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2018 Supreme(P&H) 1661
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ANIL KSHETARPAL, J.
Smt. Sharda Sharma - Appellant
Versus
Bhagwan Dass - Respondent
RSA No.1855 of 2013(O&M), RSA No.1856 of 2013
Decided On : 16-05-2018
Advocate Appeared:
For the Appellant :Dr. Parveen Hans, Advocate.
Specific Performance--Refund of Earnest Money--Merely because discretionary relief has not been granted, the amount of earnest money paid cannot be declared to have been forfeited
Headnote:
(A) Specific Relief Act, 1963, S.20--Specific Performance--Agreement to Sell--Before granting a decree for specific performance of the agreement to sell the court is required to analyze and adjudicate whether decree for specific performance should be granted or alternative relief of refund would be appropriate.
(B) Specific Relief Act, 1963, S.20--Specific Performance--Agreement to Sell--Refund of Earnest Money--Merely because discretionary relief has not been granted, the amount of earnest money paid cannot be declared to have been forfeited.
(C) Specific Relief Act, 1963, S.20--Specific Performance--Agreement to Sell--Defendant(Buyer) was delaying execution of sale deed--Defendant admitted date for execution and registration of sale deed extended on his request--Service of notices on behalf of plaintiff(seller) establishes her willingness to honour agreement as address given on notice is same as is address given by Defendant while filing suit--Defendant to prove is readiness & willingness contended that balance sale was borrowed by him from his brother, however, he not examined in evidence--Thus, defendant not entitled to relief of possession on by way of specific performance of agreement to sell. (Para 11)
ANIL KSHETARPAL, J.
1. By this judgment Regular Second Appeal Nos.1855 and 1856 of 2013 shall stand disposed of as the property in dispute as well as parties to the litigation in both the appeals are common. For facility of reference, parties are being referred by name.
2. Smt. Sharda Sharma, the appellant, was owner of the property in dispute. It is undisputed that Sharda Sharma entered into an agreement to sell with Bhagwan Dass, the respondent, on 12.11.2003 and received an earnest money to the tune of Rs.2,00,000/-. As per the agreement to sell, sale deed was to be executed and registered on 11.10.2004. On 11.10.2004, the date for execution and registration of the sale deed was extended to 10.04.2005.
3. Sharda Sharma, the appellant, filed a suit on 31.05.2005 seeking declaration that she is owner in possession of the land in dispute and the earnest money of Rs.2,00,000/- paid under the agreement to sell dated 12.11.2003 stood forfeited. She also prayed for relief of injunction, restraining Bhagwan Dass from interfering in her possession.
4. Bhagwan Dass appeared on notice in the suit filed by Sharda Sharma before the court on 11.06.2005. Bhagwan Dass filed written statement and pleaded that the amount has not been forfeited and it was in fact Sharda Sharma who was not ready and willing to perform her part of the contract. Bhagwan Dass also pleaded that on the extended target date, he had visited the office of Sub-Registrar along with the balance sale consideration but Sharda Sharma did not come forward. Bhagwan Dass further pleaded that he had got served a notice on Sharda Sharma on 03.05.2005.
5. The written statement was filed on 30.07.2005. Injunction application was disposed of granting temporary injunction in favour of Sharda Sharma vide order dated 08.04.2006.
6. Bhagwan Dass filed civil suit seeking possession by way of specific performance of the agreement to sell, on 24.05.2006. Both the suits were consolidated and after appreciation of the evidence, both the courts have decreed the suit filed by Bhagwan Dass for specific performance of the agreement to sell, whereas the suit filed by Sharda Sharma has been dismissed.
7. In this case, notice was issued, summons were served, however, no one has come present on behalf of Bhagwan Dass.
8. In the considered opinion of this Court, following substantial questions of law arise :-
(i) Whether before granting a decree for specific performance of the agreement to sell the court is required to analyze and adjudicate whether decree for specific performance should be granted or alternative relief of refund would be appropriate?
9. In the present case, unfortunately, both the courts below have mechanically passed the decree for specific performance of the agreement to sell without examining whether decree for specific performance is to be passed or not. A reading of Section 20 of the Specific Relief Act, 1963 establishes that the discretion should not be exercised arbitrarily. However, discretion as provided under Section 20 of the Specific Relief Act, 1963 is to be based upon sound and reasonable judicial principles. Such discretion is capable of correction by a court of appeal. Section 20 of the Specific Relief Act, 1963 is extracted as under :-
20. Discretion as to decreeing specific performance.—
(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.
(2) The following are cases in which the court may properly exercise discretion not to decree specific performance:—
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage o
