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REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 462 OF 2018 (arising out of SLP(C) No.25771 of 2013)

URMILA DEVI AND OTHERS    ... APPELLANTS

VERSUS

THE DEITY, MANDIR SHREE CHAMUNDA DEVI, THROUGH TEMPLE COMMISSIONER AND OTHERS    ... RESPONDENTS

J U D G M E N T

ASHOK BHUSHAN, J.

Leave granted.

2. This appeal has been filed by the plaintiff

through  legal heirs  questioning  the  judgment of  the

High Court of Himachal Pradesh in Regular Second Appeal

No.117 of 2002 which appeal was filed by respondent

No.1 (defendant No.6 in the suit). The High Court by

the impugned judgment has modified the decree of

specific performance of contract granted by two courts

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below into a decree ordering respondent Nos.2 to 6 to

pay a sum of Rs.90,000/­ with interest @ 9% per annum

from the date of filing of the suit.

3. The brief facts of the case which are necessary to

notice for deciding the appeal are:

Respondent Nos.2 to 6 executed an agreement to

sell dated 19.04.1989 in favour of of Krishan Lal, the

predecessor­in­interest of the appellants for sale of

their 5/16th  share in Khasra Nos.430 and 431 equal to

0­22­57 hectares for consideration of Rs.90,000/­.

Respondent Nos.2 to 6 received full consideration of

Rs.90,000/­ and handed over possession to the

plaintiff. The plaintiff after getting possession

constructed three shops in the suit land. Respondent

Nos.2 to 6 executed a gift deed in favour of respondent

No.1 of the suit land on 08.07.1991. When in spite of

respondents having received the entire sale

consideration the sale deed was not executed and  with

mala fide  intention the gift deed was executed in

favour of respondent No.1. Civil Suit No.148 of 1991

was filed by Krishan Lal. Written statements were filed

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by defendant Nos.1 to 5 jointly and separate written

statement was filed by defendant No.6 who is respondent

No.1 in the present appeal. It was admitted to all

defendants that the suit land has been gifted in favour

of defendant No.6 by gift deed dated 08.07.1991. The

execution of agreement to sell was not disputed and the

receipt of total sale consideration was also not

denied. The trial court decreed the suit vide its

judgment and order dated 31.03.1999. The trial court

declared that gift deed executed by defendant Nos.1 to

5 in favour of  defendant No.6 is null and void to the

extent they relate to the doner's 5/16th  share in the

suit land that was agreed to be sold by them to the

plaintiff, decree of specific performance was granted

in favour of the plaintiff against defendant Nos.1 to

5. The appeal was filed by defendant No.6 only against

the judgment of the trial court which was also

dismissed by the First Appellate Court vide its

judgment dated 17.12.2001. Defendant No.6 filed

Regular Second Appeal in the High Court being RSA

No.117 of 2002. During pendency of the second appeal in

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the High Court notification under Section 4 of the Land

Acquisition Act dated 22.12.2005 was issued for

acquisition of suit land. An award dated 10.06.2008 was

also given for the land as well as three shops which

were constructed in the suit land. The name of

defendant No.6 being recorded in the Revenue records

compensation was awarded in favour of defendant No.6.  

4. Before the High Court a submission was raised on

behalf of defendant No.6 that the land has been

acquired during the pendency of Regular Second Appeal,

the decree of the specific performance cannot be

maintained.   The High Court agreeing with the

submission of defendant  No.6 modified the decree by

ordering respondent Nos.2 to 6 to pay a sum of

Rs.90,000/­ to the plaintiff with interest @ 9% per

annum from the date of filing of the suit. The

plaintiff through legal  heirs aggrieved  by the said

judgment has come up in this appeal.  

5. Learned counsel for the appellants in support of

the appeal contends that the High Court erred in law in

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ordering the refund of Rs.90,000/­ in favour of

plaintiff whereas the plaintiff(appellants) was

entitled to receive the amount of compensation of land

which was received by defendant No.6 consequent to the

acquisition of land. Defendant No.6 had no right in the

land in dispute as the gift deed had been declared

null and void. It was the plaintiff (appellants) who

was entitled to receive the compensation. The High

Court having not interfered with the finding of the

courts below that gift deed was void as well as

plaintiff was entitled for decree of specific

performance of the contract, it was plaintiff

(appellants)  who was entitled to receive compensation

consequent to the acquisition of the suit land.

6. Learned counsel appearing for respondent Nos.2 to

6 supports the judgment and decree of the High Court

and he, however, does not dispute that judgment and

decree of the Courts below declaring the gift deed

dated 08.07.1991 as  void having  not  been interfered

with, the defendant No.6 has no right in the suit land.

Learned  counsel  for  respondent Nos.2 to  6, however,

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submits that compensation determined consequent to the

land acquisition be appropriated equally between the

plaintiff as well as defendant Nos.1 to 5.  

7. No one has appeared on behalf of respondent No.1

(defendant No.6).

8.  We have considered the submissions of the parties

and perused the records.

9. From the facts and material on record, it is

undisputed that agreement to sell was executed by

defendant Nos.1 t 5 in favour of the plaintiff and

entire sale consideration of Rs.90,000/­ was received

and possession was delivered in the year 1989 itself.

Plaintiff constructed three  shops on the suit land.

Plaintiff's case that to defeat the rights of the

plaintiff a gift deed dated 08.07.1991 was executed by

defendant Nos.1 to 5 in favour of defendant No.6 has

been accepted by courts below which have declared the

gift deed as null and void. The decree for specific

performance was granted by the trial court,

it was confirmed   by   the   First   Appellate

Court. The suit land was acquired and

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compensation was determined in favour of defendant No.6

whose name was recorded in the Revenue records. No

objection can be taken to the view of the High Court

that consequent of the acquisition of suit land under

the land acquisition proceedings decree of specific

performance granted in favour of plaintiff could not

have been maintained.  

10. The limited question which needs to be answered in

the present appeal is as to what relief the

(plaintiff)appellants were entitled in the event the

decree of specific performance was required to be

modified by an alternate decree.

11. Section 21 of the Specific Relief Act empowers the

Court to award compensation in certain cases. Section

21 of the Specific Relief Act is as follows:

“21. Power to award compensation in certain cases.— (1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.

(2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between

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the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.

(3) If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.

(4) In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in section 73 of the Indian Contract Act, 1872 (9 of 1872).

(5) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint:

Provided that where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation.

Explanation.—The circumstances that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section.”

12. This Court had occasion to consider Section 21 of

the Specific Relief Act in context of a case which

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arose almost on similar facts in  Jagdish Singh vs.

Nathu Singh, 1992 (1) SCC 647. In the above case also

suit was filed for specific performance on the basis of

a contract to sell dated July 3, 1973, the suit was

dismissed by the trial court as well as First Appellate

Court. However, the High Court in second appeal

reversed the finding of the courts below and held that

plaintiff was ready and willing to perform the contract

and was entitled for   decree. In the above case also

during the pendency of the second appeal before the

High Court, proceedings for compulsory acquisition of

the land was initiated and the land was acquired.

Question arose as to whether plaintiff was entitled for

the amount of compensation received in the land

acquisition  proceedings  or was entitled  only to  the

refund of the earnest money. The High Court in the

above case has modified the decree of the specific

performance of the contract with decree for a

realisation of compensation payable in lieu of

acquisition. In paragraph 13 of the judgment the

directions of the High Court were extracted  which is

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to the following effect:

“13.  The High Court issued these consequential directions:

“If the decree for specific performance of contract in question is found incapable of being executed due to acquisition of subject land, the decree shall stand suitably substituted by a decree for realisation of compensation payable in lieu thereof as may be or have been determined under the relevant Act and the plaintiff shall have a right to recover such compensation together with solatium and interest due thereon. The plaintiff shall have a right to recover it from the defendant if the defendant has already realised these amounts and in that event the defendant shall be further liable to pay interest at the rate of 12 per cent from the date of realisation by him to the date of payment on the entire amount realised in respect of the disputed land.”

13. In the above context, this Court proceeded to

examine the ambit and scope of Section 21 of the

Specific Relief Act. This Court came to the opinion

that when the contract has become impossible with no

fault of the plaintiff, Section 21 enables the Court to

award compensation in lieu of the specific performance.

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Paragraphs 24, 29 and 30 are extracted below:

“24. When the plaintiff by his option has made specific performance impossible, Section 21 does not entitle him to seek damages. That position is common to both Section 2 of Lord Cairn’s Act, 1858 and Section 21 of the Specific Relief Act, 1963. But in Indian law where the contract, for no fault of the plaintiff, becomes impossible of performance Section 21 enables award of compensation in lieu and substitution of specific performance.

29.  In the present case there is no difficulty in assessing the quantum of the compensation. That  is ascertainable with reference to the determination of the market value in the land acquisition proceedings. The compensation awarded may safely be taken to be the measure of damages subject, of course, to the deduction therefrom of money value of the services, time and energy expended by the appellant in pursuing the claims of compensation and the expenditure incurred by him in the litigation culminating in the award.

30. We accordingly confirm the finding of the High Court that respondent was willing and ready to perform the contract and that it was the appellant who was in breach. However, in substitution of the decree for specific performance, we make a decree for compensation, equivalent to the amount of the land acquisition compensation awarded for the suit lands together with solatium and accrued interest, less a sum of Rs 1,50,000 (one lakh fifty thousand only)

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which, by a rough and ready estimate, we quantify as the amount to be paid to the appellant in respect of his services, time and money expended in pursuing the legal claims for compensation.”

14. This Court in Kanshi Ram vs. Om Prakash Jawal and

others, 1996 (4) SCC 593, has again in context of suit

for specific performance of the contract held that

granting decree for specific performance of contract is

one of the discretion to be exercised on sound

principles. When the court gets into equity

jurisdiction, it would be guided by justice, equity,

good conscience and fairness to both the parties.  

15. From materials brought on record, it does appear

compensation was determined   in  favour of defendant

No.6 to the extent of amount of Rs.10,03,743/­. It also

appears that compensation towards shops was also

determined. The name of defendant No.6 being recorded

in the Revenue records, compensation was determined in

its favour. In view of the judgment and decree of

courts below whereby the gift deed dated 08.07.1991 has

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been declared void, defendant No.6 is left with no

right in the suit land and is clearly not entitled to

receive any amount consequent to the acquisition of the

suit land. It has not come on the record as to whether

compensation consequent to the acquisition of the suit

land has been received by defendant No.6(respondent

No.1 to the appeal) or not.

16. Taking into consideration overall facts of the

present case, we are of the view that ends of justice

be served in awarding compensation of Rs.10 lakh in

favour of the plaintiff­appellants out of the

compensation received consequent to the acquisition of

the suit land. The rest of the compensation, if any,

received towards land and shops in question has to be

paid to the land owner that is defendant Nos.1 to 5

(respondent Nos.2 to 6 to this appeal) after deducting

an amount of Rs.10 lakh out of the said compensation.

We further direct in event compensation has not yet

been disbursed, the compensation be disbursed to the

appellants (legal heirs of the plaintiff) and

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respondent Nos.2 to 6 in the above manner and in the

event the compensation has been received by defendant

No.6 (respondent No.1), respondent No.1 shall return

the compensation to the extent of Rs.10 lakh to the

appellants and the rest of the amount to defendant

Nos.1 to 5 (respondent Nos.2 to 6). The judgment and

decree of the High Court dated 02.11.2012is modified to

the above extent.

17. The appeal is allowed accordingly.

...............................J. ( A.K. SIKRI )

...............................J. ( ASHOK BHUSHAN )

NEW DELHI, JANUARY 10, 2018.