SURINDER KAUR (D) THR. LR. JASINDERJIT SINGH (D) THR. LRS. versus BAHADUR SINGH (D) THR. LRS. on 11 September 2019

SURINDER KAUR (D) THR. LR. JASINDERJITSINGH (D) THR. LRS.

v.

BAHADUR SINGH (D) THR. LRS.

(Civil Appeal Nos. 7424-7425 of 2011)

SEPTEMBER 11, 2019

[DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ.]

Specific Relief Act, 1963 – s.16(c) – Performance of theessential terms of the contract – Predecessor-in-interest of theappellants entered into an agreement to sell the suit land withpredecessor-in-interest of the respondents for total considerationof Rs. 5605/- – Out of this Rs.1000/- was paid as earnest money atthe time of execution of agreement to sell – The possession of theland was handed over to the predecessor-in-interest of therespondents (vendee) – Since there was some litigation with regardto the property it was agreed between the parties that the sale deedwould be executed within one month from the date of decision ofcivil appeal – Clauses of the agreement stipulated that in casedecision regarding the property in civil appeal is after one year,then the predecessor-in-interest of respondents shall pay customaryrent to the predecessor-in-interest of appellants – Litigation referredto in the agreement was decided after about 13 years – Predecessor-in-interest of appellants failed to execute sale deed in favour ofpredecessor-in-interest of respondents – Suit for specificperformance was filed by predecessor-in-interest of the respondents– The suit was decreed by all the Courts below – Appellantscontended that since predecessor-in-interest of the respondentsfailed to pay the rent of the land, he was not entitled to a decree forspecific performance – Held: The suit property was handed over tothe predecessor-in-interest of the respondents and he had agreedto pay rent at the customary rate – Therefore, the possession ofland was given to him only on this clear-cut understanding – Thiswas a reciprocal promise and was an essential part of the agreementto sell – Admittedly, predecessor-in-interest of the respondents did

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Anot pay rent till the date of filing of the suit – The payment of rentwas an essential part of the contract – Equity is totally against him– He by not paying the rent did not act fairly and forfeited his rightto get the discretionary relief of specific performance – Thus,judgment and decree of all the Courts below set aside and suit forBspecific performance dismissed.

Allowing the appeals, the Court

HELD:1. The first issue is whether the promises werereciprocal promises or promises independent of each other. Therecan be no hard and fast rule and the issue whether promises areCreciprocal or not has to be determined in the peculiar facts ofeach case. As far as the present case is concerned, the vendor-predecessor-in-interest of the appellants, who was a lady receivedless than 20% of the sale consideration but handed over thepossession to the vendee-predecessor-in-interest of theDrespondents, probably with the hope that the dispute would bedecided soon, or at least within a year. Therefore, Clause 3provided that if the case is not decided within one year, then thesecond party shall pay to the first party the customary rent forthe land. It has been urged by the respondents that the HighECourt rightly held that this was not a reciprocal promise and hadnothing to do with the sale of the land. One cannot lose sight ofthe fact that the land had been handed over to the vendee and hehad agreed that he would pay rent at the customary rate. Therefore,the possession of the land was given to him only on this clear-cutFunderstanding. This was, therefore, a reciprocal promise and wasan essential part of the agreement to sell. [Para 9][143-A-C]

2. Admittedly, predecessor-in-interest of the respondentsdid not even pay a penny as rent till the date of filing of the suit.After such objection was raised in the written statement, inGreplication filed by him, he instead of offering to pay the rent,denied his liability to pay the same. Even if this Court was tohold that this promise was not a reciprocal promise, as far as theagreement to sell is concerned, it would definitely mean thatpredecessor-in-interest of the respondents had failed to performHhis part of the contract. There can be no manner of doubt that the payment of rent was an essential term of the contract. Explanation(ii) to Section 16(c) clearly lays down that the plaintiff must proveperformance or readiness or willingness to perform the contractaccording to its true construction. The only construction whichcan be given to the contract in hand is that predecessor-in-interestof the respondents was required to pay customary rent. [Para10][143-D-F]

3. In this case, predecessor-in-interest of the respondentshaving got possession of the land in the year 1964 did not pay therent for 13 long years and even when he filed the replication inthe year 1978, he denied any liability to pay the customary rent.Therefore, he did not act in a proper manner. Equity is totallyagainst him. In considered view of this Court, he was not entitledto claim the discretionary relief of specific performance of theagreement having not performed his part of the contract even ifthat part is held to be a distinct part of the agreement to sell. Thevendee by not paying the rent for 13 long years to the vendor,even when he had been put in possession of the land on paymentof less than 18% of the market value, caused undue hardship toher. The land was agricultural land. predecessor-in-interest ofthe respondents was cultivating the same. He must have beenearning a fairly large amount from this land which measured about9½ acres. He by not paying the rent did not act fairly and, forfeitedhis right to get the discretionary relief of specific performance.[Para 15][144-E-H]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7424-7425 of 2011

From the Judgment and Order dated 06.01.2009 of the High Courtof Punjab and Haryana at Chandigarh in R.S.A. No. 611 of 1982 andorder dated 26.05.2009 in Review Application No. 23-C of 2009.

Ajay Kumar Talesara, Jamshed Bey, Ekansh Bansal, Advs. forthe Appellants.

Onkar Shrivastava, Divyadeep Chaturvedi, Shashwat Sidhant,Rameshwar Prasad Goyal, Advs. for the Respondents.

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AThe Judgment of the Court was delivered by DEEPAK GUPTA, J.

1. The question of law arising in these appeals is whether a vendeewho does not perform one of his promises in a contract can obtain thediscretionary relief of specific performance of that very contract.B

2. Briefly stated the facts are that Mohinder Kaur, predecessor ininterest of the appellantsentered into an agreement with Bahadur Singh,predecessor in interest of the respondents on 13.05.1964 whereby sheagreed to sell the suit land to Bahadur Singh for a total sale considerationof Rs.5605/-. Out of this, Rs.1000/- was paid as earnest money at theCtime of execution of agreement to sell, and it was agreed that the balanceamount would be paid at the time of registration of the sale deed. Thepossession of the land was handed over to the vendee on the date ofagreement to sell itself. Since there was some litigation with regard tothe property it was agreed between the parties that the sale deed wouldDbe executed within one month from the date of decision of civil appealpending before the Punjab and Haryana High Court.

3. To decide the appeals, it would be necessary to refer to Clauses2 and 3 of the agreement to sell which read as under:- “xxx xxx xxx E

2) That an appeal in respect of the above-mentioned land is pendingin the High Court and after decision in the said appeal, the FirstParty shall execute and register Sale Deed in favour of the SecondParty in the month of July, 1965.

3) That the possession of the land has been handed today and inFcase the decision by the High Court in the appeal is after oneyear, then the sale deed shall be executed and registered afterone month from the date of decision and in the circumstance, theSecond Party shall pay to the First party the customary rent forthe said land.

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xxx xxx xxx’’

4. It is not disputed that the litigation referred to in the agreementwas decided on 17.01.1977, i.e., about 13 years after the agreement tosell was entered into. Bahadur Singh requested Mohinder Kaur to executethe sale deed but since she failed to do so, a suit for specific performance H

of the agreement was filed by Bahadur Singh. In the alternative, it wasprayed that a decree be passed for a sum of Rs.5605/-, i.e. Rs.1000/-paid as earnest money and Rs.4605/- as damages. This suit wascontested on various grounds but we are concerned with only one whereinthe defendant raised the plea that since Bahadur Singh had admittedlyfailed to pay the rent of the land in terms of Clause 3 of the agreement,he was not entitled to a decree for specific performance.

5. The suit has been decreed by all the courts below. There is nodispute with regard to the factual aspects.The only issue is whether thevendee Bahadur Singh who admittedly did not pay the rent is entitled toa decree of specific performance of the agreement dated 13.05.1964.The courts below have held that the agreement contained several promiseswhich may be reciprocal, contingent or separate. Section 51[1] of theContract Act,1872 provides that when a contract consists of reciprocalpromises to be simultaneously performed, no promisor needsto performhis promise unless the promisee is ready and willing to perform hisreciprocal promise.

6. The aforesaid provisions have to be read along with Section16(c)[2] of The Specific Relief Act, 1963 which clearly lays down that thespecific performance of a contract cannot be enforced in favour of aperson who fails to prove that he has performed or was always readyand willing to perform the essential terms of the contract which were tobe performed by him.

151. Promisor not bound to perform, unless reciprocal promisee ready and willingto perform.—When a contract consists of reciprocal promises to be simultaneouslyperformed, no promisor need perform his promise unless the promisee is ready andwilling to perform his reciprocal promise.

2 16. Personal bars to relief.– Specific performance of a contract cannot be enforcedin favour of a person –

(a) xxxxxxxxx

(b) xxxxxxxxx

(c) who fails to prove that he has performed or has always been ready and willingto perform the essential terms of the contract which are to be performed byhim, other than terms the performance of which has been prevented or waivedby the defendant.

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

(i) where a contract involves the payment of money, it is not essential for theplaintiff to actually tender to the defendant or to deposit in court any moneyexcept when so directed by the court;

(ii) the plaintiff must prove performance of, or readiness and willingness to perform,the contract according to its true construction.

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A7. We shall also have to take into consideration that the specificperformance of contract of an immovable property is a discretionaryrelief in terms of Section 20[3 ]of The Specific Relief Act as it stood at thetime of filing of the suit.

8. Section 20 of The Specific Relief Act lays down that theBjurisdiction to decree a suit for specific performance is a discretionaryjurisdiction and the court is not bound to grant such relief merely becauseit is lawful.

320. Discretion as to decreeing specific performance.—

C(1) The jurisdiction to decree specific performance is discretionary, and the court is notbound to grant such relief merely because it is lawful to do so; but the discretion of thecourt is not arbitrary but sound and reasonable, guided by judicial principles andcapable of correction by a court of appeal.

(2) The following are cases in which the court may properly exercise discretion not todecree specific performance:—D

(a) where the terms of the contract or the conduct of the parties at the time ofentering into the contract or the other circumstances under which the contractwas entered into are such that the contract, though not voidable, gives theplaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on thedefendant which he did not foresee, whereas its non-performance would involveEno such hardship on the plaintiff; or

(c) where the defendant entered into the contract under circumstances which thoughnot rendering the contract voidable, makes it inequitable to enforce specificperformance.

Explanation 1.—Mere inadequacy of consideration, or the mere fact that theFcontract is onerous to the defendant or improvident in its nature, shall not bedeemed to constitute an unfair advantage within the meaning of clause (a) orhardship within the meaning of clause (b).

Explanation2.— The question whether the performance of a contract wouldinvolve hardship on the defendant within the meaning of clause (b) shall, exceptin cases where the hardship has resulted from any act of the plaintiff subsequentto the contract, be determined with reference to the circumstances existing atGthe time of the contract.

(3) The court may properly exercise discretion to decree specific performance in anycase where the plaintiff has done substantial acts or suffered losses in consequence ofa contract capable of specific performance.

(4) The court shall not refuse to any party specific performance of a contract merely onHthe ground that the contract is not enforceable at the instance of the party.

9. The first issue is whether the promises were reciprocal promisesor promises independent of each other. There can be no hard and fastrule and the issue whether promises are reciprocal or not has to bedetermined in the peculiar facts of each case. As far as the present caseis concerned, the vendor, who was a lady received less than 20% of thesale consideration but handed over the possession to the defendant,probably with the hope that the dispute would be decided soon, or atleast within a year. Therefore, Clause 3 provided that if the case is notdecided within one year, then the second party shall pay to the first partythe customary rent for the land. It has been urged by the respondentsthat the High Court rightly held that this was not a reciprocal promiseand had nothing to do with the sale of the land. One cannot lose sight ofthe fact that the land had been handed over to Bahadur Singh and hehad agreed that he would pay rent at the customary rate. Therefore, thepossession of the land was given to him only on this clear-cutunderstanding. This was, therefore, a reciprocal promise and was anessential part of the agreement to sell.

10. Admittedly, Bahadur Singh did not even pay a penny as renttill the date of filing of the suit. After such objection was raised in thewritten statement, in replication filed by him, he instead of offering topay the rent,denied his liability to pay the same. Even if we were to holdthat this promise was not a reciprocal promise, as far as the agreementto sell is concerned, it would definitely mean that Bahadur Singh hadfailed to perform his part of the contract. There can be no manner ofdoubt that the payment of rent was an essential term of the contract.Explanation (ii) to Section 16(c) clearly lays down that the plaintiff mustprove performance or readiness or willingness to perform the contractaccording to its true construction. The only construction which can begiven to the contract in hand is that Bahadur Singh was required to paycustomary rent.

11. It has been urged that no date was fixed for payment of rent.Tenancy can be monthly or yearly. At least after expiry of one year,Bahadur Singh should have offered to pay the customary rent to thevendor which could have been monthly or yearly. But he could definitelynot claim that he is not liable to pay rent for 13 long years.

12. Learned counsel for the respondents urged that in case ofnon-payment of rent the plaintiff was at liberty to file suit for recoveryof rent. We are not impressed with this argument. A party cannot claim A

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Athat though he may not perform his part of the contract he is entitled tospecific performance of the same.

13. Explanation (ii) to Section 16(c) of The Specific Relief Actlays down that it is incumbent on the party, who wants to enforce thespecific performance of a contract, to aver and prove that he hasBperformed or has always been ready and willing to perform the essentialterms of the contract. This the plaintiff miserably failed to do in so far aspayment of rent is concerned.

14. A perusal of Section 20 of The Specific Relief Act clearlyindicates that the relief of specific performance is discretionary. MerelyCbecause the plaintiff is legally right, the Court is not bound to grant himthe relief. True it is, that the Court while exercising its discretionarypower is bound to exercise the same on established judicial principlesand in a reasonable manner. Obviously, the discretion cannot be exercisedin an arbitrary or whimsical manner. Sub clause(c) of sub-section (2) ofSection 20 provides that even if the contract is otherwise not voidableDbut the circumstances make it inequitable to enforce specificperformance, the Court can refuse to grant such discretionary relief.Explanation (2) to the Section provides that the hardship has to beconsidered at the time of the contract, unless the hardship is brought inby the action of the plaintiff.

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15. In this case, Bahadur Singh having got possession of the landin the year 1964 did not pay the rent for 13 long years and even when hefiled the replication in the year 1978, he denied any liability to pay thecustomary rent. Therefore, in our opinion, he did not act in a propermanner. Equity is totally against him. In our considered view, he wasFnot entitled to claim the discretionary relief of specific performance ofthe agreement having not performed his part of the contract even if thatpart is held to be a distinct part of the agreement to sell. The vendeeBahadur Singh by not paying the rent for 13 long years to the vendorMohinder Kaur, even when he had been put in possession of the land onpayment of less than 18% of the market value,caused undue hardship toGher. The land was agricultural land. Bahadur Singh was cultivating thesame. He must have been earning a fairly large amount from this landwhich measured about 9½ acres. He by not paying the rent did not actfairly and, in our opinion, forfeited his right to get the discretionary reliefof specific performance.

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SURINDER KAUR (D) THR. LR. JASINDERJIT SINGH (D) THR. LRS. v.BAHADUR SINGH (D) THR. LRS. [DEEPAK GUPTA, J.]

16. In view of the above, we allow the appeals, set aside thejudgment and decree of all the courts below and dismiss the suit forspecific performance. As far as the alternative plea of refund isconcerned, we are clearly of the view that since the respondents enjoyed the land for 55 long years without payment of any rent they are notentitled to any relief. No order as to costs.

Ankit Gyan

Appeals allowed.

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