NON­REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7282 OF 2009

LEELADHAR (D) THR. LRS.                           …APPELLANT(S)

VERSUS

VIJAY KUMAR (D) THR. LRS. & ORS.              …RESPONDENT(S)

J U D G M E N T

DEEPAK GUPTA, J.

One Leeladhar, the original  appellant herein, entered into

an agreement to sell 18 bighas of land for a sum of Rs.40,000/­

with Deshraj, father of the plaintiffs­respondents herein on

15.02.1985.   Admittedly, an amount of Rs.35,000/­ was paid in

advance.   This agreement to sell was registered on 18.02.1985.

On 26.03.1985 another document (Exhibit P­14) was entered into

between the parties.  Leeladhar was paid balance Rs.5,000/­ and

the subsequent agreement notes that he gave possession of the

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land to Deshraj.  On 20.01.1988, Deshraj issued a legal notice to

Leeladhar asking him to get the sale deed executed.  According to

the plaintiffs, they and their father went to the office of the Sub­

Registrar on 15.02.1988 for this purpose.  But Leeladhar did not

turn  up.  Deshraj expired  on  16.05.1988 and, thereafter, the

respondents herein filed a suit in the Court of Civil Judge,

Nainital praying for specific performance of the contract and also

prayed that if any part of the disputed land is not found in their

possession, then possession be given to them. In the alternative,

they prayed for refund of Rs.40,000/­ along with interest.  

2. In the written statement, Leeladhar took the plea that the

agreement  in question was a sham document.   Deshraj was a

moneylender  but did not  have a licence  to  do money  lending.

Therefore, he used to get such documents executed to secure the

loans advanced by him.  It was also pleaded that Leeladhar had

returned the  entire  amount  along  with interest to  Deshraj  on

03.03.1987.  This suit was decreed by the trial court.  Leeladhar

filed an appeal, which was partly allowed by the first appellate

court holding that the plaintiffs were not entitled to the

discretionary relief of specific performance.   This judgment was

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challenged before the High Court.   The second appeal was

allowed and the matter was remanded to the first appellate court

to decide the case afresh in light of the provisions of Section 20(2)

(c) of the Specific Relief Act, 1963.  After remand, the Additional

District Judge dismissed the appeal of Leeladhar and upheld the

order of the trial  court.  The second appeal  filed by Leeladhar

before the High Court was dismissed and, hence, this appeal.   

3. The main ground raised by Shri Vikas Singh, learned senior

counsel appearing for the appellants is that in terms of Section

20(2)(c), the decree of specific performance could not have been

granted in favour of the plaintiffs­respondents herein.   It is

submitted  that the  document  was a  sham document.   It  was

further urged that possession is not with the plaintiffs and the

fact that Deshraj had executed various documents but had not

filed suit for specific performance with regard to those contracts

indicated that  this document  (Exhibit  P­13) was also executed

only to secure the repayment of the loan.  It is also prayed that in

the peculiar facts and circumstances of the case, discretion

should be exercised in favour of appellants.  On the other hand,

Shri  P.K.  Jain, learned counsel  appearing for the  respondents

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submits that all the courts below have given a concurrent finding

of fact that the document executed was an agreement to sell and

Leeladhar had received the full amount, transferred possession

and, therefore, is not entitled to urge that the decree of specific

performance should not be granted.   

4. We may note  a few salient facts.  The  agreement to  sell

(Exhibit P­13) is registered on 18.02.1985.   Rs.35,000/­ out of

Rs.40,000/­ was paid.   The balance Rs.5,000/­ was paid when

the document (Exhibit P­14) was executed on 26.03.1985.  As far

as delay is concerned, we are of the considered view that there is

no delay in filing the suit.  The suit is within limitation.  Further,

in this case, even as per the appellants, the possession of the

land was with the plaintiffs­respondents.  Therefore, they were in

no hurry to get the sale deed executed and this does not

disentitle them from getting the relief of specific performance.   

5. As far  as the issue  of  Deshraj  being  a  moneylender  and

having got this document executed only to secure repayment of

amount is concerned, all the courts below have found as a fact

that this is not the case.  The finding is that an agreement to sell

was executed.   Shri Singh has made reference to the order

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passed by the first appellate court in the first round.  That order

having been set aside by the High Court, cannot help the

appellants.   After remand, the first appellate court clearly held

that the documents in question relied upon by Leeladhar could

not be used by him because they were only copies and if actually,

he had repaid those loans then he would have got originals back

from Deshraj.  Though various judgments have been cited before

us, we do not feel it necessary to refer to the same because once

we come to the conclusion that the agreement was an agreement

to sell and after entering into the agreement to sell,  Leeladhar

received the full sale consideration and handed over the

possession to Deshraj, the question of exercising any

discretionary favour to the appellant does not arise.   

6. Section 20(2)(c) of the Specific Relief Act reads as follows:

“20. Discretion as to decreeing specific performance.

—

(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such 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 and capable of correction by a court of appeal.

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

(a)  xxx xxx xxx

(b)  xxx xxx xxx  

(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.  

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

Explanation  2.— The question whether the performance of  a contract  would  involve hardship on the defendant within the meaning of clause  (b) shall,  except  in cases where the hardship has resulted from  any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.”

7. To take benefit of clause (c) of sub­section (2) of Section 20

of the  Specific  Relief  Act, the  defendant in  a suit for specific

performance must show that he entered into the contract under

the circumstances which though rendering the contract voidable,

make it inequitable.   In the present case, once we hold that the

document entered  was  an  agreement to sell and  not  a sham

transaction, the appellants can take no benefit of this provision.  

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8. In view of the above, we find no merit in the appeal which is

accordingly  dismissed.  Pending  application(s), if  any,  stand(s)

disposed of.        

…………………………J. (Deepak Gupta)

…………………………J. (Aniruddha Bose)

New Delhi September 26, 2019

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