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2013 Supreme(Kar) 867
High Court of Karnataka (Circuit Bench At Dharwad)
A.N. VENUGOPALA GOWDA, J.
The Chairman, The State Government Employees Shikshana Sangha, Hubli
Versus
Hanumantasa Tulajansa Pawar, by his Lrs. & Others
R.S.A. No. 2363 of 2006 (S-P)
Decided on: 01-03-2013
For the Appellant:V.M. Sheelavanth, Advocate.
For the Respondents:P.H. Pawar, S. Matti, Basavaraju R. Bannur, Mrs. Megha C. Kolekar, Advocates.
Headnote:SPECIFIC RELIEF ACT, 1963 - Section 16 & 20: [A.N. Venugopala Gowda, J] Suit for Specific Performance of an Agreement of Sale - Acquisition of suit schedule property during the pendency of suit - Decretal suit by the Trial Court and confirmed by the Appellate Court - Second Appeal by the defendant No.3/ Beneficiary of acquisition - Held, If the decree of specific performance of contract in question is found incapable of being executed due to acquisition of subject land, the decree shall stand suitably substituted by a decree for realization of compensation payable in lieu thereof as may be or have been determined under the relevant Act. If the subject matter of the suit for specific performance is ceased to exist during the pendency of the suit and the contract became incapable of performance for no fault of the plaintiff, he is only entitled to compensation as provided for under Section 21 of the Specific Relief Act. Further, In this case, declaration under Section 6 was issued and published, award was passed and the possession of the acquired property was taken over and even a declaration under Section 16(2) of the Act was also published. So, the suit land was acquired for the public purpose and vested absolutely in the Government free from all encumbrances and the contract was, therefore, frustrated. The contract agreed to between the plaintiff and defendant No. 1 became impossible of specific performance having regard to Section 56 of the Contract Act, 1872. The said provision provides that an agreement to do an act impossible in itself is void. A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promissory could not prevent, unlawful, becomes void then the act becomes impossible or unlawful. In the instant case, compulsory acquisition of suit property, which came into being during the pendency of the suit, which has material bearing with regard to claim made in the suit ought to have been noticed and appropriate issues with regard to the maintainability of suit and frustration of contract raised and answered by the Trial Judge, particularly in view of the Order dated 17.01.1994 passed on I.A. No. 12. The same having not been done, the Appellate Judge ought to have raised a specific point with regard to the effect of acquisition of suit property and decided the matter. Civil Court has no jurisdiction to go into the question of the validity or legality of the notification under Section 4 and declaration under Section 6, except by the High Court in a proceeding under Article 226 of the Constitution of India. So, the civil suit itself was not maintainable. On facts, held, The present case is a fit case where the L.Rs of plaintiff should be awarded compensation in spite of denial of relief of specific performance i.e., on account of frustration of the contract. Section 21 of the Specific Relief Act provides for award for compensation either in addition to or in substitution of such performance. The explanation there under makes it clear that the Court is not prevented from exercising jurisdiction to award compensation even in a case where the contract was rendered incapable of specific performance. Hence, The Judgment and Decree passed by the Trial Court and confirmed in the appeal by the lower Appellate Court, are liable to be set-aside.
Venugopala Gowda, J.
1. Appellant who was defendant No.3 in a suit for specific performance has sought reversal of the decrees passed by the two Courts below directing specific performance of an agreement of sale marked as Ex.P1, between the plaintiff and defendant No.1. For convenience, the parties would be referred to with reference to their ranks in the suit.
2. Factual matrix of the case;
On 09.08.1982, defendant No.1 entered into an agreement of sale with the plaintiff, to sell agricultural land bearing Sy. No.61/1A measuring 16 acres and 5 guntas, situated at Tarihal Village, Hobli and Taluk, for a consideration of Rs.61,101/-. Advance amount of Rs.6,000/- was paid and the balance sale consideration of Rs.55,101/- was to be paid at the time of execution of the sale deed. Defendant No.1 sold the said property on 24.10.1983 (Ex.P13) to defendant No.2 for sale consideration amount of Rs.35,000/-. Plaintiff instituted suit on 10.02.1984, to pass a decree for specific performance alleging that despite his readiness, willingness and offer of performance, defendant No.1 with dishonest intention illegally sold the property covered under the agreement of sale dated 09.08.1982 to defendant No.2. The suit having been instituted against defendant Nos.1 and 2, they contested the suit by filing separate written statements, which led to the raising of issues and additional issues. Both the defendants disputed the execution of suit agreement as well as the readiness and willingness on the part of the plaintiff to perform the contract. Plaintiff having died on 01.11.1986, his legal representatives filed I.A.IV seeking permission to come on record and prosecute the suit and the same was allowed by an Order dated 16.01.1987.
3. On 05.08.1987, a Notification under Section 4(1) of the Land Acquisition Act (for short ‘the Act’) was issued and published in the Gazette dated 20.08.1987 (Ex.P16), proposing to acquire the suit property for the benefit of the defendant No.3. A final declaration under Section 6(1) of the Act was issued on 21.12.1987 and the same was published in the Gazette on 24.12.1987. A Notification under Section 9(1) of the Act was issued on 22.02.1988 and the same was published in the Gazette on 31.12.1987 (Ex.P17). Land Acquisition Officer passed a consent Award on 26.02.1988 (Ex.P18). The possession of the acquired property pursuant to a notice issued on 08.03.1988 was taken and was handed over to the 3rd defendant on 09.03.1988 (Ex.D4). A Notification under Section 16(2) of the Act was issued on 11.05.1988 and the same was published in the Gazette dated 26.05.1988. The beneficiary of the acquisition i.e., defendant NO.3, undertook construction of the building on the suit property during August, 1988 (photographs-Exs.P13 to P23), after it was acquired and delivered to it.
4. Plaintiff filed I.A.10 to implead the beneficiary of the acquisition of the suit property as 3rd defendant. I.A.10 was allowed by an Order dated 03.07.1989. I.A.11 was filed to implead the LAO as defendant No.4 and the same was allowed by an Order dated 17.01.1994. I.A.12 was filed under Order 6 Rule 17 CPC to permit amendment of the plaint, to incorporate the events which had taken lace with regard to the acquisition of the property from the time of issuance of Notification under Section 4(1) of the Act, till the construction work was commenced by the 3rd defendant. By an Order dated 17.01.1994, I.A.12 was rejected and the same remained unchallenged.
5. Defendant No.1 died on 26.05.1988 and an application to ring his legal representatives on record was filed and since the legal representatives appeared, they were directed to file written statement, which they filed on 18.07.2002.
6. The following issues and additional issues were raised for trial and determination;
1. Whether Plaintiff proves that on 9.8.1982 the Defendant No.1 had executed the agreement for the sale of Block No.61/1A of Tarihal in favour of the Plaintiff for consideration of Rs.61,101
