2006 Supreme(Kar) 37

Karnataka High Court
Judges : V.Gopala Gowda,Jawad Rahim
S.KUGASHANKAR SUBHASH CHAND GOEL N.D.GOEL - Appellant
Versus
SUBHASH CHAND GOEL NARAIN DASS GOEL, SUNITA KUGASHANKER - Respondent
R. F. A 417 Of 1998
Decided On : 01/12/2006
Advocates Appeared :
BASAVARAJ KAREDDY, G.S.BHATTT, G.S.BHATTTTT, S.K.V.Chalapathy, SREEVATSA ASSOCIATES, UDAY HOLLA, UDAYA HOLLA, V.A.MOHAN RANGAM

Headnote:Equity -Specific performance -relief of -Grant -Necessary to examine whether it will be inequitable to grant relief sought -Court should also see if the defendant is put to undue hardship which he did not foresee at the time of agreement.

       Cases Referred: AIR 1966 SC 902; AIR 1997 SC 1751; VII (2005) SLT 689; AIR 2000 SC 191; AIR 1990 SC 854; AIR 1994 SC 1607; AIR 1995 SC 491; AIR 1995 SC 1606; 1999 (5) SCC 77; AIR 1998 SC 845; AIR 1975 SC 498; AIR 1975 AP 350 (DB); AIR 2001 SCC 2783; 2000 (6) SCC 420; 1989 (2) Supp SCC 409; AIR 1982 Kar 264 (DB); AIR 1996 SC 2150; AIR 1978 SC 537.

       Limitation Act, 1963 -Article 54 -Limitation -Agreement to sell -Enforcement of -Limitation is three years from the date of cause of action. [Gopala Gowda and Jawad Rahim, JJ]: The party seeking specific performance of the contract needs to establish firstly that he had enforceable right and there was meeting of mind between him and the opponent or that the parties were ad-edem. That right should be shown to be subsisting and enforceable in law when the suit is filed. Settled Principles: Article 54 of the Limitation Act prescribes three years as the period within which a suit for specific performance can be filed. The period of three years is to be calculated from the date specified in the agreement for performance or in the absence of any such stipulation, within three years from the date the performance was refused. It has been consistently held by the Courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time- limits prescribed by the parties in the agreement have no significance or value that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement has not relevance and can be ignored with impunity? It would also mean denying the discretion vested in the Court by both the Section 10 and 20 [AIR 1993 SC 1742].

       Cases Referred: AIR 1966 SC 902; AIR 1997 SC 1751; VII (2005) SLT 689; AIR 2000 SC 191; AIR 1990 SC 854; AIR 1994 SC 1607; AIR 1995 SC 491; AIR 1995 SC 1606; 1999 (5) SCC 77; AIR 1998 SC 845; AIR 1975 SC 498; AIR 1975 AP 350 (DB); AIR 2001 SCC 2783; 2000 (6) SCC 420; 1989 (2) Supp SCC 409; AIR 1982 Kar 264 (DB); AIR 1996 SC 2150; AIR 1978 SC 537.

       Hindu Succession Act 1956 -Section 12 -Ancestral property -Partition of -Devolution of share. Settled Principles: The share which a coparcener obtains on partition of ancestral property is ancestral property as regards his male issue. They take an interest in it by birth, whether they are in existence at the time of partition or are born subsequently. Such share, however, is ancestral property only as regards his male issue. As regards other relations, it is separate property, and if the coparcener dies without leaving male issue, it passes to his heir by succession (see P.272 of Mullas Principles of Hindu Law 14th Ed.). A person who for the time being is the sole surviving coparcener is entitled to dispose of the coparcenary property as if it were his separate property. He may sell or mortgage the property without legal necessity or he may make a gift of it. If a son is subsequently born to him or adopted by him, the alienation whether it is by way of sale, mortgage or gift, will nevertheless stand, for a son cannot object to alienations made by his father before he was born or begotten (see P.320 ibid). In view of the above it cannot be denied that the appellant at present is the absolute owner of the property which fell to his share as a result of partition and that he can deal with it as he wishes. There is admittedly no female member in existence who is entitled to maintance from the above mentioned property or who is capable of adopting a son to a deceased coparcener. Even if the assessee - appellant in future introduces a new member into the family by adoption or otherwise, his present full ownership of the property cannot be affected. Such a new member on becoming a member of the coparcenary would be entitled to such share in the property as would remain undisposed of by the assessee. In order to determine the status of the assessee for the purpose of income tax, we have to look to the realities as they exist at present and it would not be correct to project into the matter future possibilities which might or might not materializes. This would indeed amount to speculation and the same is not permissible. Excursions to the realm of speculation may be legitimate and justified when one is engaged in the study of philosophy and metaphysics; they are wholly unwarranted when one is dealing with the mundane subject of the status of the assessee for the purpose of the income tax assessment. For this purpose, we have to look to facts as they exist and emerge from the record and not to what they may or may not be in future. As things are at present in the instant case, there can, in our view, be hardly any doubt that the assessee is an individual and not a family [AIR 1975 SC 498].

       Cases Referred: AIR 1966 SC 902; AIR 1997 SC 1751; VII (2005) SLT 689; AIR 2000 SC 191; AIR 1990 SC 854; AIR 1994 SC 1607; AIR 1995 SC 491; AIR 1995 SC 1606; 1999 (5) SCC 77; AIR 1998 SC 845; AIR 1975 SC 498; AIR 1975 AP 350 (DB); AIR 2001 SCC 2783; 2000 (6) SCC 420; 1989 (2) Supp SCC 409; AIR 1982 Kar 264 (DB); AIR 1996 SC 2150; AIR 1978 SC 537.

       Hindu Succession Act 1956 -Section 6 -Entitlement of co-sharers -Joint family property -Each co-sharer has a defined and distinct share.

       Cases Referred: AIR 1966 SC 902; AIR 1997 SC 1751; VII (2005) SLT 689; AIR 2000 SC 191; AIR 1990 SC 854; AIR 1994 SC 1607; AIR 1995 SC 491; AIR 1995 SC 1606; 1999 (5) SCC 77; AIR 1998 SC 845; AIR 1975 SC 498; AIR 1975 AP 350 (DB); AIR 2001 SCC 2783; 2000 (6) SCC 420; 1989 (2) Supp SCC 409; AIR 1982 Kar 264 (DB); AIR 1996 SC 2150; AIR 1978 SC 537.

       Specific Relief Act, 1963 -Section 16(1)(c) -Specific performance of contract of sale -Co-sharer entering into an agreement respecting entire property -Specific performance cannot be granted respecting his share.

       Cases Referred: AIR 1966 SC 902; AIR 1997 SC 1751; VII (2005) SLT 689; AIR 2000 SC 191; AIR 1990 SC 854; AIR 1994 SC 1607; AIR 1995 SC 491; AIR 1995 SC 1606; 1999 (5) SCC 77; AIR 1998 SC 845; AIR 1975 SC 498; AIR 1975 AP 350 (DB); AIR 2001 SCC 2783; 2000 (6) SCC 420; 1989 (2) Supp SCC 409; AIR 1982 Kar 264 (DB); AIR 1996 SC 2150; AIR 1978 SC 537

       Specific Relief Act, 1963 -Section 20 -Specific performance -Relief of -Grant -Necessary to examine whether it will be inequitable to grant relief sought -Court should also see if the defendant is put to undue hardship which he did not foresee at the time of agreement. [Gopala Gowda and Jawad Rahim, JJ]: Provision of Section 20(2) of the Specific Relief Act enables the Court for grant of decree of specific performance. The rigour of the rule evolved by Courts and position of law that emanates therefrom undoubtedly mandates that grant of relief of specific performance is not automatic. All relevant attending circumstances governing transaction between the parties should be examined carefully to determine the enforceability of the contract. Wherever the specific performance is sought, it is inevitable that the defendant against whom such a relief is sought may suffer some hardship. But when it is noticed that at the time of entering into such transaction, the transferor would not have foreseen either the escalation in the price or the ultimate hardship resulted to him. The discretion has to be exercised by the Court on the principles of justice, equity and good consciousness. Merely because it would be lawful to do so, a decree for specific performance will not be granted. When it is likely to give unfair advantage to the plaintiff, it will have to be refused. In the instant case, all attending circumstances indicate grant of such a relief was not justified. Thus, the discretion under the provision of Section 20(2) of the Specific Relief Act has not been exercised judiciously by the Trial Court and therefore, we have carefully examined this important aspect of the case. Having regard to the evidence on record with regard to execution of Ex.P.6, P.7 and the finding recorded by us holding that Ex.P.4, P.8 and P.9 are fabricated documents and that the plaintiff has not been ready and willing to perform his part of the contract as per the covenants and the market value of the property as on the date the agreements of sale. On the date of institution of the suit and the judgment and decree passed, we are of the final view that the plaintiff is not at all entitled for the decree of specific performance in respect of suit properties.

       Cases Referred: AIR 1966 SC 902; AIR 1997 SC 1751; VII (2005) SLT 689; AIR 2000 SC 191; AIR 1990 SC 854; AIR 1994 SC 1607; AIR 1995 SC 491; AIR 1995 SC 1606; 1999 (5) SCC 77; AIR 1998 SC 845; AIR 1975 SC 498; AIR 1975 AP 350 (DB); AIR 2001 SCC 2783; 2000 (6) SCC 420; 1989 (2) Supp SCC 409; AIR 1982 Kar 264 (DB); AIR 1996 SC 2150; AIR 1978 SC 537.