2015 Supreme(SC) 928

SUPREME COURT OF INDIA
Dipak Misra, Prafulla C. Pant, JJ.
Ramesh Chand (Dead) through L.Rs. – Appellant
Versus
Asruddin (Dead) through LRs and another – Respondents
Civil Appeal No. 8427 of 2014
Decided on : 06-10-2015

IMPORTANT POINT
Where the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant, the decree of specific performance need not be passed.

Headnote:Specific Relief Act, 1963 – Section 20 – Discretionary jurisdiction – Where the contract, though not voidable, gives plaintiff an unfair advantage over defendant, decree of specific performance need not be passed – Section 20(2)(a) – Plaintiff not pleading or proving redemption of mortgaged land in favour of defendant no. 2 – Also not specifically pleading that he was ready and willing to property redeemed from mortgage – Plaintiff, held, not entitled to specific performance of agreement – Instead, appellant directed to repay the earnest amount of Rs.4 lakh to LRs of respondent no. 1 with interest of 18% p.a. – In the event of failure to do so within the time given, decree of specific performance shall stand confirmed. (Para 9)

       Facts of the case:

       Plaintiff/respondent No.1 Asaruddin claims to have entered into an agreement with defendant No. 1/appellant Ramesh Chand on 21.06.2004, whereby the appellant agreed to sell his land to the respondent No. 1 for an amount of rupees six lacs. An agreement for sale was allegedly executed between the parties after the appellant accepted rupees four lacs as a part of consideration. It was further agreed between the parties that the land in suit, mortgaged with defendant No. 2/respondent No. 2 Gurgaon Gramin Bank, Nagina, would be redeemed by the appellant before execution of the sale deed. The plaintiff/respondent No. 1 pleaded that he was and is always ready and willing to perform his part of contract. The plaintiff/respondent No. 1 gave notice to the appellant to execute the sale deed on 30.11.2004, and remained present with the balance amount of consideration in the Office of Sub Registrar, Nagina, and got his presence marked. But the appellant failed to turn up to execute the sale deed, as agreed between him and the respondent No. 1. Hence the suit for specific performance of contract.

       The appellant-defendant No.1 denied the execution of the agreement dated 21.06.2004 to sell his land. He pleaded before the trial court that he had already executed agreement dated 07.05.2004 to sell the land in favour of one Pravin Kumar, resident of Tauru for an amount of Rs.7,62,200/- after receiving Rs.1,20,000/- as earnest money. So there was no occasion to enter into agreement with the respondent No.1 to sell the same land. It is further pleaded that the answering defendant had taken loan of Rs.1,50,000/- from the plaintiff on 21.06.2004, on interest at the rate of 1.5% per month. The appellant specifically denied having received rupees four lacs, as alleged by the plaintiff. It is further pleaded that when respondent No. 1 made demand for repayment of Rs.1,50,000/- with interest, and created pressure, the answering defendant asked Pravin Kumar to make payment of Rs.1,80,000/- to the plaintiff. It is further alleged that after said payment was made to the plaintiff on 10.11.2005 by Pravin Kumar, the alleged agreement dated 21.06.2004, which was a kind of security, stood cancelled and respondent No. 1 should have returned the document to the plaintiff.

       The trial court came to the conclusion that it is not a fit case for specific performance of contract, and disposed of the suit with a finding that the agreement executed between the plaintiff and defendant No. 1 was in substance an agreement of security for repayment of loan and directed the defendant No. 1 to pay back earnest money of rupees four lacs with 8% interest per annum from 21.06.2004 till payment is made to the plaintiff.

       Plaintiff filed Civil Appeal before the first appellate court. The appellate court allowed the appeal, and decreed the suit for specific performance of contract, directing the defendant No. 1 to execute the sale deed in terms of the agreement dated 21.06.2004, after accepting balance rupees two lacs from the plaintiff.

       Defendant No. 1 Ramesh Chand filed regular Second Appeal before the High Court. The High Court dismissed the appeal upholding the order passed by the first appellate court.

       Finding of the Court:

       Instead of specific performance, respondent no.1 should be adequately compensated.

       Result: Appeal disposed of.