Bayavva, Vs Gurubasappa, S/O. Mallappa Bennal

BAYAVVA, AGE: 65 YEARS, OCC: HOUSEHOLD, W/O. LATE SANGAPPA @ KENCHANGOUDA WALIKAR, NARASAPUR VILLAGE, TALUK: BADAMI, DISTRICT: BAGALAKOTE, PIN-587 201.

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ANDANGOUDA, AGE: 40 YEARS, OCC: AGRICULTURE, S/O. LATE SANGAPPA @ KENCHANGOUDA WALIKAR, R/O: LAYADGUNDI, TALUK: BADAMI, DISTRICT: BAGALAKOTE, PIN-587 201.

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BASAVARAJ,

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AGE: 37 YEARS, OCC: AGRICULTURE, S/O. LATE SANGAPPA @ KENCHANGOUDA WALIKAR, R/O: LAYADGUNDI, TALUK: BADAMI, DISTRICT: BAGALAKOTE, PIN-587 201.

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MALLIKARJUN RUDRAYYA KALMATH Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Date: 2025.08.14 12:07:14 +0530

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PREMA, AGE: 33 YEARS, OCC: AGRICULTURE, W/O. NINGRARAAJGOUDA PATIL, R/O: LAYADGUNDI, TALUK: BADAMI, DISTRICT: BAGALAKOTE, PIN-587 201.

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… APPELLANTS

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(BY SRI. C.S. SHETTAR, ADVOCATE FOR SRI. HARSH DESAI, ADVOCATE)

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AND:

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GURUBASAPPA S/O. MALLAPPA BENNAL, HAS EXPIRED ON 05-06-2017 I.E. AFTER JUDGMENT, HENCE, HE IS NOW REPRESENTED BY HIS LRS., RESPONDENT No. 1 TO 4 ARE LEGAL HEIRS.

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1. NEELAVVA,

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AGE: 60 YEARS, W/O: LATE GURUBASAPPA BENAL, OCC: HOUSEHOLD, BASAVANAL VILLAGE, TALUK: HUNGUND, BAGALAKOTE-587 118.

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MALLAPPA, AGE: 40 YEARS, S/O: LATE GURUBASAPPA BENAL, OCC: AGRICULTURE, BASAVANAL VILLAGE, TALUK: HUNGUND, BAGALAKOTE-587 118.

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YANKANNA AGE: 37 YEARS, S/O: LATE GURUBASAPPA BENAL, OCC: AGRICULTURE, BASAVANAL VILLAGE, TALUK: HUNGUND, BAGALAKOTE-587 118.

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SIDDAMMA, AGE: MAJOR, W/O. MALLIKARJUN MARAKACHITTI @ ROLLI, NEAR SANNA AGASI, BASAVANNA DEVAR GUDI, MALLAPUR-587 111, TQ: AND DIST: BAGALAKOTE.

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GIRIYAVVA, AGE: 60 YEARS, W/O. VENKAPPA PUJARI, OCC: HOUSEHOLD, VASAN VILLAGE, TQ: NARAGUND, DIST: GADAG, PIN-582 207.

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MUDIYAVVA, AGE: 61 YEARS, W/O. RANGANGOUDA PATIL, OCC: HOUSEHOLD, NARASAPUR VILLAGE, TALUK: BADAMI, DIST: BAGALAKOTE, PIN-587 201.

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… RESPONDENTS

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(BY SRI. S.B. HEBBALLI, ADVOCATE R1 TO R4; R5 AND R6-SERVED)

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THIS RFA IS FILED UNDER SECTION 96 OF CPC., PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED 19.04.2017 PASSED IN O.S. NO.34 OF 2012 ON THE FILE OF THE SENIOR CIVIL JUDGE AT HUNGUND.

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THIS APPEAL, COMING ON FOR FURTHER ARGUMENTS, THIS DAY, JUDGMENT IS DELIVERED THEREIN AS UNDER:

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ORAL JUDGMENT

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(PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR)

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The appeal is filed by the defendants/appellants challenging the judgment and decree dated 19.04.2017 passed in O.S.No.34/2012 on the file of Senior Civil Judge, Hungund, thereby, the suit filed for specific performance of is decreed in full granting decree of specific performance directing the defendants to execute registered sale deed in favour of plaintiff by receiving the balance sale consideration amount of Rs.30,000/- from the plaintiff.

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For the sake of convenience and easy reference, the parties are referred to as per their rankings before the Trial Court.

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It is the case of the plaintiffs that the defendants’ father namely Sangappa, who is the husband of defendant No.1 and father of defendant Nos.2 to 4 and

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son of defendant No.5, are the absolute owners and in possession over the suit schedule property. The said Sangappa had executed registered agreement of sale dated 28.07.2009 in favour of plaintiffs for total sale consideration of Rs.12,30,000/- and received part of the sale consideration amount of Rs.12,00,000/- and it was agreed to receive the remaining sale consideration amount of Rs.30,000/- at the time of registration of the sale deed, but the possession was not given. The said original vendor Sangappa passed away on 31.07.2011. Thereafter, the plaintiff has got issued legal notice on 04.06.2012 calling upon the defendants to execute registered sale deed, but the defendants have not come forward to execute the sale deed. Therefore, the plaintiff is constrained to file suit for specific performance of the contract.

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On the other hand, the defendants have appeared and filed written statement denying all the averments made in the plaint. It is contended that the defendants’ father Sangappa had not been executed any

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agreement of sale and never intended to sell the suit property and agreement of sale is concocted one and by false representation, making believe Sangappa, such a forged agreement of sale is created; therefore, the entire agreement of sale is denied. Hence, prays to dismiss the suit.

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Based on the pleadings, the Trial Court has

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framed the following issues:

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1. Whether plaintiff proves that one Sangappa @ Kenchanagouda Walikar, agreed to sale the suit Land bearing Sy.No.30 measuring 19 acres 39 guntas of Benal village, for consideration amount of Rs.12,30,000/- for his financial crises and in order to made out family necessities and bonafide problems and executed agreement of sale deed on 28.07.2009, by receiving an earnest of Rs.12,00,000/-?

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2. Whether plaintiff further proves that he is ever ready to perform his part of contract?

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3. Whether plaintiff further proves that in spite of issuance of legal notice on 04.06.2012, defendants failed to perform their part of contract?

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4. Whether defendants prove that alleged agreement of sale deed is created and concocted one and same is without consideration?

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5. What order or decree?

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In order to prove the case, the plaintiff is examined as PW-1 and two more witnesses examined as PW-2 and PW-3 and got marked documentary evidence as Exs.P-1 to P-10. On behalf of defendants, defendant No.2 is examined as DW-1 and three more witnesses examined as DW-2 to DW-4 and got marked documentary evidence as Ex.D-1 to D-8.

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The Trial Court has decreed the suit in full filed for specific performance, thereby directing the defendants to execute the registered sale deed in favour of plaintiff by receiving the balance sale consideration amount of Rs.30,000/-. The Trial Court assigned reason that Ex.P-1agreement of sale and its execution proved by the attesting witnesses PW-2 and PW-3. Further, from the evidence of DW-2, who is an attesting witness, though in

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examination-in-chief has stated that he has not witnessed the sale transaction as per the agreement of sale, but in the course of cross-examination he had admitted regarding the sale talks and execution of the agreement of sale and going over to Sub-Registrar office at the time of execution of registration of the agreement of sale. Therefore, the Trial Court has come to conclusion that the agreement of sale is registered one; hence, it is proved as executed and therefore, directed the defendants to execute the sale deed in favour of the plaintiff in respect of 4/6^th share in the suit property after demarcation in favour of plaintiff.

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Being aggrieved by the judgment and decree passed by the Trial Court, the defendants have preferred this instant appeal by raising various grounds and learned counsel for the appellants/defendants submitted the said Sangappa had never executed registered agreement of sale and whatever it may be, it is a false and created one. Further, submitted that the total extent of land is 19 acres

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39 guntas, nearly 20 acres, but sale consideration fixed is Rs.12,30,000/- (Tweleve Lakh Thirty Thousand) only. Even it is less than Rs.1,00,000/- per acre. Therefore, for such a meagre sale consideration amount, it is unbelievable that an agreement of sale is executed. Hence, submitted that the Trial Court has not exercised its discretion correctly as per Section 20 of the Specific Relief Act. Further submitted that this is the only land for the defendants for their livelihood and if this land is sold away, then there would be more hardship to the defendants. Therefore, prays to allow the appeal by setting aside the judgment and decree passed by the Trial Court.

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On the other hand, learned counsel for the plaintiffs/respondents submitted that Ex.P-2-registered agreement of sale of which the execution is proved by the attesting witnesses PW-2 and PW-3. Further DW-2, though has stated that Ex.P-2 document is only for the purpose of giving lease agreement for looking after the land, but in the cross-examination, DW-2 has admitted the entire

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execution of agreement of sale. Further submitted that Sangappa after receiving a sum of Rs.12,00,000/- from the plaintiff has purchased another land, which is evident from Ex.P-8-RTC extract. Therefore, Sangappa has taken the benefit of receiving more than the amount of Rs.12,00,000/- and purchased another land, but the plaintiff has paid Rs.12,00,000/-, but till today, the plaintiff have not got any fruit; therefore, justified the judgement and decree passed by the Trial Court. Hence, prays to dismiss the appeal.

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Upon hearing the arguments of both the

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learned counsel appearing for the parties, the following points would arise for my consideration::

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i. Whether, under the facts and circumstances involved in the case, the plaintiff is entitled discretionary relief of a decree for specific performance as per Section 20 of the Specific Relief Act?

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ii. Whether, under the facts and circumstances involved in the case, if a decree for specific performance is granted, then would it cause

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hardship to the defendants compared to the plaintiff?

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iii. Whether, the judgment and decree passed by the Trial Court requires interference/modification?

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In the present case, Ex.P-2 is the registered

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agreement of sale. Admittedly, the defendants are the owners of the suit schedule land to the extent of 19 acres 39 guntas, nearly 20 acres. As per the plaintiff, the total sale consideration is Rs.12,30,000/- and out of it, the plaintiff has paid Rs.12,00,000/- towards Sangappa, who is husband of defendant No.1 and father of defendant Nos.2 to 4 and son of defendant No.5. The remaining balance sale consideration of Rs.30,000/- is to be paid by the plaintiff to the defendants. The possession is not handed over to the plaintiff by virtue of said Ex.P-2registered agreement of sale. Sangappa died on 31.07.2011. The plaintiff has got issued legal notice on 04.06.2012 at the verge of completion of three years from

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the date of agreement of sale. The defendants have

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declined to execute registered agreement of sale; therefore, the plaintiff has filed suit on 24.07.2012 just before 4 days of completion of 3 years. Therefore, one thing is proved that the date of registered agreement of sale is 28.07.2009 and for the first time, the plaintiff has issued notice on 04.06.2012 after 2 and ½ years after the death of Sangappa.

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Considering the extent of land and total sale consideration amount, the rate would be Rs.61,500/- per acre in the year 2009. PW-2 and PW-3 are the attesting witnesses who have deposed that Sangappa had been to the Sub Registrar office and executed an agreement of sale after fully understanding the same and received part of the sale consideration of Rs.12,00,000/- and only the remaining Rs.30,000/- is to be paid to the defendants. Therefore, it is the argument canvassed by the counsel for the respondents/plaintiffs that substantial part of amount was paid to the Sangappa and he has received it. DW-2 is also one of the signatories to Ex.P-2-registered agreement

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of sale, but he has deposed that Ex.P-2 document is only for the arrangement of looking after the land given to the plaintiff, but sale talks were not held. Thus, DW-2 has denied execution of the agreement of sale in his examination-in-chief, but in the course of crossexamination DW-2 has admitted that Sangappa had been to the office of the Sub-Registrar and had put signature on the registered agreement of sale and received amount of Rs.12,00,000/-. Thus, the registered agreement of sale is proved.

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Section 20 of the Specific Relief Act (Before Amendment), 2018, is a discretionary relief, which reads as follows:

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“ 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:—

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(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

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

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

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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).

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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

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plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

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(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.

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(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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The Hon’ble Supreme Court in various

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judgments by interpreting Section 20 of the Specific Relief Act (hereinafter referred to as ‘the SR Act’ for short), has laid down principle of law that granting relief of decree for specific performance is discretionary relief, subject to the principles laid down in Section 20 of the SR Act. Just because an agreement of sale is proved, that cannot be made a reason to grant decree for specific performance, though it is lawful to do so.

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The grant of decree for specific performance is

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guided by the principle of law laid down and what are the criteria that the Court shall consider upon the facts and circumstances involved in the case. It is worthwhile to refer some of the judgments of the Hon’ble Supreme Court, which are as follows:

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The Hon’ble Supreme Court in the case of JAYAKANTHAM AND OTHERS v. ABAYKUMAR¹ , at

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paragraph Nos.7, 8 and 9 has held as follows:

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“ 7. While evaluating whether specific performance ought to have been decreed in the present case, it would be necessary to bear in mind the fundamental principles of law. The court is not bound to grant the relief of specific performance merely because it is lawful to do so. Section 20(1) of the Specific Relief Act, 1963 indicates that the jurisdiction to decree specific performance is discretionary. Yet, the discretion of the court is not arbitrary but is “sound and reasonable”, to be “guided by judicial principles”. The exercise of discretion is capable of being corrected by a court of appeal in the hierarchy of appellate courts. Subsection (2) of Section 20 contains a stipulation of those cases where the court may exercise its discretion not to grant specific performance. SubSection (2) of Section 20 is in the following terms:

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“ 20. (2) The following are cases in which the court may properly exercise

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1 (2017) 5 SCC 178

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discretion not to decree specific performance-

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(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

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(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;

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

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8. However, Explanation 1 stipulates that the mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, will not constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Moreover, Explanation 2 requires that the issue as to whether the performance of a contract involves hardship on the defendant has to be determined with reference to the circumstances existing at the time of the contract, except where the hardship has

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been caused from an act of the plaintiff subsequent to the contract.

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9. The precedent on the subject is elucidated below:

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9.1. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son² , this Court held that: (scc p. 345, para 14)

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“…14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff…”

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9.2 A similar view was adopted by this Court in Sardar Singh v. Krishna Devi³ : (SCC p.26, para 14)

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“14……. Section 20(1) of the Specific Relief Act, 1963 provides that 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

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2 1987 Supp SCC 340 :AIR 1987 SC 2328

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3 (1994) 4 SCC 18

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capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified

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in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.”

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9.3. Reiterating the position in K. Narendra v. Riviera Apartments (P) Ltd⁴ , this Court held thus: (SCC p.91, para 29)

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“29…… Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy⁵ by stating that the

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4 (1999) 5 SCC 77

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5 (1996) 5 SCC 589

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decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court.”

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9.4. These principles were followed by this Court in A.C. Arulappan v. Ahalya Naik⁶ , with the following observations: (SCC pp.604 & 606, paras 7 & 15)

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“7…… The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from

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6 (2001) 6 SCC 600

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granting a decree to the plaintiff.”

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“15…… Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court…..”

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9.5. A Bench of three Judges of this Court considered the position in Nirmala Anand Vs. Advent Corporation (P) Ltd⁷ ., and held thus : (SCC p.150, para 6)

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“6…... It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during

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7 8 (2002) 8 SCC 146

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the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.”

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17. In the case of Parakunnan Veetill Joseph’s Son Mathew Vs. Nedumbara Kuruvila’s son⁸ , at

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paragraph No.14, it is held as follows:

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”14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take

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8 (1987) Supp SCC 340

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care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff. The High Court has failed to consider the motive with which Varghese instituted the suit. It was instituted because Kuruvila could not get the estate and Mathew was not prepared to part with it. The sheet anchor of the suit by Varghese is the agreement for sale Exhibit A-1. Since Chettiar had waived his rights thereunder, Varghese as an assignee could not get a better right to enforce that agreement. He is, therefore, not entitled to a decree for specific performance.”

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18. In the case of Sardar Singh Vs. Krishna

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Devi⁹ at paragraph No.14, it is held as follows:

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“14. The next question is whether the courts below were justified in decreeing the suit for specific performance. Section 20(1) of the Specific Relief Act, 1963 provides that 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. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.”

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9 (1994) 4 SCC 18

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19. In the case of K. Narendra Vs. Riviera

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Apartments (P) Ltd.,¹⁰ at paragraph Nos.29, 30, 31, 32, 33 and 34, it is held as follows:

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“29. Section 20 of the Specific Relief Act, 1963 provides that 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; 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. Performance of the contract involving some hardship on the defendant which he did not foresee while nonperformance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SCC 589 : AIR 1996 SC 2814] by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion

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10 (1999) 5 SCC 77

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should be exercised on sound principles of law capable of correction by an appellate court.

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30. Chitty on Contracts (27th Edn., 1994, Vol. 1., at p. 1296) states:

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“Severe hardship may be a ground for refusing specific performance even though it results from circumstances which arise after the conclusion of the contract, which affect the person of the defendant rather than the subject-matter of the contract, and for which the plaintiff is in no way responsible.”

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31 . Very recently in K.S. Vidyanadam v. Vairavan [(1997) 3 SCC 1] this Court has held: (SCC p. 7, para 10)

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“10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would

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it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the court by both Sections 10 and 20. As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani [(1993) 1 SCC 519 : AIR 1993 SC 1742] : (SCC p. 528, para 25)

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‘… it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the court may infer that it is to be performed in a reasonable time if the conditions are (evident?): (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract.’

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In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades — particularly after 1973.”

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32 . Referring to the principle that mere rise in prices is no ground for denying the specific performance the Court has

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emphasized the need for being alive to the realities of life and inflationary tendencies judicially noticeable and observed: (SCC p. 9, para 11)

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“Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties — evolved in times when prices and values were stable and inflation was unknown — requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so.”

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33 . The Court has further proceeded to hold: (SCC pp. 9-10, para 11)

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“All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties).”

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34 . Having noticed the Constitution Bench decision in Chand Rani [(1993) 1 SCC 519 : AIR 1993 SC 1742] the Court has further held: (SCC p. 11, para 14) “Even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms

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of the contract and the nature of the property.”

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20. In the case of A.C. Arulappan Vs. Ahalya

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Naik¹¹ at paragraph No.7, 8, 9, 10 and 15, it is held as

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follows:

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“7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff.

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8. In Damacherla Anjaneyulu v. Damcherla Venkata Seshaiah [1987 Supp SCC 75 : AIR 1987 SC 1641] the High Court

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11 (2001) 6 SCC 600

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declined to grant a decree for specific performance in favour of the plaintiff, even though the defendant was guilty of breach of agreement. That was a case where the defendant had constructed costly structures and if a decree for specific performance was granted, the defendant would have been put to special hardship. This Court directed the defendant to pay compensation to the plaintiff.

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9. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son [1987 Supp SCC 340 : AIR 1987 SC 2328] this Court cautioned and observed as under: (SCC p. 345, para 14)

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“14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff.”

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10. In Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SCC 589 : AIR 1996 SC 2814] the plaintiff, who sought for specific performance of an agreement to purchase immoveable property, filed a suit with incorrect and false facts. In the plaint, it was alleged that the plaintiff was already given possession of Door No.2/53 as a lessee and he was given possession of Door

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No.1/53 on the date of the agreement itself. But he did not give any evidence that he had got possession of Door No.1/53 on the date of the agreement. It was found that his case as regards Door No.1/53 was false. He also alleged that he had paid Rs.400 in addition to the sum of Rs.4000 paid as advance, but this was proved to be an incorrect statement. He alleged that the third defendant had inspected the house during the course of negotiations, but this also was found to be false. This Court held that it is settled law that the party who seeks to avail of the jurisdiction of a court and specific performance being equitable relief, must come to the court with clean hands. In other words, the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief.

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15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court. The trial court, which had the added advantage of recording the evidence and seeing the demeanour of the witnesses, considered the relevant facts and reached a conclusion. The appellate court should not have reversed that decision disregarding these facts and, in our view, the appellate court seriously flawed in its decision. Therefore, we hold that the

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respondent is not entitled to a decree of specific performance of the contract.”

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The next question that comes up is considering

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Section 16(c) of the Specific Relief Act. Though registered agreement of sale is dated 28.07.2009, but till the date of Sangappa’s death on 31.07.2011, there is no evidence that the plaintiff has called upon Sangappa to execute registered sale deed. For the first time, on 04.06.2012, the plaintiff had got issued a legal notice to the defendants calling upon them to execute registered sale deed and then the suit is filed on 24.07.2012, just before 4 days before completion of limitation period to institute a suit for specific performance of contract, but there is no explanation from the plaintiff why he has kept silent by not asking Sangappa to give the sale deed for these 2 and ½ years till the death of Sangappa. Further there is no evidence that the plaintiff was ever ready and willing to perform his part of contract.

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Therefore, just because an agreement of sale is

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proved and grant of decree is lawful to do so, still the Court has discretion whether to grant decree for specific performance or not. In the present case, the total extent of land is 19 acres 39 guntas, nearly 20 acres. The total sale consideration amount is Rs.12,30,000/- for the whole 19 acres 39 guntas, which comes to a sale consideration of just Rs.61,500/- per acre. When PW-1 was giving evidence on 17.09.2013, he has admitted that in Basnal village, the value of the land is Rs.5,00,000/- per acre. Though agreement is dated 28.07.2009, the value of the land was agreed for Rs.61,500/- per acre. Therefore, this certainly amounts to an arbitrary transaction. Though Sangappa during his lifetime, after receiving Rs.12,00,000/- from the plaintiff, has purchased 5 acres of land in the name of his wife, that cannot be a ground to grant decree for specific performance.

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As per the evidence of the defendants, this is

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only land for the defendants for their livelihood; therefore,

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if this land is sold away to the plaintiff on the guise of decree for specific performance, then the defendants would be put into more hardship and it would also be an unfair advantage on the defendants by the plaintiffs. Therefore, when a comparison of hardship is analysed, if the suit is decreed in full for specific performance, then the defendants would lose their only source of livelihood, but the plaintiff’s interest would be safeguarded by ordering the refund earnest amount with interest at the rate of 18% p.a. Therefore, when this comparative hardship is analysed, the plaintiff is not entitled discretionary relief of specific performance as per Section 20 of the Specific Relief Act. When, as discussed above, the entire transaction is an unfair advantage over the defendants by the plaintiff, then the discretionary power cannot be exercised in favour of the plaintiff. Also upon considering the comparative of hardship as above discussed, it is not a fit case to exercise discretionary relief of granting a decree for specific performance. Therefore, the Trial Court has

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committed an error in not exercising its discretionary relief

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properly. The Trial Court just swayed away upon the fact that the agreement of sale is registered one. Therefore, the Trial Court has committed an error and did not exercise discretionary relief. Accordingly, I answer point No.(i) in the Affirmative, point No.(ii) in the affirmative and point No.(iii) in the partly affirmative. Hence, the judgment and decree passed by the Trial Court for granting relief of specific performance is set aside and modified the decree to the extent that the plaintiff is entitled to refund of earnest amount of Rs.12,00,000/with interest at the rate of 18% p.a. from the date of agreement till the date of realization.

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In the result, I proceed to pass the following:

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ORDER

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i. The appeal is allowed .

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ii. The judgment and decree dated 19.04.2017 passed in O.S.No.34/2012 on the file of Senior Civil Judge, Hungund is modified

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directing the defendants to refund of earnest amount of Rs.12,00,000/along with interest at the rate of 18% p.a. from the date of agreement till the date of realization.

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iii. The decree of granting specific performance

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is set aside.

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iv. No order as to costs.

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v. Draw decree accordingly.

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Sd/(HANCHATE SANJEEVKUMAR) JUDGE

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SRA CT:BCK LIST NO.: 1 SL NO.: 34

Bayavva, v. Gurubasappa, S/O. Mallappa Bennal

Case brief

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Bayavva, v. Gurubasappa, S/O. Mallappa Bennal

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