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1996 Supreme(Bom) 376
IN THE HIGH COURT OF BOMBAY
(NAGPUR BENCH)
Mhase S.B., J.
Bhikaram Nathuji Vanjari another…. Appellants.
Versus
Saraswati Motilal Zarkariya…. Respondent.
Suit Appeal No. 269 of 1982, decided on 16-7-1996.
Advocates appeared :
V.V. Bhangde, for appellants.
S.A. Jaiswal, for respondent.
Headnote:Section 73-See Specific Relief Act, 1963-Section 21(5).
Section 16(c)-Civil Procedure Code, Order VI, Rule 2-Specilic performance-Decree for-In case of total non-compliance of Section 16(c) a mandatory rule of pleading read with Order VI, Rule 2 to make a complete cause of action in suit for specific performance plaintiff cannot get decree for specific performance.
Section 21(5)-Contract Act, 1872-Sectlon 73-Specific performance suit-Claim for-In view of Section 21(5) it could not be considered but earnest money ordered to be refunded.
However, as the specific performance of the contract is being refused in favour of plaintiff/respondent it becomes necessary to see as to whether alternatively, plaintiff/respondent is entitled to claim damages or compensation. In this respect, provisions contained in Section 21 of Specific Relief Act will have to be adverted to. In the plaint in prayer clause (F) plaintiff/respondent has claimed only return of Rs. 4,000/- along with interest in case specific performance of contract is not granted. Apart from this, Section 21 allows granting of compensation, in case of breach by the defendants i.e. appellants in the present case. Even though sub-section (4) makes it a provision that the compensation is to be assessed on the basis of principle laid down in Section 73 of Indian Contract Act, 1872 still further sub-section (5) envisages that no compensation shall be awarded under this section, unless plaintiff has claimed such compensation in the plaint. The proviso allows amendment to be made by the plaintiff at any stage. The plaint which is before Court does not make out any case for grant of compensation in case of refusal of specific performance but it only mentions that in case specific performance is not granted, amount of earnest money may be refunded along with interest. No amendment was intended to be carried out as provided in sub-section (5) proviso to Section 21 by the respondent and, therefore, in view of the provisions contained in sub-section (5), it is not possible to consider the claim of compensation on the basis of Section 73 of the Indian Contract Act. Apart from that, there is no evidence on record to assess the compensation to be payable to the respondent. However, in view of the fact that the suit of the plaintiff is being dismissed and in view of the fact that the claim made by the appellants that the transaction was of loan, which was not accepted by both the lower Courts. The Court feels that in the facts and circumstances of the case, it will be appropriate to direct the respondent to return the amount of Rs. 4,000/- which was paid by the appellants by way of earnest money. No doubt since 1972 i.e., since the date of agreement appellant has used and enjoyed the said amount. As per the say of the appellants, she was liable to pay interest on the said amount. Therefore, what would be appropriate interest to be awarded is a question before the High Court looking to the circumstances of the case, interest at the rate of 6% per annum from the date of institution of the suit till realisation would be reasonable.
2. The respondent filed a suit for enforcement of specific performance of contract dated 6-4-1971, wherein it was agreed by the defendants to sell house constructed on plot No. 91, Kh. Nos. 9/2 and 14/3, Ward No. 8 situated in Vishwakarmanagar within the limits of Nagpur Improvement Trust and Corporation. The agreed price was fixed at Rs. 6,000/- and out of the said amount of consideration, an amount of Rs. 4,000/- was paid before the said agreement was registered in the office of Sub-Registrar, Nagpur. It was further agreed between appellants and respondent that the sale-deed was to be executed on or before 5-4-1972 and the balance amount of Rs. 2,000/- was to be paid at that time. However, respondent stated that the appellants avoided the performance of contract and, therefore, respondent issued notice on 25-2-1973 to the appellants. It is the further case of respondent that on the scheduled date he had been to the office of Sub-Registrar and waited there throughout the day. Appellants did not turn up for executing the sale-deed and, therefore, respondent obtained endorsement on an affidavit, from the Sub-Registrar in order to establish his presence on that date. According to respondent, appellants ultimately avoided to execute the sale-deed as per the agreement and, therefore, the suit was filed for seeking specific performance of agreement. The suit was contested on numerous grounds and with a contention that the transaction was a money lending transaction and that the appellants were in need of money for the marriage of their son Janardan and, therefore, Rs. 400/- and Rs. 3000/- were advanced and the document was only by way of security for the said amount. According to the appellants, the price was inadequate and the market price of the suit property was Rs. 25,000/- to 30,000/-.
3. Both the lower Courts affirmed that the transaction between appellants and respondent dated 6-4-1971 was not of money lending but it was transaction of agreement to sell the suit property and both the lower Courts have granted specific performance of contract decreeing the suit in favour of respondent.
4. In this second appeal, the substantial question of law which is raised and which arises for decision of this Court is as to whether plaintiff's suit is maintainable in the absence of pleadings and averments as required by section 16(c) of Specific Relief Act; and whether respondents have proved the readiness and willingness to perform his part of the contract as required under section 16 of the Specific Relief Act.
5. Section 16(c) of the Specific Relief Act is reproduced as under for the sake of convenience :—
“S.16. Specific performance of contract cannot be enforced in favour of a person. —
(a)..................................
(b)..................................
(c) who fails to aver and prove that he has performed or has always been ready and willing to perform essential terms of contract, which are to be performed by him, other than the terms, the performance of which has been prevented or waived by the defendant.”
6. This provision came to be incorporated in the Specific Relief Act, 1963. However, the same was not the provision in the Specific Relief Act of 1877. However, even though in the earlier Act, there was no requirement like that of section 16(c) to be followed by the party seeking specific performance, still it has been observed by the Privy Council in the matter of (Ardeshir Mama v. Flora Sassoon)1, A.I.R. 1928 Privy Council 208 that “where the injured party sued at law for breach, going as in the present case, to the root of the contract, he thereby elected to tre
