the suit for specific performance of contract.- in a suit filed by the plaintiff/respondent No.1. - It was further agreed between the parties that the land in suit, mortgaged with defendant No.2/respondent No. 2 Gurgaon Gramin Bank, Nagina, would be redeemed by the appellant before execution of the sale deed. - since the answering defendant was in the need of money, he had taken loan of Rs.1,50,000/- from the plaintiff on 21.06.2004, on interest at the rate of
1.5% per month. The appellant specifically denied having received rupees four lacs, as alleged by the plaintiff. It is further pleaded that when respondent No. 1 made demand for repayment of Rs.1,50,000/- with interest, and created pressure, the answering defendant asked Pravin Kumar to make payment of Rs.1,80,000/- to the plaintiff. It is further alleged that after said payment was made to the plaintiff on 10.11.2005 by Pravin Kumar,the alleged agreement dated 21.06.2004, which was a kind of security, stood cancelled. And respondent No. 1 should have returned the document to the plaintiff. -is pleaded by the appellant before the trial court that he had already executed agreement dated 07.05.2004 to sell the land in favour of one Pravin Kumar, resident of Tauru for an amount of Rs.7,62,200/- after receiving Rs.1,20,000/- as earnest money.-the trial court came to the conclusion that it is not a fit case for specific performance of contract, and disposed of the suit with a finding that the agreement executed between the plaintiff and defendant No. 1 was in substance an agreement of security for repayment of loan and directed the defendant No. 1 to pay back earnest money of rupees four lacs with 8% interest per annum from 21.06.2004 till payment is made to the plaintiff.- After hearing the parties, the appellate court (Additional District Judge, Nuh) vide judgment and order dated 14.02.2011, allowed the appeal, and decreed the suit for
specific performance of contract, directing the defendant No. 1 to execute the sale deed in terms of the agreement dated 21.06.2004, after accepting balance rupees two lacs from the plaintiff. This made defendant No.1 Ramesh Chand to file Regular Second Appeal No. 1344 of 2011 before the High Court. During the Second Appeal, defendant No. 1 appears to have died, and his legal heirs prosecuted the appeal. After hearing the parties, the High Court dismissed the appeal upholding the order passed by the first appellate court. Hence this appeal before us through special leave. During this appeal the plaintiff/respondent No.1 also expired, and his legal heirs
got substituted.- Apex court held that Section 20 of 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. However, the
discretion of the court is not arbitrary but sound and reasonable, guided
by judicial principles. Sub-section (2) of Section 20 of the Act provides
the three situations in which the court may exercise discretion not to
decree specific performance. One of such situation is contained in clause
(a) of sub-section (2) of the Section which provides that where the terms
of the contract or the conduct of the parties at the time of entering into
the contract or the other circumstances under which the contract was
entered into or such that the contract though not voidable, gives the
plaintiff an unfair advantage over the defendant, the decree of specific
performance need not be passed. It is pertinent to mention here that in the
present case, though execution of agreement dated 21.06.2004 between the
parties is proved, but it is no where pleaded or proved by the plaintiff
that he got redeemed the mortgaged land in favour of defendant No. 2 in
terms of the agreement, nor is it specifically pleaded that he was ready
and willing to get the property redeemed from the mortgage.
In the above facts and circumstances of the case and the judicial principle
discussed above, we are of the opinion that it is a fit case where instead
of granting decree of specific performance, the plaintiff can be
compensated by directing the appellant to pay a reasonable and sufficient
amount to him. We are of the view that mere refund of rupees four lacs
with interest at the rate of 8% per annum, as directed by the trial court,
would be highly insufficient. In our considered opinion, it would be just
and appropriate to direct the appellants (Legal Representatives of original
defendant No.1, since died) to repay rupees four lacs along with interest
at the rate of 18% per annum from 21.06.2004 till date within a period of
three months from today to the L.Rs. of respondent No. 1 (mentioned in I.A.
No. ___ of 2015 dated 07.09.2015). If they do so, the decree of specific
performance shall stand set aside. We clarify that if the amount is not
paid or deposited before the trial court in favour of the L.Rs. of
respondent No.1 within a period of three months, as directed above, the
decree of specific performance shall stand affirmed. We order accordingly. -2015 S.C. MSKLAWREPORTS
