NANJAPPAN Vs. RAMASAMY & ANR
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 2373 of 2015, Judgment Date: Feb 24, 2015
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2373 OF 2015
(Arising out of SLP (Civil) No. 4930/2014)
NANJAPPAN ... Appellant
Versus
RAMASAMY & ANR. ... Respondents
J U D G M E N T
R. BANUMATHI, J.
Delay condoned. Leave granted.
2. This appeal arises out of the judgment dated 17.11.2011 in S.A.
No.332 of 2005, whereby the High Court of Madras dismissed the second
appeal affirming the judgment passed by the first appellate court which
reversed the judgment of the trial Court allowing the respondents' plea of
specific performance of agreement of sale.
3. Brief facts, giving rise to the present appeal, are as follows
:- Respondents have pleaded that on 30.09.1987, the appellant agreed to
sell the suit property to the respondents for a sum of Rs.45,000/- and an
agreement of sale was entered into and the appellant received a sum of
Rs.25,000/- as advance on the same day and it was agreed that the balance
amount shall be paid within a period of 2 years and the sale be executed
and to that effect a Sale Agreement (Ex. P1) was executed. As the
appellant was unable to vacate the house on 21.03.1990, the time stipulated
for performance was extended and Second Agreement (Ex. P-2) was executed,
on which day, the respondents paid a further advance of Rs.15,000/- and the
period was extended to another three years. According to the respondents,
within the stipulated period, the appellant did not shift to another house
and on 09.03.1993, the respondents paid a further sum of Rs. 2,500/- to the
appellant and third Sale Agreement (Ex. P-3) was executed and the period
was extended by another two years. Case of the respondents is that they
were ready and willing to perform their part of contract in getting the
sale executed by paying the balance amount to the appellant but the
appellant did not come forward to execute the sale deed. There was
exchange of legal notice between the parties, and thereafter, respondents
filed a suit for specific performance stating that they were always ready
and willing to perform their part of the contract.
4. Appellant filed written statement controverting the averments
made in the plaint and interalia contended that the appellant and the
respondents were friends working under the same management and taking
advantage of this, respondents tried to grab the property worth Rs.10 lakhs
by paying a meagre consideration of Rs.45,000/-. In the written statement,
the appellant further pleaded that in the year 1987 itself, entire area
including construction would have fetched more than Rs. 3 lakhs. Since the
appellant was in need of money, he decided to sell the property and sale
price was fixed at a sum of Rs. 3 lakhs and in order to reduce the
registration charges and stamp duty, the respondents requested the
appellant not to mention the actual sale consideration but to mention only
Rs.45,000/- in the sale agreement to which he agreed. According to the
appellant, the respondents could not pay the balance sale consideration and
the appellant received Rs.2,500/- under the third agreement and executed
the same only under compulsion of the respondents and that is the reason
why he did not turn to the Registrar's office to register the same. The
appellant also pleaded that the suit property is their only shelter and the
decree for specific performance after long period would cause serious
hardship to him and his family members.
5. Upon consideration of entire facts and evidence, trial court,
vide its judgment dated 21.12.2001, declined the relief of specific
performance by observing that the respondents did not prove that they were
ready and willing to make the balance sale consideration. The trial court
did not accept the defence plea that the original sale consideration was
agreed at Rs.3 lakhs and in order to reduce the registration charges and
stamp duty, in the agreement, the sale consideration was mentioned as
Rs.45,000/-. Being aggrieved by the dismissal of the suit, the
respondents filed first appeal which was allowed, vide judgment dated
30.12.2003. While allowing the appeal, the first appellate court held
that having paid substantial sale consideration of Rs.42,500/- and left
with only Rs. 2,500/- to be paid, it cannot be said that the respondents
were not ready and willing to take the sale. The first appellate court,
inter alia, held that the appellant did not discharge the onus to prove
that the value of the property was mentioned as Rs.45,000/- as against the
actual market value of Rs.3 lakhs and that no knowledgeable person will
agree to sell the property for Rs.45,000/- when the true value of the
property is more than rupees three lakhs. Being aggrieved by the decree
for specific performance, the appellant approached the High Court by filing
second appeal, wherein the High Court affirmed the view taken by the first
appellate Court and dismissed the second appeal.
6. In this appeal, arising out of special leave petition, the
appellant seeks to assail the dismissal of the second appeal contending
that after a lapse of long period, it would be inequitable to grant
discretionary relief of specific performance and that delay caused serious
hardship to him. Learned counsel for the appellant contended that the
first appellate court and the High Court ought to have considered that the
actual value fixed for the suit property was Rs.3 lakhs but on the request
of the respondents, the value of the property was shown as Rs.45,000/- in
the agreement to avoid excess stamp duty and registration charges payable
at the time of registration of the conveyance deed. It was submitted that
a long period of eight years was given to the respondents to get the sale
deed executed and even after a lapse of eight years of extension from 1987,
the respondents could not pay the actual sale consideration of rupees three
lakhs and therefore, there is no equity in favour of the respondents. It
was submitted that after obtaining permission from the concerned
authorities, the appellant has constructed a house to an extent of 1165 sq.
ft. in the suit property and that is the only shelter for the appellant and
the decree for specific performance after a lapse of long period of time,
would cause serious hardship to him and his family members.
7. Per contra, learned counsel for the respondents submitted that
in the light of the definite recitals in the agreement of sale, the courts
below rightly rejected the defence plea that as against the value of Rs.3
lakhs, lesser amount of Rs.45,000/- was entered in the agreement of sale.
It was further submitted that having signed in three agreements, it is not
open to the appellant to resile from the contract. It was contended that
upon appreciation of evidence, the first appellate court, as affirmed by
the High Court, rightly granted the decree for specific performance which
cannot be said to be perverse warranting interference.
8. On consideration of the submissions, the point falling for our
consideration is whether the courts below were justified in decreeing the
suit for specific performance.
9. The appellant pleaded that as per the agreement between the
parties, sale price was agreed to be Rs.3 lakhs and only to reduce
registration charges and stamp duty, in the agreement sale price was
written as Rs.45,000/-. All three courts below disbelieved the said
version of the appellant that the sale price was fixed at rupees three
lakhs and that only for the purpose of registration charges and stamp duty,
in the agreement the sale price was written as Rs.45,000/-.
10. As per Section 92 of the Indian Evidence Act, when the terms
of any such contract have been reduced to the form of a document , no
evidence of any oral agreement or statement shall be admitted as between
the parties to any such instrument for the purpose of contradicting,
varying, adding to or subtracting from terms. Courts have recorded
concurrent findings rejecting the stand of the appellant that the actual
sale price was rupees three lakhs and for the purpose of stamp duty and
registration charges, lesser amount was written and this is well in
accordance with Section 92 of the Evidence Act and we do not find any
reason warranting interference in the said concurrent findings of the
courts below.
11. In a suit for specific performance, the plaintiff has to aver
and prove with satisfactory evidence that he was always ready and willing
to perform his part of contract at all material time as mandatorily
required under Section 16(c) of the Specific Relief Act, 1963. First
appellate court and the High Court recorded findings that the plaintiff was
always ready and willing to perform his part of the contract. By a careful
reading of the recitals in the agreement, the concurrent findings so
recorded do not seem to reflect the conduct of the parties. As per
recitals in (Ex.P-1 agreement dated 30.9.1987), an amount of Rs.25,000/-
was paid by the respondents-plaintiffs to the appellant-defendant.
Balance amount of Rs. 20,000/- was to be paid within 21/2 years
thereafter and get the sale executed. In the second agreement of sale
(Ex.P-2 dated 21.3.1990) it is stated that the plaintiffs were unable to
pay the balance amount within the stipulated period and get the sale
deed executed and therefore the second sale agreement was executed
extending the period for execution of sale deed for a further period of
three years. As could be seen from the recitals from Ex.P-2, respondents
were unable to pay the balance sale consideration and get the sale deed
executed. It is pertinent to note that the time for performance of
contract was extended again and again totaling period of eight years. Even
though first appellate court and High Court recorded findings that
respondents-plaintiffs were ready and willing to perform their part of
contract, the fact that time was extended for eight years is to be kept in
view while considering the question whether discretion is to be exercised
in favour of the respondents-plaintiffs.
12. Under Section 20 of the Specific Relief Act, grant of specific
performance of contract is discretionary. Though the decree for specific
performance is discretionary, yet the court is not bound to grant such a
relief merely because it is lawful to do so. But the discretion of the
court is not arbitrary, but sound and reasonable, guided by judicial
principles of law and capable of correction by a court of appeal and should
be properly exercised keeping in view the settled principles of law as
envisaged in Section 20 of the Act. The jurisdiction of decreeing specific
performance is a discretion of the court and it depends upon facts and
circumstances of each case. The court would take into consideration
circumstances of each case, conduct of the parties, recitals in the sale
agreement and the circumstances outside the contract have to be seen.
13. In Sardar Singh vs. Smt. Krishna Devi & Anr., (1994) 4 SCC 18,
this Court observed that as the court has to see the totality of the
circumstances, conduct of the parties and respective interests under the
contract while granting/refusing such relief.
14. First sale agreement was executed on 30.9.1987 about twenty
seven years ago. The property is situated in Coimbatore City and over
these years, value of property in Coimbatore City would have considerably
increased. In Saradamani Kandaplan vs. Rajalakshmi & Ors., (2011) 12 SCC
18, this Court has held that the value of the property escalate in the
urban areas very fast and it would not be equitable to grant specific
performance after a lapse of long period of time. In the instant case,
first agreement was executed on 30.9.1987 i.e. twenty seven years ago. In
view of passage of time and escalation of value of the property, grant of
specific relief of performance would give an unfair advantage to the
respondents-plaintiffs whereas the performance of the contract would
involve great hardship to the appellant-defendant and his family members.
15. Considering the totality and the facts and circumstances, in
our view, it is not appropriate to grant discretionary relief of specific
performance to the respondents-plaintiffs for more than one reason.
Admittedly, suit property is the only property of the appellant-defendant
and the appellant is said to have constructed a house and where he is
currently residing with the family. As compared to respondents, the
appellant will suffer significant hardship if a decree for specific
performance is granted against the appellant. Considering the
circumstances, such as the construction of the residential house over the
suit property, sale consideration, passage of time and hardship caused to
the appellant, makes it inequitable to exercise the discretionary relief of
specific performance and the concurrent finding of first appellate court
and the High Court decreeing the suit for specific performance is to be set
aside.
16. The next point falling for determination is the relief to be
granted to the respondents-plaintiffs. Admittedly, respondents have paid
advance amount of Rs.42,500/-, even though, the respondents are not
entitled to the relief of specific performance, in our view, the advance
amount of Rs.42,500/- paid by the respondents is to be refunded to the
respondents with interest at the rate of 9% per annum. In addition, the
appellant is directed to pay compensation of Rs.2,00,000/- to the
respondents.
17. In the result, the impugned judgment dated 17.11.2011 passed
by the High Court in Second Appeal No.332/2005 is set aside and this appeal
is allowed. The appellant shall refund Rs.42,500/- with 9% interest per
annum from the date of third agreement of sale dated March 9, 1993. Both
parties shall bear their respective costs.
..........................J.
(V. Gopala Gowda)
.........................J.
(R. Banumathi)
New Delhi;
February 24, 2015
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