Nirmala Anand vs Advent Corporation Private LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2002 Supreme(SC) 974

SUPREME COURT OF INDIA
G.B.Pattanaik : H.K.Sema : Y.K.Sabharwal
Nirmala Anand
Versus
Advent Corporation Private Limited
Case No. : 574 of 1988
Date of Decision : 9/30/02
Advocates Appeared: Banerjee Gourab : Choudhary Arunabh : Gupta Bina : Gupta Nina : Karanjawala M. : Karanjawala R.N. : Mahajan A. : Mishra Meghna : Misra D.N. : Misra Neha : Mukund C. : Raghupathy V.N. : Rai Shalini : Ratnam T.V. : Sharma Sudha : Singh Gaurav K. : Tripathi P.P.

Headnote:Specific Relief Act, 1963-Section 10 Expl. (i), Section 14(1)(b) & (d) Section 20(2), (3), (4)-Contract Act, 1872 -Sections 30, 31 and 56-Maharashtra Ownership Flats Act, 1963-Bombay Municipal Corporation Act-Sections 527 and 91B-Appellant agreed to purchase Flat No. 71 on 7th Floor of Divya Prakash Building vide agreement dated 8.9.1966 for Rs. 60,000/- out of which she paid 35,000/- till June 1969-She was ready to pay balance-Building could not be completed due to non-receipt of certain permissions from the Govt. authorities and because of dispute with Bombay Municipal Corporation-Appellant filed suit for specific performance-Denied by trial Court as lease of land was terminated and building was incomplete and upheld by Appellate Court-Appeal to Supreme Court-Subsequent events-Whether suit for specific performance be decreed? (Yes) -Appeal allowed-But there is a difference of opinion on the point whether appellant should pay original price agreed or escalated price-Raju J. passing conditional decree on payment of Rs. 40 lakhs and on failure not to get relief-Ashok Bhan J. disagreeing and ordering to pay original price-Subject to this difference, Appeal allowed-Case Law reviewed.
       Per Doraiswamy Raju J.-
       Held : For all the reasons stated above, the appeal is allowed and the judgment and decree dated 23.3.81 passed in suit No.744 of 1969 on the original side of the High Court of Bombay, as affirmed by the Division Bench by its judgment dated 15.7.1987 in Appeal No. 204 of 1981, shall stand, modified and altered and there shall be a decree in suit No. 744 of 1969 on the file of the original side of the High Court, Bombay in the following terms:
        (i) There shall be conditional decree for specific performance of the agreement dated 8.9.66 entered into between the 4th plaintiff and defendants No. 1 and 2 and defendants No.1 and 2 shall execute a sale deed as envisaged in the agreement for sale of flat No .71 on 7th floor of the building known as "Divya Prabha" situated at No.12A, Foreshore Road, Bombay, in "as is where is condition";
        (ii) That the appellant/4th plaintiff shall pay the defendants/respondents 1 and 2, a sum of Rs. 40,00,000/- (Rupees Forty Lakhs) in addition to the sum already paid by them. The appellant shall be entitled to have the sale deed executed in her favour only on prior compliance and satisfaction of this condition;
        (iii) The rights and interest in the land shall be as agreed to between parties and as per scheme and arrangement contained in the agreement dated 8.9.1966;
        (iv) The defendants 1 and 2 and/or the 7th respondent in this appeal, viz., Gaurav Overseas Private Ltd., 92, Maker Chambers, Nariman Point, Bombay-400020, as and when they secure the necessary renewal of the lease and revalidation of the building plan, the same shall be for the benefit of the 4th plaintiff/appellant also, subject to the condition that she shall contribute her share of the monetary commitments and expenses incurred therefor, on being intimated by any of them in writing within four weeks from the date of such receipt of the intimation. In case of dispute about the quantum, the same shall be got determined and settled before the Commissioner for taking accounts, on being moved by either of them. The sum so determined shall be a charge on the property comprised in flat No. 71, till it is paid and shall be entitled to be recovered, accordingly.
        (v) The appellant and the 7th respondent shall be at liberty to mutually agree for completion of the incomplete building at such prevailing market rates as would be applicable for the work and manner of its completion and the mode of payment. If there can be no such mutual agreement among the appellant and the 7th respondent in this regard, as and when the sale deed is executed by the 1st and 2nd defendant, as per this decree, the appellant shall be at liberty to make her own arrangement to have her flat completed through approved and licensed Architects;
        (vi) The sale/conveyance pursuant to the decree in the suit shall be subject to all such rights and liabilities and obligations of respective parties (the appellant, the respondents 1, 2 & 7) under the suit agreement, as are available to each of them against the others, had the sale has been effected even without the intervention of this court, by mutual agreement of parties;
       ( vii) The appellant failing to comply with the terms of the conditional decree passed as above, shall stand denied and lost her right and entitlement to get specific performance of the agreement dated 8.9.66 in her favour and consequently, the appeal shall stand dismissed with the appellants rights secured as per the judgments and decrees dated 23.3.81 and 15.7.87 firmly affirmed and settled, and the rights to have them executed in the manner known to law, alone surviving to the appellant.
        (viii) Each party shall bear their respective costs in this Court. (Para 25)
       Per Ashok Bhan, J.-
       Held : I have carefully gone through the judgment proposed by my learned brother. I agree with him that the 4th plaintiff-appellant is entitled to the specific performance of the agreement dated 8.9.1966 entered into by her with defendant Nos.1 and 2 for sale of Flat No. 71 on the 7th floor of the building known as "Divya Prabha" situated at No. 12A, Foreshore Road, Bombay. I am also in agreement with term Nos. (iii), (iv), (v) and (vi) imposed and set out by my brother in the last paragraph of his judgment. But after giving considerable thought and with due deference and respect I am unable to pursued myself to agree to the proposed term (ii) wherein the 4th plaintiff has been fastened with the liability to pay an additional sum of Rs. 40 lakhs over and above the payment already made as condition precedent to the execution of the sale deed in her favour in pursuance to the agreement to sell. In my view she is entitled to get the sale deed executed in her favour on payment of the sum mentioned in the agreement to sell (already paid and balance, if any) plus the amount she becomes liable to pay under term (iv) and first portion of term (v) for completion of building in case the appellant agrees to get the building completed from 7th respondent on payment of the prevailing market rates as per mutual agreement. (Paras 26 & 27)
       Reasons as to why term No. (ii) requiring the 4th plaintiff-appellant to pay the sum of Rs. 40 lacs and consequent term (vii) should not imposed are. (Between Paras 27 & 28)
       Held : It is well-settled that in cases of contract for sale of immovable property the grant of relief of specific performance is a rule and its refusal an exception based on valid and cogent grounds. Further, the defendant cannot take advantage of his own wrong and then plead that decree for specific performance would be an unfair advantage to the plaintiff. My learned brother has already enumerated the reasons with which I agree that the appellant in the circumstances of the case is entitled to the specific performance of the agreement irrespective of the fact that certain permissions are required to be taken from the Government authorities for completing the building. I need not re-emphasis the same. The appellant had come to the Court for seeking specific performance of an agreement promptly. The Trial Court as well as the appellate Court have recorded a finding that the appellant was ready and willing, at the time of filing of the suit as well as later, to perform her part of the agreement and it was the defendants who were not prepared to perform their part of the contract. The appeal has been pending in this Court for the last 15 years. Delay by itself due to pendency of the suit/appeal in the courts is no ground to refuse the relief of specific performance unless certain compelling circumstances are brought on record to take a view to the contrary. Escalation of price during the period may be a relevant consideration under certain circumstances for either refusing to grant the decree of specific performance or for decreeing the specific performance with a direction to the plaintiff to pay an additional amount to the defendant and compensate him. It would depend on the facts and circumstances of each case. (Paras 37, 38 & 39)
       Held after reviewing case law : It would be seen in none of the above noted cases this Court has laid an absolute rule that the proposed vendee would be required to compensate the proposed vendor for the escalation of price of the land and building during the pendency of the proceeding in Court at different level. The appellant has always been ready and willing to perform her part of contract at all stages. She has not taken any advantage of her own wrong. The appellant is in no way responsible for the delay at any stage of the proceeding. It is the respondents who have always been and are trying to wriggle out of the contract. The respondents cannot take advantage of their own wrong and then plead that the grant of decree of specific performance would amount to an unfair advantage to the appellant. Requiring the appellant to pay further sum of Rs. 40 Lakhs would/may amount to frustrating the agreement itself as the appellant may not be in a position to pay the sum of Rs. 40 lakhs. Respective counsel for the parties had quoted the figure of a particular sum which could be paid to the appellant in lieu of avoiding the decree of specific performance. The appellant had not made an offer to pay any additional sum over and above the quoted price to sell by way of compensation. It does not indicate the financial position of the appellant to pay the additional sum of Rs. 40 lakhs. With due respect, in my view, it would be unfair to grant the decree of specific performance by one hand and take it back by the other. For the reasons stated above, I am of the view that the appellant is entitled to the specific performance of agreement to sell the flat No. 71 on 7th floor of Divya Prabha Building on the price mentioned in the agreement to sell which would be subject to the terms (iii), (iv), (v) and (vi) of the last paragraph of the judgment of my learned brother. There would be no order as to costs. (Paras 43 to 46)

JUDGMENT

Y.K.SABHARWAL, J.

(1) THE appellant, who was plaintiff no. 4 in the suit, entered into an agreement dated 8th September, 1966 with respondent nos. 1 and 2 for the purchase of flat no. 71, on the 7th floor of the building known as Divya Prabha situated at 12-A, Foreshore road, Bombay. The sale consideration payable under the agreement is Rs. 60,000/-. The agreement stipulated that the building was to be completed and possession of the flat delivered to the appellant by 30th June, 1969 up to which time, the appellant had already paid Rs. 35.000/- out of the sale consideration leaving a balance of Rs. 25.000/-. Just a few days before the date fixed for completion and delivery of possession, the lease of the plot of land on which the flats were being constructed was cancelled by the Bombay municipal corporation. At that stage, the building was incomplete. Admittedly, it is incomplete till date.

(2) SIMILAR agreements in respect of different flats were also entered into by the sellers with other flat purchasers. On 30th July, 1969, a suit, out of which the present appeal has arisen, was filed seeking specific performance of the flat purchase agreements The plaintiffs other than plaintiff nos. 4 and 7 settled their case with sellers during the pendency of the suit and plaintiff no. 7 also settled during pendency of the appeal before the division bench of the High Court. There was, however, no settlement between the plaintiff-appellant and respondents 1 and 2. In the decision of the suit, learned single judge of the High Court held that the appellant was always ready and willing to perform her part of the contract and it was the sellers who committed breach in not carrying out the terms of the agreement. Learned single Judge was, however, of the view that the grant of specific performance being discretionary remedy in equity taking into account several and serious imponderabilities and further considering that huge sums may be required to complete the building, which amount cannot be properly assessed, the appellant was not entitled to the relief of specific performance and instead it was directed that the seller shall pay to the appellant damages as assessed by the commissioner for taking accounts with interest at 6% per annum from the date of the decree till the date of payment/realization, in addition to the repayment of Rs. 35,000/- with interest thereon at 9% per annum from 4th October, 1967 till the date of decree and for the subsequent period at 6% per annum till the date of payment/realization. The judgment and decree of the learned single judge was affirmed by a division bench of the High Court in appeal. Aggrieved therefrom, the present appeal was filed on grant of leave.

(3) THE appeal was heard by a two judge bench. The learned judges have concurred that the appellant is entitled to the specific performance of the agreement dated 8th September, 1966. There has, however, been difference of opinion between learned judges on the condition in respect of additional amount that may be paid by the appellant to respondent nos. 1 and 2 and, therefore, the matter has been placed before this three judge bench. The opinions of the learned judges are reported in Nirmala Anand v. Advent Corporation (P) Ltd. & Ors., JT 2002 (Supl.1) SC 522;(2002) 5 SCC 481 In the opinion expressed by brother justice Doraiswamy Raju, the appellant has been directed to pay a sum of Rs. 40,00,000/- in additional to the sum already paid to respondents 1 and 2 and in the view of brother justice Ashok Bhan, it would be unfair to impose the condition of payment of Rs. 40,00,00/- and the appellant is entitled to specific performance of agreement to sell on the price mentioned in the agreement.

(4) WE have heard learned counsel for the parties. The only question to determine is as to whether the appellant shall be directed to pay to respondents 1 and 2 any additional sum and if so what amount.

(5) THE app

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