IMPORTANT POINT
Explanation-I appended to Section 20 of the Specific Relief Act clearly stipulates that mere fact that the contract is onerous to the defendant or improvident in its nature would not constitute an unfair advantage within the meaning of Section 20(2) of the Specific Relief Act.

Headnote:Specific Relief Act, 1963-Sections 19(b), 20(2)(a) and 20(2)(b)-Suit for specific performance-Agreement to sell suit premises to respondent 1 for a sum of Rs. 16,000/-Vendor, defendant 1, failed to deliver title deeds and also failed to clear the property-Conveyance executed by defendant 1 in favour of defendant 2-Plaintiff filed suit for specific performance alleging that sale of suit premises in favour of defendant 2 was sham and bogus and that he was always ready and willing to comply with his obligations under the suit agreement-Trial Court refusing the relief for specific performance-High Court decreed plaintiff s suit holding that sale in favour of defendant 2 was concocted and was made to defeat claim of plaintiff-Evidence on record indicates that sale deed in favour of defendant 2 was a nominal sale-Signatures of defendant 1 on agreement to sell property to plaintiff was different from that on sale deed executed in favour of defendant 2-Whether findings recorded by High Court were justified-(Yes).
       Held : The evidence on record indicates that Ex.P17 was a nominal sale. It was executed in order to defeat the plaintiff s claim. In this connection, the evidence on record shows that the signatures of the vendor on Ex.D4 do not tally with the signatures with Ex.P17. There were two attesting witnesses who were examined on behalf of the defendants. Both the attesting witnesses have deposed that the signatures of defendant No.1 on Ex.D4 did not tally with the signatures on Ex.P17. Therefore, the High Court was right in coming to the conclusion that Ex.D4 was a concocted document. In the circumstances, we do not see any reason to interfere with the findings recorded by the High Court. (Para 20)
       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; that in cases where one of the three circumstances mentioned in section 20(2) is established, no question of discretion arises. Hence, in this case, we are required to examine, on facts, whether the circumstances in section 20(2)(a) or section 20(2)(b) are established. (Para 22)
       Explanation-I appended to section 20 clearly stipulates that mere fact that the contract is onerous to the defendant or improvident in its nature would not constitute an unfair advantage within the meaning of section 20(2). (Para 23)
       Defendant No.2 was aware of plaintiff s possession in the suit premises as a tenant. Defendant No.2 had filed, in the Court of Small Causes, Bangalore, HRC No. 10561/81 for eviction of the plaintiff herein, under section 21(1)(h) of the Karnataka Rent Control Act, 1961. A bare reading of the order dated 14.10.1985 passed by the Small Causes Court in the above eviction suit indicates that defendant No.2 was put to notice that in case the plaintiff succeeds in the suit for specific performance, defendant No.2 will have to vacate. In the circumstances, it cannot be said that second defendant was not in a position to foresee the ensuing hardship. Hence, section 20(2)(b) is not applicable to the facts of the present case. In any event, as stated above, defendant No.2 had notice of Ex.P1 when she entered into the conveyance Ex.P17. (Para 24)

JUDGMENT

Kapadia, J.-This civil appeal, by grant of special leave, is directed against the judgment and order dated 24.2.1999 passed by the High Court of Karnataka in RFA No. 464 of 1992 decreeing the suit filed by respondent No.1 herein in the Court of VIth Additional City Civil Judge, Bangalore, being Suit No. O.S. 8296 of 1980.

2. For the sake of convenience, the parties herein are referred to as they are arrayed in the trial Court.

3. The facts giving rise to this civil appeal are as follows:-

By an agreement for sale dated 14.6.1979, R. Srinivasan, (since deceased) agreed to sell the suit premises bearing No. 15/18/1, Cambridge Road, Ulsoor, Bangalore to Shri Chidambram (respondent No.1 herein) for a sum of Rs. 16000/-. Under the said agreement, Srinivasan agreed to complete the sale by 13.11.1979. Under the said agreement, the vendor agreed to sell the suit premises free from all encumbrances. The vendor agreed to deliver the title deeds to the plaintiff. On the execution of the agreement, the vendor received Rs. 3000/- from the plaintiff. However, the said vendor, defendant No.1, failed to carry out his obligations under the agreement. He failed to deliver the title deeds. He failed to clear the property free from encumbrances.

4. In the circumstances, the plaintiff issued legal notices on 5.11.1979 and 9.11.1979 to the vendor to carry out his obligations under the said agreement. On 29.11.1979, plaintiff came to know that the vendor, defendant No.1, had purported to sell the suit premises in favour of Smt. Sargunam (since deceased), defendant No.2. In the circumstances, the plaintiff instituted suit bearing No.8296 of 1980 in the Court of VIth Additional City Civil Judge, Bangalore (hereinafter referred to as "the trial Court").

5. In the suit, it was alleged by the plaintiff that the conveyance dated 29.11.1979 executed by defendant No.1 in favour of defendant No.2 was sham and bogus. That defendant No.2 had notice of the suit agreement. The plaintiff further submitted that he was always ready and willing to comply with his obligations under the suit agreement; that defendant No.1 had committed breach thereof and consequently, he was entitled to specific performance of the suit agreement.

6. By written statement dated 9.7.1981, defendant No.1 alleged that he had terminated the suit agreement as the plaintiff had failed to complete the sale within the time stipulated in the suit agreement, that defendant No.1 had given notice of termination to the plaintiff which notice came to be returned with the postal remarks "refused" and, consequently, he had sold the property to the second defendant.

7. On 7.8.1981, defendant No.2 filed a memo adopting the written statement of defendant No.1 dated 9.7.1981.

8. On 20.11.1986, defendant No.2 filed her amended written statement. By the said written statement, defendant No.2 alleged that the sale in her favour dated 29.11.1979 was in pursuance of the agreement dated 15.4.1978 executed by defendant No.1; that she was the bona fide purchaser for value without notice; that she had no notice of the suit agreement when she entered into the conveyance with defendant No.1 on 29.11.1979; that she was the prior purchaser and in the circumstances, the sale in her favour was protected.

9. After framing the issues and after recording evidence, the trial Court inter alia held that the time was essence of the suit agreement (Ex.P1); that the plaintiff had failed to complete the sale by 13.11.1979; that the plaintiff had failed to pay the balance amount by 13.11.1979, which period was essence of the contract; that defendant No.1 was always ready and willing to comply with his part of the contract and, therefore, he had every right to sell the suit premises vide Ex.P17 dated 29.11.1979 to the second defendant. The trial Court further held that the plaintiff had failed to prove that defendant No.2 had notice of the suit agreement (Ex.P1); that Ex.P17 was pursuant to the agreement dated 15.4.1978 (Ex.D4) and

Click Here to Read the rest of this document

2004 Supreme(SC) 1259

IMPORTANT POINTExplanation-I appended to Section 20 of the Specific Relief Act clearly stipulates that mere fact that the contract is onerous to the defendant or improvident in its nature would not constitute an unfair advantage within the meaning of Section 20(2) of the Specific Relief Act.

Cases Referred (3)

IMPORTANT POINT
Explanation-I appended to Section 20 of the Specific Relief Act clearly stipulates that mere fact that the contract is onerous to the defendant or improvident in its nature would not constitute an unfair advantage within the meaning of Section 20(2) of the Specific Relief Act.