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2001 Supreme(Raj) 849

Supreme Court
Honble S. RAJENDRA BABU & K.G. BALAKRISHNAN, JJ.
A.C. Arulappan - Appellant
Versus
Smt. Ahalya Naik - Respondents
Civil Appeal Nos. 5233 of 5234 of 2001
Decided On : August 10, 2001

Advocates Appeared:
S.S. Javali, Sr. Advocate with E.C. Vidya Sagar and B.K. Choudhary, Advocates, for Appellant A. Bobde and Padmanabh Mahale, Sr. Advocates with N.L. Ganapathi and Rajesh Mahale, Advocates, Rfor Respondent

Headnote:Specific Relief Act, 1963, Sec. 20(2) – Conditions for exercise of grant of specific relief – Circumstances under which the Court shall exercise the discretion – The Court may not exercise its discretion where (a) Under the terms of contract the plaintiff gets on unfair advantage over the defendant, (b) Where the defendant would be put to undue hardship which he did not foresee at the time of agreement and (c) If it is inequitable to grant specific relief, the Court should desist from granting a decree to the plaintiff. (Paras 7 & 15)

       The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but his discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the Court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the Court would desist from granting a decree to the plaintiff. (Para 7)

Honble Balakrishnan, J.–Leave granted.

(2). Defendant in a suit for specific performance is the appellant before us. The appellant and the respondent-plaintiff entered into an agreement on 1.5.1977 whereby the appellant agreed to sell his RCC building with appurtenant land for a consideration of Rs. 85,000/-. The respondent paid a sum of Rs. 42,000/- as advance. The plaint schedule property was outstanding on two mortgages - one in favour of the Karnataka Government and another in favour of Pragathi Co-operative Bank Ltd. The appellant was also liable to pay a sum of Rs. 8,000/- to one Lakshmamma. In the agreement, it was stated that the appellant intended to sell the property to clear the loans standing in respect thereof. No time limit was stipulated for execution of sale deed. The plaint schedule house was in occupation of a tenant. According to the respondent, the appellant again executed another agreement on 10.12.1977 wherein some more terms and conditions were incorporated. As per that agreement, the appellant was to execute the sale deed on or before 16.1.1978. The respondent alleged that she had all along been ready and willing to perform her part of the contract but the appellant failed to execute the sale deed on 16.1.1978 though she was present in the Sub-Registrars Office for execution of sale deed. The respondent filed a suit within a week thereafter and sought for specific performance of the contract.

(3). The appellant contended that the respondent was not entitled to seek specific performance. He admitted the agreement entered into by him on 1.5.1977, but alleged that the consideration agreed to by him was Rs. 98,000/- and not Rs. 85,000/-. The appellant also alleged that the City Improvement Trust Board had not granted permission to sell the property and that he could not get the income tax clearance certificate from the competent authority for the sale of the property. He also alleged that the respondent resiled from the contract and requested for refund of the advance amount and that in that behalf she wrote two letters on 27.9.1977 and 1.11.1977. The appellant further alleged that the respondent wanted to revoke the agreement dated 1.5.1977 and for that purpose the respondent and her husband took the appellant to their tax consultant where the appellant was forced to sign certain papers. The appellant alleged that the agreement dated 10.12.1977 was vitiated by coercion.

(4). The trial Court declined to grant the decree for specific performance and dismissed the suit though the Court held that there was no evidence to prove that the agreement dated 10.12.1977 was vitiated by coercion. The trial Court noticed that the appellant was to retire from service and that he was not having funds to purchase another house and that he had not obtained the requisite permission under the Urban Land Ceiling Act and also had not obtained the income tax clearance certificate. The trial Court held that the agreement dated 1.5.1977 was executed with a view to discharge some debts of the appellant and he wanted to move to a small house elsewhere. It was also noticed that the appellant was not keeping good health and voluntarily retired from service. Considering the overall circumstances of the case, it was noted by the trial Court that the appellant would be put to great hardship in case the relief of specific performance was granted to the plaintiff.

(5). The respondent filed an appeal before the High Court and the appellate Court decreed the suit as prayed for. According to the appellate Court, mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, would not be deemed to constitute an unfair advantage and the ingredients of clause (b) of Section 20(2) of the Specific Relief Act are not attracted. On this premise, the appeal filed by the respondent was allowed.

(6). We heard the learned counsel for the appellant as also learned counsel for the respondent.

(7).














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