Back
2021 Supreme(Online)(Guj) 1276
HIGH COURT OF GUJARAT
VAIBHAVI D. NANAVATI, J
PANKAJKUMAR VANECHAND MEGHANI – Appellant
Versus
MAJUMDAR AND ASSOCIATES, A PARTNERSHIP FIRM – Respondent
R/SECOND APPEAL NO. 116 of 2020 | CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of 2020
For the Appellants/Petitioners: MR DHAVAL D VYAS
For the Respondents: MR AMAR N BHATT, MR AS VAKIL, MR KUNAL P VAISHNAV
Specific performance of a contract is not guaranteed even if a concluded contract exists; the court has discretion based on the parties' conduct and the need for precise terms in enforceable agreements.
Headnote:(A) Civil Procedure Code, 1908 - Section 100 - Specific Relief Act, 1963 - Dismissal of appeal regarding enforcement of oral contract for sale of property - Courts found existence of a concluded contract but denied specific performance due to lack of detailed agreement and continuous supervision required for contract execution. (Paras 8, 17, 19)
(B) Specific Performance - Discretion of the court - Even with a concluded contract, specific performance is not guaranteed and depends on equitable considerations and evidence available. (Paras 18, 19)
(C) Appellate Court's Judgment - Partly allowed the appeal for compensation of Rs.1,20,000/- with interest at 12% p.a., indicating that the plaintiffs were not denied a remedy altogether. (Paras 1, 5, 13)
Facts of the case:
The appellants agreed to buy a flat under construction; the suit was for specific performance after the defendants cited inability to perform. Rs.11,000/- was initially paid as earnest money, and the subsequent suit followed after refusal by the defendants.
Findings of Court:
The Appellate Court recognized an oral contract but declined specific performance due to insufficient documentation and the discretionary nature of such relief.
Issues: Key questions involved the existence and enforceability of the contract, including whether compensation was adequate.
Ratio Decidendi: The ruling emphasized the judicial discretion in specific performance cases and the need for precise terms in enforceable contracts. Furthermore, the courts confirmed that an absence of detailed terms and conditions would hinder the enforcement of specific performance.
Result: Second appeal dismissed.
| Table of Content |
|---|
| 1. second appeal due to a specific contract dispute (Para 1) |
| 2. factual background of the contract dispute (Para 2 , 3) |
| 3. details of the plaintiffs' specific performance request (Para 4) |
| 4. legal questions of law framed by the appellate court (Para 5 , 6) |
| 5. arguments by appellants regarding specific performance (Para 7 , 8) |
| 6. court's rationale on specific performance and damages (Para 10) |
| 7. counterarguments by the respondents (Para 11 , 12 , 19) |
| 8. respondents' justification for refusal of specific performance (Para 13) |
| 9. court's acknowledgment of case appreciation and findings (Para 16) |
| 10. court's rationale for refusing specific performance (Para 17 , 18) |
| 11. final judgment and dismissal of appeal (Para 21 , 22) |
JUDGEMENT
1. The appellants have filed present Second Appeal under Section 100 of the Civil Procedure Code, 1908 challenging the common judgment and decree dated 18.11.2019 passed by the 8th Additional District Judge, Surat in Appeal Nos. 82, 83 and 84 of 2006, in so far as the impugned judgment is passed in Regular Civil Appeal No.82 of 2006 of the present Appellants. By the impugned judgment, the Appellate Court has partly allowed the Appellants' Regular Civil Appeal No.82 of 2006 and has directed the respondentsdefendants to pay an amount of Rs.1,20,000/ along with interest at the rate of 12% per annum from the date of filing of the Suit till realisation. By the impugned judgment, the Appellate Court has granted the appellantsplaintiffs' alternative prayer of seeking refund of Rs.11,000/ towards earnest money plus a sum of Rs,1,09,999/ towards compensation totaling to Rs.1,20,000/. By the present Second Appeal, the appellantsplaintiffs are pursuing the relief of specific performance of the alleged contract which the Trial Court, as well as the Appellate Court, have refused in their discretion.
2. Brief facts, leading to institution of the present appeal are as under :
2.1 The respondentsdefendants are the owners of the land, bearing Final Plot No.
279 of Ward No. 13 [having Entry No. 300A]. They decided to construct appartments, named as “Sundaram” out of which, Flat No. 1, admeasuring about 1880 sqft was agreed to be sold to the appellants herein for an aggregate sum of Rs 1,16,560/ on 18th October 1978 and against which, the appellantsplaintiffs paid consideration of Rs.11,000/ which was receipted on 16.10.1978, 18.10.1978 and 28.12.1978 by the defendants. The defendants had assured the Plaintiffs that the construction of good quality flats shall be completed as early as possible. The land was proposed to be acquired U/s 294D by the Income Tax Department. After being aware that the acquisition was to be dropped, the Defendants therefore sent back Rs.11000/ citing impossibility of performance vide letter dated 03.10.1979. The refusal was not acquiesced by the plaintiffs and the cheque was returned to the defendants.
Thereafter, the proposed acquisition of the land was dropped which was communicated by the IT Department to the Defendants vide letter dated 15.11.1979 (Exh. 116). The plaintiffs therefore issued notice dated 24.12.1979 calling upon the Defendants to specifically perform the agreement with willingness that in the eventuality of any impediments in completing construction, the plaintiffs were prepared to bear reasonable expenses and complete the construction.
The Defendants responded vide letter dated 01.02.1980 declining to perform the Agreement.
3. The appellantsplaintiffs had filed Special Civil Suit No.163 of 1981 for specific performance of an agreement dated October, 1978 with the following prayers: “1) Kindly pass an order to draw decree of Specific Performance directing to
