Important point
Section 12(3) of the Specific Relief Act can be invoked only where terms of contract permit segregation of rights and interest of parties in the property.

Headnote:Specific Relief Act, 1963-Section 12(3)-Specific performance-Power to grant partial relief-Prayer for conveyance of life interest of vendor-Grandfather of respondent 6 executed a Will-Vendor was bequeathed the right of enjoyment during his life, of estate of testator, including the suit property but without powers of alienation-On death of testator, vendor entered into an agreement of sale of suit property with appellant, vendee-It was stated that sale of property was necessitated because of pressing demands of public authorities towards dues and tax liabilities on the estate and likelihood of coercive recovery of public dues-Sanction sought from the Court for sale of full interest in the property not granted-Vendor sending notice cancelling the agreement-Vendee attributed malafides to the vendor in rescinding the agreement-Suit for specific performance filed by vendee alleging breach of contract on the part of vendor-Whether vendee was entitled to the discretionary relief of specific performance even of life interest of vendor-(No).
       Held : In the case before us, we have not found that the vendor was guilty of rendering the suit for sanction infructuous. It did terminate the contract pending the suit for sanction but never withdrew that suit. The vendee himself prosecuted it and rendered it infructuous by his own filing of an affidavit giving up his claim for the interest of reversioners. In such a situation where the vendor was not in any manner guilty of not obtaining the sanction and the clause of the contract requiring court’s sanction for conveyance of full interest, being for the benefit of both the parties, the contract had been rendered unenforceable with the dismissal of the sanction suit. (Para 101)
       In the present case also, we have come to conclusion that the vendor waited for a reasonable period for grant of sanction to the sale by the court. There was a pressing need for sale as the public dues and taxes could have been recovered from the property by coercive process at any time. The vendor, therefore, advisedly withdrew from the contract, negotiated sale on different terms with the subsequent vendee and ultimately entered into the contract with the latter. The vendor did not actually withdraw the suit for sanction. The vendee himself became co-plaintiff to the suit and unsuccessfully tried to prosecute it. The sanction suit was rendered infructuous by vendee’s own conduct of filing affidavit restricting his claim to life interest. He suffered the dismissal of sanction suit as infructuous and did not question the correctness of the court’s order in appeal before the Division Bench, although the subsequent vendee, against grant of decree of specific performance of life interest, had preferred an appeal. (Para 105)
       After execution of the decree and registered sale-deed the vendee plaintiff was placed in possession of the property on 25.2.1995. The basement and ground floor have been constructed by the subsequent vendee after obtaining possession on the basis of his sale deed. Thereafter plaintiff-vendee, on obtaining possession pursuant to the execution of decree granted by the learned single judge, has constructed two floors above the ground floor although the construction is said to be not complete in all respects. According to the plaintiff-vendee, he has incurred an expenditure of Rs. 46,28,403/- for construction of two floors above the ground floor. As the construction put up by the plaintiff-vendee is to ensure for the benefit of the subsequent vendee, and the latter having succeeded in appeal before the Division Bench of the High Court, the Division Bench in adjusting equities has directed that on payment of construction cost incurred by the plaintiff-vendee for two floors above ground floor, the whole construction will become the sole property of the subsequent vendee. (Para 108)
       On the principle of restitution contained in Section 144 of the Code of Civil Procedure, we find no ground to interfere with the order of the Division Bench of the High Court in directing adjustment and payment by subsequent vendee of the cost of construction incurred by the plaintiff vendee. The directions for return of full sale consideration as also deduction towards misconduct of impersonation and misleading the Court also deserve no interference. (Para 110)

Judgment

Dharmadhikari, J.-These two cross appeals have been preferred against common judgment dated 24.4.2001 passed by the Division Bench of the High Court of Madras by which decree of Specific Performance of Contract of Sale of the suit property granted by the learned single judge has been set aside with certain directions to adjust the equities between the parties.

2. The facts of the present case should be an eye opener to functionaries in law courts at all levels that delay more often defeats justice invariably adds complications to the already complicated issues involved in cases coming before them, and makes their duties more onerous by requiring them to adjust rights and equities arising from delay.

3. This introductory comment is occasioned by the fact that against the judgment of the learned single judge passed on 6.9.1988 the appeal was earlier heard by the Division Bench of the High Court on 22.3.1989 but it passed the judgment after a period of about five years on 24.1.1994. It dismissed the appeal and confirmed the decree of Specific Performance of the Contract granted by the single judge.

4. In appeal preferred by the defendants, this Court by order passed on 13.1.2000 (reported in 2000 (2) SCC 13) remanded the appeal to the Division Bench of the High Court for a fresh decision only because of long gap of five years in hearing arguments and decision of appeal by the High Court.

5. After remand the Division Bench reheard the appeal and by the impugned judgment dated 24.4.2001 has allowed it. The decree granted by the learned single judge of partial relief of Specific Performance of Contract of Sale of life interest of the vendor in the suit properly has been set aside.

6. With this background the facts of the case may be stated :-

The owner of the suit property namely, Mouna Gurusamy Naicker, (hereinafter referred to as the ‘vendor’) grandfather of respondent No. 6 (G.D. Narendra Kullamma Naicker) executed a Will and two Codicils on 7.3.1948. Under the Will, the vendor herein was bequeathed the right of enjoyment during his life, of the estate of the testator, including the suit property (described as Municipal Door No. 36C, Mount Road, Madras-600 002) but without powers of alienation. In the Will, it was provided that after the death of the vendor, his male issue living at the time of his death would take all the properties absolutely. In the absence of any such male issue of the vendor, the properties would be taken by other descendants (hereinafter referred to as the ‘reversioners’).

7. Shri M.G. Naicker, the testator died on 23.10.1956. On 26.6.1977, the vendor entered into an agreement of sale of the suit property with the appellant HPA International, a partnership firm (hereinafter referred to as the vendee). It was clearly recited in the agreement that the sale of the property was necessitated because of the pressing demands of public authorities towards, dues and tax liabilities on the estate and likelihood of coercive recovery of public dues by attachment and sale by public auction. The vendor, therefore, agreed to sell and the purchaser agreed to purchase the entire interest in the suit property at Mount Road, Madras inclusive of life interest of the Vendor and the interest of the reversioners (described as remainder men) free from all encumbrances, for a total price of 5.5 lacs. A sum of Rupees 25,000/- was paid as advance. The balance of the sale consideration was to be paid by the purchaser by bank drafts in favour of the concerned public authorities for discharging the public dues and taxes. The purchaser agreed to pay Rupees 18,000/- to the tenant in occupation of the property which was the liability of the vendor. The vendor agreed to obtain at his own cost and expense the sanction of the High Court of Madras for sale of his life interest and interest of the remainder men in the property. The agreement further provided that in case the sanction of the Court was not accorded for the sale, the agreement

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2004 Supreme(SC) 686

Important pointSection 12(3) of the Specific Relief Act can be invoked only where terms of contract permit segregation of rights and interest of parties in the property.

Cases Referred (14)

Important point
Section 12(3) of the Specific Relief Act can be invoked only where terms of contract permit segregation of rights and interest of parties in the property.