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SUPREME COURT OF INDIA
Doraiswamy Raju, Ashok Bhan, JJ.
Nirmala Anand - Appellant
Versus
Advent Corporation Pvt. Ltd. & others - Respondent
Civil Appeal No. 574 of 1988
Decided On : 10-05-2002
SPECIFIC PERFORMANCE - SUIT FOR - AGREEMENT TO SELL - FLAT - ESCALATION OF PRICE - WHETHER ADDITIONAL SUM CAN BE DIRECTED TO BE PAID BY VENDEE TO VENDOR - CIRCUMSTANCES TO BE CONSIDERED - SPECIFIC RELIEF ACT, 1963, SECTION 20.
Fact of the Case:
The appellant, one of the several flat purchasers, filed a suit for specific performance of the agreement to sell a flat in a building to be constructed by the respondent. The trial court decreed specific performance, but the appellate court reversed the decree, holding that the relief could not be granted as the lease of the land on which the building stood was terminated and the building was incomplete. The appellant appealed to the Supreme Court.
Finding of the Court:
The Supreme Court held that the appellant was entitled to the specific performance of the agreement, as she had always been ready and willing to perform her part of the contract and it was the respondents who were not prepared to perform their part of the contract. The Court further held that the escalation of price during the pendency of the suit/appeal was not a ground to refuse the relief of specific performance unless certain compelling circumstances were brought on record to take a view to the contrary. The Court also held that requiring the appellant to pay a further sum of Rs. 40 lakhs would/may amount to frustrating the agreement itself as the appellant may be not in a position to pay the sum of Rs. 40 lakhs.
Issues: 1. Whether the appellant was entitled to the specific performance of the agreement to sell the flat? 2. Whether the escalation of price during the pendency of the suit/appeal was a ground to refuse the relief of specific performance?
Ratio Decidendi: 1. The appellant was entitled to the specific performance of the agreement to sell the flat as she had always been ready and willing to perform her part of the contract and it was the respondents who were not prepared to perform their part of the contract. 2. The escalation of price during the pendency of the suit/appeal was not a ground to refuse the relief of specific performance unless certain compelling circumstances were brought on record to take a view to the contrary.
Final Decision: The appeal was allowed and the judgment and decree of the appellate court was set aside. The trial court's decree for specific performance was restored.
JUDGMENT :
Doraiswamy Raju, J.
The above appeal has been filed against the judgment and decree dated 15.7.1987 of a Division Bench of the Bombay High Court in Appeal No. 204 of 1981, whereunder the judgment and decree dated 23.3.1981 passed by a learned Single Judge in Suit No. 744 of 1969 came to be confirmed. The fourth plaintiff in the Suit, who was the first appellant in the appeal before the High Court, is the appellant in this appeal. The Suit came to be filed jointly by more than one agreement-holders praying for a declaration that the scheme and the flat purchase agreement entered into between parties are valid and subsisting and the plaintiffs are entitled to specific performance of the same; that defendants 1 to 7 are promoters within the meaning of the Maharashtra Ownership Flats Act, 1963 and thereby they are trustees or occupy a fiduciary position qua the plaintiffs; that the defendants 1 to 8 and all other purchasers of flats are participants in the scheme; that defendants 1 to 8 and, in particular, defendants 1 and/or 2, may be ordered and decreed to forthwith specifically perform their respective obligations under the said agreements for sale by resuming or allowing to be resumed the construction of the building, by completing the same, by handing over possession thereof to the respective flat Purchasers and by conveying or agreeing to convey the land in suit and the two buildings to an entity representing all the purchasers of flats in both the buildings; that defendants 1 to 8 be ordered to give the plaintiffs vacant possession of the incomplete flats agreed to be sold to them and in the alternative and without prejudice to the other prayers and in the event of the Court not decreeing specific performance, direct the payment of damages for breach of the scheme and the agreements, repayment of the purchase price paid by each of them and a charge on the properties specified to secure the same, etc.
2. The sum and substance of the claim of the plaintiffs was that the Municipal Corporation of Greater Bombay is the owner of a large plot of land situated at Foreshore Road, admeasuring about 4444 4/9 square yards and bearing new Survey No. 9/8426, which came to be leased out on. 21.12.1899 in favour of the predecessors of defendants 4 to 7 for a period of 50 years, which, in due course of time, came to be renewed on 21.12.1949 for a further duration of 49 years, subject to payment of the ground rent and complying with other conditions more fully stipulated therein; that subsequently on 23.10.1959 defendants 4 to 7 entered into an agreement with the original defendant No. 1, a Company registered under the Companies Act, and carrying on business of constructing building and selling flats to members of the public on ownership basis, to develop the land by construction of two buildings and that under the said agreement the first defendant company, of which defendant No. 2 was a Promoter and Director, sought permission from the Corporation to develop the property by construction of buildings and the said permission was also granted on 28.3.1961 on condition that the ground rent payable would be Rs. 30, 185/- per annum. It is further stated that the defendant No. 1 completed the construction of one building named as "Advent' in October, 1962, which came to be occupied by about 30 members forming themselves into a Cooperative Housing Society known as "Foreshore Co-operative Housing Society Limited" shown as 8th defendant. It is also stated that in February 1962, the first defendant made an advertisement in the Newspaper in respect of the proposed construction of the second building to be named as "Divya Prabha", inviting applications for residential flats to be constructed in accordance with the advertisement, pursuant to which the plaintiffs, eight in number, and defendants 9 to 25 were said to have approached the first defendant and entered into various agreements for purchase of such plots to be constructed. So far as the
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