1984 Supreme(Cal) 383

High Court Of Calcutta
G. N. RAY, SANKARI PRASAD DAS GHOSH
SUNIL CHANDRA - Appellant
Versus
HEMENDRA KR.DEB - Respondent
A. F. O. D.  190  Of  1982
Decided On : 11/26/1984

A contract is to be judged as at the time at which it was entered into, and if fair when made, the fact that it has become too hard by the force of subsequent circumstances, or changing events, will not necessarily prevent its specific performance. Nevertheless, if it is seen that the contract itself is not fair and is one-sided, the Court may refuse to enforce the contract.

Headnote:

SPECIFIC PERFORMANCE - CONTRACT FOR SALE - SUIT FOR - DEFENCE OF FRAUD, COERCION, MISREPRESENTATION AND UNDUE INFLUENCE - ABSENCE OF INDEPENDENT LEGAL ADVICE - MOTIVATED, UNCONSCIONABLE AND ILLEGAL PERIOD OF COMPLETION OF SALE - GREAT HARDSHIP TO DEFENDANT - ONE-SIDED, UNFAIR AND INEQUITABLE TERMS - INADEQUACY OF CONSIDERATION - HELD, SUIT NOT MAINTAINABLE.

Fact of the Case:

Plaintiff filed a suit for specific performance of a contract for sale of the second and third floor along with the vacant land to the respondent within a period of ten years, after the expiry of two years from the date of the agreement. The defendant-appellant resisted the suit by filing a written statement, which was subsequently amended for incorporating therein particulars of fraud. The defence was that the consent of the appellant to the alleged agreement dated 22-9-1972 was obtained by coercion, fraud and misrepresentation as well as undue influence. The appellant had no opportunity to appoint any independent and competent lawyer of his choice. The appellant failed to appreciate the true meaning, scope and effect of the agreement for sale in the absence of any advice from any independent and competent Legal Adviser. The period of ten years for completion of the sale was motivated, unconsionable and illegal. Great hardship would be caused if the suit for specific performance was decreed, as the appellant has no other house or landed property anywhere else. The payment of the sum of Rs. 1,000/- as earnest money was denied.

Finding of the Court:

The Court found that the plaintiff has not filed this suit with clean hands. The agreement is one-sided, unfair and inequitable. The defendant was to keep the suit-premises, reasonably repaired for a period of ten years from the date of the agreement and was to have only the right of residence in the built-premises for getting only 1% (one percent) of the consideration money (earnest money of Rs. 1,000/- being 1% of the total consideration money of Rs. 1,00,000/- ). One is yet to hear about any such agreement for sale extending over a period of ten years after expiry of two years from the date of the agreement to benefit the purchaser and to cause untold hardship on the seller. Is it equitable to keep the seller bound to keep the premises reasonably repaired for a period of ten years on receipt of only 1% (one percent) of the consideration money on the offchance of selling the premises to the purchaser within ten years from the date of the agreement? No right was given in the agreement to the defendant to rescind the contract before ten years from the date of the agreement. This is, to say the least, most unfair for a vendor. It is not understood how time could be the essence of the contract if the purchaser was to get a period of ten years from the date of the agreement for completing the purchase, after expiry of two years from the date of the agreement. The price of the suit-premises and the open space and vacant land, as mentioned in the second agreement, Ext. 1 (a), is also low.

Issues: 1. Whether the plaintiff has filed this suit with clean hands? 2. Whether the agreement is one-sided, unfair and inequitable? 3. Whether the period of ten years for completion of the sale was motivated, unconscionable and illegal? 4. Whether great hardship would be caused if the suit for specific performance was decreed? 5. Whether the price of the suit-premises and the open space and vacant land, as mentioned in the second agreement, Ext. 1 (a), is also low?

Ratio Decidendi: A contract is to be judged as at the time at which it was entered into, and if fair when made, the fact that it has become too hard by the force of subsequent circumstances, or changing events, will not necessarily prevent its specific performance. Nevertheless, if it is seen that the contract itself is not fair and is one-sided, the Court may refuse to enforce the contract. The relief by way of specific performance being discretionary under S. 20 of the Specific Relief Act, 1963 (hereinafter called the Act for the sake of brevity), the plaintiff must come to Court with clean hands. If in a suit for specific performance of a contract, the plaintiff does not come with clean hands, as where he is guilty of fraud or some other practice, he may ordinarily get no relief by way of specific performance. The inadequacy of consideration mentioned in the second agreement cannot be the sole ground for refusing specific performance, in view of Explanation 1 to S. 20 (2) of the Specific Relief Act, 1963. Under Explanation 1 to S. 20 (2) of the Act, mere inadequacy of the consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of Cl. (a) or hardship within the meaning of Cl. (b) of S. 20 (2) of the Act.

Final Decision: Appeal allowed. The judgment and decree of the learned Subordinate Judge, second Court, Alipore are set aside subject to the condition that the defendant-appellant do deposit the sum of Rs. 1000/- (one thousand) in the court below to the credit of the plaintiff-respondent, within two months from this date. It is ordered that in the event of such deposit, within two months from this date, in the court below, the plaintiff-respondent, would be entitled to withdraw the sum of Rs. 1000/- in satisfaction of his dues towards earnest money and damages, if any, for not getting the decree for specific performance of contract. It is further ordered that in case of non-deposit of the sum of Rs. 1000/- by the appellant within two months from this date, the appeal shall stand dismissed and the decree shall be executable at once.