IMPORTANT POINT
In the matter of specific performance, the discretion given to the Court of equity is required to be exercised not arbitrarily but on sound and reasonable basis guided by judicial principles.

ORDER

Leave granted.

2. These appeals by special leave arise from the judgment and order dated August 10, 1995 of the Kerala High Court made in A.S. Nos. 147 and 303 of 1987. The appellants were the plaintiffs. The first respondent and her son Sailesh were defendants in O.S. No. 56/80 for partition between the co-parceners. Therein Prabha Cinema Theatre situated in Cannanore was allotted to them in a compromise decree, subject to their paying a sum of Rs. 1,55,000/- each to the plaintiff and the second defendant therein within three months from the date of the compromise decree dated 22.10.80. Since the amount could not be paid, the theatre was brought to sale at a court auction dated June 24, 1982 and was sold for a sum of Rs. 5,44,000/-. The auction was to be confirmed on or before July 25, 1982. Since she was not in a position to pay the amount, she had through her brother, DW-2 approached the appellant. In furtherance of the understanding, the appellant was to deposit Rs. 2,10,391/- in the court before confirmation of the sale towards the 1/3rd of the amount deposited plus 5% of the founding fees. Accordingly, the appellant had lent that amount with a condition that the respondent and her son would sell the theatre to the appellant, the later agreeing to pay a further sum of Rs. 2 lakhs. In other words, he had agreed to purchase the theatre for 5,44,00/- and 2 lakhs. It is the case of the appellant that the contract came to be executed on July 22, 1982 and the sale was set aside on deposit of the amount advanced by the appellant.

3. When he issued a notice to the respondent to get the sale deed executed in furtherance of the agreement, she pleaded that it was not intended to be executed; rather, it was by way of security for loan. Consequently, the appellant laid the suit for specific performance. Therein the appellant prayed for decree for specific performance and in the alternative for refund of the amount advanced by him, namely, Rs. 2,10,391. The trial Court noticing that the appellant had not had the sanction of the civil Court under Section 8 of the Hindu Minority and Guardianship Act, 1956 held that the agreement of sale to the extent of half share of the minor was not valid in law. However, since the respondent had executed the agreement decreed to the extent of her half share in the theatre a decree for specific performance was granted subject to the appellant depositing a sum of Rs. 1,61,609 towards the half share of the first respondent. Both the appellant as well as the respondents filed the appeals against the decree of the trial Court. The High Court in the impugned judgment reversed the decree of the trial Court even to the extent of granting the decree for specific performance against the first respondent and granted alternative relief of refund of the amount advanced by the appellant. Thus, these appeals by special leave.

4. Though the first respondent had pleaded in her written statement and an issue was raised that due to her impecunious circumstances the appellant and her brother DW-2 Premarajan had a dominating influence over the first respondent and, therefore, the agreement of sale was vitiated by undue influence, that plea was negatived by the trial Court as well as the appellate Court. Therefore, it is not necessary to dwell at length on this issue though the learned counsel for the respondent sought to press the same for our consideration. Shri Venugopal, learned senior counsel for the appellants has strenuously contended that in view of the findings concurrently recorded by the High Court as well as the trial Court that the agreement is not vitiated by either fraud or undue influence and the first respondent having received the consideration to discharge the decree debt to set aside the sale, the High Court was not right in reversing the decree of the trial Court and granting the decree of refund of the amount advanced by the appellant. In view of the admitted finding that she was not in a position