SUKHBIR versus AJIT SINGH on 30 April 2021

[2021] 4 S.C.R. 169

SUKHBIR

v.

AJIT SINGH

(Civil Appeal No. 1653 of 2021)

APRIL 30, 2021

[DR. DHANANJAYA Y CHANDRACHUD AND

M. R. SHAH, JJ.]

Specific Relief Act, 1963: s.21 – Power to award compensation– Agreement to sell land – Plaintiff-purchaser paid Rs.31.5 lakhsout of Rs.32 lakhs – Failure on part of defendant to execute saledeed in terms of the agreement of sale – Suit for specific performance– During pendency of suit, land in question acquired under LandAcquisition Act – Trial court passed decree for specific performancedirecting defendant to execute sale deed on receiving balanceconsideration – First appellate court upheld the order of trial court– High Court held that plaintiff shall be deemed to have steppedinto the shoes of the defendant-original land owner and shall beentitled to entire amount of compensation along with solatium andinterest etc. owing to the acquisition of the land in question – Onappeal, held: There are concurrent findings of fact recorded by allthe courts below on the execution of the agreement to sell by thedefendant in favour of the plaintiff; payment of Rs. 31.50 lakhstowards part sale consideration and the readiness and willingnessof the plaintiff to pay the balance sale consideration of Rs. 50,000/- – Therefore, as such, the plaintiff is entitled to the decree forspecific performance – However, in view of the fact that before thefinal decree could be passed by trial court, the land in questioncame to be acquired and, therefore, plaintiff would be deemed to bein the shoes of the defendant and shall be entitled to the amount ofcompensation, determined and awarded under the Land AcquisitionAct – Submission of defendant has no substance that ascompensation was not specifically prayed by the plaintiff in thesuit, the plaintiff shall not be entitled to any amount of compensationeven considering s.21 of the Specific Relief Act – The decree forcompensation is passed as an alternate decree and in lieu of thedecree for specific performance – High Court rightly held that theplaintiff shall be entitled to the entire amount of compensation

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Aawarded together with interest and solatium – However, at the sametime, the defendant-original land owner shall also be entitled to thededuction therefrom of money value of the services, time and energyexpended in pursuing the claims of compensation and theexpenditure incurred by him in the litigation culminating in theaward.B

Partly allowing the appeal, the Court

HELD: 1.1 There are concurrent findings of fact recordedby all the courts below on the execution of the agreement to sellby the defendant in favour of the plaintiff; payment ofCRs. 31,50,000/- towards part sale consideration by the plaintiff tothe defendant (out of the total sale consideration of Rs. 32 lakhs)and the readiness and willingness of the plaintiff to pay the balancesale consideration of Rs. 50,000/-. Therefore, as such, the plaintiffshall be entitled to the decree for specific performance. However,in view of the fact that before the final decree could be passed byDthe trial court, the land in question came to be acquired underthe provisions of the Land Acquisition Act and therefore thequestion arose before the High Court what relief the plaintiff shallbe entitled to in the event the decree of specific performance isrequired to be modified by an alternative decree. [Para 7][175-EH; 176-A-C]

1.2 Applying the law laid down by this Court in Jagdish Singhand Urmila Devi to the facts of the case in hand, it cannot be saidthat the High Court has committed any error in modifying thedecree for specific performance. As rightly held by the High Court,Fas such, the plaintiff will be deemed to be in the shoes of thedefendant and therefore shall be entitled to the amount ofcompensation, determined and awarded under the provisions ofthe Land Acquisition Act. [Para 9][178-B-C]

Jagdish Singh v. Natthu Singh (1992) 1 SCC 647 :G[1991] 2 Suppl. SCR 567; Urmila Devi v. Deity, MandirShree Chamunda Devi (2018) 2 SCC 284 : [2018] 1SCR 797 – relied on.

2. Now so far as the submission on behalf of the appellantthat as compensation has not been specifically prayed by the H

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plaintiff in the suit, the plaintiff shall not be entitled to any amountof compensation even considering Section 21 of the Specific ReliefAct. The aforesaid has no substance. The decree for compensationis passed as an alternate decree and in lieu of the decree forspecific performance. [Para 10][178-C-D]

3. Now so far as the amount of compensation is concerned,as observed by this Court in the case of Jagdish Singh, thecompensation determined and awarded under the LandAcquisition Act may safely be taken into consideration. Therefore,the High Court has rightly observed and held that the plaintiffshall be entitled to the entire amount of compensation awardedunder the Land Acquisition Act together with interest andsolatium. However, at the same time, the defendant – originalland owner shall also be entitled to the deduction therefrom ofmoney value of the services, time and energy expended inpursuing the claims of compensation and the expenditure incurredby him in the litigation culminating in the award. As such, nothingis on record to suggest that any expenses have been incurred bythe appellant. However, in the facts and circumstances of thecase and considering the decisions of this Court in the cases ofJagdish Singh and Urmila Devi, ends of justice will be served ifthe plaintiff is awarded the entire amount of compensationdetermined under the Land Acquisition Act together with interestand solatium less Rs. 2,50,000/- + Rs.50,000/- (towards thebalance sale consideration). [Para 11][178-D-H]

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Case Law Reference

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1653of 2021.

From the Judgment and Order dated 23.09.2016 of the High CourtGof Punjab and Haryana at Chandigarh in RSA No. 4848 of 2016.

Sushil Sardana, Shafik Ahmed, Kaushal Yadav, Advs. for theAppellant.

Rakesh Talukdar, Abhimanyu Tewari, Ankit Jaglan, Ashray Chopra,Advs. for the Respondent.

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172SUPREME COURT REPORTS

[2021] 4 S.C.R.

AThe Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 23.09.2016 passed by the High Court of Punjab andHaryana at Chandigarh in R.S.A. No. 4848/2016, by which the HighBCourt has disposed of the said second appeal modifying the judgmentand decree for specific performance qua agreement to sell which wasin favour of the original plaintiff to the extent holding that the respondent-original plaintiff shall be deemed to have stepped into the shoes of thevendor and shall be entitled to the entire amount of compensation alongCwith solatium and interest etc. owing to the acquisition of the land, theoriginal defendant has preferred the present appeal.

2. The facts leading to the present appeal in nutshell are as under:

2. The facts leading to the present appeal in nutshell are as under:

That an agreement to sell was executed by the appellant – originaldefendant (hereinafter referred to as the ‘defendant’) in favour of theDrespondent – original plaintiff (hereinafter referred to as the ‘plaintiff’)on 9.3.2010 with respect to the land in question for a total saleconsideration of Rs. 32 lakhs. That out of the total sale consideration ofRs. 32 lakhs, the plaintiff paid Rs. 31, 50,000/- to the defendant. That asper the agreement the sale deed was to be executed on 8.7.2010. UponEfailure of the defendant to execute the sale deed, the plaintiff served alegal notice dated 13.7.2020 requesting the defendant to remain presentat Sub-Registrar’s office on 6.8.2010 to execute the sale deed. But insteadof remaining present on the said date at the office of the Sub-Registrar,the defendant refused to do so on 4.8.2010. That thereafter the plaintiffinstituted a suit on 5.8.2010 being Civil Suit No. RBT-34/2010 in theFCourt of learned Civil Judge, Senior Division, Jhajjar, Haryana for specificperformance of the agreement to sell and to handover the possession ofthe land in question. By way of an alternative prayer, it was prayed forrecovery of Rs. 31,50,000/- with interest @ 24% per annum from9.3.2010 till the date of payment. That after the filing of the suit butGbefore passing of the final decree, the land in question came to beacquired by the acquiring body for which a notification under Section 6of the Land Acquisition Act was issued on 6.7.2012. That the learnedtrial Court decreed the suit by judgment and decree dated 19.12.2012and passed a decree for specific performance. That the learned trialCourt specifically gave findings in favour of the plaintiff on the executionH

of the agreement to sell; readiness and willingness on the part of theplaintiff. That the learned trial Court directed the defendant to executethe sale deed in favour of the plaintiff by receiving the balance saleconsideration of Rs. 50,000/- and handover the possession of the suitproperty to the plaintiff. The judgment and decree passed by the learnedtrial Court came to be affirmed by the learned first appellate court.

At this stage, it is required to be noted that before the learned trialcourt, it was not brought to the notice of the court that with respect tothe land in question a notification under Section 6 of the Land AcquisitionAct has been issued on 6.7.2012.

3. Feeling aggrieved and dissatisfied with the judgment and decreepassed by the learned trial Court, affirmed by the first appellate court,the defendant preferred second appeal before the High Court being R.S.A.No. 4848/2016. Before the High Court, it was submitted on behalf of thedefendant that in view of the fact that the land in question has beenacquired under the provisions of the Land Acquisition Act, the defendanthas no saleable right and interest in the suit property and therefore theagreement to sell cannot be executed. Submissions on merits were alsomade on behalf of the defendant on the findings recorded by the learnedtrial court on execution of the agreement to sell by the defendant infavour of the plaintiff; accepting Rs. 31,50,000/- by way of part saleconsideration; and readiness and willingness on the part of the plaintiffto pay the balance sale consideration of Rs. 50,000/-.

3.1 On behalf of the plaintiff, heavy reliance was placed on thedecision of this Court in the case of Jagdish Singh v. Natthu Singh,(1992) 1 SCC 647. It was submitted that an identical situation hadarisen before this Court where during the pendency of the suit the landin question was acquired and after considering Section 21 of he SpecificRelief Act it was held by this Court that the plaintiff is entitled to take allthe benefits of compensation along with interest and solatium, less thecost of litigation incurred by the original land owner – vendor for recoveryof the amount of compensation.

3.2 The High Court accepted the same and after following thedecision of this Court in the case of Jagdish Singh (supra), has modifiedthe judgment and decree for specific performance passed by the learnedtrial Court, affirmed by the first appellate court and has held that theplaintiff shall be deemed to have stepped into the shoes of the defendant AB

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A– original land owner and shall be entitled to the entire amount ofcompensation along with solatium and interest etc., owing to theacquisition of the land in question. The High Court also affirmed thefindings recorded by the courts below qua execution of the agreementto sell; and readiness and willingness which were in favour of the plaintiff.

B4. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, the original defendant has preferredthe present appeal.

5. Shri Sushil Sardana, learned Advocate appearing on behalf ofthe defendant has vehemently submitted that in the facts andCcircumstances of the case and more particularly when during thependency of the suit the land in question came to be acquired under theprovisions of the Land Acquisition Act, the defendant had no saleableright and interest in the suit property and therefore no relief for specificperformance of the agreement to sell could have been passed. It issubmitted that in fact in the appeal preferred by the defendant – appellantDherein the High Court has modified the decree passed by the learnedtrial court, affirmed by the first appellate court, and held that in lieu ofdecree for specific performance, the plaintiff shall be entitled to theentire amount of compensation with solatium and interest.

5.1 It is further submitted that in view of Section 21 of the SpecificERelief Act r/w Section 73 of the Indian Contract Act, the plaintiff at themost shall be entitled to the refund of the amount of sale considerationpaid with interest.

5.2 It is further submitted that in the present case the plaintiffnever claimed for any compensation. It is submitted that as per SectionF21(1) of the Specific Relief Act if the contract is broken by the defendant,in that event, compensation may be granted, but again Section 21(5)says that no compensation shall be awarded under Section 21 unless theplaintiff has claimed such compensation in his plaint. It is submitted thatin the present case the plaintiff himself by an alternate prayer prayedGthat if the specific performance cannot be performed by any reason, inthat event, decree for refund of Rs. 31,50,000/- along with interest @24% per annum may be passed.

It is submitted that at the most in view of the judgment and decreepassed by the courts below, the plaintiff shall be entitled to recover theamount of Rs. 31,50,000/- along with interest only. It is submitted thatH

pursuant to the judgment and order passed by the High Court, the plaintiffshall be entitled to receive Rs. 80 lakhs (approximately), which is lyingwith the concerned acquiring body of the State of Haryana. It is submittedthat therefore the High Court has fallen in error in holding and directingthat the plaintiff shall be entitled to the entire amount of compensationawarded under the Land Acquisition Act along with solatium and interest.

6. While opposing the present appeal, Shri Rakesh Talukdar,learned Advocate appearing on behalf of the plaintiff has heavily reliedupon the decisions of this Court in the cases of Jagdish Singh (supra)and Urmila Devi v. Deity, Mandir Shree Chamunda Devi, (2018) 2SCC 284. It is submitted that in both the cases this Court had an occasionto consider the very submission made on Section 21 of the SpecificRelief Act and it is held by this Court that the original plaintiff shall beentitled to the amount of compensation awarded under the LandAcquisition Act less the amount of expenses incurred by the defendant– original land owner for receiving the compensation. It is submitted thatin the present case, as such, there is nothing on record that any amountwas incurred by the defendant for receiving the amount of compensationunder the Land Acquisition Act.

6.1 It is submitted by the learned Advocate appearing on behalfof the plaintiff that as held by this Court in the case of Jagdish Singh(supra), which has been subsequently considered by this Court in thecase of Urmila Devi (supra), having regard to Section 21 of the SpecificRelief Act when the contract becomes impossible with no fault of theplaintiff, Section 21 of the Specific Relief Act enables the Court to awardcompensation in lieu and substitution of the specific performance.

6.2 It is submitted that so far as the findings on execution of theagreement to sell; the payment of the sale consideration of Rs. 31,50,000-and readiness and willingness to pay the balance amount of saleconsideration, there are concurrent findings recorded by all the threecourts below which are on appreciation of evidence on record.

6.3 Making the above submissions, it is prayed to dismiss thepresent appeal.

7. We have heard the learned counsel for the respective partiesat length.

At the outset, it is required to be noted that as such there areconcurrent findings of fact recorded by all the courts below on the AB

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Aexecution of the agreement to sell by the defendant in favour of theplaintiff; payment of Rs. 31,50,000/- towards part sale consideration bythe plaintiff to the defendant (out of the total sale consideration of Rs. 32lakhs) and the readiness and willingness of the plaintiff to pay the balancesale consideration of Rs. 50,000/-. Therefore, as such, the plaintiff shallbe entitled to the decree for specific performance. However, in view ofBthe fact that before the final decree could be passed by the learned trialcourt, the land in question came to be acquired under the provisions ofthe Land Acquisition Act and therefore the question arose before theHigh Court what relief the plaintiff shall be entitled to in the event thedecree of specific performance is required to be modified by an alternativeCdecree.

7.1 Relying upon the decisions of this Court in the cases of JagdishSingh (supra) and Urmila Devi (supra) and considering Section 21 ofthe Specific Relief Act, the High Court, by the impugned judgment andorder has modified the judgment and decree for specific performanceDand held that the plaintiff shall be entitled to the amount of compensationas there was no fault on the part of the plaintiff. It is held that the plaintiffshall be entitled to the amount of compensation as awarded under theLand Acquisition Act together with interest and solatium by way ofcompensation. Therefore, the short question which is posed for theconsideration of this Court is, whether in the facts and circumstances ofEthe case, the High Court is justified in modifying the judgment and decreepassed by the learned trial court for specific performance?

8. An identical question came to be considered by this Court inthe case of Jagdish Singh (supra). In the case before this Court, thelearned trial court as well as the first appellate court dismissed the suitFfor specific performance. However, the High Court in second appealreversed the findings of the courts below and held that the plaintiff wasready and willing to perform the contract and was entitled for decree.However, during the pendency of the second appeal before the HighCourt, proceedings for compulsory acquisition of the land were initiatedGand the land was acquired. Therefore, the question arose as to whetherthe plaintiff was entitled for the amount of compensation received in theland acquisition proceedings or was entitled only to the refund of theearnest money. The High Court modified the decree of the specificperformance of the contract with decree for a realisation of compensationpayable in lieu of acquisition. The matter was carried before this Court.H

After referring to Section 21 of the Specific Relief Act, this Court hasheld that where the contract for no fault of the plaintiff becomesimpossible, Section 21 enables award of compensation in lieu andsubstitution of the specific performance. So far as the determination ofthe amount of compensation, this Court observed and held that thecompensation awarded under the Land Acquisition Act may safely betaken to be the measure of damages subject, of course, to the deductiontherefrom of money value of the services, time and energy expended bythe original land owner in pursuing the claims of compensation and theexpenditure incurred by him in the litigation culminating in the award. Inparas 24, 29 and 30, it is observed and held as under:

“24. When the plaintiff by his option has made specificperformance impossible, Section 21 does not entitle him to seekdamages. That position is common to both Section 2 of Lord Cairn’sAct, 1858 and Section 21 of the Specific Relief Act, 1963. But inIndian law where the contract, for no fault of the plaintiff, becomesimpossible of performance Section 21 enables award ofcompensation in lieu and substitution of specific performance.

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29. In the present case there is no difficulty in assessing thequantum of the compensation. That is ascertainable with referenceto the determination of the market value in the land acquisitionproceedings. The compensation awarded may safely be taken tobe the measure of damages subject, of course, to the deductiontherefrom of money value of the services, time and energyexpended by the appellant in pursuing the claims of compensationand the expenditure incurred by him in the litigation culminating inthe award.

30. We accordingly confirm the finding of the High Court thatrespondent was willing and ready to perform the contract andthat it was the appellant who was in breach. However, insubstitution of the decree for specific performance, we make adecree for compensation, equivalent to the amount of the landacquisition compensation awarded for the suit lands together withsolatium and accrued interest, less a sum of Rs 1,50,000 (one lakhfifty thousand only) which, by a rough and ready estimate, wequantify as the amount to be paid to the appellant in respect of his AB

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Aservices, time and money expended in pursuing the legal claimsfor compensation.”

The aforesaid view has been followed by this Court in the case ofUrmila Devi (supra).

9. Applying the law laid down by this Court in the aforesaid twoBdecisions to the facts of the case in hand, it cannot be said that the HighCourt has committed any error in modifying the decree for specificperformance. As rightly held by the High Court, as such, the plaintiff willbe deemed to be in the shoes of the defendant and therefore shall beentitled to the amount of compensation, determined and awarded underCthe provisions of the Land Acquisition Act.

10. Now so far as the submission on behalf of the appellant thatas compensation has not been specifically prayed by the plaintiff in thesuit, the plaintiff shall not be entitled to any amount of compensationeven considering Section 21 of the Specific Relief Act. The aforesaidDhas no substance. The decree for compensation is passed as an alternatedecree and in lieu of the decree for specific performance.

11. Now so far as the amount of compensation is concerned, asobserved by this Court in the case of Jagdish Singh (supra), thecompensation determined and awarded under the Land Acquisition ActEmay safely be taken into consideration. Therefore, the High Court hasrightly observed and held that the plaintiff shall be entitled to the entireamount of compensation awarded under the Land Acquisition Acttogether with interest and solatium. However, at the same time, thedefendant – original land owner shall also be entitled to the deductiontherefrom of money value of the services, time and energy expended inFpursuing the claims of compensation and the expenditure incurred byhim in the litigation culminating in the award. As such, nothing is onrecord to suggest that any expenses have been incurred by the appellant.However, in the facts and circumstances of the case and consideringthe decisions of this Court in the cases of Jagdish Singh (supra) andGUrmila Devi (supra), ends of justice will be served if the plaintiff isawarded the entire amount of compensation determined under the LandAcquisition Act together with interest and solatium less Rs. 2,50,000/- +Rs.50,000/- (towards the balance sale consideration).

12. In view of the above and for the reasons stated above, thepresent appeal is disposed of by modifying the impugned judgment andH

order passed by the High Court to the extent directing and holding thatthe plaintiff – respondent herein shall be entitled to recover the entireamount of compensation along with solatium and interest awarded underthe provisions of the Land Acquisition Act, which is reported to be lying/deposited with the acquiring body with respect to the land in questionminus Rs. 3,00,000/- (Rs. 2,50,000/- towards the expenses which mighthave been incurred in pursuing the claims of compensation and theexpenditure incurred by him in the litigation culminating in the award +Rs. 50,000/- towards balance sale consideration). Therefore, the appellant– defendant shall be entitled to Rs. 3,00,000/- from the amount ofcompensation deposited with the acquiring body and the balance amountof compensation together with interest and solatium to be paid to theoriginal plaintiff.

13. The appeal is partly allowed to the aforesaid extent only. Restof the judgment and order passed by the High Court is hereby confirmed.No costs.

Devika Gujral

Appeal partly allowed.

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