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REPORABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL      APPEAL      NO.       8102       OF     2011    (arising out of SLP(C)No.21139 of 2007)

PRAKASH CHANDRA  … APPELLANT

Versus

NARAYAN               … RESPONDENT

J     U     D     G     M     E     N     T   

SUDHANSU      JYOTI      MUKHOPADHAYA,      J.   

Leave was granted on 22.9.2011.

2. This  appeal  has  been  preferred  by  the  

appellant­plaintiff  against  the  judgment  and  

order dated 6th March, 2007 passed by the learned  

Single  Judge  of  the  High  Court  of  Judicature  of  

Mumbai,  Nagpur  Bench  in  Second  Appeal  No.198  of  

2006,  whereby  the  judgment  and  decree  passed  by  

the  District  Court,  Pandharkawada  (Kelapur)  in  

Regular  Civil  Appeal  No.129  of  2002  came  to  be  

confirmed.  

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3. The  first  appellate  court  by  the  aforesaid  

judgment  and  decree  reversed  the  judgment  and  

decree dated 23rd September, 1998 and 3rd October,  

1998  in  Special  Civil  Suit  No.175  of  1997  which  

was  preferred  by  the  appellant­plaintiff  for  

specific performance.

4. The  suit  in  question  was  filed  by  the  

appellant  against  the  respondent  for  specific  

performance  of  agreement  for  sale  dated  18th  

April,  1996  in  respect  of  agricultural  land  

admeasuring  1  H.  61Are.  at  a  price  of  

Rs.51,000/­.  It  was  the  case  of  the  appellant  

that he had paid the earnest money of Rs.39,000/­  

while  the  balance  amount  was  to  be  paid  on  the  

date  of  execution  of  the  sale  deed  which  was  

fixed  for  18th  March,  2007,  but  despite  the  

appellant  being  present  for  the  purpose  of  

completion  of  the  formalities  of  agreement  for  

sale,  the  respondent  did  not  turn  up.  

Consequently,  the  appellant  purchased  a  stamp  

paper of Rs.100/­   on 18th March, 1997 and issued  

a notice to the respondent on 2nd April, 1997 and  

called  upon  him  to  execute  the  sale  deed  dated  

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21st  April,  1997  but  a  false  reply  was  given  by  

the  respondent  on  15th  April,  1997.  As  the  

respondent  refused  to  perform  his  part  of  the  

contract, the appellant filed Special Civil Suit  

No.175  of  1997  for  specific  performance  of  

contract, and alternatively to refund the earnest  

money.

5. The  respondent  contested  the  case  claiming  

that  his  signatures  were  obtained  on  a  blank  

stamp  paper  for  the  outstanding  money  of  

Rs.12,000/­  for  the  purchase  of  fertilizers  and  

clothes  etc.   The  trial  court  by  its  judgment  

dated  23rd  September,  1998  and  decree  dated  3rd  

October,  1998  decreed  the  suit  for  specific  

performance.  

6. On  appreciation  of  the  material  on  record,  

the  trial  court  held  that  the  appellant  had  

proved  that  the  respondent  agreed  to  sell  the  

suit  land  for  consideration  of  Rs.51,000/­  by  

executing  an  agreement  for  sale  on  18th  April,  

1996  and  that  he  had  paid  earnest  money  of  

Rs.39,000/­  to  the  respondent.  The  respondent  

failed  to  prove  that  he  had  signed  on  a  blank  

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Stamp  paper  in  the  presence  of  Vithal  Sitaram  

Thaori.  On  the  other  hand  there  is  sufficient  

material on record to show that the appellant was  

ready  and  willing  to  perform  his  part  of  the  

contract  and,   therefore,  the  appellant  is  

entitled  to  the  decree  for  specific  performance  

of contract while the alternative prayer needs no  

consideration. The respondent is not entitled to  

compensatory  cost.   All  the  six  issues  were  

decided  in  favour  of  the  appellant  and  against  

the respondent with a direction to the respondent  

to execute the sale deed on or before 31st August,  

1998  in  respect  of  the  suit  land  i.e.  southern  

portion of the land admeasuring 1 H 61Are having  

Gat No.1/2 situated at village Khadki on payment  

of the balance consideration of Rs.12,000/­. The  

Court also directed the respondent to deliver the  

possession of the suit land to the appellant with  

the  clear  condition  that  in  the  event  of  the  

respondent failing to execute the sale deed on or  

before the fixed date, the appellant will deposit  

the balance amount in the Court to get the sale  

deed executed.

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7. The  respondent  took  up  the  matter  vide  

first  appeal  before  the  District  Court.  The  

following  questions  were  framed  for  

determination:

1) Whether  the  defendant  has  agreed  to  sell  and  the  plaintiff  has  agreed  to  purchase  the  suit  property  for  consideration  of  Rs.51,000/­ on 18.4.1996?

2)        Whether the defendant has signed Ex.25  blank Stamp paper in     lieu of the credit  amount of the plaintiff towards the clothes  and fertilizers?

3) Whether the plaintiff was and is ready and  willing  to  perform  his  part  of  the  contract?

4) Whether the defendant has failed to perform his  part of the contract?

5) Whether  it  is  necessary  to  interfere  with  the  impugned judgment and decree?

6) What order and relief?”

8. The  first  appellate  court  on  hearing  the  

parties  and  on  appreciation  of  the  material  on  

record  answered  all  the  issues  in  favour  of  the  

appellant  but  reversed  the  judgment  and  decree  

thereby  allowing  discretion  in  favour  of  the  

respondent  by  directing  him  to  pay  the  earnest  

money with interest.         

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 Referring Clause (b) of sub­section (2) of  

Section  20  of  Specific  Relief  Act,  the  First  

Appellate Court held as follows:

“20. Having  regard  to  the  facts  on  the  record, it is evident from the evidence of  the  defendant  and  also  an  admitted  fact  that  the  defendant  was  having  the  only  suit land and he would be landless if the  decree  would  be  granted  for  specific  performance.  On  the  other  hand,  the  plaintiff  is  having  landed  properties  and  all  the  riches  including  the  business  of  clothes  and  fertilizers.  Therefore  these  aspects are not considered by the learned  lower  court,  while  exercising  the  discretion,  in  granting  the  decree  for  specific  performance.   The  amount  of  Rs.12,000/­ were not paid or deposited to  the defendant’s favour since the agreement  for  sale  till  the  date  of  decree.  Therefore  having  regard  to  all  these  circumstances  and  facts  on  the  record,  this  Court  is  of  the  opinion  that  this  Court  should  interfere  in  the  discretion  exercised by the learned lower court while  granting  the  decree  for  specific  performance. The hardship would be, in all  probabilities  and  facts  and  circumstances  caused  to  the  defendant  than  the  plaintiff.  In the result, the court is of  the  opinion  that  alternative  relief  for  refund  of  the  earnest  amount  of  Rs.39,000/­  to  the  plaintiff  by  the  defendant, would meet the ends of justice.  The same can be utilized and exercised by  awarding the damages by way of an interest  on the earnest amount……..”

9. When the matter was taken up in the second  

appeal,  the  learned  Single  Judge  vide  impugned  

judgment  dated  6th  March,  2007  dismissed  the  

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second  appeal  on  the  ground  that  the  first  

appellate  court  has  factually  found  that  the  

respondent  would  be  landless  as  against  the  

appellant  who  is  having  various  businesses  as  

well.

10. According  to  the  learned  counsel  for  the  

appellant, there was no impediment in according a  

relief  of  specific  performance  particularly  when  

all the issues have been decided in favour of the  

appellant and against the respondent.  He further  

submitted  that,   in  the  absence  of  any  defence  

taken  by  the  respondent  that  he  would  become  

landless  if  the  relief  for  specific  performance  

is  granted  and  in  absence  of  any  material  on  

record, the finding of the first appellate court  

cannot be sustained.  

11. Learned counsel for the appellant referring  

to  the  cross­examination  of  the  respondent  

contended  that  the  respondent  would  not  become  

landless   as is evident from the fact that after  

the agreement reached with the appellant, he sold  

4  acres  of  land  to  one  Dilip  Karekar.  Even  

thereafter  the  respondent  is  having  2.25  H  of  

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cultivable  land  apart  from  0.88  H  uncultivable  

land.  

12. According  to  the  learned  counsel  for  the  

respondent,  as  hardship  would  be  caused  to  the  

respondent,   the  appellate  court  rightly  held  

that  it  would  sub­serve  the  ends  of  justice  if  

the  entire  amount  of  earnest  money  received  by  

the  respondent  is  directed  to  be  paid  back  to  

appellant along with interest.

13. We  have  heard  the  learned  counsel  for  the  

parties. The learned counsel appearing on either  

side elaborately took us through the findings of  

the  trial  court,  the  first  appellate  court  as  

well  as  the  High  Court  in  second  appeal.  From  

the  materials  on  record  and  the  agreement  dated  

18th  April,  1996  and  from  the  judgment  of  the  

trial court and the first appellate court,  it is  

evident that no issue relating to the hardship of  

the respondent was framed. In a case of  Specific  

performance, hardship is a good defence provided  

such  defence  is  taken  by  the  defendant  and  

evidence in support of such defence is brought on  

record,   while in this case no such defence was  

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taken  by  the  respondent  and  no  evidence  was  

brought on record in its support.   

14. The appellant has specifically pleaded that  

the  respondent  possessed  agricultural  land  

admeasuring 5 H. 76.R. in Gat No. ½,   which has  

not been denied by the respondent. The appellant  

proved that an agreement was reached between the  

parties  on  18th  April,  1996  to  sell  southern  

portion of land admeasuring 1.61 H. by making an  

east­west  boundary  for  the  consideration  of  Rs.  

51,000/­ for which appellant had paid Rs.39,000/­  

to  the  respondent  as  earnest  money.   The  

appellant  also  proved  that  he  was  always  ready  

and willing to perform his part of the contract.  

These  issues  were  decided  in  favour  of  the  

appellant.  During  cross­examination  the  

respondent  stated  that  he  sold  only  4  acres  of  

land  during  the  pendency  of  the  case,  thereby  

remaining  2.25  H  cultivable  and  0.88  H  

uncultivable  land  is  still  available  with  the  

respondent.  

15. The  question  as  to  whether  the  grant  of  

relief  for  specific  performance  will  cause  

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hardship  to  the  defendant  within  the  meaning  of  

Clause  (b)  of  sub­section  (2)  of  Section  20  of  

the  Specific  Relief  Act,  1963,  being  a  question  

of  fact,  the  first  appellate  court  without  

framing such an issue ought not to have reversed  

the  finding  of  the  trial  court  while  concurring  

with  it  on  all  other  issues  with  regard  to  the  

appellant’s  entitlement  to  relief  for  specific  

performance of contract.  

The High Court in the second appeal failed  

to  notice  that  the  respondent  had  not  taken  any  

defence of hardship and  no such issue was framed  

and  in  absence  of  any  such  evidence  on  record,  

the  first  appellate  court  held  that  he  would  be  

landless  should  the  decree  for  specific  

performance be granted.   

16. For the reasons stated above, we are of the  

view  that  the  appellant  is  entitled  to  the  

specific  performance  of  agreement  for  sale,  as  

ordered  and  decreed  by  the  trial  court.  The  

appeal is accordingly allowed.   The order passed  

by   the High Court in the second appeal and the  

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judgment and decree passed by the first appellate  

court  are  set  aside.   The  judgment  and  decree  

passed  by  the  Trial  Court  is  affirmed.  The  

appellant  is  allowed  two  months  to  pay  the  

balance consideration to the respondents. If the  

respondent  fails  to  execute  the  sale  deed,  such  

amount will be deposited in the trial court which  

will ensure the execution of the sale deed as per  

its judgment and decree.   

……………………………………………….J.                    ( G.S. SINGHVI )

……………………………………………….J.              ( SUDHANSU JYOTI MUKHOPADHAYA)

NEW DELHI, APRIL 23, 2012.

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