SHIVAJI YALLAPPA PATIL versus SRI RANAJEET APPASAHEB PATIL & OTHERS on 16 April 2018

[2018] 6 S.C.R. 739

SHIVAJI YALLAPPA PATIL

v.

SRI RANAJEET APPASAHEB PATIL & OTHERS

(Civil Appeal No. 5012 of 2008)

APRIL 16, 2018

[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]

Specific Relief Act, 1963 – s.20 – Case of Respondents Nos.1& 2 that four joint owners of a land agreed to sell their respectiveshares to them – Two joint owners expired – Respondent No.3,wifeof one of the expired joint owners, got share of her husband recordedin her name – Other co-owners (except Respondent no.3) executedsale deed in favour of Respondents Nos.1 & 2 and they were put inactual possession of the land – Respondent No.3 sold her share toRespondent No.4 – Aggrieved, Respondent Nos.1 & 2 filed suit forspecific performance before Munsiff against respondent Nos.3 &4, which was dismissed – Appeal filed by Respondent Nos.1 & 2was partly allowed, however, the appellate Court refused to grantspecific performance of contract – During pendency of the appeal,the appellant purchased the suit property from Respondent No.4 –In regular second appeal, High Court allowed appeal in favour ofRespondents Nos.1 & 2 and ordered the specific performance ofthe contract – Held: The possibility of injury to the interest of thirdparty does not, disentitle the plaintiff from specific performancebut it depends upon the facts and circumstances of each case whichwill be considered by the court in the exercise of its discretion – Ininstant case, the whole case revolves around the question whetherRespondent Nos.1 and 2-plaintiffs got possession of entire land –On facts, on the basis of the findings in a separate suit for permanentinjunction filed by the respondents-plaintiffs, it is well establishedthat the present Respondent Nos.1 & 2 were put into the possessionof the entire land – The decree passed by the Munsiff regardingpossession in an independent suit is indicative of the fact that theplaintiff/respondent Nos.1 & 2 were in possession – Plaintiffs-Respondent Nos.1 & 2 are entitled for benefit of s.53-A of Transferof Property Act – No illegality with the judgment passed by theHigh Court in granting specific performance in favour of

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DEFG

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ARespondent Nos.1 & 2 subject to payment of the sale considerationas per prevailing market value – Transfer of Property Act, 1882 –s.53A.

Dismissing the appeal, the Court

HELD: 1. It is a well settled law that the power to orderBspecific performance of contract is discretionary and parties cannotclaim it as a matter of right although it is lawful but such discretionshould be exercised judicially and prudently. [Para 10] [744-G]

2. The possibility of injury to the interest of third partydoes not, by itself, disentitle the plaintiff from specific performanceCbut it depends upon the facts and circumstances of each casewhich will be considered by the court in the exercise of itsdiscretion. The court may properly exercise discretion to decreespecific performance, in any case where the plaintiff has donesubstantial acts or suffered losses in consequence of a contractDcapable of specific performance. [Para 11] [746-B]

3. In the present case, the whole case revolves around theone question whether Respondent Nos. 1 and 2 got the possessionof entire suit land. It is undisputed fact that deceased husband ofRespondent No.3, along with other owners, entered into anEagreement with the Respondent Nos. 1 and 2 but later onRespondent No. 3 refused to execute the said agreement. Afterperusal of the factual matrix of the entire case and peculiar facts,it is clear that on the basis of the finding in OS No. 129 of 1984(separate suit for permanent injunction filed by plaintiffs-Respondent Nos. 1 & 2), it is well established that the RespondentFNos. 1 and 2 were put into the possession of entire land. Thedecree passes by the Munsiff in the year 1987 regardingpossession in an independent suit filed in the year 1984 isindicative of the fact that the plaintiffs/Respondent Nos. 1 and 2were in possession. Hence, in the interest of justice and sinceGthe Respondent Nos. 1 & 2 are in possession of suit land forlong time, there is no illegality with the reasoned judgmentpassed by the High Court in granting specific performance intheir favour subject to paying of the sale consideration by themas per the present prevailing market value. [Paras 15 and 16][747-E-G; 748-B]H

SHIVAJI YALLAPPA PATIL v. SRI RANAJEET APPASAHEBPATIL & OTHERS

Elizabeth Maddison v. John Alderson (1883) 8 AppCases 467 – referred to.

Case Law Reference

(1883) 8 App Cases 467 referred toPara 12

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5012of 2008.

From the Judgment and Order dated 29.06.2005 of the High Courtof Karnataka at Bangalore in Regular Second Appeal No. 568 of 2000.

Shankar Divate, Adv. for the Appellant.

S. N. Bhat, Adv. for the Respondents.

The Judgment of the Court was delivered by

R. K. AGRAWAL, J. 1. The above appeal has been filed againstthe judgment and order dated 29.06.2005 passed by the High Court ofKarnataka at Bangalore in Regular Second Appeal No. 568 of 2000whereby learned single Judge of the High Court allowed the appeal filedby Respondent Nos. 1 and 2 herein (original plaintiffs) against the judgmentand decree dated 25.02.2000 in Regular Appeal No. 29 of 1997 passedby the Court of Civil Judge (Sr. Division), Hukeri and the order dated21.07.1992 in Original Suit No. 123 of 1986.

2. Brief facts:

(a) The suit property is an agricultural land situated atKhavanewadi village in Hukeri Taluka bearing Survey No. 77, measuring6 acres 8 guntas wherein several persons were owners of their definedshares and were in cultivation till 28.05.1981. Later on, the above suitland was divided into two parts as Eastern and Western measuring 3acres 4 guntas each. In pursuance to the said partition, the joint ownersgave a joint application to the Survey Department for demarcation ofboundary line between the eastern and western land showing theirrespective names to their respective parts. The land in the ratio of 1/2,1/6, 1/6 and 1/6 was given to Ashabai w/o Manohar Kulkarni, YashwantKulkarni (Husband of Respondent no. 3 herein), Dattaraya Kulkarniand Laxmibai Ganesh Kulkarni respectively in the eastern side.

(b) It is the case of the plaintiffs (Respondent Nos. 1 and 2 herein)that the above named persons agreed to sell their share to the plaintiffs A

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A(Respondent Nos. 1 and 2 herein). Though the exact division was notascertained, it was decided to execute the sale deed only after thedivision. After settlement, the total price of 3 acres 4 guntas was fixedat Rs. 22,000/- and Rs. 2,000/- was paid in advance. The measurementwas finally carried out and approved on 30.12.1983. By that time,Yashwant Kulkarni and Dattaraya Kulkarni expired. Sudha, wife ofBYashwant Kulkarni got 1/6 share of her husband in the eastern side andgot her name entered in the record of rights for Survey No. 77.

(c) The co-owners (except Sudha, having 1/6[th] share) of theeastern side executed a sale deed in favour of plaintiffs on 13.02.1984and they were put in actual possession of the land. On 21.03.1986,CRespondent No. 3 herein (wife of Yashwant Kulkarni), the owner of1/6[th] share of land in Survey No. 77, sold her share to Respondent No. 4herein.

(d) Being aggrieved, the plaintiffs (Respondent Nos. 1 and 2 herein)filed an Original Suit being No. 123 of 1986 for specific performanceDagainst Respondent Nos. 3 and 4 herein before the Court of the Addl.Munsiff, Hukeri. Learned Addl. Munsiff, vide judgment and order dated21.07.1992, dismissed the suit.

(e) Aggrieved by the decision dated 21.07.1992, the plaintiffs fileda Regular Appeal being No. 29 of 1997 before the Court of Civil Judge,E(Sr. Dn.) Hukeri. During the pendency of the appeal, the appellantherein, purchased the suit property through a registered sale deed forvaluable consideration. It is also alleged by the appellant herein that hewas put in possession of the suit property. The appellant purchased thesuit property as he is having his landed property adjacent to the suitFproperty. Learned Civil Judge, vide judgment and order dated 25.02.2000,partly allowed the appeal while refusing to grant specific performanceof the contract.

(f) Aggrieved by the judgment and order dated 25.02.2000, theplaintiffs preferred a Regular Second Appeal being No. 568 of 2000Gbefore the High Court. Learned single Judge of the High Court, videjudgment and order dated 29.06.2005, allowed the second appeal in favourof the plaintiffs and ordered the specific performance of the contractprovided plaintiffs shall pay prevailing market value within 6 (six) monthsfrom the date of judgment.

H

(g) Aggrieved by the judgment and order dated 29.06.2005, theappellant herein has preferred this appeal by way of special leave beforethis Court.

3. Heard Mr. Shankar Divate, learned counsel for the appellantand Mr. S.N. Bhat, learned counsel for the respondents.

Point(s) for consideration:-

4. Whether in the present facts and circumstances of the casethe High Court was right in granting decree for specific performance tothe original plaintiffs (Respondent Nos. 1 and 2 herein)?

Rival contentions:-

5. At the outset, learned counsel for the appellant contended thatthe High court erred in law while interfering in well considered, wellreasoned judgments of the courts below refusing to grant discretionaryrelief under Section 20 of the Specific relief Act, 1963 (in short ‘the SRAct’). It was further contended that the appellant was served with thenotice of impleadment only on 02.06.2005 and when the appellant wasmaking arrangements to enter and defend the matter, the appeal cameto be decided vide judgment dated 29.06.2005. Hence, the principles ofnatural justice of the appellant stand violated.

6. Further, it was contended that the High court has seriouslyerred in relying upon the judgment dated 24.09.1987 passed by learnedAdditional Munsiff in Original Suit No. 129 of 1984 for permanentinjunction by the original plaintiffs while upholding that the original plaintiffswere in possession of the entire extent of the land. At this juncture, itwas contended that the Respondent No. 3 herein, who was the originalowner of the suit property, was not the party to the said case. Hence,the judgment in the said Suit ought not to be considered for deciding theissue of possession of share of Respondent No 3. Learned counselfurther contended that two fact finding courts have found no evidencethat the possession of the suit land was handed over to the originalplaintiffs and the plaintiffs even did not aver in plaint in original suit thatthey are ready and willing to perform their part of the contract beforefiling the suit.

7. It was further contended by learned counsel for the appellantthat the High Court failed to see that the owner of 1/6[th] share of the suit A

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Aproperty sold the same to Respondent No. 4 herein with the possessionway back in 1986 through a registered sale deed for valuable considerationand the appellant purchased the same in 1999 for valuable considerationthrough a registered sale deed and he was put in possession of the suitland also. Hence, directing the execution of the sale deed in favour ofthe original plaintiffs after the lapse of a considerable long period isBunjustified and will cause grave injustice to the appellant herein. Learnedcounsel finally contended that the ends of justice demand that decreefor specific performance should not have been granted.

8. Per contra, learned counsel for the respondents submitted thatCthe courts below had failed to appreciate the materials on record inproper perspective and their findings contained manifest error whilerefusing to grant decree for specific performance to the plaintiffs. Thedispute raised is a matter of appreciation of evidence and the High Courtwas right in granting the same.

D9. Learned counsel for the respondents further submitted that theappellant herein was brought on record and impleaded as a party to theproceedings but the appellant herein never represented himself beforethe High Court or defended the case. Learned counsel further submittedthat the trial court and the lower appellate court had proceeded to arriveat the conclusion that there was no delivery of possession in favour ofEthe original plaintiffs as per the agreement to sell dated 28.05.1981 onthe ground that there was no mention of delivery of possession in theexhibits produced before it whereas the High Court was right in arrivingat the conclusion with regard to the decree for specific performancewhile setting aside the erroneous findings arrived at by the courts belowFit. Learned counsel finally submitted that in view of the peculiarcircumstance of the case, no interference is sought for by this Court inthe matter.

Discussion:-

G10. It is a well settled law that the power to order specificperformance of contract is discretionary and parties cannot claim it as amatter of right although it is lawful but such discretion should be exercisedjudicially and prudently. Section 20 of the SR Act reads as follows:

“20. Discretion as to decreeing specific performance.—

(1) The jurisdiction to decree specific performance is discretionary,and the court is not bound to grant such relief merely because it islawful to do so; but the discretion of the court is not arbitrary butsound and reasonable, guided by judicial principles and capable ofcorrection by a court of appeal.

(2) The following are cases in which the court may properlyexercise discretion not to decree specific performance:—

(a) where the terms of the contract or the conduct of the partiesat the time of entering into the contract or the other circumstancesunder which the contract was entered into are such that thecontract, though not voidable, gives the plaintiff an unfair advantageover the defendant; or (b) where the performance of the contract would involve somehardship on the defendant which he did not foresee, whereas itsnon-performance would involve no such hardship on the plaintiff;or

(c) where the defendant entered into the contract undercircumstances which though not rendering the contract voidable,makes it inequitable to enforce specific performance. Explanation1.—Mere inadequacy of consideration, or the mere fact that thecontract is onerous to the defendant or improvident in its nature,shall not be deemed to constitute an unfair advantage within themeaning of clause (a) or hardship within the meaning of clause(b). Explanation 2.— The question whether the performance of acontract would involve hardship on the defendant within themeaning of clause (b) shall, except in cases where the hardshiphas resulted from any act of the plaintiff subsequent to the contract,be determined with reference to the circumstances existing at thetime of the contract.

(3) The court may properly exercise discretion to decree specificperformance in any case where the plaintiff has done substantialacts or suffered losses in consequence of a contract capable ofspecific performance.

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[2018] 6 S.C.R.

A(4) The court shall not refuse to any party specific performanceof a contract merely on the ground that the contract is notenforceable at the instance of the party.”

11. The possibility of injury to the interest of third party does not,by itself, disentitle the plaintiff from specific performance but it dependsBupon the facts and circumstances of each case which will be consideredby the court in the exercise of its discretion. The court may properlyexercise discretion to decree specific performance, in any case wherethe plaintiff has done substantial acts or suffered losses in consequenceof a contract capable of specific performance.

C12. In the instant case, Respondent Nos. 1 and 2 filed an originalsuit for the specific performance of the contract on the ground thatowners of the suit property transferred the entire possession of propertyto them after agreement to sell and it was done in pursuance of partperformance. Hence, plaintiffs are entitled for the benefit of Section53A of the Transfer of Property Act, 1882 (In short ‘the TP Act’). SectionD53 A which was added in 1929 and imports into India a modified form ofthe equity of part performance as developed in England in ElizabethMaddison vs. John Alderson (1883) 8 App Cases 467. The followingpostulates are sine qua non for basing a claim on Section 53 A of theTP act, 1882:E· There must be a contract to transfer for consideration any im-movable property.

· The contract must be in writing signed by the transferor, or bysomeone on his behalf.

· The writing must be in such words from which the termsFnecessary to construe the transfer can be ascertained.

· The transferee must be in part performance of the contracttake possession of the property, or of any part thereof.

· The transferee must have done some act in furtherance of theGcontract.

· The transferee must have performed or be willing to performhis part of the contract.

13. It is well settled law that Section 53A of the TP Act confersno right on a party who was not willing to perform his part of the contract.A transferee has to prove that he was honestly ready and willing toperform his part under the contract.

14. In the present case, during the course of hearing, it is broughtto our knowledge that both the trial court as well as the lower appellatecourt had proceeded to arrive at the conclusion that there was no deliveryof possession in favour of the Respondent Nos. 1 and 2 herein as per theagreement to sell dated 28.05.1981 on the ground that there was nomention of delivery of possession. It is submitted that the said courtsbelow had failed to appreciate the said judgment and decree dated24.09.1987 of the learned Additional Munsiff, Hukkeri in O.S. No. 129of 1984 in proper prospective which clearly shows that the said courthaving found the possession of Respondent Nos. 1 and 2 herein in respectof the said entire property including suit property had granted injunctionin the matter and restrained the third party to interfere with the possessionof Respondent Nos. 1 and 2 herein. Henceforth, Respondent Nos. 1and 2 have been in possession of suit land against all other persons andcan claim right of possession even against the subsequentpurchaser.

15. In the present case, the whole case revolves around the onequestion whether Respondent Nos. 1 and 2 got the possession of entiresuit land. It is undisputed fact that deceased husband of RespondentNo.3, along with other owners in Survey No. 77, entered into anagreement with the Respondent Nos. 1 and 2 but later on RespondentNo. 3 refused to execute the said agreement. In pursuance of the same,it is alleged that the possession of the entire land got transferred toRespondent Nos. 1 and 2. However, Respondent No. 3 herein deniedthis fact and alleged that possession of her share never transferred tothe original plaintiffs. After perusal of the factual matrix of the entirecase and peculiar facts, we are of the considered view that on the basisof the finding in OS No. 129 of 1984, it is well established that the presentRespondent Nos. 1 and 2 were put into the possession of entire land.The decree passes by the Munsiff in the year 1987 regarding possessionin an independent suit filed in the year 1984 is indicative of the fact thatthe plaintiffs/respondent Nos. 1 and 2 were in possession.

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AConclusion:-

16. In view of the foregoing discussion, we do not find any reasonfor not granting specific performance in favour of Respondent Nos. 1and 2. Hence, in the interest of justice and since the Respondent Nos. 1& 2 are in possession of suit land for long time, we do not find anyBillegality with the reasoned judgment passed by the High Court in grantingspecific performance in their favour subject to paying of the saleconsideration by them as per the present prevailing market value withinsix months from today. The appeal is dismissed with no order as tocosts.

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Ankit Gyan

Appeal dismissed.

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