have been discretionary, such
power could not be arbitrary. The discretion had necessarily to be
exercised in accordance with sound and reasonable judicial principles.
68. Section 10 of the S.R.A. as it stood prior to its amendment
with effect from 1.10.2018 provided:-
“10. Cases in which specific performance of contract
enforceable.- Except as otherwise provided in this Chapter,
the specific performance of any contract may, in the
discretion of the court, be enforced-
(a) when there exists no standard for ascertaining
actual damage caused by the non-performance of
the act agreed to be done; or
25
(b) when the act agreed to be done is such that
compensation in money for its non-performance
would not afford adequate relief.
Explanation.- Unless and until the contrary is proved, the
court shall presume-
(i) that the breach of a contract to transfer immovable
property cannot be adequately relieved by
compensation in money; and
(ii) that the breach of a contract to transfer movable
property can be so relieved except in the following
cases:-
(a) where the property is not an ordinary article of
commerce, or is of special value or interest to the
plaintiff, or consists of goods which are not easily
obtainable in the market;
(b) where the property is held by the defendant as the
agent or trustee of the plaintiff.”
69. After amendment with affect from 1.10.2018, Section 10 of
the S.R.A. provides:
10. Specific performance in respect of contracts.-
The Specific performance of a contract shall be enforced
by the court subject to the provisions contained in subsection (2) of section 11, section 14 and section 16.
70. After the amendment of Section 10 of the S.R.A., the words
“specific performance of any contract may, in the discretion of the
Court, be enforced” have been substituted with the words “specific
performance of a contract shall be enforced subject to ...”. The Court
is, now obliged to enforce the specific performance of a contract,
subject to the provisions of sub-section (2) of Section 11, Section 14
and Section 16 of the S.R.A. Relief of specific performance of a
contract is no longer discretionary, after the amendment.
26
71. An agreement to sell immovable property, generally creates a
right in personam in favour of the Vendee. The Vendee acquires a
legitimate right to enforce specific performance of the agreement.
72. It is well settled that the Court ordinarily enforces a contract in
its entirety by passing a decree for its specific performance.
However, Section 12 of the Specific Relief Act carves out exceptions,
where the Court might direct specific performance of a contract in
part. Section 12 of the Specific Relief Act, 1963 is set out
hereinbelow for convenience.
12. Specific performance of part of contract.-(1)
Except as otherwise hereinafter provided in this section the
court shall not direct the specific performance of a part of a
contract.
(2) Where a party to a contract is unable to perform the
whole of his part of it, but the part which must be left
unperformed by only a small proportion to the whole in
value and admits of compensation in money, the court may,
at the suit of either party, direct the specific performance of
so much of the contract as can be performed, and award
compensation in money for the deficiency.
(3) Where a party to a contract is unable to perform the
whole of his part of it, and the part which must be left
unperformed either-
(a) forms a considerable part of the whole, though
admitting of compensation in money; or
(b) does not admit of compensation in money,
he is not entitled to obtain a decree for specific
performance; but the court may, at the suit of other party,
direct the party in default to perform specifically so much of
his part of the contract as he can perform, if the other party-
(i) in a case falling under clause (a), pays or has paid
the agreed consideration for the whole of the
27
contract reduced by the consideration for the part
which must be left unperformed and a case falling
under clause (b), [pays or had paid] the consideration
for the whole of the contract without any abatement;
and
(ii) in either case, relinquishes all claims to the
performance of the remaining part of the contract
and all right to compensation, either for the
deficiency or for the loss or damage sustained by him
through the default of the defendant.
(4) When a part of a contract which, taken by itself, can
and ought to be specifically performed, stands on a separate
and independent footing from another part of the same
contract which cannot or ought not to be specifically
performed, the court may direct specific performance of the
former part.
Explanation.- For the purposes of this section, a party to a
contract shall be deemed to be unable to perform the whole
of his part of it if a portion of its subject matter existing at
the date of the contract has ceased to exist at the time of its
performance.
73. Where a party to the contract is unable to perform the whole
of his part of the contract, the Court may, in the circumstances
mentioned in Section 12 of the S.R.A., direct the specific performance
of so much of the contract, as can be performed, particularly where
the value of the part of the contract left unperformed would be small
in proportion to the total value of the contract and admits of
compensation.
74. The Court may, under Section 12 of the S.R.A. direct the party
in default to perform specifically, so much of his part of the contract,
as he can perform, provided the other party pays or has paid the
consideration for the whole of the contract, reduced by the
28
consideration for the part which must be left unperformed. In this
case the Vendee had apparently tendered the full consideration
within the time stipulated in the Agreement dated 21.3.1984, that is,
within 45 days or if not 45, within 47/48 days from the date of its
execution.
75. As observed above, the Vendee admittedly paid Rs.40,000/-
from out of the total consideration of Rs.75,000/- on the date of
execution of the agreement, a further sum, of Rs.5,000/- sometime
thereafter, which was duly acknowledged and also offered to pay the
balance Rs.30,000/- within 30.4.1984 that is, within 45 days from the
date of execution of the contract, which the Vendor did not accept. A
Demand Draft for equivalent amount of Rs.30,000/- was obtained
from Canara Bank on 4.5.1984, that is the 47th day of the execution of
the agreement.
76. Admittedly, a major portion of the full consideration, that is,
Rs.45,000/- had already been paid by the Vendor to the Vendee and
the Vendor had been ready to and had offered to pay the entire
balance consideration to the Vendor. However, the Vendor purported
to sell 100 square yards of the suit land to Pratap Reddy by executing
a registered deed of conveyance in his favour.
77. As argued by Mr. Navare, a registered deed of conveyance
takes effect, as regards the property comprised therein, against every
unregistered deed relating to the same property as provided in
29
Section 50 of the Registration Act.
78. The Vendee claimed specific performance of the agreement
dated 21.3.1984 in its entirety, and sought execution and registration
of a deed of conveyance in respect of the entire suit land comprising
300 square yards, but without impleading Pratap Reddy to whom
ownership of 100 square yards of land had been transferred by a
registered deed of conveyance.
79. A transferee to whom the subject matter of a sale agreement
or part thereof is transferred, is a necessary party to a suit for specific
performance. Unfortunately, the Vendee omitted to implead Pratap
Reddy. By the time she filed an application to implead Pratap Reddy,
in 1989, the suit for specific performance of the agreement dated
21.3.1984 had become barred by limitation as against Pratap Reddy.
80. Under the Limitation Act 1963 the period of limitation for filing
a suit for specific performance is three years from the date fixed for
performance of the contract, or if no date is fixed, then three years
from the date on which the Vendee is put to notice of refusal to
perform the agreement (Item No.54 in Part II of the Schedule to the
Limitation Act 1963).
81. Section 21 of the Limitation Act provides:
21. Effect of substituting or adding new plaintiff or
defendant.- (1) Where after the institution of a suit, a new
plaintiff or, defendant is substituted or added, the suit shall,
as regards him, be deemed to have been instituted when he
30
was so made a party:
Provided that where the court is satisfied that the
omission to include a new plaintiff or defendant was due to
a mistake made in good faith it may direct that the suit as
regards such plaintiff or defendant shall be deemed to have
been instituted on any earlier date.
(2) Nothing in sub-section (1) shall apply to a case
where a party is added or substituted owing to assignment
or devolution of any interest during the pendency of a suit or
where a plaintiff is made a defendant or a defendant is
made a plaintiff.
82. The Vendee was put to notice of the refusal of the Vendor to
execute the agreement dated 21.3.1984, by the Vendor’s letter/legal
notice dated 20.6.1984. Any suit for specific performance would be
time barred by June/July 1987. Moreover, it is a matter of record that
the Vendee knew of the registered deed of conveyance in favour of
Pratap Reddy, when she instituted the suit in 1984.
83. The Vendee neither amended her pleadings in the plaint nor
amended the prayers. Pratap Reddy was simply added defendant.
The Court adding Pratap Reddy as defendant in the suit for specific
performance, did not make any direction in terms of the proviso to
Section 21(1) of the Limitation Act, that the suit against Pratap Reddy
be deemed to be instituted at any earlier date. There could therefore
be no question of any relief against Pratap Reddy in the suit for
specific performance.
84. The Vendee did not implead the Vendor as defendant in her
later suit (Original Suit No.401 of 1985, renumbered Original Suit
31
No.92 of 1993) inter alia for a declaration that the Deed of
conveyance executed by the Vendor in favour of Pratap Reddy was
null and void. The suit has rightly been dismissed for non joinder of
the Vendor as defendant. There could be no question of a document
being adjudged null and void without impleading the executant of the
document, as defendant.
85. The suit for specific performance being time barred against
Pratap Reddy, and the suit against Pratap Reddy also having been
dismissed for non joinder of the Vendor, there could be no question
of nullifying the rights that had accrued to Pratap Reddy, pursuant to
the Deed of Conveyance dated 25.4.1984 executed by the Vendor
transferring 100 sq. yards of the suit land to Pratap Reddy. Moreover,
there was apparently an agreement in writing executed between the
Vendor and Pratap Reddy on or about 25.01.1984 before execution of
the agreement between the Vendor and the Vendee.
86. Since title in respect of 100 square yards had passed to Pratap
Reddy and the suit for specific performance was barred by limitation,
the Trial Court was constrained to decree the suit for specific
performance in part, and direct that a Deed of Conveyance be
executed in respect of the balance 200 square yards of the suit land,
under the ownership and control of the Vendor.
87. Section 12 of the SRA is to be construed and interpreted in a
purposive and meaningful manner to empower the Court to direct
32
specific performance by the defaulting party, of so much of the
contract, as can be performed, in a case like this. To hold otherwise
would permit a party to a contract for sale of land, to deliberately
frustrate the entire contract by transferring a part of the suit property
and creating third party interests over the same.
88. Section 12 has to be construed in a liberal, purposive manner
that is fair and promotes justice. A contractee who frustrates a
contract deliberately by his own wrongful acts cannot be permitted to
escape scot free.
89. After having entered into an agreement for sale of 300 Sq.
yards of land, with her eyes open, and accepted a major part of the
consideration (Rs.45,000/- out of Rs.75,000/-) it does not lie in the
mouth of the Vendor to contend that the contract should not have
specifically been enforced in part, in respect of the balance 200 sq.
yards meters of the suit land which the Vendor still owned. It is
patently obvious that the Vendor did not disclose any earlier
agreement to the Vendee, as discussed above. The agreement in
writing dated 21.3.1984, does not bear reference to any earlier
agreement, as noted above.
90. Instead of awarding damages in respect of the part of the
contract which could not be enforced and/or in other words damages
for breach of agreement to sell the entire suit land, the Trial Court
reduced the total consideration by 1/3rd of the agreed amount, in lieu
33
of damages, as one third of the area agreed to be sold to the Vendee
could not be sold to her. The total price agreed upon being
Rs.75,000/- for the entire suit land, comprising 300 square yards, the
agreed price works out to Rs.25,000/- for 100 square yards and/or
Rs.2,500/- per square yard. The Trial Court very fairly reduced the
consideration by Rs.25,000/-, being the price of 100 square yards of
land computed proportionally, in lieu of damages. The Vendor can
have no legitimate reason to complain.
91. Since we have upheld the dismissal of Suit No.92/1993 filed by
the Appellant against Pratap Reddy, it is not really necessary to go
into the question of whether the said suit was barred under Order II
Rule 2 of the Civil Procedure Code as contended by Mr. Navare. It is
true that, the clubbing of suits for hearing them together and
disposal thereof by a common judgment and order is for practical
reasons. Such clubbing together of the suits do not convert the suits
into one action as argued by Mr. Navare. The suits retain their
separate identity as held in Mahalaxmi Coop. Housing Society
Ltd. and Ors. v. Ashabhai Atmaram Patel (supra). The clubbing
together is done for convenience, inter alia, to save time, costs,
repetition of procedures and to avoid conflicting judgments.
92. We are, however, unable to agree with Mr. Navare’s argument
that the Court is under an obligation to reject the subsequent suit,
irrespective of whether objection of bar under Order II Rule 2 of the
CPC was raised or not.
34
93. The plea of bar under Order II Rule 2 of the CPC is a technical
plea which has to be pleaded and satisfactorily established. In R. A.
Oswal v. Deepak Jewellers and Ors.
3
, this Court held that if the
plea of bar under Order II Rule 2 is not taken, the Court should not
suo moto decide the plea. Moreover, in Dalip Singh v. Mehar
Singh Rathee and Ors.
4
, this Court held that the plea cannot be
raised before this Court if not raised in the High Court.
94. We find no such infirmity in the judgment and order of the
High Court under appeal, confirming the judgment and order of the
Trial Court, that calls for interference of this Court. The High Court
has rightly dismissed the appeals from the judgment of the Trial
Court.
95. These appeals are, therefore, dismissed.
.......................................J.
[ UDAY UMESH LALIT ]
..….…..............................J.
[ INDIRA BANERJEE ]
NEW DELHI
SEPTEMBER 18, 2020
3. (1999) 6 SCC 40 [42]
4. (2004) 7 SCC 650
