A. Civil Procedure Code, 1908 — Section 100 — Second Appeal
Interference with findings of fact — Scope — Principles reiterated
High Court cannot interfere with concurrent or appellate findings of fact unless such findings are:
(i) contrary to mandatory provisions of law;
(ii) based on no evidence;
(iii) based on inadmissible evidence; or
(iv) perverse or legally unsustainable.
(Paras 18, 43)
B. Specific Relief Act, 1963 — Sections 10, 16(c), 20 (pre-amendment)
Specific performance — Nature of relief — Discretion — Principles governing exercise
Relief of specific performance is discretionary but once the agreement is proved to be true and valid and readiness and willingness are established, discretion must ordinarily be exercised in favour of enforcement unless inequity or hardship is proved.
(Paras 21, 30, 42)
C. Agreement of sale — Registered document — Presumption
Execution and registration of agreement admitted — Burden lies on executant to prove sham or nominal nature — Mere plea of nominal document without proof insufficient.
(Paras 22, 30, 35–36)
D. Agreement alleged to be sham and nominal
Where defendants admit execution and signatures on registered agreement of sale but plead that it was executed as security for debt, burden squarely lies on defendants to establish such plea by cogent evidence.
Failure to discharge burden renders plea untenable.
(Paras 19–20, 35–36)
E. Advance consideration — Substantial payment
Payment of more than 75% of total sale consideration at the time of agreement is a strong circumstance supporting genuineness of transaction and militates against theory of sham agreement.
(Paras 21, 25, 30, 36, 42)
F. Readiness and willingness — Section 16(c)
Plaintiff must establish continuous readiness and willingness from date of contract till decree.
Where plaintiff pleads readiness, issues legal notice, proves availability of balance consideration, and defendants fail to reply or deny readiness, Section 16(c) stands satisfied.
(Paras 21–26, 30, 36, 38)
G. Silence after receipt of legal notice — Adverse inference
Failure of defendants to issue reply to legal notice disputing agreement or consideration is a strong circumstance supporting plaintiff’s case.
(Paras 21, 25, 30, 36, 38)
H. Time — Whether essence of contract
In contracts relating to immovable property, time is ordinarily not essence of contract unless intention is clearly expressed or circumstances warrant such inference.
Merely stipulating date for payment does not make time essence.
(Paras 31–32, 37–38)
I. Delay — Limitation — Effect
Filing suit within limitation does not automatically entitle plaintiff to decree; however, delay alone cannot defeat specific performance where substantial consideration is paid and readiness and willingness are proved.
(Paras 21, 38, 42)
J. Escalation of property prices
Rise in value of property over time is not by itself a ground to refuse specific performance, particularly where defendants enjoyed substantial advance consideration for decades.
(Paras 41–42)
K. Hindu Law — Joint family property — Alienation by Kartha
Alienation of joint family property by father as kartha binds minor coparceners when:
• property is joint family property, and
• alienation is for legal necessity or benefit of estate.
Section 8 of Hindu Minority and Guardianship Act does not apply to undivided coparcenary interest.
(Paras 33–34)
L. Legal necessity — Proof
Where agreement itself recites purpose of sale as:
• maintenance of minors, and
• family development,
such recital constitutes evidence of legal necessity unless rebutted by defendants.
(Paras 20, 33–36)
M. Minors’ challenge — Limitation
Minor coparceners who attain majority and fail to challenge alienation within limitation cannot subsequently dispute binding nature of transaction after decades.
(Paras 33, 36)
N. First appellate court — Final court of facts
First appellate court is final court on facts; where it frames points, re-appreciates evidence and assigns reasons, High Court cannot substitute its own view.
(Paras 18, 40, 43)
FINAL DECISION
• Both Second Appeals dismissed
• Judgment and decree dated 12-07-2013 in A.S. No.73 of 1998 confirmed
• Decree for specific performance upheld
• No costs
• All pending applications closed
(Paras 44–45)
FACTUAL MATRIX (As Recorded by Court)
Original Suit
• O.S. No.85 of 1990
• Filed for specific performance of agreement of sale dated 12-08-1987
Agreement Details
• Sale consideration: Rs.46,000/-
• Advance paid: Rs.38,000/-
• Balance: Rs.8,000/-
• Stipulated date: 31-01-1988
• Document: Registered agreement of sale (Ex.A-1)
Trial Court
• Held agreement true
• Treated it as security transaction
• Granted alternative relief of refund
First Appellate Court
• Re-appreciated evidence
• Rejected sham-document theory
• Granted decree for specific performance
Second Appeals
• Filed by defendants
• Multiple substantial questions framed
• Additional substantial question framed on time for performance
FINDINGS OF THE HIGH COURT
1. Agreement not sham or nominal
• Execution admitted
• Registration admitted
• Consideration substantially paid
• Defendants failed to prove loan theory
(Paras 19–22, 35–36)
2. Plaintiff proved readiness and willingness
• Pleaded readiness
• Issued legal notice
• Defendants silent
• Balance amount negligible
(Paras 21–26, 36, 38)
3. Time not essence
• No express clause making time essence
• Nature of immovable property
• Conduct of parties
(Paras 31–32, 37–38)
4. Agreement binding on defendants 2–4
• Property joint family property
• Father acted as kartha
• Legal necessity pleaded and proved
• No challenge after attaining majority
(Paras 33–36)
5. No substantial question of law
• Findings based on evidence
• No perversity
• No violation of law
(Paras 43–44)
RATIO DECIDENDI
Where a registered agreement of sale is admitted, substantial portion of sale consideration is paid, plaintiff proves readiness and willingness, defendants fail to rebut consideration or reply to legal notice, and the agreement executed by a father as kartha recites legal necessity for family benefit, the decree for specific performance is justified; mere plea that the agreement was sham or executed as security for debt, without cogent proof, does not constitute a substantial question of law under Section 100 CPC, and escalation of property prices or efflux of time by itself cannot defeat enforcement of contract.
