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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7424­7425 OF 2011

SURINDER KAUR (D) THR. LR. JASINDERJIT SINGH (D) THR. LRS.                 …  APPELLANT(S)

VERSUS

BAHADUR SINGH (D) THR. LRS.               …RESPONDENT(S)

J U D G E M E N T

Deepak Gupta, J.

The question of  law arising in these appeals is whether a

vendee who does not perform one of his promises in a contract

can obtain the discretionary relief of specific performance of that

very contract.

2. Briefly stated the facts are that Mohinder Kaur, predecessor

in interest of the appellants entered into an agreement with

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Bahadur  Singh,  predecessor in interest  of the respondents  on

13.05.1964 whereby she agreed to sell the suit land to Bahadur

Singh for a total sale consideration of Rs.5605/­.   Out of this,

Rs.1000/­ was paid as earnest money at the time of execution of

agreement to sell,  and  it  was agreed that the balance amount

would be paid at the time of registration of the sale deed.   The

possession of the land was handed over to the vendee on the date

of agreement to sell itself.   Since there was some litigation with

regard to the property it was agreed between the parties that the

sale deed would be executed within one month from the date of

decision of civil appeal pending before the Punjab and Haryana

High Court.

3. To  decide the  appeals, it  would  be  necessary to refer to

Clauses 2 and 3 of the agreement to sell which read as under:­

“ xxx             xxx                       xxx

2) That  an  appeal in respect of the  above­mentioned land is pending in the High Court and after decision in the said  appeal, the  First  Party  shall execute  and register  Sale Deed in favour of the Second Party in the month of July, 1965.

3) That the  possession  of the land has  been  handed today and in case the decision by the High Court in the appeal is  after one year, then the sale deed shall  be executed and registered after one month from the date of decision and in the

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circumstance, the Second Party shall pay to the First party the customary rent for the said land.

xxx             xxx                       xxx ”

4. It is not disputed that the litigation referred to in the

agreement was decided on 17.01.1977, i.e., about 13 years after

the agreement to sell was entered into.   Bahadur Singh

requested Mohinder Kaur to execute the sale deed but since she

failed to do so, a suit for specific performance of the agreement

was filed by Bahadur Singh.   In the alternative, it was prayed

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

was contested on various grounds but we are concerned with

only one wherein the defendant raised the plea that since

Bahadur Singh had admittedly failed 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

no dispute with regard to the factual aspects. The only issue is

whether the vendee Bahadur Singh who admittedly did not pay

the rent  is  entitled to a decree of  specific  performance of the

agreement dated 13.05.1964.   The courts below have held that

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the agreement contained several promises which may be

reciprocal, contingent or separate.   Section 511  of the Contract

Act,1872 provides that  when a contract  consists  of  reciprocal

promises to be simultaneously performed, no promisor needs to

perform his promise unless the promisee is ready and willing to

perform his reciprocal promise.  

6. The aforesaid provisions have to be read along with Section

16(c)2  of The Specific Relief Act, 1963 which clearly lays down

that the specific performance of a contract cannot be enforced in

favour of a person who fails to prove that he has performed or

was always ready and willing to perform the essential terms of

the contract which were to be performed by him.

1  51. Promisor not bound to perform, unless reciprocal promisee ready and willing to perform. —When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise.  

22 16. Personal bars to relief. – Specific performance of a contract cannot be enforced in favour of a person –  

(a)xxx xxx xxx

(b) xxx xxx xxx

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

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

         (i)    where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the  defendant or to  deposit in court any  money except  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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7. We shall also have to take into consideration that the

specific performance of contract of an immovable property is a

discretionary relief in terms of Section 203 of The Specific Relief

Act as it stood at the time of filing of the suit.   

8. Section 20 of  The Specific  Relief  Act lays down that the

jurisdiction to decree a suit for specific performance is a

320. 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.

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

(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though  not voidable, gives the plaintiff an  unfair advantage over the defendant; or

(b) where the performance of the contract  would  involve some hardship on the defendant which he did not foresee, whereas its non­performance would involve no such hardship on the plaintiff; or

(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.

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

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

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discretionary jurisdiction and the court  is not bound to grant

such relief merely because it is lawful.

9. The first issue is whether the promises were reciprocal

promises or promises independent of each other.   There can be

no hard and fast rule and the issue whether promises are

reciprocal or not has to be determined in the peculiar facts of

each case.  As far as the present case is concerned, the vendor,

who was a lady received less than 20% of the sale consideration

but handed over the possession to the defendant, probably with

the hope that  the dispute would be decided soon, or at  least

within a year.   Therefore, Clause 3 provided that if the case is

not decided within one year, then the second party shall pay to

the first  party the  customary  rent for the land.   It  has  been

urged by the respondents that the High Court rightly held that

this was not a reciprocal promise and had nothing to do with the

sale of the land.  One cannot lose sight of the fact that the land

had been handed over to Bahadur Singh and he had agreed that

he would pay rent at the customary rate.   Therefore, the

possession of the land was given to him only on this clear­cut

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understanding.   This was, therefore, a reciprocal promise and

was an essential part of the agreement to sell.

10. Admittedly, Bahadur Singh did not even pay a penny as

rent till the date of filing of the suit.   After such objection was

raised in the written statement, in replication filed by him, he

instead of offering to pay the rent, denied his liability to pay the

same.  Even  if  we  were to  hold that this  promise  was not  a

reciprocal promise, as far as the agreement to sell is concerned,

it would definitely mean that Bahadur Singh had failed to

perform his 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 prove performance or readiness or willingness

to perform the contract according to its true construction.   The

only construction which can be given to the contract in hand is

that Bahadur Singh was required to pay customary 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

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customary rent to the vendor which could have been monthly or

yearly.  But he could definitely not claim that he is not liable to

pay rent for 13 long years.  

12.   Learned counsel for the respondents urged that in case of

non­payment of  rent the plaintiff  was at  liberty to  file  suit for

recovery of rent.   We are not impressed with this argument.   A

party cannot claim that though he may not perform his part of

the contract he is entitled to specific performance of the same.

13. Explanation  (ii) to Section 16(c)  of  The Specific  Relief  Act

lays down that  it is incumbent on the party, who wants to

enforce the specific performance of a contract, to aver and prove

that he has performed or has always been ready and willing to

perform the essential terms of the contract.  This the plaintiff

miserably failed to do in so far as payment of rent is concerned.

14. A perusal  of  Section 20 of  The Specific  Relief  Act  clearly

indicates that the relief of specific performance is discretionary.

Merely because the  plaintiff is legally right, the  Court is not

bound to grant him the relief.   True it is, that the Court while

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exercising its discretionary power is bound to exercise the same

on established judicial principles and in a reasonable manner.

Obviously, the discretion cannot be exercised in an arbitrary or

whimsical manner.  Sub clause(c) of sub­section (2) of Section 20

provides that even if the contract is otherwise not voidable but

the circumstances make it inequitable to enforce specific

performance,  the Court can refuse to grant such discretionary

relief.   Explanation (2) to the Section provides that the hardship

has to  be considered at the time  of the contract,  unless the

hardship is brought in by the action of the plaintiff.

15. In this case, Bahadur Singh having got possession of the

land in the year 1964 did not pay the rent for 13 long years and

even when he filed the replication in the year 1978, he denied

any liability to pay the customary rent.  Therefore, in our opinion,

he did not act in a proper manner.  Equity is totally against him.

In our considered view, he was not entitled to claim the

discretionary relief of specific performance of the agreement

having not performed his part of the contract even if that part is

held to be a distinct part of the agreement to sell. The vendee

Bahadur Singh by not paying the rent for 13 long years to the

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vendor Mohinder Kaur, even when he had been put in possession

of the land on payment of less than 18% of the market value,

caused undue hardship to her.  The land was agricultural land.

Bahadur Singh was cultivating the same.   He must have been

earning  a fairly large  amount from this land which measured

about 9½ acres.  He by not paying the rent did not act fairly and,

in our opinion, forfeited his right to get the discretionary relief of

specific performance.

16. In view of the above, we allow the appeals, set aside the

judgment and decree of all the courts below and dismiss the suit

for specific performance.  As far as the alternative plea of refund

is concerned, we are clearly of the view that since the

respondents enjoyed the land for 55 long years without payment

of any rent they are  not entitled to any relief.  No order as

to costs.

…………………………J. (Deepak Gupta)

…………………………J. (Aniruddha Bose)

New Delhi September 11, 2019