REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO .3049 OF 2017
[Arising out of SLP (C) No. 32285 of 2015]
JAYAKANTHAM & OTHERS .....APPELLANTS
Versus
ABAYKUMAR .....RESPONDENT
J U D G M E N T
Dr D Y CHANDRACHUD, J
Leave granted
2 This appeal arises from a judgment rendered by a learned Single Judge
of the Madras High Court on 11 June 2015 in a second appeal under Section
100 of the Code of Civil Procedure, 1908. Dismissing the second appeal, the
learned Single Judge confirmed the judgment of the Principal District
Judge, Villupuram by which an appeal against the judgment of the sub-Judge,
Kallakurichi was dismissed. The trial court decreed the suit for specific
performance instituted by the respondent against the appellants.
3 The subject matter of the suit for specific performance is a property
bearing survey No. 314/1A at Kallakurichi village admeasuring 735 square
feet upon which a residential house is situated. An agreement to sell was
entered into between the appellants and the father of the respondent on
2 June 1999. The consideration agreed upon was
rupees one lakh sixty thousand of which an amount of rupees sixty thousand
was received as advance. The balance was to be paid when the sale deed was
executed. Time for completion of the sale transaction was reserved until 2
June 2002. A legal notice seeking performance of the agreement was issued
on 7 May 2002. In response, the defence that was set up was inter alia that
the agreement to sell was executed only as a security for a loan
transaction.
4 In support of the plea for specific performance, the father of the
respondent was examined as PW1. Evidence on behalf of the appellants was
adduced by DW1 and DW2. The trial court by a judgment and order dated
5 January 2007 decreed the suit for specific performance and directed
the appellants to execute a sale agreement in favour of the respondent
against receipt of the balance consideration of rupees one lakh. The trial
court noted that the agreement to sell had been registered and rejected the
defence that it is merely a document executed by way of security for a loan
transaction. In the view of the trial court, there was nothing in the
agreement to indicate that it was executed merely by way of a security. A
finding of fact was arrived at to the effect that the respondent was ready
and willing to perform the agreement. The suit was decreed. The judgment of
the trial court was confirmed in appeal on 26 August 2008 by the Principal
District Judge, Villupuram.
5 A second appeal was initially admitted on a substantial question of
law but was eventually dismissed by a learned Single Judge of the Madras
High Court on 11 June 2015.
6 When the Special Leave Petition came up on 29 January 2016, this
Court observed that there was no error in the finding of facts recorded by
three courts concurrently and hence those findings could not be reversed on
merits. However, the alternative submission which was urged on behalf of
the appellants was that the suit property is the only property held by them
and has an extremely high value. The appellants stated that they are ready
to pay a sum of rupees ten lakhs or even more to retain it. Notice was
issued to the respondent limited to the above contention.
7 On behalf of the appellants, it has been submitted that this is a fit
and proper case where specific performance ought not to be ordered and a
decree for compensation in lieu thereof would meet the ends of justice. It
was urged that specific performance of an agreement need not necessarily be
ordered merely because it is lawful to do so and the matter lies in the
judicious exercise of discretion of the court. In support of this plea,
reliance was placed on several circumstances; primary among them being the
fact that it is not in dispute that the father of the respondent who
entered into the transaction and deposed as PW1(the respondent being about
sixteen years of age at the time of execution of the agreement) carried on
money lending business. Opposing this submission, it was urged on behalf of
the respondent that while it is true that his father is a money lender,
this by itself would not disable the respondent from seeking specific
performance. Moreover, it was urged that the mere fact that there has been
an escalation of land prices would not be a justification to refuse
specific performance.
8 While evaluating whether specific performance ought to have been
decreed in the present case, it would be necessary to bear in mind the
fundamental principles of law. The court is not bound to grant the relief
of specific performance merely because it is lawful to do so. Section 20(1)
of the Specific Relief Act, 1963 indicates that the jurisdiction to decree
specific performance is discretionary. Yet, the discretion of the court is
not arbitrary but is “sound and reasonable”, to be “guided by judicial
principles”. The exercise of discretion is capable of being corrected by a
court of appeal in the hierarchy of appellate courts. Sub-section 2 of
Section 20 contains a stipulation of those cases where the court may
exercise its discretion not to grant specific performance. Sub-Section 2 of
Section 20 is in the following terms :
“Section 20 (2). The following are cases in which the court may properly
exercise discretion not to decree specific performance-
(a) 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 are such that the contract, though not
voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on
the defendant which he did not foresee, whereas its non-performance would
involve no such hardship on the plaintiff;
(c) where the defendant entered into the contract under circumstances which
though not rendering the contract voidable, makes it inequitable to enforce
specific performance.”
However, explanation 1 stipulates that the mere inadequacy of
consideration, or the mere fact that the contract is onerous to the
defendant or improvident in its nature, will not constitute an unfair
advantage within the meaning of clause (a) or hardship within the meaning
of clause (b). Moreover, explanation 2 requires that the issue as to
whether the performance of a contract involves hardship on the defendant
has to be determined with reference to the circumstances existing at the
time of the contract, except where the hardship has been caused from an act
of the plaintiff subsequent to the contract.
9 The precedent on the subject is elucidated below :
(i) In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son
and Ors[1] ,this Court held that :
“…14. Section 20 of the Specific Relief Act, 1963 preserves judicial
discretion of Courts as to decreeing specific performance. The Court should
meticulously consider all facts and circumstances of the case. The Court is
not bound to grant specific performance merely because it is lawful to do
so. The motive behind the litigation should also enter into the judicial
verdict. The Court should take care to see that it is not used as an
instrument of oppression to have an unfair advantage to the plaintiff…”
(ii) A similar view was adopted by this Court in Sardar Singh v. Smt.
Krishna Devi and another[2] :
“…14. Section 20(1) of the 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;
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. The grant of relief of specific performance is discretionary. The
circumstances specified in Section 20 are only illustrative and not
exhaustive. The court would take into consideration the circumstances in
each case, the conduct of the parties and the respective interest under the
contract.”
(iii) Reiterating the position in K. Narendra v. Riviera Apartments (P)
Ltd[3],this Court held thus :
“…29. Performance of the contract involving some hardship on the defendant
which he did not foresee while non-performance involving no such hardship
on the plaintiff, is one of the circumstances in which the court may
properly exercise discretion not to decree specific performance. The
doctrine of comparative hardship has been thus statutorily recognized in
India. However, mere inadequacy of consideration or the mere fact that the
contract is onerous to the defendant or improvident in its nature , shall
not constitute an unfair advantage to the plaintiff over the defendant or
unforeseeable hardship on the defendant. The principle underlying
Section 20 has been summed up by this Court in Lourdu Mari David v. Louis
Chinnaya Arogiaswamy by stating that the decree for specific performance is
in the discretion of the Court but the discretion should not be used
arbitrarily; the discretion should be exercised on sound principles of law
capable of correction by an appellate court.”
(iv) These principles were followed by this Court in A.C.
Arulappan v. Smt. Ahalya Naik[4], with the following observations :
“…..7. The jurisdiction to decree specific relief is discretionary and the
court can consider various circumstances to decide whether such relief is
to be granted. Merely because it is lawful to grant specific relief, the
court need not grant the order for specific relief; but this discretion
shall not be exercised in an arbitrary or unreasonable manner. Certain
circumstances have been mentioned in Section 20(2) of the Specific Relief
Act, 1963 as to under what circumstances the court shall exercise such
discretion. If under the terms of the contract the plaintiff gets an unfair
advantage over the defendant, the court may not exercise its discretion in
favour of the plaintiff. So also, specific relief may not be granted if the
defendant would be put to undue hardship which he did not foresee at the
time of agreement. If it is inequitable to grant specific relief, then also
the court would desist from granting a decree to the plaintiff.”
……..
“…..15. Granting of specific performance is an equitable relief, though the
same is now governed by the statutory provisions of the Specific Relief
Act, 1963. These equitable principles are nicely incorporated in Section 20
of the Act. While granting a decree for specific performance, these
salutary guidelines shall be in the forefront of the mind of the court…..”
(v) A Bench of three Judges of this Court considered the position in
Nirmala Anand Vs. Advent Corporation (P) Ltd. and Ors.[5], and held thus :
“…..6. It is true that grant of decree of specific performance lies in the
discretion of the court and it is also well settled that it is not always
necessary to grant specific performance simply for the reason that it is
legal to do so. It is further well settled that the court in its discretion
can impose any reasonable condition including payment of an additional
amount by one party to the other while granting or refusing decree of
specific performance. Whether the purchaser shall be directed to pay an
additional amount to the seller or converse would depend upon the facts and
circumstances of a case. Ordinarily, the plaintiff is not to be denied the
relief of specific performance only on account of the phenomenal increase
of price during the pendency of litigation. That may be, in a given case,
one of the considerations besides many others to be taken into
consideration for refusing the decree of specific performance. As a general
rule, it cannot be held that ordinarily the plaintiff cannot be allowed to
have, for her alone, the entire benefit of phenomenal increase of the value
of the property during the pendency of the litigation. While balancing the
equities, one of the considerations to be kept in view is as to who is the
defaulting party. It is also to be borne in mind whether a party is trying
to take undue advantage over the other as also the hardship that may be
caused to the defendant by directing specific performance. There may be
other circumstances on which parties may not have any control. The totality
of the circumstances is required to be seen.”
10 In the present case, the material on the record contains several
aspects which will have to weigh in the balance. There is no dispute about
the fact that the father of the respondent who entered into an agreement on
his behalf (and deposed in evidence) carried on moneylending business. The
consistent case of the appellants in reply to the legal notice, in the
written statement as well as in the course of evidence was that there was a
transaction of a loan with the father of the respondent. The evidence of
DW2 was to the following effect :
“The defendant was having a relationship with plaintiff’s father, Babu
Dhanaraj in respect of loan transaction. Already the Defendant No. 2 has
taken loan from Babu Dhanapathy Raj and bought a lorry and was driving it.
In this case, in order to return the loan of Rs. 1,00,000/- as per the
instruction of Babu Dhanapathy Raj only on the basis of trust, the Exhibit
P1 agreement to sell was executed. In the said document, I have put my
signature as a witness.”
During the course of the evidence, the appellants produced material
(Exhibit D3) indicating that the value of the property was six lakhs thirty
thousand on 20 November 2006. The agreed consideration
between the parties was rupees one lakh sixty thousand of which an amount
of rupees sixty thousand was paid at the time of the execution of the
agreement. The sale transaction was to be completed within three years
against the payment of the balance of rupees one lakh. The appellants also
relied upon Exhibit D2 which indicated that the value of the property as on
1 April 1999. These aspects were adverted to in the judgment of the trial
court and the first appellate court while setting out the evidence, but
have evidently not been borne in mind in determining as to whether a decree
for specific performance could judiciously have been passed.
11 In our view the material which has been placed on record indicates
that the terms of the contract, the conduct of parties at the time of
entering into the agreement and circumstances under which the contract was
entered into gave the plaintiff an unfair advantage over the defendants.
These circumstances make it inequitable to enforce specific performance.
12 For the above reasons a decree for the payment of compensation in
lieu of specific performance would meet the ends of justice. As we have
noted earlier the father of the respondent paid an amount of rupees sixty
thousand to the appellants in June 1999 of the total agreed consideration
of Rs. 1.60 lakhs. The appellants have voluntarily offered to pay an amount
of rupees ten lakhs, as just compensation in lieu of specific performance.
In our view, the ends of justice would be met by directing the appellants
to pay to the respondent an amount of rupees fifteen lakhs in lieu of
specific performance.
13 The decree for specific performance shall accordingly stand set aside
and shall stand substituted with a direction to the appellants to pay a sum
of rupees fifteen lakhs to the respondent in lieu of specific performance.
The amount shall be paid within two months from the date of receipt of a
copy of this judgment. Upon the expiry of the period of two months, the
amount shall carry interest at the rate of 9 per cent per annum, till
payment or realization.
14 The appeal shall stand allowed in these terms. There shall be no
order as to costs.
...….......................................J
[ARUN MISHRA]
..............................................J
[Dr D Y CHANDRACHUD]
New Delhi
February 21, 2017
ITEM NO.1A COURT NO.1 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No. 3049/2017 @
Petition(s) for Special Leave to Appeal (C) No(s). 32285/2015
(Arising out of impugned final judgment and order dated 11/06/2015 in SA
No. 436/2009 passed by the High Court Of Madras)
JAYAKANTHAM AND ORS. Petitioner(s)
VERSUS
ABAYKUMAR Respondent(s)
[HEARD BY HON'BLE ARUN MISHRA AND HON'BLE DR. D.Y. CHANDRACHUD, JJ.]
Date : 21/02/2017 This petition was called on for judgment today.
For Petitioner(s) Mr. K. V. Mohan,Adv.
For Respondent(s) Mr. A. Lakshminarayanan,AOR
Hon'ble Dr. Justice D.Y. Chandrachud pronounced the judgment of
the Bench comprising Hon'ble Mr. Justice Arun Mishra and His Lordship.
Leave granted.
For the reasons recorded in the Reportable judgment, the appeal
is allowed. There shall be no order as to costs.
(Renuka Sadana) (Parveen Kumar)
Assistant Registrar AR-cum-PS
[Reportable signed judgment is placed on the file]
-----------------------
[1]
[2] AIR 1987 SC 2328
[3]
[4] (1994) 4 SCC 18
[5]
[6] (1999) 5 SCC 77
[7]
[8] (2001) 6 SCC 600
[9]
[10] (2002) 8 SCC 146
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO .3049 OF 2017
[Arising out of SLP (C) No. 32285 of 2015]
JAYAKANTHAM & OTHERS .....APPELLANTS
Versus
ABAYKUMAR .....RESPONDENT
J U D G M E N T
Dr D Y CHANDRACHUD, J
Leave granted
2 This appeal arises from a judgment rendered by a learned Single Judge
of the Madras High Court on 11 June 2015 in a second appeal under Section
100 of the Code of Civil Procedure, 1908. Dismissing the second appeal, the
learned Single Judge confirmed the judgment of the Principal District
Judge, Villupuram by which an appeal against the judgment of the sub-Judge,
Kallakurichi was dismissed. The trial court decreed the suit for specific
performance instituted by the respondent against the appellants.
3 The subject matter of the suit for specific performance is a property
bearing survey No. 314/1A at Kallakurichi village admeasuring 735 square
feet upon which a residential house is situated. An agreement to sell was
entered into between the appellants and the father of the respondent on
2 June 1999. The consideration agreed upon was
rupees one lakh sixty thousand of which an amount of rupees sixty thousand
was received as advance. The balance was to be paid when the sale deed was
executed. Time for completion of the sale transaction was reserved until 2
June 2002. A legal notice seeking performance of the agreement was issued
on 7 May 2002. In response, the defence that was set up was inter alia that
the agreement to sell was executed only as a security for a loan
transaction.
4 In support of the plea for specific performance, the father of the
respondent was examined as PW1. Evidence on behalf of the appellants was
adduced by DW1 and DW2. The trial court by a judgment and order dated
5 January 2007 decreed the suit for specific performance and directed
the appellants to execute a sale agreement in favour of the respondent
against receipt of the balance consideration of rupees one lakh. The trial
court noted that the agreement to sell had been registered and rejected the
defence that it is merely a document executed by way of security for a loan
transaction. In the view of the trial court, there was nothing in the
agreement to indicate that it was executed merely by way of a security. A
finding of fact was arrived at to the effect that the respondent was ready
and willing to perform the agreement. The suit was decreed. The judgment of
the trial court was confirmed in appeal on 26 August 2008 by the Principal
District Judge, Villupuram.
5 A second appeal was initially admitted on a substantial question of
law but was eventually dismissed by a learned Single Judge of the Madras
High Court on 11 June 2015.
6 When the Special Leave Petition came up on 29 January 2016, this
Court observed that there was no error in the finding of facts recorded by
three courts concurrently and hence those findings could not be reversed on
merits. However, the alternative submission which was urged on behalf of
the appellants was that the suit property is the only property held by them
and has an extremely high value. The appellants stated that they are ready
to pay a sum of rupees ten lakhs or even more to retain it. Notice was
issued to the respondent limited to the above contention.
7 On behalf of the appellants, it has been submitted that this is a fit
and proper case where specific performance ought not to be ordered and a
decree for compensation in lieu thereof would meet the ends of justice. It
was urged that specific performance of an agreement need not necessarily be
ordered merely because it is lawful to do so and the matter lies in the
judicious exercise of discretion of the court. In support of this plea,
reliance was placed on several circumstances; primary among them being the
fact that it is not in dispute that the father of the respondent who
entered into the transaction and deposed as PW1(the respondent being about
sixteen years of age at the time of execution of the agreement) carried on
money lending business. Opposing this submission, it was urged on behalf of
the respondent that while it is true that his father is a money lender,
this by itself would not disable the respondent from seeking specific
performance. Moreover, it was urged that the mere fact that there has been
an escalation of land prices would not be a justification to refuse
specific performance.
8 While evaluating whether specific performance ought to have been
decreed in the present case, it would be necessary to bear in mind the
fundamental principles of law. The court is not bound to grant the relief
of specific performance merely because it is lawful to do so. Section 20(1)
of the Specific Relief Act, 1963 indicates that the jurisdiction to decree
specific performance is discretionary. Yet, the discretion of the court is
not arbitrary but is “sound and reasonable”, to be “guided by judicial
principles”. The exercise of discretion is capable of being corrected by a
court of appeal in the hierarchy of appellate courts. Sub-section 2 of
Section 20 contains a stipulation of those cases where the court may
exercise its discretion not to grant specific performance. Sub-Section 2 of
Section 20 is in the following terms :
“Section 20 (2). The following are cases in which the court may properly
exercise discretion not to decree specific performance-
(a) 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 are such that the contract, though not
voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on
the defendant which he did not foresee, whereas its non-performance would
involve no such hardship on the plaintiff;
(c) where the defendant entered into the contract under circumstances which
though not rendering the contract voidable, makes it inequitable to enforce
specific performance.”
However, explanation 1 stipulates that the mere inadequacy of
consideration, or the mere fact that the contract is onerous to the
defendant or improvident in its nature, will not constitute an unfair
advantage within the meaning of clause (a) or hardship within the meaning
of clause (b). Moreover, explanation 2 requires that the issue as to
whether the performance of a contract involves hardship on the defendant
has to be determined with reference to the circumstances existing at the
time of the contract, except where the hardship has been caused from an act
of the plaintiff subsequent to the contract.
9 The precedent on the subject is elucidated below :
(i) In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son
and Ors[1] ,this Court held that :
“…14. Section 20 of the Specific Relief Act, 1963 preserves judicial
discretion of Courts as to decreeing specific performance. The Court should
meticulously consider all facts and circumstances of the case. The Court is
not bound to grant specific performance merely because it is lawful to do
so. The motive behind the litigation should also enter into the judicial
verdict. The Court should take care to see that it is not used as an
instrument of oppression to have an unfair advantage to the plaintiff…”
(ii) A similar view was adopted by this Court in Sardar Singh v. Smt.
Krishna Devi and another[2] :
“…14. Section 20(1) of the 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;
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. The grant of relief of specific performance is discretionary. The
circumstances specified in Section 20 are only illustrative and not
exhaustive. The court would take into consideration the circumstances in
each case, the conduct of the parties and the respective interest under the
contract.”
(iii) Reiterating the position in K. Narendra v. Riviera Apartments (P)
Ltd[3],this Court held thus :
“…29. Performance of the contract involving some hardship on the defendant
which he did not foresee while non-performance involving no such hardship
on the plaintiff, is one of the circumstances in which the court may
properly exercise discretion not to decree specific performance. The
doctrine of comparative hardship has been thus statutorily recognized in
India. However, mere inadequacy of consideration or the mere fact that the
contract is onerous to the defendant or improvident in its nature , shall
not constitute an unfair advantage to the plaintiff over the defendant or
unforeseeable hardship on the defendant. The principle underlying
Section 20 has been summed up by this Court in Lourdu Mari David v. Louis
Chinnaya Arogiaswamy by stating that the decree for specific performance is
in the discretion of the Court but the discretion should not be used
arbitrarily; the discretion should be exercised on sound principles of law
capable of correction by an appellate court.”
(iv) These principles were followed by this Court in A.C.
Arulappan v. Smt. Ahalya Naik[4], with the following observations :
“…..7. The jurisdiction to decree specific relief is discretionary and the
court can consider various circumstances to decide whether such relief is
to be granted. Merely because it is lawful to grant specific relief, the
court need not grant the order for specific relief; but this discretion
shall not be exercised in an arbitrary or unreasonable manner. Certain
circumstances have been mentioned in Section 20(2) of the Specific Relief
Act, 1963 as to under what circumstances the court shall exercise such
discretion. If under the terms of the contract the plaintiff gets an unfair
advantage over the defendant, the court may not exercise its discretion in
favour of the plaintiff. So also, specific relief may not be granted if the
defendant would be put to undue hardship which he did not foresee at the
time of agreement. If it is inequitable to grant specific relief, then also
the court would desist from granting a decree to the plaintiff.”
……..
“…..15. Granting of specific performance is an equitable relief, though the
same is now governed by the statutory provisions of the Specific Relief
Act, 1963. These equitable principles are nicely incorporated in Section 20
of the Act. While granting a decree for specific performance, these
salutary guidelines shall be in the forefront of the mind of the court…..”
(v) A Bench of three Judges of this Court considered the position in
Nirmala Anand Vs. Advent Corporation (P) Ltd. and Ors.[5], and held thus :
“…..6. It is true that grant of decree of specific performance lies in the
discretion of the court and it is also well settled that it is not always
necessary to grant specific performance simply for the reason that it is
legal to do so. It is further well settled that the court in its discretion
can impose any reasonable condition including payment of an additional
amount by one party to the other while granting or refusing decree of
specific performance. Whether the purchaser shall be directed to pay an
additional amount to the seller or converse would depend upon the facts and
circumstances of a case. Ordinarily, the plaintiff is not to be denied the
relief of specific performance only on account of the phenomenal increase
of price during the pendency of litigation. That may be, in a given case,
one of the considerations besides many others to be taken into
consideration for refusing the decree of specific performance. As a general
rule, it cannot be held that ordinarily the plaintiff cannot be allowed to
have, for her alone, the entire benefit of phenomenal increase of the value
of the property during the pendency of the litigation. While balancing the
equities, one of the considerations to be kept in view is as to who is the
defaulting party. It is also to be borne in mind whether a party is trying
to take undue advantage over the other as also the hardship that may be
caused to the defendant by directing specific performance. There may be
other circumstances on which parties may not have any control. The totality
of the circumstances is required to be seen.”
10 In the present case, the material on the record contains several
aspects which will have to weigh in the balance. There is no dispute about
the fact that the father of the respondent who entered into an agreement on
his behalf (and deposed in evidence) carried on moneylending business. The
consistent case of the appellants in reply to the legal notice, in the
written statement as well as in the course of evidence was that there was a
transaction of a loan with the father of the respondent. The evidence of
DW2 was to the following effect :
“The defendant was having a relationship with plaintiff’s father, Babu
Dhanaraj in respect of loan transaction. Already the Defendant No. 2 has
taken loan from Babu Dhanapathy Raj and bought a lorry and was driving it.
In this case, in order to return the loan of Rs. 1,00,000/- as per the
instruction of Babu Dhanapathy Raj only on the basis of trust, the Exhibit
P1 agreement to sell was executed. In the said document, I have put my
signature as a witness.”
During the course of the evidence, the appellants produced material
(Exhibit D3) indicating that the value of the property was six lakhs thirty
thousand on 20 November 2006. The agreed consideration
between the parties was rupees one lakh sixty thousand of which an amount
of rupees sixty thousand was paid at the time of the execution of the
agreement. The sale transaction was to be completed within three years
against the payment of the balance of rupees one lakh. The appellants also
relied upon Exhibit D2 which indicated that the value of the property as on
1 April 1999. These aspects were adverted to in the judgment of the trial
court and the first appellate court while setting out the evidence, but
have evidently not been borne in mind in determining as to whether a decree
for specific performance could judiciously have been passed.
11 In our view the material which has been placed on record indicates
that the terms of the contract, the conduct of parties at the time of
entering into the agreement and circumstances under which the contract was
entered into gave the plaintiff an unfair advantage over the defendants.
These circumstances make it inequitable to enforce specific performance.
12 For the above reasons a decree for the payment of compensation in
lieu of specific performance would meet the ends of justice. As we have
noted earlier the father of the respondent paid an amount of rupees sixty
thousand to the appellants in June 1999 of the total agreed consideration
of Rs. 1.60 lakhs. The appellants have voluntarily offered to pay an amount
of rupees ten lakhs, as just compensation in lieu of specific performance.
In our view, the ends of justice would be met by directing the appellants
to pay to the respondent an amount of rupees fifteen lakhs in lieu of
specific performance.
13 The decree for specific performance shall accordingly stand set aside
and shall stand substituted with a direction to the appellants to pay a sum
of rupees fifteen lakhs to the respondent in lieu of specific performance.
The amount shall be paid within two months from the date of receipt of a
copy of this judgment. Upon the expiry of the period of two months, the
amount shall carry interest at the rate of 9 per cent per annum, till
payment or realization.
14 The appeal shall stand allowed in these terms. There shall be no
order as to costs.
...….......................................J
[ARUN MISHRA]
..............................................J
[Dr D Y CHANDRACHUD]
New Delhi
February 21, 2017
ITEM NO.1A COURT NO.1 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No. 3049/2017 @
Petition(s) for Special Leave to Appeal (C) No(s). 32285/2015
(Arising out of impugned final judgment and order dated 11/06/2015 in SA
No. 436/2009 passed by the High Court Of Madras)
JAYAKANTHAM AND ORS. Petitioner(s)
VERSUS
ABAYKUMAR Respondent(s)
[HEARD BY HON'BLE ARUN MISHRA AND HON'BLE DR. D.Y. CHANDRACHUD, JJ.]
Date : 21/02/2017 This petition was called on for judgment today.
For Petitioner(s) Mr. K. V. Mohan,Adv.
For Respondent(s) Mr. A. Lakshminarayanan,AOR
Hon'ble Dr. Justice D.Y. Chandrachud pronounced the judgment of
the Bench comprising Hon'ble Mr. Justice Arun Mishra and His Lordship.
Leave granted.
For the reasons recorded in the Reportable judgment, the appeal
is allowed. There shall be no order as to costs.
(Renuka Sadana) (Parveen Kumar)
Assistant Registrar AR-cum-PS
[Reportable signed judgment is placed on the file]
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[1]
[2] AIR 1987 SC 2328
[3]
[4] (1994) 4 SCC 18
[5]
[6] (1999) 5 SCC 77
[7]
[8] (2001) 6 SCC 600
[9]
[10] (2002) 8 SCC 146
