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Specific Relief Act, 1963: Nature of transaction between the plaintiffs and defendant nos.1 to 3 – Suit for specific performance of agreements for sale of agricultural land and in the alternative for recovery of earnest money with interest – Case of plaintiffs was that defendant 1 to 3 had executed agreement dated 20.9.1965 for sale of suit land for a consideration of Rs.22,951 and that Rs.3,500 was paid as earnest money; that plaintiffs further paid Rs.2,000 on 24.9.1965 and took possession of 25 acres of land – Plaintiff further averred that defendants executed a supplementary agreement for sale and accepted an additional sum of Rs.500 from plaintiffs and handed over the remaining portion of land to plaintiffs and the remaining sale consideration was settled at Rs.11,951 after deducting Rs.5,000 towards encumbrances and on payment of this amount defendants 1 to 3 were liable to execute the sale deed in their favour – Case of defendants 1 to 3 (vendors) was that the said agreements were executed only as collateral security for a loan advanced by plaintiff no.1 and not for sale of property – Held: There was not even a remote suggestion in the agreements that there was any loan or borrowing transaction between the parties and the said agreements were being executing towards security – On the contrary, the recitals and stipulations in the agreements were only in affirmation of the agreement for sale and of the receipt of part payment from time to time against the sale consideration – As to whether the possession of the land in question was delivered to the plaintiffs or not, could not have been taken as a factor decisive as regards nature of transaction – Moreover, execution of the supplementary agreement after notice and after receiving further an amount of Rs. 500/- by defendant Nos. 1 to 3 could only show re-affirmation of the intention of the parties towards the sale transaction – In the supplementary agreement, the defendants not only acknowledged the receipt of part consideration to the tune of Rs. 6,000/- but further agreed for adjustment of Rs. 5,000/- towards encumbrances and, therefore, agreed to receive remaining Rs. 11,921/- at the time of execution of the sale deed – In view of the dealings of the parties, this circumstance about execution of the supplementary agreement only strengthened the case of the plaintiffs. Specific Relief Act, 1963: Specific performance – Readiness and willingness of plaintiff to perform his part of the contract – The plaintiffs pleaded in the plaint that they were ready to get the sale deed executed as per the conditions in the agreement for sale and also stated that they served the notice, then supplementary agreement was executed; and then, on many occasions, they asked the defendant to execute the sale deed – Defendant No.1 in his written statement merely stated a bald denial that such averments were false and were ‘not agreeable to the defendants’ – The entire emphasis of the written statement was on the assertion that the agreement in question was not for sale and was obtained by the plaintiffs towards security against the amount borrowed by defendant No.1 – Held: The plea of the plaintiffs as regards their readiness to perform the contract as per its conditions did not meet with categorical denial from the defendants – This apart, even at the time of entering into the agreement, the plaintiffs paid Rs. 3,500/- against the sale consideration of Rs. 22,951/- – Moreover, and much before the stipulated date of execution of sale deed, they made another payment of Rs. 2,000/- against the sale consideration – When the sale deed was not executed within stipulated time, the plaintiffs served notice – Defendants thereafter executed the supplementary agreement and the plaintiffs made payment of yet another sum of Rs. 500/- while it was also agreed by the vendors that the property carried encumbrance to the tune of Rs. 5,000/-, which was to be adjusted against the sale consideration – Therefore, the plaintiffs were left to make payment of about half of the sale consideration – The plaintiffs showed their readiness and willingness to perform their part of the contract and there did not operate any personal bar against their claim for specific performance.Transfer of Property Act, 1882: s.52 – Doctrine of lis pendens – Both the sale transactions in favour of the appellants, purporting to transfer the suit property in part, having been effected after filing of the suit, were directly hit by the doctrine of lis pendens, as embodied in s.52 of the Act, 1882 – Specific Relief Act, 1963. Transfer of Property Act, 1882: s.52 – Effect of doctrine of lis pendens – Held: Is not to annul all the transfers effected by the parties to a suit but only to render them subservient to the rights of the parties under the decree or order which may be made in that suit – Its effect is only to make the decree passed in the suit binding on the transferee, i.e., the subsequent purchaser – Nevertheless, the transfer remains valid subject, of course, to the result of the suit – Hence, the effect of s.52, for the purpose of the instant case would only be that the said sale transactions in favour of the subsequent purchasers shall have no adverse effect on the rights of the plaintiffs and shall remain subject to the final outcome of the suit in question – However, the High Court, while holding that the said transactions were hit by lis pendens, proceeded to observe further that the sale deeds so made in favour of the subsequent purchasers were illegal – These observations by the High Court not approved. Specific Relief Act, 1963: Requirement to prove readiness and willingness of plaintiff to perform his part of the contract is not that the plaintiff should continuously approach the defendant with payment or make incessant requests for performance – For the relief of specific performance, which is essentially a species of equity but has got statutory recognition in terms of the Specific Relief Act, the plaintiff must be found standing with the contract and the plaintiff’s conduct should not be carrying any such blameworthiness so as to be considered inequitable. Specific Relief Act, 1963: Limitation – When the plaintiffs had the limitation of three years for filing the suit for specific performance, it cannot be said that during the said period, the plaintiffs are required to show overt act by them in furtherance of the agreement in question – In the instant case, when the plaintiffs had the limitation of three years for filing the suit and have indeed filed the suit well within limitation, no aspect of delay operates against them –Limitation – Delay/Latches.Specific Relief Act, 1963: ss.21 and 22 – Grant of relief – Agreements in question were executed way back on 20.09.1965 and 28.04.1966 – The evidence on record showed that vendors and thereafter, the subsequent purchasers remained in effective possession thereof – High Court took note of the fact that as on the date of its decision, the subsequent purchasers were in possession of the land in question for about 40 years – High Court found that land in question carried much higher valuation at the time of passing of the judgment in second appeal and hence, enhanced the sale consideration to Rs. 10,000/- per acre – Plaintiffs, even while seeking specific performance, prayed for the alternative reliefs of recovery of amount paid by them with interest and compensation to the tune of Rs 15,000/- – Plaintiff No. 1 expired during the pendency of suit and plaintiff No. 2 expired during the pendency of this appeal; though legal representative of plaintiff Nos. 1 and 2 was on record as plaintiff No.4 (respondent No. 2) – Plaintiff No.2, while deposing as PW2 had stated that in case specific performance was not granted, she ‘may be granted alternative relief and compensation with interest’ – In view of this, instead of specific performance, awarding of monetary compensation to respondent No. 2 would meet the ends of justice – Subsequent purchasers themselves filed valuation report suggesting that the market value of unirrigated land was Rs. 70,000/- per hectare whereas that of the irrigated land was Rs. 1,40,000/- per hectare – The fact also remained that the appellants have been enjoying the land in question for a long length of time – Further, the predecessors of respondent No. 2 made payment of the sum of Rs. 6,000/- to the vendors in the years 1965- 1966; and the plaintiffs had claimed alternative relief of recovery of the said amount together with interest as also of compensation – Taking all the relevant factors into account, a lump sum of Rs. 15,00,000/- is awarded to respondent No. 2 as compensation in lieu of specific performance – Equity. |
