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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  

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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 2½ 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.   

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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  

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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  

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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  

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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  

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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  

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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  

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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,  

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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  

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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  

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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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