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SUPREME COURT OF INDIA
K.K. MATHEW AND M.H. BEG, JJ.
M. L. Devender Singh and others, Appellants
Versus
Syed Khaja, Respondent.
Civil Appeal No. 2517 of 1969, D/-3-8-1973.
Constitution of India, 1950 - Articles 132 and 133 - Specific Relief Act 1877 - Section 12, 21, 23, 22 and 22 (1) - Specific Relief Act of 1963 - Section 10, 14 and 20 - Property - Contract to Sell a House - Specific Performance - Keen to Dispose of Property - Whether first Defendant had authorised Sambamurthy by telephone to conclude contract on his behalf for sale of property - Whether by way of penalty or damages, to secure performance of this very act - Whether Courts are relieved by agreement between parties of duty to determine, on facts of a particular case - Whether damages, specified or left unspecified, would really afford adequate compensation to party which wants a conveyance of immovable property as agreed - Whether specific performance of a contract to convey a property ought to be granted - Whether presumption has been repelled or not – Held, In instant case, both sides have led evidence - But, there is no evidence as to extent of loss of prospective gains to plaintiff-Respondent, who carries on a Bakery business, from deprivation of a site so valuable as one in front of Secunderabad Junction Railway Station - In fact, there is no standard for judging loss from such a deprivation either to Plaintiff-Respondent or to partners of Alpha Hotel who are real contending parties - No attempt was even made to gauge value of future prospects of such a site to businessmen in position of Plaintiff-Respondent and those Defendants-Appellants who are partners of Alpha Hotel - It is, therefore, clear that first Defendant must have some ulterior motive in being prepared to suffer an ostensible loss of Rs. 10,000/even if his sale for Rs. 70,000/- to partners of Alpha Hotel could be upheld - Plaintiff himself had stated that financial considerations do not really determine his stand – Court is unable to accept this profession of unconcern for financial gain on part of an astute businessman like first Defendant - It is more likely that there is some undisclosed understanding between him and partners of Alpha Hotel who are also co-appellants with him before Court - Result is that Court think that presumption contained in explanation to Section 12 of old Act was not rebutted here - In such cases equity helps honest plaintiffs against Defendants who break solemnly given undertakings - High Court had rightly decreed suit for specific performance of contract - Trial Court had gone completely astray in exercise of its discretion on footing that Plaintiff-Respondent enjoyed an "unfair advantage" over first Defendant- Appellant, whereas, on facts and circumstances of case it was first Defendant who was placed in a position to exploit need of plaintiff and plaintiff s allegedly insecure position under first agreement - It is clear that Plaintiff-Respondent had dealt very fairly and squarely with first Defendant-Appellant - Trial Court s error in exercise of its discretion on an utterly untenable, fanciful and unsound ground was rightly corrected by High Court - Appeal dismissed.
Judgment
BEG, J.:- This appeal has come before us on a Certificate of fitness granted by the High Court of Andhra Pradesh, under Articles 132 and 133 of the Constitution of India.
2. The Plaintiff-Respondent had sued Defendant-Appellant Devender Singh (hereinafter referred to as the "First Defendant") for specific performance of a contract to sell a house facing the Secunderabad Junction Railway Station in Hyderabad for a sum of Rs. 60,000/- concluded on 9-10-1962 at New Delhi where the first Defendant resides. It appears that there was a previous agreement on 27-9-1962 (hereinafter referred to as the first agreement") between the Plaintiff, who resides at Hyderabad, and the first Defendant, through an agent, Laxmanaswamy, D.W. 2, with the help of Sambamurthy, D.W. 3, a nephew of Laxmanaswamy and an Income-tax practitioner residing at Secunderabad, for the sale of this very property for Rs. 55,000/- the terms of which were embodied in a document Ex. B. 15. The First Defendant denies the binding character of the first agreement of 27-9-1962 under which a cheque for Rs. 10,000/ was drawn up by the Plaintiff in favour of the first Defendant and handed over to his agent the Plaintiff. The exact reason for cancellation of this cheque for Rupees l0,000/- in favour of the 1st Defendant is not clear, but, according to Sambamurthy, D.W. 3, the reason was that, actually, Rs. 20,000/ was being demanded on behalf of the first Defendant as earnest money to which the plaintiff had consented so that a new cheque was, for some unknown reason, to be issued and not another cheque for Rs. 10,000/-. The evidence of Sambamurthy also shows that the Plaintiff had become aware of want of written authority on the part of either Laxmanaswamy or Sambamurthy to conclude the contract on behalf of the 1st Defendant so that he must have felt uncertain about the effect of the first agreement. Evidently, attempts to show the Plaintiff that his position was shaky under the first agreement and higglings were going on despise the agreement of 27-9-1962. Evidence in the case and findings recorded there on by the Trial Court as well as the High Court show that, although the first Defendant, who was keen to dispose of his property at Secunderabad, may have had other offers, yet, upto 27-9-1962, when the first agreement was concluded, he had no better offer than the plaintiff s. Evidence is conflicting the question whether the first Defendant had authorised Sambamurthy by telephone to conclude the contract on his behalf for the sale of property of Rs. 55,000/-, but this was unimportant in view of the subsequent agreement of 9-10-1962. The Plaintiff, who was evidently very anxious to obtain the property, had flown to Delhi with his lawyer and had managed, by offering Rs. 60,000/- as the price of the property, out of which Rs. 20,000/- was paid as earnest money (Rs.10,000/- in cash and Rs. 10,000/- by a cheque dated 9-10-1962) and the balance at the time of registration, to induce the first Defendant himself to conclude and execute the fresh agreement of 9-10-1962.
3. The deed of agreement of 9-10-1962 Ex. AI was not executed in a hurry by. the first Defendant. He had ample time to consider any other offers there might be till then for sale of his property and to take legal advice, if he had wanted to have it, before executing the deed of 9-10-1962. The Trial Court as well as the High Court had found that the first Defendant was fully aware of all the facts and had entered into the agreement of 9th October, 1962, with open eyes because it was the most advantageous transaction open to the first Defendant at that time and not as a result of any pressure or misrepresentation or fraud practiced upon the first Defendant, a middle aged, hard headed and astute businessman who deposed that he was a Director of : Blackwood Hodge (Pvt.) Ltd., and was connected with a number of other business concerns. He had himself stated in his evidence in Court that he entered into the agreemen
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