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SUPREME COURT OF INDIA
V. Gopala Gowda, R. Banumathi, JJ.
NANJAPPAN – Appellant
Versus
RAMASAMY & ANR. – Respondents
CIVIL APPEAL NO. 2373 of 2015 (Arising out of SLP (Civil) No. 4930/2014)
Decided on : 24-02-2015
(b) Specific Relief Act, 1963 – Section 16(c) and 20 – Agreement for sale extended twice because respondent was not able to pay the consideration amount within stipulated time – Not ready and willing to perform his part of contract – Power to grant specific performance discretionary – Court not bound to grant – a (Para 11, 12)
(1994) 4 SCC 18 – Relied upon
(c) Specific Relief Act, 1963 – Section 16(c) – Specific performance – First agreement executed 27 years ago – Long lapse of time and escalation in cost of land in the meantime – Grant of specific relief of performance would give an unfair advantage to the respondents-plaintiffs – At the same time it would involve great hardship to the appellant-defendant and his family members – Grant of discretionary relief of specific performance to the respondents-plaintiffs not justified – Appellant directed to refund the amount of 45000 paid by respondents and in addition pay a compensation of 200000. (Para 14 - 16)
(2011) 12 SCC 18 – Relied upon
Facts of the case:
Respondents have pleaded that on 30.09.1987, the appellant agreed to sell the suit property to them for a sum of Rs.45,000/-and an agreement of sale was entered into and the appellant received a sum of Rs.25,000/-as advance on the same day and it was agreed that the balance amount shall be paid within a period of 2½ years and the sale be executed and to that effect a Sale Agreement (Ex. P1) was executed. As the appellant was unable to vacate the house on 21.03.1990, the time stipulated for performance was extended and Second Agreement (Ex. P-2) was executed, on which day, the respondents paid a further advance of Rs.15,000/-and the period was extended to another three years. According to the respondents, within the stipulated period, the appellant did not shift to another house and on 09.03.1993, the respondents paid a further sum of Rs. 2,500/-to the appellant and third Sale Agreement (Ex. P-3) was executed and the period was extended by another two years.
Respondents filed a suit for specific performance stating that they were always ready and willing to perform their part of the contract.
The trial court declined the relief of specific performance.
The respondents filed first appeal which was allowed.
The appellant approached the High Court by filing second appeal, wherein the High Court affirmed the view taken by the first appellate Court and dismissed the second appeal.
Finding of the Court:
Impugned judgment if not sustainable.
Result:
Appeal allowed.
Key Points: - Written contract terms cannot be contradicted by oral evidence (!) . - Specific performance is discretionary and not mandatory (!) . - Courts must consider hardship, passage of time, and conduct of parties (!) . - Refund of paid amount plus compensation may be ordered when specific performance is denied (!) . - The agreement cannot be altered by showing a different actual price (!) (!) .
JUDGMENT
R. BANUMATHI, J.
Delay condoned. Leave granted.
2. This appeal arises out of the judgment dated 17.11.2011 in S.A. No.332 of 2005, whereby the High Court of Madras dismissed the second appeal affirming the judgment passed by the first appellate court which reversed the judgment of the trial Court allowing the respondents’ plea of specific performance of agreement of sale.
3. Brief facts, giving rise to the present appeal, are as follows :-Respondents have pleaded that on 30.09.1987, the appellant agreed to sell the suit property to the respondents for a sum of Rs.45,000/-and an agreement of sale was entered into and the appellant received a sum of Rs.25,000/-as advance on the same day and it was agreed that the balance amount shall be paid within a period of 2½ years and the sale be executed and to that effect a Sale Agreement (Ex. P1) was executed. As the appellant was unable to vacate the house on 21.03.1990, the time stipulated for performance was extended and Second Agreement (Ex. P-2) was executed, on which day, the respondents paid a further advance of Rs.15,000/-and the period was extended to another three years. According to the respondents, within the stipulated period, the appellant did not shift to another house and on 09.03.1993, the respondents paid a further sum of Rs. 2,500/-to the appellant and third Sale Agreement (Ex. P-3) was executed and the period was extended by another two years. Case of the respondents is that they were ready and willing to perform their part of contract in getting the sale executed by paying the balance amount to the appellant but the appellant did not come forward to execute the sale deed. There was exchange of legal notice between the parties, and thereafter, respondents filed a suit for specific performance stating that they were always ready and willing to perform their part of the contract.
4. Appellant filed written statement controverting the averments made in the plaint and interalia contended that the appellant and the respondents were friends working under the same management and taking advantage of this, respondents tried to grab the property worth Rs.10 lakhs by paying a meagre consideration of Rs.45,000/-. In the written statement, the appellant further pleaded that in the year 1987 itself, entire area including construction would have fetched more than Rs. 3 lakhs. Since the appellant was in need of money, he decided to sell the property and sale price was fixed at a sum of Rs. 3 lakhs and in order to reduce the registration charges and stamp duty, the respondents requested the appellant not to mention the actual sale consideration but to mention only Rs.45,000/-in the sale agreement to which he agreed. According to the appellant, the respondents could not pay the balance sale consideration and the appellant received Rs.2,500/-under the third agreement and executed the same only under compulsion of the respondents and that is the reason why he did not turn to the Registrar's office to register the same. The appellant also pleaded that the suit property is their only shelter and the decree for specific performance after long period would cause serious hardship to him and his family members.
5. Upon consideration of entire facts and evidence, trial court, vide its judgment dated 21.12.2001, declined the relief of specific performance by observing that the respondents did not prove that they were ready and willing to make the balance sale consideration. The trial court did not accept the defence plea that the original sale consideration was agreed at Rs.3 lakhs and in order to reduce the registration charges and stamp duty, in the agreement, the sale consideration was mentioned as Rs.45,000/-. Being aggrieved by the dismissal of the suit, the respondents filed first appeal which was allowed, vide judgment dated 30.12.2003. While allowing the appeal, the first appellate court held that having paid substantial sale consideration of Rs.42,500/-and left with only Rs. 2,
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