C. HARIDASAN versus ANAPPATH PARAKKATTU VASUDEVA KURUP & OTHERS on 13 January 2023

SUPREME COURT REPORTS

[2023] 3 S.C.R.

C. HARIDASAN

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v.

ANAPPATH PARAKKATTU VASUDEVA KURUP & OTHERS

(Civil appeal no. 4072 of 2022)

BJANUARY 13, 2023

[M. R. SHAH AND B. V. NAGARATHNA, JJ.]

Specific Relief Act, 1963 : ss. 10, 16(c), 20 – Discretion as todecreeing specific performance – On facts execution of theagreement to sell land between the parties and receipt ofCconsideration by the appellant-buyer – Balance amount to be paidwithin six months provided the respondent-seller made availablethe document of title and purchase certificate after measuring theproperty – Thereafter notice served by the appellant to therespondent to execute the sale deed – Refusal of the respondent toDexecute the sale deed and cancelled the agreement – Suit for specificperformance of the agreement to sell by the appellant – Trial courtallowed the suit and also directed the appellant to pay 25% moreamount, over and above the agreed consideration – High Courtwhile considering s. 20, set aside the decree for specific performanceand directed the respondent to pay the consideration amount to theEappellant – On appeal held: In view of difference of opinion, matterreferred to the larger bench – Reference to larger Bench.

Referring *the matter to larger Bench, the Court HELD :FPER M. R. SHAH, J.

1.1. It was never the case on behalf of the defendants inthe written statement and/or even before the trial court that theagreement to sell was inequitable and/or was a forced agreementto sell. Even the trial court also did not frame the issue, “whetherGagreement to sell was a forced agreement to sell/contract or not”.

Ed. Note : Hon'ble Mr. Justice M.R. Shah and Hon’ble Mrs. Justice B.V. Nagarathnapronounced separate reportable judgments of the Bench comprising Their Lordships.In view of difference of opinion in the matter it was directed to place the papers beforeHon’ble the Chief Justice of India for appropriate orders for constituting a larger BenchHto decide the controversy.

On appreciation of entire evidence on record, the trial court afterrecording the findings on the execution of the agreement to sellby the defendants and receipt of part sale consideration and thatthe plaintiff was always ready and willing to perform his part ofthe contract, decreed the suit for specific performance. The HighCourt, as such, has not commented upon and/or set aside any ofthe findings recorded by the trial court, recorded while passing adecree for specific performance. Straightway, the High Courtconsidered Section 20 of the Specific Relief Act and observedand held that by enhancing the amount of sale consideration, thetrial court has wrongly exercised the discretion in favour of theplaintiff. The High Court commented upon the order passed bythe trial court enhancing the amount of sale consideration anddirecting the plaintiff to pay more amount than the saleconsideration mentioned in the agreement to sell. [Para 6][257-A-E]

1.2 The trial court directed the plaintiff to pay some moreamount than the amount mentioned in the agreement to sell, atthe most, the plaintiff can be said to be aggrieved. Still, the HighCourt considered such an order passed by the trial court againstthe defendants. As such, the trial court was absolutely justified incompensating the defendants by paying some more amount whilepassing a decree for specific performance. Therefore, in the factsand circumstances of the case and more particularly when thetrial court exercised the discretion in favour of the plaintiff afterhaving observed and recorded the findings on the execution ofthe agreement to sell by the defendants and that the part saleconsideration was paid by the plaintiff which was accepted by thedefendants and thereafter the finding that the plaintiff was alwaysready and willing to perform his part of the contract, the trialcourt was absolutely justified in passing the decree for specificperformance. The High Court has erred in interfering with thejudgment and decree passed by the trial court, without settingaside the findings recorded by the trial court recorded whilepassing the decree for specific performance. The impugnedjudgment and order passed by the High Court is unsustainable,both, on law as well as on facts, and is quashed and set aside andthe judgment and decree passed by the trial court for specificperformance of agreement to sell is restored. However, to do AB

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Acomplete justice and in exercise of powers under Article 142 ofthe Constitution of India, it is directed that over and above thesale consideration mentioned in the agreement to sell and theamount already deposited by the plaintiff, the plaintiff to pay afurther sum of Rs. 10,00,000/- (Rupees Ten Lakhs only) to theoriginal defendants, to be paid within the stipulated period. TheBamount which might have been deposited by the originaldefendants, deposited pursuant to the impugned judgment andorder passed by the High Court, i.e., Rs. 3,10,000/- be alsoreturned/paid to the original defendants. [Para 7, 8][257-F-H; 258-A-E]CPratap Lakshman Muchandi v. Shamlal UddavadasWadhwa, (2008) 12 SCC 67 : [2008] 1 SCR 854 – reliedon.

PER B. V. NAGARATHNA, J. (Dissenting) :

1.1 The High Court relied on Section 20 of the SpecificDRelief Act, prior to the same being substituted by way of Act No.18 of 2018, to deny the relief of specific performance to theplaintiff. Section 20 of the Act as it stood prior to the AmendmentAct of 2018 provided that the jurisdiction to decree specificperformance is discretionary. It said that the Court is not boundEto grant such relief merely because it is lawful to do so. Such adiscretion, however, was not to be exercised arbitrarily, but oughtto have been based on sound and reasonable judicial principles.Even in the absence of discretionary power under Section 20 todeny the relief of specific performance, the plaintiff was not entitledto claim such relief as a matter of right. The position of law, evenFfollowing the amendment of 2018 remains that the provisions ofSection 16 of the Act have to be mandatorily complied with bythe party seeking the relief of specific performance. The relief ofspecific performance cannot be granted in favour of a party whohas not performed his obligations under the contract. It istherefore necessary to ascertain whether, the plaintiff hadGcomplied with the statutory prerequisites under Section 16 (c),before claiming the relief of specific performance. [Para12,18][268-B-C; 270-H; 271-A-B]

1.2 Clause (c) of Section 16 of the Act, which is relevant inthe instant case, though amended w.e.f. 01[st] October, 2018 clearlyHstates that unless the plaintiff establishes his readiness and

willingness to perform his part of the contract, he would not beentitled to a decree of specific performance. Prior to theamendment, the expression “who fails to aver and prove” wason the statute book and its substitution by the words “who failsto prove” does not bring about any drastic change to the objectand intent of the clause. This is because failing to prove readinessand willingness to perform the essential terms of the contractwould first require averments to that effect to be made in theplaint by the plaintiff. The absence of such averments regardingreadiness and willingness to perform the essential terms of thecontract by the plaintiff would not permit him to let in any evidenceon that aspect. It is a settled principle of law that no evidence canbe permitted to be let in in the absence of averments in the plaint/ pleadings. [Para 19][271-G-H; 272-A-C]

1.3 Notwithstanding the amendment to Section 16 of theAct whereby the expression “who fails to aver and prove” hasbeen substituted with the phrase “who fails to prove,” the lawremains that no evidence can be let in on a plea that was neverput forward in the plaint/pleadings. But, it is necessary to sounda caveat. Even the absence of the words “ready and willing toperform the contract” in the plaint would now not have an adverseimpact on the plaintiff’s case, so long as plaintiff’s readiness andwillingness to perform the essential terms of the contract couldbe gathered on a holistic reading of the plaint. In fact, even inrelation to the earlier scheme of Section 16 of the Act whichrequired a plaintiff seeking the remedy of specific performanceto ‘aver and prove’ that he was ready and willing to perform hisobligations under an agreement, it was sufficient if the avermentsin substance indicate continuous readiness and willingness onthe part of the person suing, to perform his part of the contractlanguage in Section 16 (c), as it stood prior to the AmendmentAct of 2018, did not require any specific phraseology to be followedin relation to the averments as to readiness and willingness. Thatthe compliance of requirements of readiness and willingness haveto be in spirt and substance and not in letter and form. That iswhy the deletion of the words “who fails to aver” in Section 16(c) of the Act does bring about any real change in the position oflaw as it stood prior to the amendment. [Para 20, 21][272-E-H;273-A-B]

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A1.4 Readiness and willingness cannot be considered in astraitjacket formula; it has to be inferred on a consideration ofthe entire facts and circumstances of each case and the intentionand conduct of the parties concerned. Even if a party to thecontract is ready and has the requisite funds he may not be willingto perform his part of the contract and vice versa. Thus, bothBreadiness as well as willingness have to be established by theplaintiff on whom the burden is cast in a suit for specificperformance of an agreement. [Para 22, 23][273-C-D; 274-B]

1.5 Nothing was brought on record by the plaintiff todemonstrate that positive steps were taken by him in pursuanceCof the agreement of sale of Kanam and Kuzhikoor rights. It istrite that the relief of specific performance cannot be granted infavour of a party who has not performed his obligations under thecontract. The only exception to such rule is that a party is notrequired to perform those obligations, as are prevented or waivedDby the other party to the contract. [Para 26][275-G-H]

1.6 It is an admitted fact that the plaintiff had paid an amount,which constituted merely 4% of the consideration. The trial courtitself recorded findings to the effect that neither party had initiatedtimely steps to perform their respective obligations under theEcontract. Although the defendants did not make available the titledeeds of the schedule property to the plaintiff, it could not besaid that the conduct of the defendants had prevented the plaintifffrom tendering the balance sale consideration, within thestipulated date, or at any time before filing the suit for specificperformance as the whole object of the intended sale was to garnerFfunds for discharging a debt which was ultimately done by thedefendants by selling family jewellery. Further, there was no delayon the part of the defendant in acting in pursuance of theagreement. The fact that the purchase certificate was granted bythe concerned authority only on 31st May, 2007, was beyond theGcontrol of the defendants and such delay could not be attributedto the defendants. The defendants had duly initiated the processof obtaining a purchase certificate soon after entering into theagreement. [Para 27, 28][276-A-E]

1.7 While the counsel for the appellant-plaintiff hasHcontended that since the transaction in question involved the transfer of rights in immovable property, a prudent purchaserwould have to satisfy himself as to the genuineness and validityof the documents of title, and therefore, owing to thenonavailability of documents of title, the plaintiff was unable toproceed with his obligations, no explanation has been providedas to why ancillary steps such as measurement of the propertywas not proceeded with. Delay in securing relevant documentsfrom the concerned authorities could not absolve the plaintiff ofhis obligations under the agreement of sale of Kanam andKuzhikoor rights. Further, this aspect of the matter is to beappreciated in light of the fact that there is nothing on recordwhich would demonstrate any step taken by the plaintiff to pursuethe agreement, until, 2[nd] November, 2006, on which date, thelegal notice was served on the defendants calling upon them toexecute the sale deed in respect of the Kanam and Kuzhikoorrights over the suit property. No explanation has been providedas to why the legal notice was not served earlier, particularlywhen the six–month period stipulated under the agreement hadexpired on 7th February, 2006. Such conduct of the plaintiff iscertainly not reflective of willingness, in terms of Section 16(c) ofthe Act. Further, the Court has to be mindful of circumstanceswhich compelled the defendants to enter into the agreement ofsale of Kanam and Kuzhikoor rights dated 7th February, 2006.The time limit stipulated in the agreement is of significance inthe instant case when this aspect is viewed in light of the fact thatthe defendants were debt-ridden and sought to sell their Kanamand Kuzhikoor rights over suit property with the sole intention ofclearing off such debts which were incurred to support the cardiactreatment of defendant no. 1. It was therefore necessary that theplaintiff paid a significant portion of the consideration, if not theentire sale consideration, within the period of six months asstipulated in the agreement. But the plaintiff refused to do soeven on being repeatedly requested by the defendants. [Para 29,30][276-E-H; 277-A-C]

1.8 The period of six months which was stipulated in theagreement of sale of Kanam and Kuzhikoor rights, in the presentcase, has to be accorded its due significance while deciding thesuit for specific performance. Having regard to the urgency ofthe financial need of the defendants, which need had prompted AB

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Athem to sell their Kanam and Kuzhikoor rights over the suitproperty, it must be held that time stipulated in the agreementwas the essence of the contract. The plaintiff in the present caseserved a legal notice only on 02nd November, 2006 while the sixmonth period stipulated in the agreement had elapsed on 07thFebruary, 2006. There is no explanation as to what occasionedBthe delay in serving the legal notice on the defendants and whysuch steps were not adopted soon after the expiry of the six monthperiod stipulated in the agreement of sale of Kanam and Kuzhikoorrights. Therefore, it is held that the plaintiff, having paid no morethan 4% of the sale consideration, and having not done even asCmuch as getting the property measured within the period of sixmonths stipulated under the agreement, cannot, at a belated date,claim specific performance of the agreement dated 7[th] August,2005 to the disadvantage and hardship of the defendants. [Para32-34][279-B-F]

D1.9 The Courts may grant additional amount ofconsideration, a relief to balance equities, such a decree wouldbe warranted only in cases where the plaintiff satisfactorilyestablishes compliance with Section 16 of the Act. That themeasure of enhancement of compensation may be awarded at thediscretion of the Court only if insufficiency of compensation isEthe only impediment to ensuring equity and preventing unduegain to one party. In the absence of compliance with theelementary requirements of Section 16 of the Act, enhancementof compensation cannot be employed as a device to allow specificperformance in cases where the plaintiff has not performed hisFobligations under the contract as in the instant case. [Para 35][280-A-C]

1.10 The appeal fails on the sole ground that the conduct ofthe plaintiff was not reflective of his readiness as well aswillingness on his part to pursue the agreement of sale of Kanamand Kuzhikoor rights, in terms of Section 16(c) of the Act. [ParaG36][280-C-D]

1.11 The impugned judgment of the High Court wherebythe High Court set-aside the judgment and decree passed by thetrial court, (by which the suit for specific performance of anagreement of sale of Kanam and Kuzhikoor rights, filed by theHplaintiff was decreed), is affirmed. [Para 38][280-H; 281-A]

C. HARIDASAN v. ANAPPATH PARAKKATTU VASUDEVAKURUP

Pratap Lakshman Muchandi and Ors. vs. ShamlalUddavadas Wadhwa and Ors., (2008) 1 SCC 67;Shenbagam vs. K.K. Rathinavel, 2022 SCC OnLine SC71; Mehboob-Ur-Rehman (Dead) through LRs vs.Ahsanul Ghani (2019) 19 SCC 415; Sughar Singh vs.Hari Singh (Dead) through LRs and Ors., A.I.R. 2021SC 5581; B. Santoshamma vs. D. Sarala and Anr.,(2020) 19 SCC 80; Bachhaj Nahar vs. Nilima Mandaland Ors., (2008) 17 SCC 491; Motilal Jain vs. RamdasiDevi, A.I.R. 2000 SC 2408 : [2000] 1 Suppl. SCR 615;Syed Dastagir vs. T.R. Gopalakrishna Shetty, (1999) 6SCC 337 : [1999] 1 Suppl. SCR 351; His HolinessAcharya Swami Ganesh Dassji vs. Sita Ram Thapar,(1996) 4 SCC 526 : [1996] 2 Suppl. SCR 111; J.P.Builders vs. A. Ramdas Rao, (2011) 1 SCC 429 : [2010]15 SCR 538;Saradamani Kandappan vs. S.Rajalakshmi, (2011) 12 SCC 18 : [2011] 8 SCR 874;K.S. Vidyanadam vs. Vairavan (1997) 3 SCC 1 : [1997]1 SCR 993 – referred to.

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Case Law Reference

In the Judgment ofM. R. SHAH, J.

[2008] 1 SCR 854relied on

Para 7

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In the Judgment of B. V. NAGARATHNA, J.

(2008) 1 SCC 67referred to(2019) 19 SCC 415referred toA.I.R. 2021 SC 5581referred to(2020) 19 SCC 80referred to(2008) 17 SCC 491referred to[2000] 1 Suppl. SCR 615referred to[1999] 1 Suppl. SCR 351referred to[1996] 2 Suppl. SCR 111referred to[2010] 15 SCR 538referred to[2011] 8 SCR 874referred to[1997] 1 SCR 993referred to

Para 9.4, 35Para 15Para 16Para 17FPara 19Para 21

Para 21

Para 23GPara 24Para 31Para 32

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ACIVIL APPELLATE JURISDICTION : Civil Appeal No.4072of 2022.

From the Judgment and Order dated 03.11.2021 of the High Courtof Kerala at Ernakulam in RFA No.63 of 2009.

M. K. S. Menon, Ms. Usha Nandini V., Biju P. Raman, M. S.BVishnu Sankar, Ravi, Advs. for the Appellant.

Raghenth Basant, Ms. Rashmi Nandakumar, Ms. Roopali Lakhotia,Shankar Narayanan, Advs. for the Respondents.

The Judgments of the Court were delivered by CM. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 03.11.2021 passed by the High Court of Kerala atErnakulam in Regular First Appeal No. 63 of 2009, by which the HighCourt has allowed the said appeal preferred by the original defendantsDand has set aside the judgment and decree dated 18.08.2008 passed bythe learned trial Court in Original Suit No. 205/2006, decreeing the suitfor specific performance, the original plaintiff has preferred the presentappeal.

2. That the plaintiff and the defendants entered into an agreementEto sell dated 07.08.2005 under which the defendants agreed to sell theland in question for a consideration of Rs. 8,750/- per cent. The plaintiffpaid an amount of Rs. 10,000/- as advance towards the part saleconsideration amount. The balance consideration was agreed to be paidby the plaintiff within six months from the date after measuring theproperty provided the defendants make available the documents of titleFincluding the purchase certificate under the Kerala Land Reforms Act.

2.1 That thereafter, the plaintiff served a legal notice dated02.11.2006 upon the defendants to execute the sale deed to which thedefendants sent reply and refused to execute the sale deed and cancelledthe agreement to sell. Therefore, the appellant herein – original plaintiffGinstituted a Suit being Original Suit No. 205/2006 before the learned trialCourt for specific performance of agreement to sell and in the alternativereturn of the plaintiff’s amount with interest.

2.2 The said suit was resisted by the defendants by filing writtenstatement. It was denied that the plaintiff was ever ready and willing toH

perform his part of the contract. It was also submitted that the suit wasfiled after one year from the date of expiry of the agreement. It was thecase on behalf of the defendants that defendant No.1 was a heart patientand he had undergone the surgery on which huge amount was spentwhich was borrowed from others and therefore to clear off the saidliability, the defendants agreed to sell the property in question. It wasalso the case of the defendants that even though the defendants hadapproached the plaintiff to pay some more money, he was not preparedfor the same, thereby defendants had been compelled to sell the goldornaments and clear the liabilities. It was submitted that the defendantswere always ready and willing to perform their part of the agreement.

2.3 The learned trial Court framed the following issues:

“1. Whether plaintiff had performed his part of the contract, therebyentitling him for specific performance of the agreement?

2. Whether plaintiff has got any cause of action against defendants?

3. Whether the plaintiff is entitled to the reliefs sought?

4. Relief and costs?”

2.4 On appreciation of the entire evidence on record, the learnedtrial Court decreed the suit for specific performance of agreement tosell dated 07.08.2005. However, at the same time and to do completejustice between the parties, the learned trial Court directed the plaintiffto pay 25% more amount, over and above the agreed consideration i.e.,sale consideration at the rate of Rs. 11,000/- per cent (Rs. 8750/- percent + 25% = 10,037/-, rounded off to Rs. 11,000/-). The learned trialCourt also directed the plaintiff to deposit the balance sale consideration,i.e., Rs. 3,97,000/-, within a period of two months.

2.5 Feeling aggrieved and dissatisfied with the judgment and decreepassed by the learned trial Court decreeing the suit for specificperformance of agreement to sell dated 7.8.2005, the defendantspreferred an appeal before the High Court. Without upsetting the findingsrecorded by the learned trial Court on execution of agreement to selldated 7.8.2005; payment of part sale consideration and the other issuesheld in favour of the plaintiff, straightway the High Court consideredSection 20 of the Specific Relief Act and opined that the trial Court wasnot justified in enhancing the sale consideration and ought not to haveexercised the discretion in favour of the plaintiff. By the impugned A

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Ajudgment and order, the High Court, while relying upon and/or consideringSection 20 of the Specific Relief Act, has partly allowed the appeal andhas set aside the judgment and decree for specific performance and hasdirected the defendants to pay Rs. 3,10,000/- to the plaintiff.

2.6 Feeling aggrieved and dissatisfied with the impugned judgmentBand order passed by the High Court, setting aside the judgment anddecree passed by the learned trial Court for specific performance ofagreement to sell, the original plaintiff has preferred the present appeal.

3. It is vehemently submitted by the learned counsel appearing onbehalf of the appellant that in the facts and circumstances of the case,Cthe High Court has committed an error in reversing the decree of specificperformance.

3.1 It is submitted that the execution of the agreement to sell andreceipt of part sale consideration have not been disputed by thedefendants.D

3.2 It is submitted that as per the conditions mentioned in theagreement to sell, the balance sale consideration was required to be paidwithin a period of six months from the date after measuring the propertyprovided the defendants make available the documents of title includingthe purchase certificate under Kerala Land Reforms Act, which wasEyet to be obtained.

3.3 It is submitted that even the purchase certificate was issuedby the Government during the pendency of the suit. It is submitted thattherefore once the execution of agreement to sell is admitted and thepart sale consideration is received and it was found that the plaintiff wasFalways ready and willing to perform his part of the contract, the learnedtrial Court was justified in decreeing the suit for specific performance.

3.4 It is then submitted that even, though not required, the learnedtrial Court enhanced the sale consideration to do complete justice, whichthe plaintiff agreed. It is submitted that enhancement of the saleconsideration by the learned trial Court could not have been gone againstGthe plaintiff.

3.5 It is further submitted that even otherwise when whileexercising the discretion in favour of the plaintiff to pass a decree forspecific performance, the learned trial Court enhanced the amount ofsale consideration and directed the plaintiff to pay some more amountH

than the sale consideration mentioned in the agreement to sell, the samewas not required to be interfered with by the High Court.

3.6 It is submitted that as such the High Court has straightwaygone and considered Section 20 of the Specific Relief Act, withoutadverting to the findings recorded by the learned trial Court on executionof the agreement to sell; payment of part sale consideration and that theplaintiff was always ready and willing to perform his part of the contract.

3.7 Making the above submissions, it is prayed to allow the presentappeal.

4. The present appeal is opposed by Shri Raghenth Basant, learnedcounsel appearing on behalf of the original defendants.

4.1 It is vehemently submitted by the learned counsel appearingon behalf of the original defendants that as such the agreement to sellwas a forced agreement to sell as at the relevant time, defendant no.1suffered a heart attack and he was in need of money and therefore hewas compelled to sell the property in question. It is therefore submittedand as rightly observed by the High Court, the learned trial Court oughtnot to have exercised the discretion in favour of the plaintiff, ratherought to have exercised the discretion in favour of the defendants on theground of equity.

4.2 Learned counsel appearing on behalf of the original defendantshas submitted that at the time of execution of agreement to sell, theplaintiff paid a meagre amount of Rs. 10,000/- only as advance towardsthe consideration amount. It is submitted that as the defendants werehard pressed and were in need of immediate money as defendant no.1suffered a heart attack, it was agreed that the balance consideration tobe paid within six months from the date of agreement to sell. It issubmitted that thereafter as the plaintiff did not pay the balance saleconsideration within six months, the defendants cleared their liabilitiesby selling gold ornaments of their family members and therefore thereafterthe defendants were not in need of money and therefore there was nocause and/or reason to sell the property in question and thereafter theagreement to sell was cancelled. It is submitted that considering theaforesaid circumstances, the High Court has rightly set aside the decreefor specific performance, considering Section 20 of the Specific ReliefAct and has rightly exercised the discretion in favour of the defendants,rather than in favour of the plaintiff.

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4.3 It is further submitted by the learned counsel appearing onbehalf of the defendants that as on today the price of the property inquestion has gone very high and therefore it is prayed not to interferewith the impugned judgment and order passed by the High Court.

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5. I have heard the learned counsel for the respective parties atBlength.

At the outset, it is required to be noted that the execution ofagreement to sell and receipt of part sale consideration paid under theagreement to sell has not been disputed by the defendants. It is not indispute that the defendants as such agreed to sell the property in question.CThe relevant terms of agreement to sell, as agreed between the parties,are as follows:

“(a) the balance consideration was to be paid by the Petitioner tothe Respondents within six months from the date of saleagreement.

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(b) The Petitioner was obligated to measure the property at hisown expense, arrange the balance consideration amount andprepare the deeds with respect to the plaint schedule property infavour of himself or in favour of its nominees.

(c) Respondents were to handover the abovementioned deeds asEalso the anterior documents, possession certification, tax receiptand encumbrance certificate for the last 13 years, purchasecertificate, either in their originals or certified copies within thestipulated six months to the Petitioner.

(d) After the fulfilment of the above terms and conditions, theFRespondent No.1 and his wife were obligated to execute the saledeed prepared by the Petitioner and register the same afterobtaining the balance consideration amount and then accordingly,the Respondents were to hand over actual possession of the plaintschedule property to the Petitioner.”

G6. It is contended on behalf of the defendants that the agreementto sell was a forced agreement to sell. On the contrary, the defendantsstated in the written statement in para 4 that the defendants were alwaysready and willing to perform their part of the contract. It may be truethat at the relevant time the defendants may be in need of money.However, the fact remains that they agreed to sell the property in questionH

for sale consideration mentioned in the agreement to sell and as observedhereinabove, it was the case on behalf of the defendants that they werealways ready and willing to perform their part of the contract. Therefore,as observed hereinabove, it was never the case on behalf of thedefendants in the written statement and/or even before the learned trialCourt that the agreement to sell was inequitable and/or was a forcedagreement to sell. Even the learned trial Court also did not frame theissue, “whether agreement to sell was a forced agreement to sell/contractor not”. On appreciation of entire evidence on record, the learned trialCourt after recording the findings on the execution of the agreement tosell by the defendants and receipt of part sale consideration and that theplaintiff was always ready and willing to perform his part of the contract,decreed the suit for specific performance. By the impugned judgmentand order, the High Court, as such, has not commented upon and/or setaside any of the findings recorded by the learned trial Court, recordedwhile passing a decree for specific performance. Straightway, the HighCourt has considered Section 20 of the Specific Relief Act and hasobserved and held that by enhancing the amount of sale consideration,the learned trial Court has wrongly exercised the discretion in favour ofthe plaintiff. The High Court has commented upon the order passed bythe learned trial Court enhancing the amount of sale consideration anddirecting the plaintiff to pay more amount than the sale considerationmentioned in the agreement to sell.

7. When to do the complete justice and relying upon and/orconsidering the decision of this Court in the case of Pratap LakshmanMuchandi v. Shamlal Uddavadas Wadhwa, (2008) 12 SCC 67, thelearned trial Court directed the plaintiff to pay some more amount thanthe amount mentioned in the agreement to sell, at the most, the plaintiffcan be said to be aggrieved. Still, the High Court has considered such anorder passed by the learned trial Court against the defendants. As such,the learned trial Court was absolutely justified in compensating thedefendants by paying some more amount while passing a decree forspecific performance. Therefore, in the facts and circumstances of thecase and more particularly when the learned trial Court exercised thediscretion in favour of the plaintiff after having observed and recordedthe findings on the execution of the agreement to sell by the defendantsand that the part sale consideration was paid by the plaintiff which wasaccepted by the defendants and thereafter the finding that the plaintiffwas always ready and willing to perform his part of the contract, the AB

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Alearned trial Court was absolutely justified in passing the decree forspecific performance. The High Court has erred in interfering with thejudgment and decree passed by the learned trial Court, without settingaside the findings recorded by the learned trial Court recorded whilepassing the decree for specific performance. The impugned judgmentand order passed by the High Court is unsustainable, both, on law asBwell as on facts.

8. In view of the above and for the reasons stated above, thepresent appeal succeeds. The impugned judgment and order passed bythe High Court is hereby quashed and set aside and the judgment anddecree passed by the learned trial Court for specific performance ofCagreement to sell is hereby restored.

However, to do complete justice and in exercise of powers underArticle 142 of the Constitution of India, I direct that over and above thesale consideration mentioned in the agreement to sell and the amountalready deposited by the plaintiff, the plaintiff to pay a further sum ofDRs. 10,00,000/- (Rupees Ten Lakhs only) to the original defendants, tobe paid within a period of six weeks from today. The amount whichmight have been deposited by the original defendants, deposited pursuantto the impugned judgment and order passed by the High Court, i.e., Rs.3,10,000/- be also returned/paid to the original defendants.

E9. The present appeal is accordingly allowed in the aforesaid terms.However, in the facts and circumstances of the case, there shall be noorder as to costs.

NAGARATHNA, J.

F1. I have had the advantage of reading the judgment proposed byHis Lordship M.R. Shah, J. However, I regret to agree with the reasoningas well as the conclusion arrived at by His Lordship. Hence, my separatejudgment.

2. The plaintiff in Original Suit No. 205/2006 has assailed thejudgment dated 03[rd] November, 2021, passed by the High Court of KeralaGat Ernakulam in Regular First Appeal No. 63 of 2009. By the impugnedjudgment, the High Court has set-aside the judgment and decree passedby the Trial Court, i.e., the Court of the Subordinate Judge, Tirur in O.S.No. 205/2006, by which the suit for specific performance of an agreementof sale of Kanam and Kuzhikoor rights, filed by the plaintiff, was allowed.HHence, the appeal by the plaintiff in the suit.

3. For the sake of convenience, the parties herein shall be referredto in terms of their rank and status before the Trial Court.

4. The case of the plaintiff in a nutshell is stated as under:

4.1 That the defendants who have Kanam and Kuzhikoor rightsover the suit property, measuring 37 cents since 1989, assigned suchrights over the same in favour of the plaintiff for a consideration of Rs.8750/- per cent. That an agreement of sale in respect of the Kanam andKuzhikoor rights over the suit property was entered into between thedefendants-sellers and the plaintiff-buyer on 7[th]August, 2005 in thepresence of witnesses. An advance sale consideration of Rs. 10,000/-was paid by the plaintiff. The remaining sale consideration was requiredas per the agreement to be paid within six months from the date onwhich agreement of sale was entered into, following which the saledeed was to be executed in favour of the plaintiff or his nominees, inrespect of the Kanam and Kuzhikoor rights, which are valuableusufructuary rights and possession of the suit property was to be handedover to the plaintiff.

4.2 That before the expiry of six months, the defendants were tomake available to the plaintiff documents pertaining to the suit property,such as tax receipts, non-encumbrance certificate, purchase certificateetc. That the plaintiff contacted the defendants repeatedly and expressedhis willingness to comply with the terms of the agreement of sale dated7[th]August, 2005. However, defendants sought to evade and delaycompliance with the said agreement on the ground that anterior documentsand certificates relating to the suit property could not be obtained.

4.3 That though the plaintiff had sent a legal notice dated 02[nd]November, 2006 calling upon the defendants to execute the deedassigning Kanam and Kuzhikoor rights after accepting the balance saleconsideration from the plaintiff, the defendants took no positive steps inthis regard.

4.4 That the plaintiff was ready and willing to tender the balancesale consideration and have the deed of assignment registered in hisname within the period stipulated in the agreement. That the defendantswere attempting to evade the agreement of sale in an attempt to obtaina better price for the Kanam and Kuzhikoor rights over the suit propertyas the market value thereof had increased manifold. Therefore, theplaintiff was constrained to file a suit for specific performance of the A

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Aagreement of sale of Kanam and Kuzhikoor rights, dated 7[th]August,2005.

4.5 With the aforesaid averments, it was prayed that the defendantsbe directed to receive the balance sale consideration from the plaintiffand execute the sale deed in respect of the Kanam and KuzhikoorBrights over the suit property in his favour. In the alternative, it was prayedthat the defendants may be directed to return the advance amount ofRs. 10,000/- paid by the plaintiff, together with interest thereon.

5. In response to the plaint, the defendants filed a written statement,the contents of which are encapsulated as under:- C

5.1 That the plaintiff was never ready and willing to perform hisobligations under the agreement dated 7[th]August, 2005. That the suit forspecific performance was filed on 13[th]December, 2006, which wasnearly one year after the expiry of the deadline fixed in the agreement,for compliance of the terms thereof.

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5.2 That as per the agreement of sale of Kanam and Kuzhikoorrights, the plaintiff-purchaser was to measure the suit property andaccordingly ascertain the sale consideration payable at the rate ofRs. 8750/- per cent. That no attempt was made by the plaintiff in thisregard. Therefore, it could not be said that the plaintiff was ready andEwilling to perform his part of the agreement, more so, when no attemptwas made by the plaintiff to determine even as much as the exact purchaseprice for the Kanam and Kuzhikoor rights over the suit property. Thatthe plaintiff had paid only Rs. 10,000/- which is a very negligible portionof the purchase price. That the defendants were in dire need for financesin order to bear the expenses for cardiac treatment of defendant no. 1.FTherefore, the defendants had approached the plaintiff repeatedly, withrequests to tender the balance sale consideration. However, the plaintiffdid not pay heed to the requests of the defendants and therefore, thedefendants were constrained to raise the requisite funds by selling theirjewellery and ornaments.

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G5.3 That the defendants agreed to sell their Kanam and Kuzhikoorrights over the suit property only with a view to urgently raise requisitefinances to enable them to bear the medical expenses for the treatmentof defendant no. 1. Therefore, it was additionally important for the plaintiffto have duly paid the balance consideration within six months from thedate on which agreement of sale of Kanam and Kuzhikoor rights wasH

entered into. Since the plaintiff failed to do so, it could not be concludedthat he was ready and willing to perform his obligations under theagreement dated 7[th]August, 2005.

5.4 That the plaintiff was by occupation, a real estate agent andfrequently engaged in the practice of entering into agreements of sale inrespect of properties and thereafter attempting to find buyers for smallerextents or portions of such properties. That since the plaintiff could notfind prospective buyers, he did not pursue the agreement dated 7[th]August,2005 for over one year and had been attempting to evade the same.However, since the value of the suit property considerably increasedover time, the plaintiff sought to claim the same at a price significantlybelow the prevailing market rate by placing reliance on a stale agreementof sale of Kanam and Kuzhikoor rights.

5.5 With the aforesaid averments, it was prayed before the TrialCourt that the suit filed by the plaintiff for specific performance of theagreement of sale dated 7[th]August, 2005, be dismissed.

6. The Court of the Subordinate Judge, Tirur by its judgment anddecree dated 18[th]August, 2008 allowed the suit filed by the plaintiff andpassed a decree of specific performance of the agreement of sale ofKanam and Kuzhikoor rights dated 7[th]August, 2005. Sale considerationwas enhanced by 25% and it was directed that a sale consideration ofRs. 11,000/- per cent, instead of Rs.8750/- per cent, be paid by theplaintiff. It was directed that on payment of the sale consideration, saledeed in respect of the Kanam and Kuzhikoor rights over the suit propertybe executed in favour of the plaintiff within a period of three monthsfrom the date on which the decree was passed.

The salient findings of the Trial Court are as under:

The salient findings of the Trial Court are as under:

i)That specifying the time for performance of an agreementis not sufficient to prove that time was indeed the essenceof the contract. That if time was the essence of theagreement, either of the parties ought to have initiated dueperformance of the same within the specified period.However, since neither of the parties to the agreement ofsale had initiated timely steps in pursuance of the saidagreement, it was held that time was not the essence of thecontract.

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Aii)That the purchase certificate and title deed of the propertywere not readily available with the defendants at the timeof entering into the agreement of sale of Kanam andKuzhikoor rights over the suit property. That this fact raisedthe probability that non-performance of the agreement withinthe stipulated time, was not attributable to the plaintiff.

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iii)That since the transaction in question involved sale of rightsover immovable property, a prudent purchaser would haveto satisfy himself as to the genuineness and validity of thedocuments of title. Therefore, the first step ought to havebeen taken by the defendants, by handing over the relevantCdocuments to the plaintiff, which would have in turn enabledthe plaintiff to measure the property and tender the balancesale consideration. That the delay in performance of theagreement of sale could be attributed to the non-availabilityand non-furnishing of the title deeds of the plaint scheduleDproperty.

iv)That the mere fact that the defendants had handed overthe photostat copy of the title deed to the plaintiff, could notlead to the inference that the plaintiff could have proceededto measure the property.

Ev)That although a direction of specific performance wouldcause some hardship to the defendants, because they couldno longer pursue their intention of constructing a house onthe suit property, that alone would not be a ground to denyspecific performance of a valid agreement.

Fvi)That since the value of the suit property had increasedmanifold and had doubled within a short span of time, specificperformance, if allowed by payment of the considerationagreed upon in the agreement, would confer an unduebenefit on the plaintiff. Therefore, the sale considerationGwas enhanced by 25% vis-à-vis the consideration agreedupon in the agreement dated 7[th]August, 2005.

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7. Being aggrieved, the defendants preferred Regular First AppealNo. 63 of 2009 before the High Court of Kerala at Ernakulam. By theimpugned judgment dated 3[rd]November, 2021, the first appeal wasallowed and the judgment of the Trial Court dated 18[th]August, 2008 wasH

set aside. The following findings were recorded by the High Court in theimpugned judgment:

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i)That the Trial Court could not have re-fixed the saleconsideration at Rs. 11,000/- per cent as against Rs. 8,750/- per cent, which was the price agreed upon by the parties.That the Court could not have dictated or deviated fromBthe terms and conditions enumerated in the contract forsale between the parties.

ii)That under Section 20 of the Specific Relief Act, 1963 (priorto the same being substituted by way of Act No. 18 of2018) Courts were vested with the discretion to deny theCrelief of specific performance. The Court could balancecompeting interests by compensating the plaintiff in termsof money so as to bring him back to his original position, tothe extent possible. The compensation so granted was tobe understood to be compensation for not granting specificDperformance in favour of the plaintiff. The said provisiondid not contemplate exercise of discretion to award anamount to the defendant in excess of the amount agreedupon contract of sale, while still allowing specificperformance.

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iii)That in the present suit, the agreement of sale of Kanamand Kuzhikoor rights was executed on 07[th]August, 2005when the defendants were faced with a financial crisis.What was received by way of advance was merely 4% ofthe sale consideration of Rs. 3,23,750/-. Therefore, it wasnot a fit case for grant of the discretionary relief of specificperformance.

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iv)Having regard to the fact that the plaintiff had, in compliancewith the judgment of the Trial Court dated 18[th] August, 2008,deposited the enhanced consideration of Rs. 3,97,000/-, itwas directed that an amount of Rs. 3,00,000/- be paid byGthe defendants to the plaintiff in addition to the advancesum of Rs. 10,000/- which was paid by the plaintiff at thetime of entering into the agreement of sale dated 07[th]August,2005. Such a direction was issued based on a proposal madeto that effect by the counsel appearing on behalf of thedefendants.H

AAggrieved by the judgment of the High Court allowing the regularfirst appeal preferred by the defendants, the plaintiff has approachedthis Court.

8. We have heard Sri M.K.S Menon, learned advocate appearingon behalf of the appellant and Sri Raghenth Basant, learned advocateBappearing on behalf of the respondents, and perused the material onrecord.

9. Learned counsel for the appellant-plaintiff made the followingsubmissions. At the outset it was contended that the High Court was notright in allowing the first appeal preferred by the defendants by applyingCSection 20 of the Specific Relief Act, 1963 (hereinafter “the Act”). Thatthe present case was not a fit case for exercising discretion to deny therelief of specific performance.

9.1 It was next contended that the Trial Court rightly noted thatthe first step ought to have been taken by the defendants, by handingDover the relevant documents to the plaintiff. That since the purchasecertificate and title deed of the property were not readily available withthe defendants at the time of entering into the agreement, it was rightlypresumed by the Trial Court that the delay in performance of theagreement of sale was attributable to the defendant.

E9.2 It was urged that the High Court committed a serious error inlaw by applying Section 20 of the Act to deny the relief of specificperformance in favour of the appellant-plaintiff. That the relief could notbe denied on the ground of insufficiency of sale consideration in light ofthe fact that the market value of the suit property had increased manifoldover a period of time. That denial of the relief of specific performanceFon such ground was barred by Explanation 1 to Clause (c) of Section 20(2) of the Act. That although Section 20 permits denial of the remedy ofspecific performance where a decree of specific performance wouldinvolve some hardship to the defendant(s), the Explanation to Clause (c)of Section 20 (2) clarifies that mere insufficiency of consideration wouldGnot be deemed to constitute ‘hardship.’ Therefore, the considerationguiding the decision of the High Court to deny the relief of specificperformance, was extraneous.

9.3 It was next contended that the Court ought to have mouldedthe relief by having due regard to the conduct of the plaintiff. That theplaintiff’s conduct was reflective of the fact that he duly pursued theH

execution of the agreement of sale of Kanam and Kuzhikoor andtherefore, was entitled to be awarded a decree of specific performancein his favour. That in the absence of any proof demonstrative of delay,unwillingness, unreadiness on the part of the plaintiff, the relief of specificperformance could not have been denied.

9.4 Learned counsel for the appellant contended that this Courthas authoritatively laid down that in cases where specific performanceof a contract is sought in relation to property, the market value of whichhas increased since the date on which contract of sale was entered into,it would be justified to award an additional amount of consideration tothe seller, at the discretion of the Court, vide Pratap LakshmanMuchandi and Ors. vs. Shamlal Uddavadas Wadhwa and Ors.,(2008) 1 SCC 67. Therefore, the Trial Court had not erred in decreeingthe suit for specific performance in favour of the plaintiff, by directingthe plaintiff to pay additional sale consideration to the defendants. Thatthe direction of the Trial Court to enhance the consideration did notamount to rewriting the terms of the agreement, but was done with aview to balance the equities. That the direction of the Trial Court oughtto be appreciated in light of the fact that the relief of specific performanceis an equitable remedy. In that context it was further submitted that theplaintiff duly paid the enhanced sale consideration, which fact also woulddemonstrate the conduct of the plaintiff and his willingness to executethe agreement of sale.

9.5 It was submitted that the reason the plaintiff did not tender thesale consideration in excess of 4% of the total consideration agreedupon was because the defendants had not made available any documentswhich would enable the plaintiff to satisfy himself as to the title of thedefendants. Therefore, the High Court had erred in holding that sinceonly 4% of the sale consideration had been paid, it would not be a fitcase to grant the discretionary remedy of specific performance, withoutappreciating the facts of the case in its true perspective.

With the aforesaid averments, it was prayed that the impugnedjudgment of the High Court be set-aside and the judgment of the TrialCourt, be restored.

10. Respondent – defendants’ counsel per contra advanced thefollowing arguments:

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A10.1 He supported the impugned judgment of the High Court andcontended that the High Court rightly applied Section 20 of the Act anddenied the relief of specific performance of the agreement dated 7[th]August, 2005. That the defendants’ daughter and son-in-law were desirousof building a house on the suit property and therefore, they would be putthrough great hardship if the suit for specific performance was decreedBin favour of the plaintiff; more so, given that market price of the suitproperty had increased manifold over a period of time and it would notbe possible for the defendants to purchase rights over land similar to thesuit property with the enhanced consideration awarded by the Trial Court.

10.2 It was further submitted that the High Court rightlyCappreciated that the defendants had entered into the agreement whenthey were faced with a financial crisis and therefore, it was imperativethat the plaintiff paid a significant portion of the consideration, if not theentire sale consideration, within the period of six months as stipulated inthe agreement of sale of Kanam and Kuzhikoor rights. That it was inDthe said context that the fact as to payment of merely 4% of the saleconsideration would be relevant to determine the plaintiff’s readinessand willingness to perform his obligations under the agreement of sale.That the object of agreement to sell the Kanam and Kuzhikoor rightsover the suit property in the year 2005 was to receive the entire saleconsideration within a period of six months, which would enable theEdefendants to pay off certain debts which had been taken to enable thedefendants to bear the medical expenses towards cardiac treatment ofdefendant no. 1. Since the plaintiff refused to pay the balanceconsideration within the time stipulated in the agreement, notwithstandingseveral requests by the defendants, the defendants were compelled toFsell their jewellery and ornaments to clear the debts.

10.3 That by refusing to pay sale consideration exceeding 4% ofthe total sale consideration within six months from the date of the contract,the plaintiff defeated the purpose of the agreement to sell the Kanamand Kuzhikoor rights. That the plaintiff was well aware of the fact thatGthe only reason compelling the defendants to sell the Kanam andKuzhikoor rights over suit property at a nominal price agreed upon bythe parties was the critical financial condition that the defendants werefaced with at the time of entering into the agreement of sale. That freedomfrom financial pressure within a short span of time (six months) was thesole motive guiding the decision of the defendants to part with the suitH

property. In that regard, it was contended that time was the essence ofthe agreement and having failed to deposit the balance sale considerationwithin the stipulated period, the plaintiff could not subsequently seek theremedy of specific performance, having defeated the purpose of theagreement vis-à-vis the defendants.

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10.4 It was submitted that admittedly, the defendants had,immediately after executing the agreement of sale of Kanam andKuzhikoor rights , moved the Land Tribunal, Tirur for obtaining thepurchase certificate. However, the issuance of purchase certificate andtime taken for the same was not under the control of the defendants.That the plaintiff was well aware of the status of the matter at everyjuncture. It was averred that delay on the part of the Land Tribunal ingranting purchase certificate could neither be attributed to the defendants,nor could it absolve the plaintiff of his obligations under the agreementof sale of Kanam and Kuzhikoor rights. That had the plaintiff duly gotmeasured the schedule property and tendered the balance saleconsideration, it could be concluded that he was ready and willing tocomply with the terms of the agreement.

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10.5 With the aforesaid averments it was lastly submitted that theHigh Court, appreciated the matter in its true perspective and passedthe impugned judgment which appropriately balances equities betweenthe parties and the same does not call for interference by this Court.Therefore, it was prayed that the instant appeal be dismissed.

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11. Having heard the learned counsel for the respective parties,the following points would arise for consideration which shall beconsidered together:

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i)Whether the plaintiff’s conduct demonstrates readiness andwillingness on his part to carry out his obligations under theagreement of sale of Kanam and Kuzhikoor rights dated7[th ]August, 2005?

ii)Whether the plaintiff, by not paying consideration above4% of total sale consideration within the period stipulatedGin the agreement, had defeated the purpose of theagreement to sell Kanam and Kuzhikoor rights executedby the defendants?

iii)What order?

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268SUPREME COURT REPORTS

AThe detailed narration of facts and contentions would not call forreiteration.

12. The High Court has relied on Section 20 of the Act, prior tothe same being substituted by way of Act No. 18 of 2018, to deny therelief of specific performance to the plaintiff. Section 20 of the Act as itBstood prior to the Amendment Act of 2018 provided that the jurisdictionto decree specific performance is discretionary. It said that the Court isnot bound to grant such relief merely because it is lawful to do so. Sucha discretion, however, was not to be exercised arbitrarily, but ought tohave been based on sound and reasonable judicial principles. The Sectionalso specified the circumstances in which the Court may properly exerciseCthe discretion not to decree specific performance and it also specified when, in an appropriate case, a decree could be given by proper exerciseof discretion. Section 20, as it then stood was not an exhaustive provision,but merely illustrative as it was not possible to define the circumstancesin which equitable relief could or could not be granted. If, therefore, onDa consideration of all the circumstances of the case, the Court thoughtthat it would be inequitable to grant the relief prayed for, it should not do so.

13. However, in Shenbagam vs. K.K. Rathinavel, 2022 SCCOnLine SC 71, this Court reiterated that in deciding whether or not toEgrant the relief of specific performance, the Courts must be cognizant ofthe conduct of the parties, the escalation in the price of the suit propertyand consider whether one party will unfairly benefit from the decree.

14. By way of the Specific Relief (Amendment) Act, 2018(hereinafter “the Amendment Act”), Section 20 of the Act has beenFsubstituted, thereby rendering the relief of specific performance to be astatutory remedy, instead of a discretionary remedy. Previously, theunamended provision granted the courts the discretion to deny the reliefof specific performance, on the basis of judicially developed exceptions,even where it would otherwise be lawful to direct specific performance.Now, such statutorily created exceptions have been excluded. TheGAmendment Act has eliminated the discretion of the courts in casesinvolving specific performance of contracts and grants a right to anaggrieved party to seek specific performance of a contract in certaincases, subject to the provisions contained in Sections 11(2), 14 and 16 ofthe Act. These Sections deal with ‘Cases in which specific performance H

of contracts connected with trusts being enforceable’, ‘contracts whichcannot be specifically enforced’ and ‘personal bars to relief,’ respectively.

15. It is however to be noted that notwithstanding substitution ofSection 20 of the Act, the position of law on all material aspects, such asthe essential elements of readiness and willingness and other aspectsunder the unamended Section 16 remains the same. In this regard, thedecision of this Court in Mehboob-Ur-Rehman (Dead) through LRs

vs. Ahsanul Ghani – [(2019) 19 SCC 415] may be referred to. In thesaid case, this Court held that even following the amendment of theSpecific Relief Act, 1963, by way of Act No. 18 of 2018, the position oflaw on all material aspects remains the same. It was observed that,even following the amendment, the law was to the effect that specificperformance of a contract could not be granted or enforced in favour tothe person who fails to prove that he has already performed or hasalways been ready and willing to perform the essential terms of thecontract which are to be performed by him, other than the terms ofwhich, the performance has been prevented or waived by the otherparty.

16. Reference may also be had to the decision of this Court inSughar Singh vs. Hari Singh (Dead) through LRs and Ors., A.I.R.2021 SC 5581. In the said case, the question as to applicability of theunsubstituted provision of Section 20 of the Act on transactions enteredinto prior to the date on which the Amendment Act of 2018, was keptopen. However, the Court held that the provisions subsequentlysubstituted, may act as a guide to Courts in exercising discretion in mattersdating prior to the substitution, even though such provisions may notapply retrospectively. The relevant observations of this Court have beenextracted as under:

“10. Now, so far as the finding recorded by the High Court andthe observations made by the High court on Section 20 of the Actand the observation that even if the agreement is found to be dulyexecuted and the plaintiff is found to be ready and willing toperform his part of the Agreement, grant of decree of specificperformance is not automatic and it is a discretionary relief isconcerned, the same cannot be accepted and/or approved. In sucha case, many a times it would be giving a premium to the dishonestconduct on the part of the defendant/executant of the agreementto sell. Even the discretion under Section 20 of the Act is required AB

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Ato be exercised judiciously, soundly and reasonably. The plaintiffcannot be punished by refusing the relief of specific performancedespite the fact that the execution of the agreement to sell in hisfavour has been established and proved and that he is found to bealways ready and willing to perform his part of the contract. Notto grant the decree of specific performance despite the executionBof the agreement to sell is proved; part sale consideration is provedand the plaintiff is always ready and willing to perform his part ofthe contract would encourage the dishonesty. In such a situation,the balance should tilt in favour of the plaintiff rather than in favourof the defendant – executant of the agreement to sell, whileCexercising the discretion judiciously.

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For the aforesaid, even amendment tothe Specific ReliefAct, 1963 by which section 10(a) has been inserted, though maynot be applicable retrospectively but can be a guide on thediscretionary relief. Now the legislature has also thought it to insertDSection 10(a) and now the specific performance is no longer adiscretionary relief. As such the question whether thesaid provisionwould be applicable retrospectively or not and/or should be madeapplicable to all pending proceedings including appeals is kept open.However, at the same time, as observed hereinabove, the same”can be a guide.

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(emphasis by me)

17. In B. Santoshamma vs. D. Sarala and Anr., (2020) 19SCC 80 this Court, while examining the amendment made to Section 10of the Act observed that after the amendment to Section 10, the wordsF“specific performance of any contract may, in the discretion of theCourt, be enforced” have been substituted with the words “specificperformance of a contract shall be enforced subject to the provisionscontained in sub-section (2) of Section 11, Section 14 and Section16”. It was concluded that although the relief of specific performanceof a contract is no longer discretionary, after the amendment, the sameGwould still be subject to Section 11, Section 14 and Section 16 of the Act.

18. Applying the law discussed above to the facts of the presentdispute, I am of the view that even in the absence of discretionary powerunder Section 20 to deny the relief of specific performance, the plaintiffwas not entitled to claim such relief as a matter of right. The position ofHlaw, even following the amendment of 2018 remains that the provisions of Section 16 of the Act have to be mandatorily complied with by theparty seeking the relief of specific performance. The relief of specificperformance cannot be granted in favour of a party who has notperformed his obligations under the contract. It is therefore necessaryto ascertain whether, the plaintiff had complied with the statutoryprerequisites under Section 16 (c) of the Act, before claiming the reliefof specific performance. Section 16 of the Act on being amended w.e.f.01[st ]October, 2018, reads as under:

“16. Personal bars to relief.—Specific performance of a contractcannot be enforced in favour of a person—

(a) who has obtained substituted performance of contract undersection 20; or (b)who has become incapable of performing, or violates anyessential term of, the contract that on his part remains to beperformed, or acts in fraud of the contract, or wilfully actsat variance with, or in subversion of, the relation intendedto be established by the contract; or

(c) who fails to prove that he has performed or has alwaysbeen ready and willing to perform the essential terms ofthe contract which are to be performed by him, other thanterms of the performance of which has been prevented orwaived by the defendant.

Explanation.—For the purposes of clause (c),—

(i) where a contract involves the payment of money, it is notessential for the plaintiff to actually tender to the defendantor to deposit in court any money except when so directedby the court;

(ii) the plaintiff must prove performance of, or readiness andwillingness to perform, the contract according to its trueconstruction.”

19. Clause (c) of Section 16 of the Act, which is relevant in theinstant case, though amended w.e.f. 01[st ]October, 2018 clearly statesthat unless the plaintiff establishes his readiness and willingness to performhis part of the contract, he would not be entitled to a decree of specificperformance. Prior to the amendment, the expression “who fails to averand prove” was on the statute book and its substitution by the words A

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A“who fails to prove” does not bring about any drastic change to theobject and intent of the clause. This is because failing to prove readinessand willingness to perform the essential terms of the contract would firstrequire averments to that effect to be made in the plaint by the plaintiff.The absence of such averments regarding readiness and willingness toperform the essential terms of the contract by the plaintiff would notBpermit him to let in any evidence on that aspect. It is a settled principleof law that no evidence can be permitted to be let in in the absence ofaverments in the plaint / pleadings vide Bachhaj Nahar vs. NilimaMandal and Ors., (2008) 17 SCC 491. In the said case, a Bench ofthis this Court speaking through Raveendran J. laid down as follows:C

(i) No amount of evidence can be looked into, upon a pleawhich was never put forward in the pleadings. A questionwhich did not arise from the pleadings and which was notthe subject matter of an issue, cannot be decided by theCourt.

D(ii)A Court cannot make out a case not pleaded. The Courtshould confine its decision to the question raised in pleadings.Nor can it grant a relief which is not claimed and whichdoes not flow from the facts and the cause of action allegedin the plaint.

E20. Therefore, notwithstanding the amendment to Section 16 ofthe Act whereby the expression “who fails to aver and prove” has beensubstituted with the phrase “who fails to prove,” the law remains that noevidence can be let in on a plea that was never put forward in the plaint/pleadings. But, it is necessary to sound a caveat. Even the absence ofFthe words “ready and willing to perform the contract” in the plaint wouldnow not have an adverse impact on the plaintiff’s case, so long asplaintiff’s readiness and willingness to perform the essential terms ofthe contract could be gathered on a holistic reading of the plaint.

21. In fact, even in relation to the earlier scheme of Section 16 ofGthe Act which required a plaintiff seeking the remedy of specificperformance to ‘aver and prove’ that he was ready and willing to performhis obligations under an agreement, this Court had observed that it wassufficient if the averments in substance indicate continuous readinessand willingness on the part of the person suing, to perform his part of thecontract vide Motilal Jain vs. Ramdasi Devi, A.I.R. 2000 SC 2408.H

Further, it had been declared that language in Section 16 (c), as it stoodprior to the Amendment Act of 2018, did not require any specificphraseology to be followed in relation to the averments as to readinessand willingness. That the compliance of requirements of readiness andwillingness have to be in spirt and substance and not in letter and formvide Syed Dastagir vs. T.R. Gopalakrishna Shetty, (1999) 6 SCC337.

That is why the deletion of the words “who fails to aver” in Section16 (c) of the Act does bring about any real change in the position of lawas it stood prior to the amendment.

22. Further, readiness and willingness cannot be considered in astraitjacket formula; it has to be inferred on a consideration of the entirefacts and circumstances of each case and the intention and conduct ofthe parties concerned. Even if a party to the contract is ready and hasthe requisite funds he may not be willing to perform his part of the contractand vice versa.

23. In this regard, reference may be made to the decision of thisCourt in His Holiness Acharya Swami Ganesh Dassji vs. Sita RamThapar, (1996) 4 SCC 526 wherein this Court made a distinctionbetween ‘readiness’ and ‘willingness’ and the manner in which the saidparameters are to be scrutinised in deciding a suit for specificperformance. The relevant findings of this Court are extracted as under:

“2. There is a distinction between readiness to perform the contractand willingness to perform the contract. By readiness may bemeant the capacity of the plaintiff to perform the contract whichincludes his financial position to pay the purchase price. Fordetermining his willingness to perform his part of the contract, theconduct has to be properly scrutinised.

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The factum of readiness and willingness to perform plaintiffs partof the contract is to be adjudged with reference to the conduct ofthe party and the attending circumstances. The court may inferfrom the facts and circumstances whether the plaintiff was readyand was always ready and willing to perform his part of thecontract. The facts of this case would amply demonstrate thatthe petitioner/plaintiff was not ready nor capacity to perform hispart of the contract as he had no financial capacity to pay the A

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consideration in cash as contracted and intended to bite for thetime which disentitles him as time is the essence of the contract.”

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Thus, both readiness as well as willingness have to be establishedby the plaintiff on whom the burden is cast in a suit for specificperformance of an agreement. Therefore, the question would arise as toBwhether the plaintiff discharged such burden in the instant case.

24. Further, in J.P. Builders vs. A. Ramdas Rao, (2011) 1 SCC429, this Court held as under, as regards the onus on a plaintiff claimingthe relief of specific performance, to prove that he had complied withSection 16 (c) of the Act and had demonstrated ‘readiness’ andC‘willingness’ to carry out his obligations under the agreement of sale:

“25. Section 16(c) of the Specific Relief Act, 1963 mandates“readiness and willingness” on the part of the plaintiff and it is acondition precedent for obtaining relief of grant of specificperformance. It is also clear that in a suit for specific performance,Dthe plaintiff must allege and prove a continuous “readiness andwillingness” to perform the contract on his part from the date ofthe contract. The onus is on the plaintiff.

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27. It is settled law that even in the absence of specific plea byEthe opposite party, it is the mandate of the statute that plaintiff hasto comply with Section 16(c) of the Specific Relief Act and whenthere is non-compliance with this statutory mandate, the Court isnot bound to grant specific performance and is left with no otheralternative but to dismiss the suit. It is also clear that readiness toFperform must be established throughout the relevant points of time.“Readiness and willingness” to perform the part of the contracthas to be determined/ascertained from the conduct of the parties.”

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25. As per the agreement of sale of Kanam and Kuzhikoor rights,dated 07[th]August, 2005, the plaintiff was obligated to carry out thefollowing terms:G(a) The plaintiff was obligated to measure the property at his ownexpense; (b) Prepare the deeds with respect to the plaint schedule propertyin favour of himself or in favour of his nominees; H

(c) The balance consideration was to be paid by the plaintiff tothe defendants within six months from the date of agreement.

The agreement also stipulated that the defendants were to:

(a) Handover the abovementioned deeds as also the anteriordocuments, possession certification, tax receipt and encumbrancecertificate for the last thirteen years, purchase certificate, either in theiroriginals or certified copies to the plaintiff; (b) On receipt of the balance sale consideration execute the saledeed in favour of the plaintiff within six months.

The relevant terms of the agreement are reproduced hereinunder:

“The 1[st]Parties have decided to assign the above propertybelonged and possessed by them to 2[nd]Party by fixing an amountof Rs.8750/- (Eight Thousand Seven Hundred and Fifty Only) fortheir rights of Kanam and Kuzhikkoor rights over the propertyand the 2[nd]Party has agreed for the same and accordingly the 1[st]Parties have received an amount of Rs. 10,000/- (Ten ThousandOnly) from the 2[nd]Party towards advance for the considerationamount. It has been decided that the 2[nd]Party shall measure theproperty on his expense, arrange the balance consideration amountand prepare the deeds pertaining to the above property in favourof 2[nd]party or in favour of the nominees of 2[nd]Party within 6(six) months from today and the 1[st]Parties shall sign the deedprepared by the 2[nd]Party and register the same after obtainingthe balance consideration amount from 2[nd]Party and hand overactual possession of the property to 2[nd]party. It is further decidedthat the 1[st]party shall hand over the above mentioned deeds andanterior documents, possession certificate, tax receipt,encumbrance certificate for the last 13 years, purchase certificate,either in original or certified copies, within the above said periodto 2[nd]Party.”

26. Nothing was brought on record by the plaintiff to demonstratethat positive steps were taken by him in pursuance of the agreement ofsale of Kanam and Kuzhikoor rights. It is trite that the relief of specificperformance cannot be granted in favour of a party who has notperformed his obligations under the contract. The only exception to suchrule is that a party is not required to perform those obligations, as areprevented or waived by the other party to the contract.

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A27. In the present case, it is an admitted fact that the plaintiff hadpaid an amount, which constituted merely 4% of the consideration. TheTrial Court itself recorded findings to the effect that neither party hadinitiated timely steps to perform their respective obligations under thecontract. Although the defendants did not make available the title deedsof the schedule property to the plaintiff, it could not be said that theBconduct of the defendants had prevented the plaintiff from tendering thebalance sale consideration, within the stipulated date, or at any timebefore filing the suit for specific performance as the whole object of theintended sale was to garner funds for discharging a debt which wasultimately done by the defendants by selling family jewellery.C

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28. That paragraph 11 of the Trial Court’s judgment records afinding to the effect that the defendants had applied for the purchasecertificate in the year 2005 itself, i.e., soon after entering into theagreement of sale of Kanam and Kuzhikoor rights. The same wasobtained on 31[st]May, 2007. This fact would suggest that there was noDdelay on the part of the defendant in acting in pursuance of theagreement. The fact that the purchase certificate was granted by theconcerned authority only on 31[st]May, 2007, was beyond the control ofthe defendants and such delay could not be attributed to the defendants.The defendants had duly initiated the process of obtaining a purchasecertificate soon after entering into the agreement.E

29. While learned counsel for the appellant-plaintiff has contendedthat since the transaction in question involved the transfer of rights inimmovable property, a prudent purchaser would have to satisfy himselfas to the genuineness and validity of the documents of title, and therefore,owing to the non- availability of documents of title, the plaintiff wasFunable to proceed with his obligations, no explanation has been providedas to why ancillary steps such as measurement of the property was notproceeded with. Delay in securing relevant documents from theconcerned authorities could not absolve the plaintiff of his obligationsunder the agreement of sale of Kanam and Kuzhikoor rights. Further,Gthis aspect of the matter is to be appreciated in light of the fact that thereis nothing on record which would demonstrate any step taken by theplaintiff to pursue the agreement, until, 02[nd]November, 2006, on whichdate, the legal notice was served on the defendants calling upon them toexecute the sale deed in respect of the Kanam and Kuzhikoor rightsover the suit property. No explanation has been provided as to why theH

legal notice was not served earlier, particularly when the six-month periodstipulated under the agreement had expired on 7[th]February, 2006. Suchconduct of the plaintiff is certainly not reflective of willingness, in termsof Section 16(c) of the Act.

30. Further, the Court has to be mindful of circumstances whichcompelled the defendants to enter into the agreement of sale of Kanamand Kuzhikoor rights dated 7[th]February, 2006. The time limit stipulatedin the agreement is of significance in the instant case when this aspect isviewed in light of the fact that the defendants were debt-ridden andsought to sell their Kanam and Kuzhikoor rights over suit property withthe sole intention of clearing off such debts which were incurred tosupport the cardiac treatment of defendant no. 1. It was thereforenecessary that the plaintiff paid a significant portion of the consideration,if not the entire sale consideration, within the period of six months asstipulated in the agreement. But the plaintiff refused to do so even onbeing repeatedly requested by the defendants.

31. At this juncture, it may also be apposite to refer to the decisionof this Court in Saradamani Kandappan vs. S. Rajalakshmi, (2011)12 SCC 18 wherein this Court had an occasion to consider the aspectof payment of a nominal advance by the plaintiff and effect of the amountof advance paid on the decision of the Court to grant the discretionaryrelief of specific performance. This Court has authoritatively laid downthat it would amount to injustice to hold that a vendor who took a verymeagre sum as earnest money, and agreed that the rest of theconsideration would be paid within a stipulated period of time, did notintend that time was of essence to the contract. The relevant portion ofthe said judgment is usefully extracted as under:

“37. The reality arising from this economic change cannot continueto be ignored in deciding cases relating to specific performance.The steep increase in prices is a circumstance which makes itinequitable to grant the relief of specific performance where thepurchaser does not take steps to complete the sale within theagreed period, and the vendor has not been responsible for anydelay or non-performance. A purchaser can no longer take shelterunder the principle that time is not of essence in performance ofcontracts relating to immovable property, to cover his delays,laches, breaches and “non-readiness”. The precedents from anera, when high inflation was unknown, holding that time is not of A

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278SUPREME COURT REPORTS

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278SUPREME COURT REPORTS

Athe essence of the contract in regard to immovable properties,may no longer apply, not because the principle laid down thereinis unsound or erroneous, but the circumstances that existed whenthe said principle was evolved, no longer exist. In thesedays ofgalloping increases in prices of immovable properties, to hold thata vendor who took an earnest money of say about 10% of theBsale price and agreed for three months or four months as theperiod for performance, did not intend that time should be theessence, will be a cruel joke on him, and will result in injustice.Adding to the misery is the delay in disposal of cases relating tospecific performance, as suits and appeals therefrom routinelyCtake two to three decades to attain finality. As a result, an owneragreeing to sell a property for rupees one lakh and received rupeesten thousand as advance may be required to execute a sale deeda quarter century later by receiving the remaining rupees ninetythousand, when the property value has risen to a crore of rupees.”

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32. Further, regarding the factors that ought to guide the Court’sdecision in decreeing a suit for specific performance, particularly whenthe agreement of sale has not been given effect to within the timestipulated therein, the following directions issued in an earlier decision inEK.S. Vidyanadam vs. Vairavan (1997) 3 SCC 1, were reiterated:

(i) The courts, while exercising discretion in suits for specificperformance, should bear in mind that when the partiesprescribe atime/period, for taking certain steps or forcompletion of the transaction, that must have someFsignificance and therefore time/period prescribed cannotbe ignored.

(ii) The courts will apply greater scrutiny and strictness whenconsidering whether the purchaser was “ready and willing”to perform his part of the contract.

G(iii)Every suit for specific performance need not be decreedmerely because it is filed within the period of limitation byignoring the time- limits stipulated in the agreement. Thecourts will also “frown” upon suits which are not filedimmediately after the breach/refusal.The fact that limitationis three years does not mean that a purchaser can wait forH

1 or 2 years to file a suit and obtain specific performance.The three-year period is intended to assist the purchasersin special cases, as for example, where the major part ofthe consideration has been paid to the vendor and possessionhas been delivered in part- performance, where equity shiftsin favour of the purchaser.

(emphasis by me)

In light of the said directions, the period of six months which wasstipulated in the agreement of sale of Kanam and Kuzhikoor rights, inthe present case, has to be accorded its due significance while decidingthe suit for specific performance. Having regard to the urgency of thefinancial need of the defendants, which need had prompted them to selltheir Kanam and Kuzhikoor rights over the suit property, it must be heldthat time stipulated in the agreement was the essence of the contract.

33. Further, the direction of this Court in the aforecited caseregarding the onus on the party claiming specific performance to initiateaction immediately after the breach or refusal by the other party to thecontract, is also relevant to the facts of the present case. The plaintiff inthe present case served a legal notice only on 02[nd]November, 2006while the six month period stipulated in the agreement had elapsed on07[th]February, 2006. There is no explanation as to what occasioned thedelay in serving the legal notice on the defendants and why such stepswere not adopted soon after the expiry of the six month period stipulatedin the agreement of sale of Kanam and Kuzhikoor rights.

34. Therefore, it is held that the plaintiff, having paid no morethan 4% of the sale consideration, and having not done even as muchas getting the property measured within the period of six monthsstipulated under the agreement, cannot, at a belated date, claim specificperformance of the agreement dated 7[th] August, 2005 to thedisadvantage and hardship of the defendants.

35. Learned counsel for the plaintiff has sought to rely on thedecision of this Court in Pratap Lakshman Muchandi and Ors. vs.Shamlal Uddavadas Wadhwa and Ors., (2008) 1 SCC 67 wherein itwas held that in cases where specific performance of a contract is soughtin relation to property, the market value of which has increased since thedate on which contract of sale of Kanam and Kuzhikoor rights wasentered into, it would be justified to award an additional amount of A

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Aconsideration to the seller, at the discretion of the Court. While I ammindful of the fact that Courts may grant such a relief to balance equities,such a decree would be warranted only in cases where the plaintiffsatisfactorily establishes compliance with Section 16 of the Act. Thatthe measure of enhancement of compensation may be awarded at thediscretion of the Court only if insufficiency of compensation is the onlyBimpediment to ensuring equity and preventing undue gain to one party.In the absence of compliance with the elementary requirements of Section16 of the Act, enhancement of compensation cannot be employed as adevice to allow specific performance in cases where the plaintiff hasnot performed his obligations under the contract as in the instant case.C36. In my view, this appeal must fail on the sole ground that theconduct of the plaintiff was not reflective of his readiness as well aswillingness on his part to pursue the agreement of sale of Kanam andKuzhikoor rights, in terms of Section 16(c) of the Act. Accordingly, thepresent appeal is dismissed.D37. At this juncture, it is clarified that the result of this appeal hasbeen arrived at having regard to the conduct of the plaintiff, which doesnot reflect his willingness to comply with the terms of the agreement ofsale dated 7[th]August, 2005. The suit for specific performance of theagreement of sale of Kanam and Kuzhikoor rights would fail on theEsole ground that the plaintiff has failed to comply with the essentialrequirements of Section 16(c) of the Act. Although it is acknowledgedthat the defendants would be put through hardship if the suit for specificperformance was decreed in favour of the plaintiff, the appeal has beendecided dehors considerations of hardship to the defendants, or of othercircumstances under which the contract was entered into which couldFgive the plaintiff an unfair advantage over the defendants, which areconsiderations in equity as the relief of specific performance is essentiallyan equitable remedy though crystalised in the form of a legislation as perthe Act. Thus, the appeal has not been decided in light of Section 20 ofthe Act, as it stood prior to the Amendment Act of 2018. The question asGto applicability of the provision of Section 20 of the Act as it stood priorto its amendment in 2018, on transactions entered into prior to the dateon which the Amendment Act of 2018, is thus kept open.

38. The impugned judgment of the High Court of Kerala dated03[rd]November, 2021 whereby the High Court set-aside the judgmentHand decree passed by the Trial Court, i.e., the Court of the Subordinate

Judge, Tirur in O.S. No. 205/2006 (by which the suit for specificperformance of an agreement of sale of Kanam and Kuzhikoor rights,filed by the plaintiff was decreed), is affirmed. This appeal is dismissed.

Parties are directed to bear their respective costs.

Nidhi Jain

Matter referred to larger Bench.

(Assisted by : Abhishek Agnihotri and Tamana, LCRAs)

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