B. Santoshamma & anr v. D. Sarala & anr
CIVIL APPEAL NO.3574 OF 2009 decided on September 18, 2020
Bench: Uday Umesh Lalit, Indira Banerjee, JJ
A ‘Vendee’ purchased 300 square yards of land [‘suit land’] from Vendor under a registered sale deed dated 20th August, 1982.
After about ten days, the Vendor allegedly entered into an oral agreement with the proforma respondent Mr. X in the said appeal for sale of 100 sq. yards out of the suit land in his favour, for a total consideration of Rs.3000/-, out of which Rs.2,500/- was paid in advance. The Vendor claims to have delivered possession of the said 100 sq. yards to Mr.X on the date of the oral agreement itself.
On or about 20th January, 1984, the alleged oral agreement between the Vendor and Mr. X was allegedly reduced into writing, upon payment of the balance consideration of Rs.500/-.
On 21st March, 1984, the Vendor entered into an agreement for sale of the suit land to the Vendee, for a total consideration of Rs.75,000/-, out of which Rs.40,000/- was paid by the Vendee to the Vendor in advance.
The Vendor claims to have informed the Vendee of the oral agreement with Mr. X which had been reduced to writing on 20th January, 1984.
The Vendor has alleged that he specifically requested the Vendee to incorporate a clause with regard to the earlier agreement with Mr.X in the sale agreement between the Vendor and the Vendee. However, the Vendee assured the Vendor that she would get the earlier agreement with Mr. X cancelled as her husband knew Mr X well and had already spoken to him.
According to the Vendor, the Vendee represented to the Vendor, that there was no need for the Vendor to get any clearance from Mr.X as the Vendee had been assured by Mr.X that no difficulty would be created by him.
On or about 25 May, 1984, that is, about two months after execution of the sale agreement with the Vendee, the Vendor executed a registered deed of conveyance transferring 100 sq. yards of the suit land in favour of Mr X.
The Vendor and Mr X have alleged that the Vendee had tried to interfere with MrX’s possession of 100 sq. yards of the suit land.
On or about 20th June, 1984, the Vendor allegedly issued notice to the Vendee contending that the agreement of sale dated 21st March, 1984 was conditional upon clearance from Mr X in view of the earlier agreement of the Vendor with Mr X for sale of 100 sq. yards of the suit.
Sometime thereafter, the Vendee filed a suit for specific performance of the agreement of sale dated 21st March, 1984. In the said suit, the Vendee, being the plaintiff, claimed delivery of possession of 300 sq. 5 yards of land from the Vendor.
In the meanwhile, in 1985, Mr X filed a suit in the court of the seeking a decree of perpetual injunction restraining the Vendee from interfering with his possession over 100 sq. yards of the suit land. In the suit filed by Mr X, it was alleged that he was not aware of any agreement of sale between the Vendor and the Vendee in respect of the suit land or of payment of Rs.40,000/- to the Vendee in terms thereof.
By a common judgment and decree dated 30th March, 1994, the Lower Court disposed the suit. The suit for specific performance was allowed, in part, holding that the Vendee, was not entitled to seek specific performance of the agreement in respect of 100 sq. yards covered by the sale deed dated 25th May, 1984, but entitled to relief of specific performance in respect of the remaining 200 sq. yards of the suit land.
Being aggrieved, by the judgment and order referred to above, the Vendor filed an appeal in the High Court, against the judgment and decree in the suit for specific performance.
The High Court dismissed the appeal and confirmed the judgment of court below. Hence, this appeal.
Whether the High Court erred in dismissing the appeal?
The Supreme Court said that there is no such infirmity in the judgment and order of the High Court under appeal.
View of Supreme Court on Specific Performance
The relief of specific performance of an agreement was equitable, discretionary relief, governed by the provisions of the Specific Relief Act 1963, hereinafter referred to as S.R.A. Even though the power of the Court to direct specific performance of an agreement may have been discretionary, such power could not be arbitrary. The discretion had necessarily to be exercised in accordance with sound and reasonable judicial principles.
After the amendment of Section 10 of the S.R.A., the words “specific performance of any contract may, in the discretion of the Court, be enforced” have been substituted with the words “specific performance of a contract shall be enforced subject to …”. The Court is, now obliged to enforce the specific performance of a contract, subject to the provisions of sub-section (2) of Section 11, Section 14 and Section 16 of the S.R.A. Relief of specific performance of a contract is no longer discretionary, after the amendment.
It is well settled that the Court ordinarily enforces a contract in its entirety by passing a decree for its specific performance. However, Section 12 of the Specific Relief Act carves out exceptions, where the Court might direct specific performance of a contract in part.
Where a party to the contract is unable to perform the whole of his part of the contract, the Court may, in the circumstances mentioned in Section 12 of the S.R.A., direct the specific performance of so much of the contract, as can be performed, particularly where the value of the part of the contract left unperformed would be small in proportion to the total value of the contract and admits of compensation. The Court may, under Section 12 of the S.R.A. direct the party in default to perform specifically, so much of his part of the contract, as he can perform, provided the other party pays or has paid the consideration for the whole of the contract, reduced by the consideration for the part which must be left unperformed.
View of Supreme Court on Agreement to Sell
An agreement to sell immovable property, generally creates a right in personam in favour of the Vendee.