Important Point
As per section 20(2)(b) of the Specific Relief Act,1963, the jurisdiction to grant decree of specific performance is discretionary and section 20(2) lists the cases in which the court may properly exercise discretion not to grant decree of specific performance.

Headnote:Specific Relief Act,1963 – Section Section 20(2) (a) and (b) – Respondents plaintiffs filed a suit for specific performance against appellants – Partly decreed by Trial Court directing defendants to pay Rs.3,00,000/ – to the plaintiffs along with interest –Appeals – Appellate Court while dismissing appeal preferred by defendant – appellants, allowed appeal preferred by plaintiff – respondents and directed defendant – appellants to get sale deed executed and registered in favour of plaintiff – respondents – Second appeals – Dismissed – Appeals – Finding of fact recorded by Trial Court was annulled by First Appellate Court in exercise of its appellate power without examining the pleadings and substantiated evidence on record particularly the recitals of the agreement of sale and the compromise deed between the parties – Said finding of fact recorded by First Appellate Court in reversing the finding of Trial Court recorded on the contentious issue not only erroneous but also suffered from error in law. – Since the defendants had agreed to return the amount as per the compromise, the judgment of the Trial Court decreeing return of an amount of [pic]3,00,000/ – with 9% simple interest from the date of execution of the agreement of sale till the date of payment, upheld and that of the appellate courts decreeing specific performance rejected – Appellate court grossly erred in law by decreeing the suit for specific performance considering the well – reasoned order of Trial Court – High Court also erroneously upheld the same – Impugned judgment and order passed by the High Court set aside and the judgment and decree passed by the Trial Court modified directing the defendant Nos.1 to 3 to repay the plaintiff an amount of 2,00,000/ – with interest @6% per annum – Appeals allowed(Paras 11 to 15)
       Facts of the Case
       Respondents plaintiffs herein in the instant case filed a suit for specific performance against appellants. Said suit was Partly decreed by Trial Court directing defendants to pay Rs.3,00,000/ – to the plaintiffs along with interest .On Appeals thereagainst, Appellate Court while dismissing appeal preferred by defendant – appellants, allowed appeal preferred by plaintiff – respondents and directed defendant – appellants to get sale deed executed and registered in favour of plaintiff – respondents. Second appeals filed by parties were Dismissed by High Court.
       B. Present appeals have been filed against said order of High Court.
       Findings of the Court – Finding of fact recorded by Trial Court was annulled by First Appellate Court in exercise of its appellate power without examining the pleadings and substantiated evidence on record particularly the recitals of the agreement of sale and the compromise deed between the parties. Said finding of fact recorded by First Appellate Court in reversing the finding of Trial Court recorded on the contentious issue not only erroneous but also suffered from error in law. Since the defendants had agreed to return the amount as per the compromise, the judgment of the Trial Court decreeing return of an amount of 3,00,000/ – with 9% simple interest from the date of execution of the agreement of sale till the date of payment, was upheld and that of the appellate courts decreeing specific performance was rejected. Appellate court grossly erred in law by decreeing the suit for specific performance considering the well – reasoned order of Trial Court. High Court also erroneously upheld the same. Impugned judgment and order passed by the High Court was set aside and the judgment and decree passed by the Trial Court was modified directing the defendant Nos.1 to 3 to repay the plaintiff an amount of 2,00,000/ – with interest @6% per annum. Appeals were allowed.
       Result – Appeals allowed

JUDGMENT

V.Gopala Gowda, J. –

Leave granted.

2. These appeals have been preferred by the appellants (the original defendants) against the common Judgment and final Order dated 17th September, 2012 passed by the High Court of Punjab and Haryana at Chandigarh in RSA Nos. 2871 & 1543 of 2012. By the said impugned judgment, two separate RSAs filed by the appellants against the common judgment of First Appellate Court were dismissed by the High Court.

3. The factual matrix of the case is as follows:

The respondents (original plaintiffs) filed a suit for specific performance against the appellants herein alleging that an agreement to sell dated 3rd June, 2002 was entered between them with respect to the suit land. It was alleged that out of [pic]3,00,000/ – (total agreed consideration), [pic]2,00,000/ – had already been paid by the plaintiffs on 3rd June, 2002 and as per agreement, the balance amount were to be paid at the time of execution of sale deed, i.e. on 20th December, 2002. It was further alleged that later, the defendant – appellants became dishonest and wanted to sell the land to some other persons. Therefore, they had to file the suit.

4. The defendants filed their written statement contending in that they had never entered into any agreement to sell the suit land to the plaintiffs. It was also contended that the alleged agreement to sell was a product of forgery and fabrication and so, it was null and void. The Trial Court having considered the contention of both the parties, partly decreed the suit of the plaintiffs on 13th May, 2009 and directed the defendants to pay [pic]3,00,000/ – to the plaintiffs along with simple interest @9% per annum from the date of execution of the agreement to sell till the date of payment.

5. Being aggrieved by the Judgment and Decree, the defendant – appellants filed Civil Appeal No. 74 of 2009 on the ground that the alleged agreement to sell was not valid and legal and the appellants never intended to sell the suit land. They further contended that there was no signature of any of the attesting witness on the receipt of the earnest money and the land was already under mortgage with the banks and so there was no question of any agreement to sell and urged other grounds as well.

6. The plaintiffs also filed a Special Civil Appeal No. 102 of 2009 against the judgment and decree dated 13th May, 2009 with prayer for direction of execution of sale deed and transfer of possession of the suit land. Both the appeals were disposed of by the First Appellate Court vide common judgment and order dated 17th February, 2012. The Appellate Court while dismissing the appeal preferred by the defendant – appellants, allowed the appeal preferred by the plaintiff – respondents and directed the defendant – appellants to get the sale deed executed and registered in favour of the plaintiff – respondents.

7. Second appeals preferred by the defendant – appellants against the common judgment passed by the First Appellate Court were dismissed by impugned common judgment dated 17th September, 2012. Hence, these appeals.

8. The main issues in this case are (i) whether a decree of specific performance can be passed with respect to the purported agreement of sale between the plaintiff and the defendants and (ii) whether the defendant nos.1 to 3 could have entered into this purported agreement of sale with respect to the fact that their land has been contended to be mortgaged with the defendant nos.4 and 5 as security for loans that they have taken. The first appellate court as well as the High Court have decreed the specific performance, ordering the defendants to enforce the agreement of sale, Ex. P – 2. The Trial Court, on the other hand, did not grant decree of specific performance, but instead passed a decree ordering the defendants to return [pic]3,00,000/ – with interest to the plaintiffs on the ground that a balanced approach should be taken as the plaintiffs should be protected and the defendant nos. 1 to 3 should not be

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2014 Supreme(SC) 310

SUPREME COURT OF INDIASUDHANSU JYOTI MUKHOPADHAYA, V. GOPALA GOWDA, JJ.SHAMSHER SINGH & ORS. – APPELLANTSVersusRAJINDER KUMAR & ORS. – RESPONDENTSCIVIL APPEAL NOS.4597 – 4598 OF 2014 (Arising out of SLP (C) Nos. 31491 – 31492 of 2012)Decided On : 16-04-2014

Important PointAs per section 20(2)(b) of the Specific Relief Act,1963, the jurisdiction to grant decree of specific performance is discretionary and section 20(2) lists the cases in which the court may properly exercise discretion not to grant decree of specific performance.

Cases Referred (1)

SUPREME COURT OF INDIA
SUDHANSU JYOTI MUKHOPADHAYA, V. GOPALA GOWDA, JJ.
SHAMSHER SINGH & ORS. – APPELLANTS
Versus
RAJINDER KUMAR & ORS. – RESPONDENTS
CIVIL APPEAL NOS.4597 – 4598 OF 2014 (Arising out of SLP (C) Nos. 31491 – 31492 of 2012)
Decided On : 16-04-2014

Important Point
As per section 20(2)(b) of the Specific Relief Act,1963, the jurisdiction to grant decree of specific performance is discretionary and section 20(2) lists the cases in which the court may properly exercise discretion not to grant decree of specific performance.