2014 Supreme(SC) 774

SUPREME COURT OF INDIA
FAKKIR MOHAMED IBRAHIM KALIFULLA, ABHAY MANOHAR SAPRE, JJ.
Rathnavathi & Another – Appellants
VERSUS
Kavita Ganashamdas – Respondents
CIVIL APPEAL Nos. 9949-9950 OF 2014 (Arising out of SLP (C) Nos.35800-35801 of 2011)
Decided On : 29-10- 2014

MAIN POINTS
Bar of Order II, rule 2, CPC applies only when the two suits have same cause of action.
Ingredients for suits for specific performance under Section 16 and suit for permanent injunction under section 38 r/w Order XXXIX, rule 1 & 2, CPC are different.
Cause of action is material for determining applicability of bar of Order II, Rule 2, not the pleadings.
If a date is fixed for performance of the agreement, then limitation of three years starts form expiry of that date. If no date is fixed, limitation of three years would begin when the plaintiff notices that the defendant has refused the performance of the agreement.
First appellate court being last court of facts is well within its powers to re-appreciate the evidence and come to its own conclusions.
If the owner after entering into an agreement to sale transfers the property to another person and the party with whom agreement was made succeeds in suit for specific performance then the owner and the transferee both have to execute sale deed in favour of the specific performance decree holder.

Headnote:(a) Code of Civil Procedure, 1908 – Order II, rule 2 – Cause of action for the two suits by plaintiff – Different – Suit for permanent injunction arising out of threat of dispossession in January 2000 – Cause of action for suit for specific performance of agreement arising out of non-performance of agreement dated 15.2.1989 by defendant no. 2 – For invoking Order II, Rule 2 both suits must have same cause of action – Order II, Rule 2 not attracted to present case. (Para 29, 30, 32)

       AIR 1964 SC 1810; (2013) 1 SCC 625 – Relied upon

       (b) Specific Relief Act, 1963 – Section 16 and section 38 r/w Order XXXIX, rule 1 & 2, CPC; and section 6 – Ingredients of suit for permanent injunction are different than that for specific performance of agreement – In case of permanent injunction, existence of prima facie case has to be made out, and balance of convenience and irreparable loss likely to be suffered by the plaintiff are to be established – In case of specific performance continuous readiness and willingness of plaintiff to perform his/her part of agreement as also failure of defendant to perform his/her part of the agreement has to be pleaded and proved (Para 31)

       (c) Code of Civil procedure, 1908 – Order II, Rule 2 – Cause of action for the two suits different – Cause of action is material for determining applicability of bar of Order II, Rule 2, not the pleadings – Plaintiff was not required to obtain leave of court for filing second suit. (Para 36)

       (d) Limitation Act, 1963 – Article 54 – If the date is fixed for performance of the agreement, then non-compliance of the agreement on the date would give a cause of action to file suit for specific performance within three years from the date so fixed – When no such date is fixed, limitation of three years to file a suit for specific performance would begin when the plaintiff has noticed that the defendant has refused the performance of the agreement – Instantly the agreement not providing any specific date for completion of its execution – Plaintiff coming to know intention of defendants to dispossess her and refusing to perform the agreement on 02.01.2000 and 09.01.2000 – The event rightly taken as starting point of refusal to perform the agreement by defendant no.2 – Plaintiff giving notice to defendant no.2 on 6.3.2000 and then filing of suit on 31.3.2000 – Suit filed by the plaintiff for specific performance of the agreement held within limitation. (Para 44, 46, 51, 52)

       AIR 1967 SC 868; (1977) 2 SCC 539; (1993) 1 SCC 519; (1997) 3 SCC 1; (1999) 5 SCC 77 – Relied upon

       (e) Code of Civil Procedure, 1908 – Section 96 – First appeal – High Court the last Court of appeal on facts /law while hearing first appeal – Was well within its powers to appreciate the evidence and came to its own conclusion independent to that of the trial court's decision – Grant/refusal of specific performance being discretionary relief, its grant by appellate court cannot be assailed under Article 136, Constitution of India unless against settled principles of law, arbitrary or perverse – Instant is not such a case. (Para 56, 57)

       (f) Specific Relief Act, 1963 – Section 16 – Agreement for sale between defendant no. 2 and plaintiff – Subsequent sale between defendant no. 2 and defendant no. 1 – Plaintiff held entitled to specific performance of agreement – High directing defendant no. 2 (owner) and defendant no. 1 (transferee) to execute sale deed in favour of plaintiff – Perfectly in order. (Para 62, 63)

       AIR 1954 SC 75 – Relied upon

       (g) Constitution of India – Article 142 – Doing complete justice – By holding plaintiff entitled to specific performance of agreement to sale and directing the defendants to execute sale deed in favour of plaintiff; sale for consideration by defendant no.2 in favour of defendant no. 1 nullified – Defendant no. 2 liable to refund the sale consideration to defendant no. 1 – Refund directed within three months, attracting interest on failure. (Para 67, 68, 70, 71)

       Facts of the case:

       The plaintiff filed two suits, one for specific performance of agreement and other for grant of permanent injunction in relation to the suit house. The trial court vide common judgment and decree dated 16.10.2001 dismissed both the suits. The first appellate court, i.e., the High Court, in appeal reversed the judgment and decree of the trial court and decreed both the suits in appeal, against the defendants.

       Defendant no.2 is the original owner of the suit house and defendant no.1 is the subsequent purchaser of the suit house from defendant no.2.

       The suit house was purchased by defendant no. 2 from Bangalore Development Authority in a scheme. On 15.02.1989, Defendant no. 2 entered into an agreement with plaintiff for sale of suit house at a total consideration of Rs. 3,50,000/-. The plaintiff paid a sum of Rs. 50,000/-as advance towards sale consideration.

       On 07.01.2000, the plaintiff filed a civil suit initially against 3 defendants for seeking permanent injunction restraining the defendants jointly and severally from interfering in plaintiff's possession over the suit house. The plaintiff claims to have further paid the balance consideration of Rs. 3 Lacs towards the sale price and obtained receipts acknowledging the payment so made. Since then she has been in possession of the suit house.

       As per plaintiff defendant no. 2 did not execute the sale deed despite having received the full sale consideration from the plaintiff.

       Since police authorities did not take any action, which was required of, the plaintiff filed the aforesaid civil suit for permanent injunction restraining the defendants from interfering in her peaceful possession over the suit house.

       On 31.03.2000, the plaintiff filed another civil suit against the defendants for specific performance of agreement dated 15.02.1989 in relation to the suit house.

       The trial court consolidated both the suits for trial and though answered some issues in plaintiff's favour but eventually dismissed the civil suits.

       The High Court allowed both the appeals, reversed the judgment/decree of the trial court and decreed both the civil suits by passing a decree for specific performance of agreement against the defendants in relation to suit house and also issued permanent injunction as claimed by the plaintiff.

       

       Finding of the Court:

       Defendants (appellants herein) are not entitled to raise a plea of bar contained in Order II Rule 2 of CPC to successfully non suit the plaintiff from prosecuting her suit for specific performance of the agreement against the defendants.

       Second suit (OS No. 2334 of 2000) filed by the plaintiff for specific performance of agreement was not barred by virtue of bar contained in Order II Rule 2 CPC.

       Result: Appeals disposed of.