The discretionary nature of granting specific performance, the importance of balancing equities, and the interpretation of Section 13 (1) (c) of the Specific Relief Act were the central legal principles established in the judgment.

Kuldip Singh, J.

The plaintiff having lost in both the Courts below has filed the appeal against judgment, decree dated 29.12.2000 passed by learned District Judge, Una in Civil Appeal No. 87 of 1995 affirming judgment, decree dated 1.4.1995 passed by learned Sub Judge 1st Class, Amb, in Civil Suit No. 189 of 1990.

2. The facts, in brief, are that the appellant had filed suit for specific performance of contract against Karam Singh, predecessor-in-interest of the respondents in respect of land measuring 0-66-00 Hect. (17 K-2 Mls.) out of 0-98-39 Hectares, Khasra No. 2343 new as per Khatauni Settlement Jadid for the year 1988-89 village Pirthipur on payment of Rs.16,000/- the balance sale consideration, in alternative, recovery of Rs.40,000/- as damages for non-performance of contract.

3. The further case of the appellant is that Karam Singh vide an agreement dated 25.2.1988 agreed to sell 10 Kanals land out of the suit land for a consideration of Rs.22,000/-. Karam Singh had received Rs.15,000/- as earnest money and possession of the land was delivered to appellant. The balance sale consideration Rs.7,000/- was agreed to be paid at the time of execution of the sale deed which was to be executed on or before 24.2.1990.On failure of payment to perform his part of contract, earnest money of appellant was to be forfeited and on failure of Karam Singh to execute the sale deed, a sum of Rs.30,000/- was to be paid by him to the appellant.

4. Karam Singh evaded the execution of the sale deed. On 21.12.1988 Karam Singh entered into an agreement to sell remaining 7 Kanals 2 Marlas land out of the suit land for consideration of Rs.14,000/-, out of which, he received Rs.5,000/-. The balance sale consideration was agreed to be paid at the time of the execution of the sale deed which was to be executed on or before 24.2.1990. The possession of that land was also delivered to the appellant. On failure of Karam Singh to execute the sale ded, a sum of Rs.10,000/- was to be paid to appellant and on failure on the part of the appellant to perform his part of the contract, his earnest money was to be forfeited.

5. The appellant approached Karam Singh many times and also issued registered notice on 19.2.1990 asking Karam Singh to perform his part of the contract but without any response. On 5.3.1990 Karam Singh executed fresh agreement, he acknowledged the execution of previous agreements and receipt of earnest money Rs.20,000/-. He agreed to execute sale deed on or before 5.7.1990 on payment of sale consideration Rs.16,000/- and on his failure to do so, he agreed to pay Rs.40,000/- to appellant. Karam Singh failed to perform his part of the contract, therefore, the suit was filed.

6. The suit was contested by Karam Singh by filing written statement. He took preliminary objections of estoppel, limitation and maintainability. On merits, he admitted agreement dated 25.2.1988 to sell 10 Kanals land for a consideration of Rs.22,000/-. He admitted that a sum of Rs.15,000/- was received by him, he denied that possession of the suit land was delivered to the appellant. It was pleaded that the suit land was already mortgaged with the Cooperative Agricultural Society Bank, Kangra for Rs.51,000/- which fact was told to appellant at the time of the execution of the agreement dated 25.2.1988. He was told that the land could not be sold as it was already mortgaged. The execution of agreement dated 21.12.1988 and receipt of Rs.5,000/- was denied. The notices were admitted. It has been pleaded that the appellant was told that the land could not be sold. The agreement dated 5.3.1990 was denied.

7. The replication was filed. On the pleadings of the parties, the following issues were framed:-

1. Whether the defendant executed agreement to sell in favour of plaintiff-bank qua the suit land on 22.2.1988 for a consideration of Rs.22,000/- ? OPP

2. Whether consideration of Rs.15,000/- stood paid by the plaintiff and received by the defendant, as alleged? OPP

3.