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Sridhara babu.

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READINESS

AND

WILLINGNESS

IN

SPECIFIC

PERFORMANCE SUIT
In Manjunath v. Tammanasa, AIR 2003 SC 1391 : 2003 (2) Cur
CC 177 : 2003 (10) SCC 390 and Rameshwar Prasad v. Basanti
Lal, AIR 2008 SC 2050, in specific terms it is laid down that
specific performance of contract cannot be enforced in favour of
a person who fails to aver and prove that he has performed or
has always been ready and willing to perform the essential
terms of the contract. The requirement of law is two folds: (i)
that the plaintiff must aver in the plaint and (ii) that he must
prove by evidence that he was always been ready and willing to
perform his part of the contract. The plaintiff cannot be allowed
to succeed if he fails to fulfil any of the two obligations enjoined
by law.
Supreme Court in Pramod Buildings and Developers Private
Limited vs. Shanta Chopra, (2011) 4 SCC 741. In this case it is
held that: In a suit for specific performance, burden lies on
plaintiff to prove readiness and willingness to perform his
obligations in terms of contract. If plaintiff was not willing to
pay balance amount at the time of sale as agreed, he could not
claim that he was ready and willing to perform his obligations.
In the earlier decision viz. Pramod Buildings and Developers
Private Limited vs. Shanta Chopra, (2011) 4 SCC 741, the
decision

in

Man

Kaur

(Dead)

by Lrs.

vs.

Hartar

Singh

Sangha,(2010) 10 SCC 512 was cited to support the contention


of the appellant that the defendant did not state into the
witness box and evidence was given only by her husband and

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that was insufficient. The said contention was considered and


negatived by both the Single Judge and the division Bench. Man
Kaur (Dead) by Lrs. vs. Hartar Singh Sangha, (2010) 10 SCC
512. In this connection, the Division Bench has held that the
decision viz.Man Kaur (Dead) by Lrs's case has no bearing on
the facts of the case. While dealing with Section 16(c) of the
Specific Relief Act, 1963 and Section 101 of the Evidence Act,
1872, the Hon'ble Mr. JUSTICE R.V.RAVEENDRAN speaks on
behalf of the Division Bench that the suit in a specific
performance the plaintiff should not only plead and prove the
terms of the agreement and also should plead and prove his
readiness and willingness to perform his obligations under the
contract in terms of the contract. In Paragraph No.40 of the
Judgment His Lordship has held as follows: 40........There are
two distinct issues. The first issue is the breach by the
defendant - vendor which gives a cause of action to the plaintiff
to file a suit for specific performance. The second issue relates
to the personal bar to enforcement of a specific performance by
persons enumerated in section 16 of the Act. A person who fails
to aver and 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 the terms the
performance of which has been prevented or waived by the
defendant) is barred from claiming specific performance.
Therefore, even assuming that the defendant had committed
breach, if the plaintiff fails to aver in the plaint or prove that he
was always ready and willing to perform the essential terms of
contract which are required to be performed by him (other than
the terms the performance of which has been prevented or

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waived by the plaintiff), there is a bar to specific performance in


his favour. Therefore, the assumption of the respondent that
readiness and willingness on the part of plaintiff is something
which need not be proved, if the plaintiff is able to establish that
defendant refused to execute the sale deed and thereby
committed breach, is not correct. Let us give an example. Take a
case where there is a contract for sale for a consideration of
Rs.10 lakhs and earnest money of Rs.1 lakh was paid and the
vendor wrongly refuses to execute the sale deed unless the
purchaser is ready to pay Rs.15 lakhs. In such a case there is a
clear breach by defendant. But in that case, if plaintiff did not
have the balance Rs.9 lakhs (and the money required for stamp
duty and registration) or the capacity to arrange and pay such
money, when the contract had to be performed, the plaintiff will
not be entitled to specific performance, even if he proves breach
by defendant, as he was not `ready and willing' to perform his
obligations.
K.S.Vidyanadam vs. Vairavan, (1997) 3 SCC 1 and held as
follows: In an agreement for sale of immovable properties, the
readiness and willingness of the parties to perform their part of
the contract is essential. Hence, we are of the view that the
concurrent findings of fact arrived at by the High Court and the
trial court on the question of readiness and willingness to
perform their part of obligation, so far as the appellants are
concerned, cannot at all be interfered with. Accordingly, we are
of the view that the High Court has rightly confirmed the
concurrent findings of fact arrived at by the courts below on the
question of readiness and willingness on the part of the
appellants to complete the agreement for sale.

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SPECIFIC PERFORMANCE BEING EQUITABLE RELIEF CANNOT BE SOUGHT WITH UNCLEAN HANDS
It is settled law that the party who seeks to avail of the equitable
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. This principle is
laid down in Lourdu Mari David and others v. Louis Chinnaya
Arogiaswamy and others, AIR 1996 SC 2814(1).
TIME IS THE ESSENCE OF THE CONTRACT
As observed in A.K.Lakshmipathy (Dead) and Others vs. Rai
Saheb Pannalal H.Lahoti Charitable Trust and Others (2010) 1
SCC 287, the surrounding circumstances arising from the
nature of the case lead the Court to presume the time is the
essence of the contract and therefore this Court is also of view
that the plaintiff having failed to perform his part of contract, he
cannot be allowed to take advantage of his own mistake and
conveniently passes the blame on the defendant.

STAMP DUTY SHOULD BE PAID AS ON THE DATE OF


REGISTRATION NOT AS PER THE DECREE VALUATION IN
SPECIFIC PERFORMANCE 2008 and 2010 SC
State of Rajasthan v. M/s.Khandaka Jain Jewellers (AIR 2008
SC 509) 2007 (12 ) SCR 105 = 2007 (14 ) SCC 339 The

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Collector shall determine was the valuation of the instrument on


the basis of the market value of the property at the date when
the document was tendered by the respondent for registration,
and the respondent shall pay the stamp duty charges and
surcharge, if any, as assessed by the Collector as per the
provisions of the Act.
There is a difference between an agreement to sell and a sale.
An agreement to sell is not a sale. An agreement to sell becomes
a sale after both the parties signed the sale deed. What is
relevant in fact is the actual valuation of the property at the
time of the sale. The crucial expression used in Section 17 of the
Stamp Act, 1899 is "at the time of execution". Therefore, stamp
duty on a sale has to be assessed on the market value of the
property at the time of execution of sale deed, and not at the
time of the prior agreement to sell, nor at the time of filing of the
suit. The Stamp Act, 1899 is in the nature of a taxing statute,
and it has to be construed strictly; and considerations of
hardship or equity have no role to play in its construction. It is
true that no one should suffer on account of the pendency of
the matter in court but this consideration does not affect the
principles of interpretation of a taxing statute. A taxing statute
has to be construed as it is. The contingencies that the matter
was under litigation and the value of the property by that time
shot up cannot be taken into account for interpreting the
provisions of a taxing statute.

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STATE

OF

2010 SC
) SCC 350

HARYANA
1779 = 2010
This

&

ORS. VS MANOJ
(3

SCR 175

KUMAR
= 2010

AIR
(4

was a case where a decree for specific

performance of an agreement to sell was granted in favour of the


plaintiff and registration was done on the basis of the sale price
given in the transfer deed (carried forward from the agreement
for sale). Question arose whether stamp duty paid was proper.
The Supreme court observed in paragraph 29 that the view of
the High Court that stamp duty paid was proper is wrong, If
genuineness of the sale price entered into by the buyer and
seller cannot be questioned, then in majority of the cases it is
likely that the State would ever receive stamp duty according to
the circle rate or the Collector rate. The Supreme Court held
that no sale deed can be registered for an amount less than the
amount notified by the Collector. In order to ensure that there
is no evasion of stamp duty, circle rates are fixed from time to
time and the notification issued to that effect. The issuance of
such notification has become imperative to arrest the tendency
of evading the payment of actual stamp duty. It is a matter of
common knowledge that usually the circle rate or the collector
rate is lower than the prevalent actual market rate but to
ensure registration of sale deeds at least at the circle rates or
the collector rates such notifications are issued from time to
time. It is not disputed that in the instant case the commercial
plot of 788 sq. yards was valued by the circle rate at Rs.4,200
per sq. yard fixed by the Collector, meaning thereby that after
the notification, no sale deed could be registered for an amount
lesser than Rs.4,200/- per sq.yard. The High Court has not
properly construed the observations of the District Collector to

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the effect that the suit was filed in the civil court with the
intention to avoid tax and stamp duty inasmuch as the value of
the property as per the circle rate was Rs.33,09,600, on which
stamp duty to be paid was Rs.5,13,050/- whereas the stamp
duty actually paid was only Rs.31,000/-, therefore stamp duty
to the tune of Rs.4,82,050 was payable. This order was upheld
by the Commissioner. The High Court while exercising its
jurisdiction under Article 227 has set aside the orders passed
by the authorities below without any basis or rationale. Apart
from the jurisdiction, even what is factually stated in the order
of the District Collector as upheld by the Commissioner, is
unexceptionable and any interference was totally unwarranted.
CONTRACT WHOSE PERFORMANCE IS NOT POSSIBLE
WITHOUT DISOBEDIENCE TO LAW IS VOID 1965 KAR
NEMINATH

APPAYYA

HANAMANNAVAR

v.

JAMBURAO

SATAPPA KOCHERI, 1965(1) Mys.LJ. 442 if an agreement to sell


land which if enforced would leave the purchaser with lands in
excess

of

ceiling

area

and

therefore

the

contract

is

unenforceable as it by Section 23 of the Act, in view of


prohibition contained under Section 34 of the Bombay Tenancy
and Agricultural Lands Act, and also Sections 35 and 73(m) and
85 of that Act. Somanath Iyer J, (as his Lordship then was),
speaking for the Bench observed that Section 23 of the Contract
Act, and the other seven Sections following it incorporate among
others three well settled principles. The first is that an
agreement or contract whose purpose is the commission of an
illegal act is void; second is that an agreement or contract

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expressly or impliedly prohibited by law is similarly void; and


the third is that an agreement or contract whose performance is
not possible without disobedience to law is again void.

WHEN

THERE

PARTIES

WAS

NO

REGARDING

AGREEMENT

ESSENTIAL

BETWEEN

TERMS

OF

THE
THE

AGREEMENT NO CONSENSUS AD-IDEM AS SUCH NO


VALID CONTRACT TO BE ENFORCED 1990 SC
JUSTICE SAIKIA, K.N. and JUSTICE RANGNATHAN, S. of
Supreme Court in the case of Smt. Mayawanti vs Smt.
Kaushalya Devi Reported in 1990 SCR (2) 350, 1990 SCC (3)
1 :- The specific performance of a contract is the actual
execution of the contract according to its stipula- tions and
terms, and the courts direct the party in default to do the very
thing which he contracted to do. The stipula- tions and terms of
the contract have, therefore, to be certain and the parties must
have been consensus ad idem. The burden of showing the
stipulations and terms of the contract and that the minds were
ad idem is, of Course, on the plaintiff. If the stipulations and
terms are uncertain and the parties are not ad idem there can
be no specific performance, for there was no contract at all.
Where there are negotiations, the Court has to determine at
what point, if at all, the parties have reached agree- ment.
Negotiations thereafter would also be material if the agreement
is rescinded. In the instant case the defence of there having not
been a contract for lack of consensus ad idem was available to
the defendant.

The jurisdiction of the Court in specific

performance is discretionary. When a promise is made in an

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alternative form and one alternative is impossible to perform,


the question whether the promiser' is bound to perform the
other or is altogether excused depends on the intention of the
parties to he ascer- tained from the nature and terms of the
contract and the circumstances of the particular case.

The

expression 'otherwise pay back the advance and compensation


in the same amount' is capable of being inter- preted as
payment of the amount as alternative to perform- ance. Of
course the amount advanced and the compensation was
stipulated to he the same amount. That, however, would not
effect the real character of the promise.

In Laxminarayanachar v. Narayana 1969(2) My.L.J 299 this


Court has held that when the document is produced before the
Court for being used in evidence, the first jurisdiction of
determining the duty and penalty is that of the Court. It is only
when that stage is crossed and the document is not tendered in
evidence, the provisions of Sub-section (2) of Section 37 of the
Act are attracted. Therefore, the court below is justified in
determining duty and penalty on the document in question.

TIME IS AN ESSENCE OF CONTRACT


A Five Judges Bench of Supreme Court in the case Smt. Chand
Rani (dead) by LRs. v. Smt. Kamal Rani (dead) by LRs., AIR
1993 SC 1742, in Para 24 has held as under :-- From an
analysis of the above case law it is clear that in the case of sale
of immovable property there is no presumption as to time being

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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 condition are :
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 :

WHEN THERE IS GREATER HARDSHIP TO OTHER PARTY


COURT CANNOT ENFORCE SPECIFIC PERFORMANCE
Justice K Jagannatha Shetty, and Justice P Kulkarni. In the
case of Ranganayakamma vs N. Govinda Narayan Reported
in AIR 1982 Kant 264, ILR 1982 KAR 121, 1982 (1) KarLJ
485:It is a well established doctrine that the Court will not enforce
specific performance of a contract, the result of which would be
to impose great hardship on either of the parties to it. 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 however, should be exercised on
reasonable principles capable of correction by a Court of appeal.
When the Section states that "the jurisdiction to decree specific
performance is discretionary" to it only means that the mere

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existence of a legal right is not sufficient to attract the remedy.


An agreement may be valid in law and there may not be
sufficient grounds for its cancellation; yet, upon a fair and just
consideration of the attendant circumstances, the Court may
abstain from its enforcement. Sub-section (2) of Section 20 sets
forth the cases in which the Court may properly -exercise such
discretion to refuse specific performance. It broadly divides
those cases into three categories, namely:(1) where- (i) the terms of -the contract, or (ii) the conduct of the
parties at the time of entering into the contract or (iii) other
circumstances. under which the contract was entered into, are
such that the contract gives the plaintiff an unfair advantage
over the defendant, or
(2) Where the performance of the contract would - (i) involve
some hardship on the defendant, which he did not foresee; and
(ii) its non-performance would not involve any such hardship on
the plaintiff, or
(3) Where although the contract is not viodable at the instance
of the defendant, yet it is inequitable to enforce specific
performance.

DEFENDANT

PLEADING THAT MONEY WAS RECEIVED

AS LOAN--PLAINTIFF'S

CASE NOT PROVED-WHETHER

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DECREE

CAN

BE GIVEN FOR RECOVERY OF MONEY AS

LOAN ON DEFENDANT'S PLEA


SRINIVAS RAM KUMAR VS MAHABIR PRASAD AND OTHERS.
1951 AIR 177 Pleadings--Inconsistent pleas--Plaintiff suing
for specific performance alleging that money was paid
as price--Defendant

pleading that money was received as

loan--Plaintiff's case not proved-Whether decree can be given


for recovery of money as loan on defendant's plea. Though the
court would not grant relief to the plaintiff on a case for which
there was no foundation in the pleadings and which the
other side was not called upon or had no opportunity to meet,
yet, when the alternative

case

which the

plaintiff could

have made was not only admitted by the defendant


written statement but was expressly

in

put forward

an answer to the claim which the plaintiff made in

his
as

the suit.

there would be nothing improper in giving the plaintiff a decree


upon the case which the defendant himself makes.
circumstances, when no injustice can
defendant, it may not be proper to

possibly

In

such

result to the

drive the plaintiff to a

separate suit.

EXECUTING

COURT

POSSESSION

OF

RELIEF

IS

GRANT

PROPERTY

GRANTED

PERFORMANCE

CAN
BY

EVEN

DELIVERY

WHERE

DECREE

FOR

NO

OF
SUCH

SPECIFIC

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In Venkatesh v. Parappa, (1966) 1 Mys LJ 799, Mysore High


Court sustained the order of delivery of possession though the
decree for specific performance was passed In general terms. All
these decisions Were referred to and relied on by single Judge of
Kerala High Court in Narayana Pillai v. Ponnuswami Chettiar/ ,
where the learned Judge held : "The executing Court can grant
delivery of possession of property even where no such relief is
granted by a decree for specific performance of the contract of
sale."

K. Venkoji Rao vs M. Abdul Khuddur Kureshi

AIR 1991

Kant 119, 1991 (1) KarLJ 1 Then again, it is necessary to


remember that mere rise in price subsequent to the date of the
contract or inadequacy of price is not to be treated as a
hardship entailing refusal of specific performance of the
contract. Further, the hardship involved should be one not
foreseen by the party and should be collateral to the contract. In
sum it is not just one factor two, that is relevant for
consideration. But it is the some (sum) total on various factors
which is required to enter into the judicial verdict. At this
juncture it is necessary to remember that defendant has not
made out a case alleging hardship muchless has he proved to
substantiate the same. He has not been able to show as

how

he would be put to any hardship in the event of the grant of


specific performance. It is needless to say that every decree for
specific performance may entail some inconvenience to the
parties against whom such a decree is passed. However, that is
not a circumstance constituting hardship within the meaning of
that expression employed in S. 20 of the Specific Relief Act. In

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the instant case, defendant has not even made clear in the
course of his evidence as to what was the price which he had
paid for the property in question. His evidence if read in a
proper perspective would indeed go to show that he was not
prepared to lay bare the facts within his knowledge for one
reason or the other. . It is also necessary to note here
that the defendant has agreed to sell the property in question to
the plaintiff for Rs. 14,000/-, and had actually received an
advance of Rs.2,000/-. The evidence on record does not go to
show that the consideration is inadequate, notwithstanding the
fact that inadequacy of consideration by itself cannot constitute
a factor warranting the refusal of the decree for specific
performance. On the other hand, the circumstances, would
indeed go to show that the price agreed to be paid by the
plaintiff to the defendant was fair. Further, there are no
circumstances to indicate that the parties namely, plaintiff's
and defendants were on unequal terms. Further, there is
nothing to show that the plaintiff had taken any undue or
unfair advantage of the position in which the defendant was
placed. Having regard to these materials I am indeed of the view
that the plea of hardship sought to he made at this stage by the
learned Advocate for the appellant does not find support from
the materials on record.

RELIEF OF CLAIMING RECTIFICATION OF INSTRUMENT IN A


SUIT CAN BE CLAIMED BY WAY OF AMENDMENT 2010 SC

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JUSTICE DR. B.S. CHAUHAN and JUSTICE

SWATANTER

KUMAR in SUBHADRA & ORS. .Vs. THANKAM Reported in AIR


2010 SC 3031, The relief of rectification can be claimed where
it is through fraud or a mutual mistake of the parties that real
intention of the parties is not expressed in relation to an
instrument. Even then the party claiming will have to make
specific pleadings and claim an issue in that behalf
The plea of the appellant that since no relief for rectification has
been prayed, the decree for specific performance ought not to be
granted is not tenable. Section 26(4) of the Act only says that no
relief for the rectification of an instrument shall be granted to
any party under this section unless it has been specifically
claimed. However, proviso to Section 26(4) of the Act makes it
clear that when such a relief has not been claimed by the
concerned parties, the Court shall, at any stage of the
proceedings allow him to amend the pleadings on such terms,
as may be just, for including such a claim and it would be
necessary for the party to file a separate suit. The legislative
intent in incorporating this provision, therefore, is unambiguous
and clear. The purpose is not to generate multiplicity of
litigation but to decide all issues in relation thereto in the same
suit provided the provisions of Section 26 of the Act are
attracted in the facts of a given case.
DISCRETIONARY RELIEF OF

SPECIFIC PERFORMANCE

EXPLAINED:Section 20 of the Act states that the jurisdiction to decree


specific performance is discretionary. It says that the Court is

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not bound to grant such relief merely because it is lawful to do


so. Such a discretion, however, is not to be exercised arbitrarily,
but must be based on sound and reasonable judicial principles.
The Section also specifies the circumstances in which the Court
may properly exercise the discretion not to decree specific
performance and it also specifies when, in an appropriate case,
a decree could be given by proper exercise of discretion.
Section 20 is not an exhaustive provision, but merely illustrative
as it is not possible to define the circumstances in which
equitable relief could or could not be granted. If, therefore, on a
consideration of all the circumstances of the case, the Court
thinks that it will be inequitable to grant the relief asked for, it
should not give the relief. In this context, it is necessary to refer
to explanation to Section 10 of the Act provides that, unless and
until the contrary is proved, the Court shall presume that the
breach of a contract to transfer immovable property cannot be
adequately relieved by compensation in money. But the said
presumption is a rebuttable presumption.
Sub-section (2) of Section 20 specifies certain circumstances
when discretion may be exercised not to decree specific
performance. These circumstances are illustrative and they can
be defined as follows:
(i) when the terms of the contract or the conduct of the parties
at the time of entering into contract or the circumstances under
which the contract was entered into are such that they give the
plaintiff an unfair advantage over the defendant.

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(ii) where the performance of the contract would involve some


hardship to the defendant whereas, its non-performance would
involve no such hardship on the plaintiff.
(iii) that it makes it inequitable to enforce specific performance.

While explaining these circumstances,


Explanation-I speaks about unfair disadvantage.
Explanation-II relates to hardship which is a circumstance in
favour of the defendant, while Explanations-Ill and IV are in
favour of the plaintiff when in a case where the plaintiff has
done substantial acts in consequence of a contract capable of
specific performance or refused specific performance, merely
because the contract is not enforceable at the instance of the
defendant.

The decision of the Supreme Court in the case Parakunnan


Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son and
Ors., AIR 1987 SC 2328 is relied upon by the respondent to
contend that it is the duty of the Court to see that litigation is
not used as an instrument of oppression to have an unfair
advantage to the plaintiff. In the said decision, the Hon'ble
Supreme Court, while considering Section 20 of the Specific
Relief Act, stated that Section 20 preserves judicial discretion to
Courts as to decreeing specific performance. The Court should
meticulously consider all facts and circumstances of the case
and the Court is not bound to grant specific performance merely

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because it is lawful to do so. The motive behind the litigation


should also enter into the judicial verdict.

In

1999(3)

Kar.L.J.

677

(Y.N.

Gopala

RAO

v.

D.R.

Laxminarayana and Ors.) it has been held by this Court that the
presumption in a suit for specific performance is that a breach
of contract cannot be adequately relieved by compensation in
money and that contract can be satisfied only by conveyance of
particular estate contracted for sale and the said presumption is
rebuttable, and the burden of rebutting is on the party opposing
enforcement of contract and where such party has failed to
rebut presumption, suit for specific performance is to be
decreed against such party. This principle is also stated in
Explanation (i) to Sub-section (b) of Section 10 of the Specific
Relief Act.
While adverting to Section 20 of the Act, it is stated in this
decision that rise in price is no ground to refuse specific
performance and the refusal may also have tendency to cause
hardship in the plaintiff in acquiring such property or other
property at such time.
In AIR 2004 SC 909 (M.S. Madhusoodhanan and Anr. v. Kerala
Kaumudi Pvt. Ltd. and Ors.) it is observed that the guidelines
for the exercise of the Court's discretion to decree specific
performance of an agreement have been statutorily laid down in
Sub-section (2) of Section 20 of the Act and that, in Explanation
1 to Section 20, it is stated that mere inadequacy of

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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).

ILR 1992 Kar 717 (Yogambika v. Narsingh) is relied upon by the


respondent to contend that the mere fact that a person is a
retired Government servant cannot at all be considered to be a
valid ground to refuse to enforce the contract he had voluntarily
agreed to and that, under Section 20 of the Act, the grounds
which enable the Court to refuse to grant a decree must be such
which were not in the contemplation of the parties when they
entered into an agreement of sale and also that the defendant
had no control over those grounds and as a result of those
grounds, it has become impossible for him to get on without the
property agreed to be sold.

PERMISSION OF AUTHORITIES IS NO BAR TO SPECIFIC


PERFORMANCE DECREE:In this context it would be of relevance to refer to a decision of
the Apex Court in the case of Ranjibhai v. Narotham Das
reported in AIR 1986 SC 1912. In the said case there was an
agreement for sale of flat which had to be finalized after
obtaining permission of authorities to use as village site was a
pre-condition for the execution of the sale deed. The suit for
specific performance was filed within three years after obtaining

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permission, it was held to be not barred by limitation. The said


decision is applicable to the facts of the present case also.
Consequently, the other decisions which have been cited by the
learned Counsel for the appellants namely ILR 1992 Karnataka
429 and ILR 1992 Karnataka 644 are not applicable to the
facts of the present case.

Gahesa Naicken v. Arumugha Naicken AIR 1954 Mad 811 has


been cited to contend that where the darkhast grant was in the
nature of a gift by the Government with a specific provision that
the property shall not be alienated without the consent of the
Tahsildar, any contract which has the effect of circumventing
this policy of the Government would be opposed to public policy
and the agreement to sell the property would be void. The said
decision is not applicable to the facts of the present case since
the sale agreement had to be executed by the appellants after
the period of non-alienation and it is only on the lapse of the
said period that the respondent filed the suit for specific
performance. Similarly, the decision in Ramachandraiah v.
Nagappa Naidu, ILR 1995 Kar 570 is also not applicable.

Pujari Narasappa and Anr. v. Shaik Hazrat and Ors. AIR 1960
Mys 59 has been cited on behalf of the appellant to contend
that where permission of the collector is a condition precedent
for alienation under the Act and the plaintiffs sought before the
Civil Court specific performance of the agreement to sell and if
the said suit is decreed, it would defeat the pre-condition of

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obtaining permission which would be in contravention of the


grant or law regarding alienation of such grant and Section 23
of the Contract Act and would be a bar to such a suit. However,
another Division Bench of this Court in the case of Yogambika
v. Narsingh, ILR 1992 Kar 717 has held that even in the
presence of a period of non-alienation clause for ten years in a
document of allotment is not a bar to decree a suit for specific
performance as the object of the law is to enforce contract which
is applicable to the facts of the present case.

In the case of Nirmala Anand v. Advent Corporation Put Ltd.


and Ors., AIR 2002 SC 2290 it has been held that when the
construction company refused construction on the ground that
the original lease of plot was terminated by the municipality and
the facts showed that there was a possibility of renewal of lease
and revalidation of building plan and the purchaser was ready
to perform her part of the contract, then specific performance
cannot be refused. The said decision is applicable to the facts of
the present case.

In the case of Andanur Rajashekar v. Vasavi Industrial


Enterprises and Ors. AIR 2007 Kar 497 this Court considered
Section 80 of the Karnataka Land Reforms Act in the context of
Section 23 of the Contract Act and Section 20 of the Specific
Relief Act and held that what is prohibited under Section 80 is a
non-agriculturist

purchasing

agricultural

land

and

if

permission can be obtained from the statutory authority, then

Sridhara babu. N

proviso to Section 80 would not be a bar. It was also stated that


Section 80 did not bar an agreement to sell agricultural land to
a non-agriculturist, but what is prohibited is a sale. The said
decision is in fact applicable to the facts of the present case as
no sale has taken place in contravention of the terms of the
grant in the instant case and the agreement of sale specifically
mentions that the sale deed would be executed after the period
of non-alienation is completed. Therefore, the agreement in
question cannot be held to be null and void or hit by Section 23
of the contract. To the same effect is the decision in another
decision of this Court in the case of Ningappa Durgappa v.
Hanumantappa Balappa and Anr. L.J. 1982(1) 419. In fact
even in the case of Manasa Housing Co-operative Society Ltd. v.
Marikellaiah and Ors. AIR 2006 Kant 273 it has been held that
the mere filing of a suit for specific performance of contract for
grant of a decree in the same would not amount to violation of
Section 80 of the Karnataka Land Reforms Act and that the said
Section will not create any bar in the Civil Court to decide
whether the plaintiff would be entitled to a decree for specific
performance or not.

In the case of Balu Babu Rao v. Shaik Akbar, AIR 2001


Bombay 364 in the context of Section 43 of the Bombay
Tenancy and Agricultural Lands Act and Section 20 of the
Specific Relief Act it has been held that when the suit property
was not transferable, without prior permission of the collector a

Sridhara babu. N

decree of specific performance granted subject to sanction of


collector cannot be held to be improper.

READINESS

AND

WILLINGNESS

INFERRED

FROM

EVIDENCE:- In Manzoor Ahmed Magray v. Gulam Hassan Aram


and Ors., AIR 2000 SC 191 it is held that readiness and
willingness can be inferred from evidence led by the parties and
if there is no delay on the part of the plaintiff, equitable relief
cannot be denied.

SYED ZAHEER

VS. C.V. SIDDAVEERAPPA DECIDED ON

DEC

REPORTED

18

2009

HONBLE

JUSTICES: K.L.

IN

ILR

2010

MANJUNATH

KAR
AND

765,
B.V.

NAGARATHNA,
WHEN

NO

TIME

IS

FIXED

UNDER

CONTRACT

AND

SORROUNDING CIRCUMSTANCES TO DECIDE CAUSE OF


ACTION:Article 54 of the Limitation Act specifies two points of time from
which time begins to run for the purpose of computing the
period of three years limitation with regard to filing suits for
specific performance of contract. One, is the date fixed for the
performance of the contract and two, if no such date Is fixed

Sridhara babu. N

then when the plaintiff has notice of the performance being


refused. Much reliance has been placed on the decision of the
Apex Court in the case of Ahamed Saheb Abidulla Mulla v.
Bibijan reported in (2009) 5 SCC 462, by the counsel for the
appellants to contend that in the instant case, the suit filed for
specific performance was beyond the prescribed period of
limitation and therefore, the suit filed by the respondent herein
was not maintainable by placing reliance on the second limb of
Article 54 of the limitation Act. While considering time from
which period begins to run under Article 54 of the Limitation
Act, the Apex Court in the aforesaid decision held that 'fixed'
used in the said article in essence means having final or
crystallized form or not stopped to change or fluctuation and the
inevitable conclusion is that the expression "date fixed for the
performance" is a crystallized notion which is clear from the fact
that the second part of Article 54 states "time from which period
begins to run" which refers to a case where no such date is
fixed. In other words, the Apex Court held that when date is
fixed, it means that there is a definite date fixed for doing a
particular act and when there is no date fixed then when the
plaintiff has notice that performance is refused is also a definite
point of time when the plaintiff notices the refusal and in that
sense both the particulars refer to definite dates. The same has
been relied upon to contend that in the instant case the legal
notice was issued by the appellants in the year 1995 with
regard to refusal to perform the contract, In as much as it was
stated that the agreement was unenforceable on account of nonalienation clause, but the suit has been filed only in the year
1999. The facts of the present case have to be considered in the

Sridhara babu. N

light of the decision of the Apex Court. It is seen that the land
grant which Is the subject matter of the agreement in question
was made in the year 1983 and there was a fifteen year period
of non-alienation which would have come to an end only In the
year 1998. However, three years prior to that date i.e., in the
year 1995 Itself legal notice was sent to the respondent stating
that on account of the non-alienation clause, the contract could
not be performed by the appellants on account of permission
not been obtained from the concerned authority by them. At
that point of time there were still three more years for the nonalienation period to come to an end and therefore, it was
premature on the part of the appellants to contend that in the
year 1995 itself that on account of the non-alienation clause the
contract could not be performed on account of permission not
being

obtained.

However,

declaration

with

regard

to

unenforceability of the contract was sought by the appellants by


filing a suit in the year 1995 itself. But, what has to be noticed
is the fact that on account of the non-alienation clause it was
specifically mentioned in the contract that the sale deed would
be registered only after coming to an end of the non-alienation
period, which would have been in the year 1998. Therefore,
until the non-alienation period came to an end the respondent
also could not have asked for performance of the contract by the
appellants. Only after the end of the non-alienation period i.e.,
in the year 1998 the cause of action to seek specific
performance of the contract arose for the respondent.

Sridhara babu. N

AIR 2008 SC 1267, B.K. SRI HARSHA (D) BY L.R. & ANR VS
M/S BHARATH HEAVY ELECTRICALS LTD BENCH: DR.
ARIJIT PASAYAT & P. SATHASIVAM
Specific Relief Act, 1963; Ss.16 & 20 The suit was for specific
performance and the Trial Court recorded findings about
adverse possession. That being so, triable issues are involved.
When triable issues are involved, the appeals should not be
summarily dismissed or disposed of in the manner done.

bare reading of the High Court's judgment shows that there was
no serious effort made by it to analyse the various points raised.
The

High

Court

has

given

finding

regarding

adverse

possession in a suit for specific performance. There is total nonapplication of mind by the High Court. The manner in which the
appeals were dismissed cannot be said to be proper. Hence, the
matter is remitted to the High Court to consider the same afresh
The nature of suit for specific performance of contract has been
highlighted by Supreme Court in several cases. In Rajeshwari v.
Puran Indoria (2005 (7) SCC 60), it was inter- alia observed as
under: "Normally, a suit for specific performance of an
agreement for sale of immovable property involves the question
whether the plaintiff was ready and willing to perform his part of
the contract in terms of Section 16 of the Specific Relief Act,
whether it was a case for exercise of discretion by the court to
decree specific performance in terms of Section 20 of the
Specific Relief Act and whether there were laches on the part of
the plaintiff in approaching the court to enforce specific
performance of the contract. In some cases, a question of

Sridhara babu. N

limitation may also arise in the context of Article 54 of the


Limitation Act on the terms of the agreement for sale. Other
questions like the genuineness of the agreement, abandoning of
the right to specific performance, a novation and so on, may
also arise in some cases. No doubt, a finding on the three
primary aspects indicated earlier would depend upon the
appreciation of the pleadings and the evidence in the case in the
light of the surrounding circumstances.

The right to specific

performance of an agreement for sale of immovable property,


when filed, raises questions of substantial importance between
the parties as to whether the plaintiff has satisfied the
requirements of Section 16 of the Specific Relief Act, whether it
is a case in which specific performance of the contract is
enforceable in terms of Section 10, whether in terms of Section
20 of the Act, the discretion to decree specific performance
should be exercised by the court and in some cases, whether
the suit was barred by limitation and even if not, whether the
plaintiff has been guilty of negligence or laches disentitling him
to a decree for specific performance. These questions, by and
large, may not be questions of law of general importance. But
they cannot also be considered to be pure questions of fact
based on an appreciation of the evidence in the case. They are
questions which have to be adjudicated upon, in the context of
the relevant provisions of the Specific Relief Act and the
Limitation Act (if the question of limitation is involved). Though
an order in exercise of discretion may not involve a substantial
question of law, the question whether a court could, in law,
exercise a discretion at all for decreeing specific performance,

Sridhara babu. N

could be a question of law that substantially affects the rights of


parties in that suit."

S. Brahmanand and Others v. K.R. Muthugopal (Dead) and


Others [(2005) 12 SCC 764] wherein this Court laid down the
law: "Thus, this was a situation where the original agreement of
10-3-1989 had a "fixed date" for performance, but by the
subsequent letter of 18-6- 1992 the defendants made a request
for postponing the performance to a future date without fixing
any further date for performance. This was accepted by the
plaintiffs by their act of forbearance and not insisting on
performance forthwith. There is nothing strange in time for
performance

being

extended,

even

though

originally

the

agreement had a fixed date. Section 63 of the Contract Act,


1872 provides that every promisee may extend time for the
performance of the contract. Such an agreement to extend time
need not necessarily be reduced to writing, but may be proved
by oral evidence or, in some cases, even by evidence of conduct
including forbearance on the part of the other party.
"In R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy [(2006) 2
SCALE 156], wherein, it was observed: " In terms of the said
Article, a suit for specific performance of a contract is required
to be filed within three years; in the event no date is fixed for the
performance, within a period of three years from the date when
the plaintiff has notice that performance is refused.."

Sridhara babu. N

The said decision has again been noticed in Gunwantbhai


Mulchand Shah & Ors. v. Anton Elis Farel & Ors. [(2006) 3
SCALE 82] wherein it has been held: "We may straightaway say
that the manner in which the question of limitation has been
dealt with by the courts below is highly unsatisfactory. It was
rightly noticed that the suit was governed by Article 54 of the
Limitation Act, 1963. Then, the enquiry should have been, first,
whether any time was fixed for performance in the agreement
for sale, and if it was so fixed, to hold that a suit filed beyond
three years of the date was barred by limitation unless any case
of extension was pleaded and established. But in a case where
no time for performance was fixed, the court had to find the
date on which the plaintiff had notice that the performance was
refused and on finding that date, to see whether the suit was
filed within three years thereof. We have explained the position
in the recent decision in R.K. Parvatharaj Gupta v. K.C.
Jayadeva Reddy 2006 (2) Scale 156.
In Chairman, Life Insurance Corpn. and Others v. Rajiv
Kumar Bhasker [(2005) 6 SCC 188], Court held: "Agency as is
well settled, is a legal concept which is employed by the Court
when it becomes necessary to explain and resolve the problems
created by certain fact situations. In other words, when the
existence of an agency relationship would help to decide an
individual problem, and the facts permits a court to conclude
that such a relationship existed at a material time, then
whether or not any express or implied consent to the creation of
an agency may have been given by one party to another, the

Sridhara babu. N

Court is entitled to conclude that such relationship was in


existence at the time, and for the purpose in question.
In Veerayee Ammal v. Seeni Ammal [(2002) 1 SCC 134] it
was observed : "When, concededly, the time was not of the
essence of the contract, the appellant-plaintiff was required to
approach the court of law within a

reasonable time. A

Constitution Bench of this Hon'ble Court in Chand Rani v.


Kamal Rani held that in case of sale of immovable property
there is no presumption as to time being of the essence of the
contract. Even if it is not of the essence of contract, the court
may infer that it is to be performed in a reasonable time if the
conditions are (i) from the express terms of the contract; (ii)
from the nature of the property; and (iii) from the surrounding
circumstances, for example, the object of making the contract.
For the purposes of granting relief, the reasonable time has to
be ascertained from all the facts and circumstances of the case."
It was furthermore observed : "The word "reasonable" has in law
prima

facie

meaning

of

reasonable

in

regard

to

those

circumstances of which the person concerned is called upon to


act reasonably knows or ought to know as to what was
reasonable. It may be unreasonable to give an exact definition of
the word "reasonable". The reason varies in its conclusion
according to idiosyncrasy of the individual and the time and
circumstances in which he thinks. The dictionary meaning of
the "reasonable time" is to be so much time as is necessary,
under the circumstances, to do conveniently what the contract
or duty requires should be done in a particular case. In other
words it means, as soon as circumstances permit. In P.

Sridhara babu. N

Ramanatha Aiyar's The Law Lexicon it is defined to mean: `A


reasonable time, looking at all the circumstances of the case; a
reasonable time under ordinary circumstances; as soon as
circumstances will permit; so much time as is necessary under
the circumstances, conveniently to do what the contract
requires should be done; some more protracted space than
`directly'; such length of time as may fairly, and properly, and
reasonably be allowed or required, having regard to the nature
of the act or duty and to the attending circumstances; all these
convey more or less the same idea.' " It is also a well settled
principle of law that not only the original vendor but also a
subsequent purchaser would be entitled to raise a contention
that the plaintiff was not ready and willing to perform his part of
contract.
CONTRACT
ALKA BOSE VS PARMATMA DEVI & ORS. 2008(16) SCALE
281 ,
Contract Act, 1872: s.10 - Agreement to sell signed only by
vendor and not by purchaser - Suit for specific performance Maintainability of, challenged on the ground that agreement
was not valid/concluded - Held: Agreement to sell signed by
vendor alone and delivered to purchaser, and accepted by
purchaser

was

valid

contract

Moreover,

vendor

acknowledged receipt of earnest money and further receipt of


part of consideration amount - Evidence of witnesses also show
that it was concluded contract - Notice by purchaser conveying

Sridhara babu. N

willingness and readiness to pay balance sale consideration Plaintiff entitled to decree for specific performance.
Dismissing the appeal, the Court HELD:
1. There was no valid reason to disturb the factual finding based
on acceptable materials. The Single Judge of the High Court
committed an error in taking a contrary view.
2. All agreements of sale are bilateral contracts as promises are
made by both - the vendor agreeing to sell and the purchaser
agreeing to purchase. An agreement of sale comes into existence
when the vendor agrees to sell and the purchaser agrees to
purchase, for an agreed consideration on agreed terms. It can
be oral. It can be by exchange of communications which may or
may not be signed. It may be by a single document signed by
both parties. It can also be by a document in two parts, each
party signing one copy and then exchanging the signed copy as
a consequence of which the purchaser has the copy signed by
the vendor and a vendor has a copy signed by the purchaser. Or
it can be by the vendor executing the document and delivering it
to the purchaser who accepts it. S.10 of the Contract Act, 1872
provides all agreements are contracts if they are made by the
free consent by the parties competent to contract, for a lawful
consideration and with a lawful object, and are not expressly
declared to be void. The proviso to s.10 of the Act makes it clear
that the section will not apply to contracts which are required to
be made in writing or in the presence of witnesses or any law
relating to registration of documents. Even an oral agreement to

Sridhara babu. N

sell is valid. If so, a written agreement signed by one of the


parties, if it evidences such an oral agreement will also be valid.
In any agreement of sale, the terms are always negotiated and
thereafter reduced in the form of an agreement of sale and
signed by both parties or the vendor alone (unless it is by a
series of offers and counter-offers by letters or other modes of
recognized communication). In India, an agreement of sale
signed by the vendor alone and delivered to the purchaser, and
accepted by the purchaser, has always been considered to be a
valid contract. In the event of breach by the vendor, it can be
specifically enforced by the purchaser. There is, however, no
practice of purchaser alone signing an agreement of sale.
In Bismillah Begum (Smt.) v. Rahmatullah Khan (dead) by
Lrs. (AIR 1998 SC 970) it was held as follows: "We may also
add that in contracts relating to re-conveyance of property, time
is always the essence of the contract as laid down by the
Federal Court in the case of Shanmugam Pillai v. Analakshmi
Ammal (AIR 1950 FC 38) and also laid down by this Court in
Caltex (India) Ltd. V. Bhagwan Devi Marodia (AIR 1969 SC 405).
The relevant passage in the judgment of
Caltex (India) Ltd.

Supreme Court in

reads as follows: "At common law

stipulations as to time in a contract giving an option for renewal


of a lease of land were considered to be the essence of the
contract even if they were not

expressed to be so and were

construed as conditions precedent. Equity followed the common


law rule in respect of such contracts and did not regard the
stipulation as to time as not of the essence of the bargain. An
option for the renewal of a lease, or for the purchase or re-

Sridhara babu. N

purchase of property must in all cases be exercised strictly


within the time limited for the purpose otherwise it will lapse."
In Chunchun's case

it was observed by Supreme Court as

follows: "If the sale and agreement to repurchase are embodied


in separate documents, then the transaction cannot be a
mortgage, whether the documents, are contemporaneously
executed or not. In the case of agreement of re-purchase, the
conditions of repurchase must be construed strictly against the
original vendor and the stipulation with regard to time of
performance of the agreement must be strictly complied with as
the time must be treated as being of the essence of the contract
in the case of an agreement of reconveyance."

SPECIFIC RELIEF ACT


Azhar Sultana .Vs B. Rajamani & Ors. ...February 17, 2009
Supreme Court HELD:
1. In view of the fact that approval was required to be obtained
from the competent authority, the plaintiff could not have
proceeded on the assumption that the suit could be filed within
a period of three years from the date of refusal on the part of the
original defendant to execute the said deed of sale in terms of
the agreement.
2. It may be true that the name of the purchaser was not
disclosed but then it was open to the plaintiff to ask for other

Sridhara babu. N

and better particulars of the said statements. Why she had to


wait for a period of more than three years for impleading the
subsequent purchasers as parties has not been explained. Even
an application for injunction was filed only in September 1985.
According to her husband, she came to learn about the sale of
property in the name of defendant No.5 only on 29.9.1986. Why
an inquiry was not made in the Registration Office although the
deed of sale was a registered one again defies anybody's
comprehension. Readiness and willingness on the part of the
plaintiff, therefore, is required to be considered from the
aforementioned backdrop of events.
3. It was not necessary that the entire amount of consideration
should be kept ready and the plaintiff must file proof in respect
thereof. It may also be correct to contend that only because the
plaintiff who is a Muslim lady, did not examine herself and got
examined on her behalf, her husband, the same by itself would
lead to a conclusion that she was not ready and willing to
perform her part of contract.
4. If the plaintiff has failed to establish that she had all along
been ready and willing to perform her part of contract, it would
not be necessary to enter into the question as to whether the
defendant Nos.5 and 6 were bona fide subsequent purchasers
for value without notice or not. Furthermore, grant of decree for
specific performance of contract is discretionary. The contesting
respondents herein are living in the property since 1981 in their
own right. There is absolutely no reason as to why they should
be forced to vacate the said property at this juncture.

Sridhara babu. N

5. The conduct of the respondent was not good but, similarly,


one cannot lose sight of the conduct of the appellants as well.
She had also not brought any evidence to show that she did not
have the notice of the said deed of sale. Thus, the interest of
justice would be subserved if this Court refuses to exercise its
discretionary jurisdiction in terms of Section 20 of the Act,
directing the defendant to pay a sum of Rs.60,000/- to the
plaintiff which sum would include the amount of advance paid
by her.
6. It is also a well settled principle of law that not only the
original vendor but also a subsequent purchaser would be
entitled to raise a contention that the plaintiff was not ready
and willing to perform his part of contract. [See Ram Awadh
(Dead) by LRs. & Ors. v. Achhaibar Dubey & Anr. [(2000) 2 SCC
428 para 6]
7. In Veerayee Ammal v. Seeni Ammal [(2002) 1 SCC 134] it was
observed : "When, concededly, the time was not of the essence
of the contract, the appellant-plaintiff was required to approach
the court of law within a

reasonable time. A Constitution

Bench of Hon'ble Supreme Court in Chand Rani v. Kamal Rani


held that in case of sale of immovable property there is no
presumption as to time being of the essence of the contract.
Even if it is not of the essence of contract, the court may infer
that it is to be performed in a reasonable time if the conditions
are (i) from the express terms of the contract; (ii) from the
nature

of

the

property;

and

(iii)

from

the

surrounding

Sridhara babu. N

circumstances, for example, the object of making the contract.


For the purposes of granting relief, the reasonable time has to
be ascertained from all the facts and circumstances of the case."
8. It was furthermore observed : "The word "reasonable" has in
law prima facie meaning of reasonable in regard to those
circumstances of which the person concerned is called upon to
act reasonably knows or ought to know as to what was
reasonable. It may be unreasonable to give an exact definition of
the word "reasonable". The reason varies in its conclusion
according to idiosyncrasy of the individual and the time and
circumstances in which he thinks. The dictionary meaning of
the "reasonable time" is to be so much time as is necessary,
under the circumstances, to do conveniently what the contract
or duty requires should be done in a particular case. In other
words it means, as soon as circumstances permit. In P.
Ramanatha Aiyar's The Law Lexicon it is defined to mean: `A
reasonable time, looking at all the circumstances of the case; a
reasonable time under ordinary circumstances; as soon as
circumstances will permit; so much time as is necessary under
the circumstances, conveniently to do what the contract
requires should be done; some more protracted space than
`directly'; such length of time as may fairly, and properly, and
reasonably be allowed or required, having regard to the nature
of the act or duty and to the attending circumstances; all these
convey more or less the same idea."

Sridhara babu. N

2008 (6) SCR 726

WAHEED BAIG VS BANGI LAKSHMAMMA

& ORS BENCH: DR. ARIJIT PASAYAT & P. SATHASIVAM:Specific Relief Act, 1963 - s. 13 - Suit for specific performance of
agreement of sale - In respect of the property allotted to the
alleged vendor by Government - Suit decreed - Set aside by first
appellate court - In second appeal, High Court confirming the
decree and directing the Government Department to transfer the
property in favour of the alleged vendor and then to transfer the
same to the vendee as per the agreement - On appeal, held : The
agreement was null and void - The property vested with the
Government and the allottee thereof had no alienable right
thereto - Direction of the High Court is not correct
The High Court could not have directed transfer of the property
in favour of the appellant and thereafter directing him to
transfer the property by giving full effect to the agreement for
sale. Such a course is unknown in law.
Section 13 of Specific Relief Act, 1963 deals with rights of a
purchaser in certain cases, where a person contracts to sell or
let certain immovable property having no title or only an
imperfect title. These rights enable the purchaser to take action
when title of vender is bettered in the circumstances given in
this Section. The vender is under a duty to prove his title and to
convey what he has contracted to convey. The Section gives
right to purchaser in the event there is a defect in title as
enumerated in Clauses (a) to (d) to compel the vender to convey

Sridhara babu. N

the title or to secure the concurrence or conveyance or to


redeem the mortgage etc. as the case may be.
In the instant case the Labour Department was not a party to
the agreement. It was not bound to sell the property to the
appellant. The land belonged to the Government and the land in
question was given on lease cum sale agreement basis by the
Labour Department. There was a clear stipulation that the
lessee is not the owner of the property and did not have any
right to sell or mortgage or otherwise to dispose of the property
until sale price finally determined by the Commissioner of
Labour in his sole discretion is paid in full. At the time alleged
agreement of sale was entered into, the appellant was not the
owner of the property.
The alleged agreement between the first plaintiff and the first
defendant was without the knowledge of the defendant No.2, it
was null and void and it was not binding upon the Government
even if certain payments were made by the plaintiff. The title in
the property still vests in the Government and was not
registered in favour of the first defendant. The first defendant
had no right to sell or alienate the property to any other person.
In terms of the agreement, notice was given to the first
defendant to reside in the property immediately, otherwise
allotment of the same would be cancelled more particularly
when there was sub letting. The Government has constructed
the quarters for the industrial workers on rental basis and
subsequently there was a decision to sell those to the industrial
workers. The arrangement was for the benefit of the industrial

Sridhara babu. N

workers and therefore the defendant No.1 had no alienable right


in the property.
The agreement for sale does not refer to any condition that after
payment of installment, the lessee can become the owner and
the agreement for sale was to take effect. Since the appellant
was not the owner of the property, he could not have entered
into an agreement to sell a property of which admittedly he was
not the owner.

AIR 2008 SC 2019,

GURDIAL KAUR (D) THROUGH LRS VS

PIARA SINGH (D) THROUGH LRS BENCH: S.B. SINHA & V.S.
SIRPURKAR
Specific Relief Act, 1963 - ss. 12, 16 ( c ), 20 and 28 - Agreement
of sale - Failure to execute sale deed - Suit for specific
performance of contract - Subsequent change in the revenue
survey numbers in respect of the land in question - Trial court
denying decree of specific performance holding that vendee
failed to comply with requirements of s. 16 (c ) having failed to
state that he was always ready and willing - However directed
refund of the advance amount paid by the vendee - First
appellate court denying the decree of specific performance on
the ground that there was failure to show readiness and
willingness in respect of the changed revenue survey numbers High Court in second appeal decreeing the suit - On appeal,
held: Decree of specific performance is liable to be passed in
respect of the land which formed subject matter of the original

Sridhara babu. N

agreement - Change in revenue survey numbers in respect of


those lands would not bring the contract of sale to an end as
the subject matter of the agreement substantially remained the
same - In the facts of the case vendee has fulfilled the critirea of
readiness and willingness - Further averment/proof regarding
readiness and willingness after change in survey numbers not
required, to the extent subject matter was same.
Partly allowing the appeal, the Supreme Court HELD:
A suit for specific performance of contract provides for a
discretionary remedy. The Court in terms of Section 20 of
Specific Relief Act, 1963, may for sufficient and cogent reasons
refuse to grant a decree for specific performance of contract.
Like any other suit, the Court in terms of Order 7 Rule 7 CPC
may, however, take into consideration the subsequent events
including the change in the revenue survey numbers in respect
of a particular land. In other words, if the land in suit remains
the same which was the subject matter of an Agreement of Sale,
a decree for specific performance can be granted. The matter,
however, would be different where having regard to the
consolidation or any other proceedings, the subject matter of
land itself changes resulting in substantive change in the
original agreement.
The appellants did not spell out as to what were his objections
in regard to amendment of plaint. When the second application
for amendment of plaint was filed, no objection thereto was
raised. Allegedly, in the suit for recovery of possession, the

Sridhara babu. N

appellants mentioned the same description of land. How despite


alteration in the description of the land in respect of a part of
the suit premises, the respondent came into possession, if at all,
is not known. The plaintiff/respondent did not bring on records
any material to show that owing to consolidation proceedings or
otherwise, there had been a change in the suit land in the sense
that some other lands had been allotted to the predecessor of
the appellant instead and in place of the lands in suits. The
plaintiff/respondent was categorical in his statement as to why
the amendment had to be brought about, but neither the same
was opposed nor any amended written statement/additional
written statement was filed. Except the two plots, identity of the
rest of the plots remained the same.
The rigours of Section 16(c) of the Act, however, are not such
which would for all intent and purport to be strictly construed.
It is, however, trite that, even for the said purpose, the entirety
of the plaint must be taken into consideration. If upon reading
the plaint in its entirety, the Court comes to the conclusion that
for all intent and purport, the requirements of Section 16(c)
stood complied with, no exception thereto can be taken.
In the instant case, the plaintiff has not only expressed his
readiness to purchase the land, his willingness to do so can be
culled out from other averments made in the plaint as and in
particular the one where he had stated that he had gone to the
Registration Office for getting the deed of sale executed and
registered but it was the defendant, who did not turn up
thereafter. He has also fulfilled the criteria of his readiness and

Sridhara babu. N

willingness to perform his part of the contract as not only he


had paid half of the consideration amount on the date of the
execution of the agreement, he had deposited a balance sum on
the date of presentation of the plaint. Thus, the Court of First
Appeal was right in holding that he was ready and willing to
perform his part of the contract.
The Court of First Appeal, however, committed a serious error
insofar as it failed to take into consideration that the identity of
a part of the land being the same, it was not necessary to make
any further averment or proof that he had been ready and
willing to perform his part of the contract in respect of the
subject matter of the agreement. Readiness and willingness to
perform one's part of the contract must be confined to the
subject matter thereof. If subject matter of the suit remained the
same only because Khewat Nos. or Khatauni Nos. changed, the
same ipso facto would not change. To the extent the subject
matter of the agreement remains the same, a suit for specific
performance of the contract can be decreed.
Proper substantial question which should have been framed
having regard to the admitted position is as to whether the
contract of sale came to an end only on account of change of
Khasra Nos., although the subject matter of the agreement
substantially remained the same. If on the admitted fact, it is
found that at least substantial portion of the land remained the
same, there does not exist any bar in granting a decree in
respect of a part of the suit property. For the said purpose, even
Section 12 of the Specific Relief Act would not stand as a bar. If

Sridhara babu. N

a decree for specific performance cannot be granted in respect of


the entirety, an option in terms thereof has to be exercised.
Respondent, furthermore has all along been in possession of the
major portion of the land since a long time. He is said to have
made improvements on the land. It would be not, thus,
equitable to deprive him from possession at least from that
portion of the land which was the subject matter of the original
agreement.
However, having regard to the fact that the plaintiff/respondent
No. 1 was denied the decree for specific performance of contract
by two courts, although he had been in possession of the lands,
in question from 1964, this Court in exercise of its discretionary
jurisdiction under Article 142 of the Constitution of India as
also Section 28 of the Specific Relief Act directs him to pay a
further sum of Rs. 30,000/- to the appellant.

AIR 2008 SC 1960, PURAN RAM VS BHAGURAM & ANR


BENCH: TARUN CHATTERJEE & HARJIT SINGH BEDI
Specific Relief Act, 1963: s.26 - Rectification of instrument Suit for specific performance of agreement for sale - Part of suit
property wrongly described by mutual mistake in the agreement
for sale and in the plaint - Prayer for amendment of plaint and
agreement for sale to correct a part of description of suit
property - Permissibility of - Held: Permissible by virtue of
proviso to s.26 - The relief claimed in the suit would remain

Sridhara babu. N

same and would not change the nature of suit from suit for
specific performance to suit for declaration - Code of Civil
Procedure, 1908 - Order 6 r.17. Code of Civil Procedure, 1908:
Order 6 r.17 - Amendment application - Held: Can be allowed by
court in its discretion even where the relief sought to be added
by amendment is barred by limitation.
When the description of a part of the suit property was found to
be a mutual mistake, appellant filed an application under Order
6 Rule 17 CPC seeking the amendment of the plaint and for
giving the description of the suit property. The trial Court
rejected the prayer for amendment of the plaint on the ground
that plaint was filed on the basis of agreement to sell and since
no prayer was made for amending

the agreement,

the

application for amendment of the plaint could not be allowed.


The appellant filed another application for amendment of the
plaint seeking amendment this time not only of the plaint but
also of the agreement to sell. The First Appellate Court allowed
the said application. Aggrieved respondent No.2, who was
purchaser of suit property, from respondent no.1 filed a petition
under Article 227 of the Constitution of India. High Court
allowed the petition on the ground that relief sought for by the
appellant by way of amendment of the plaint could not be
allowed in view of the expiry of the period of limitation; and that
if such amendment was allowed, the nature of the suit would
change from a suit for specific performance of contract for sale
to a suit for declaration which was not permissible. Hence the
present appeal.

Sridhara babu. N

Partly allowing the appeal, the Supreme Court HELD:


In a suit for specific performance of contract for sale, it is
permissible to amend a part of the description of the suit
property not only in the plaint but also in the agreement in
terms of s.26 of the Specific Relief Act, 1963. A reading of the
two conditions made under s.26 of the Act show that either
party may institute a suit to have the instrument rectified or a
party who has already filed a suit in which any right arising
under the instrument is in issue may claim in his pleading that
the instrument be rectified. The main issue in the instant suit
for specific performance of the contract for sale was relating to
the agreement for sale in which a part of the description of the
suit property was wrongly given by mutual mistake and
therefore, needed to be amended. S.26, of course, says that it
would be open to a party to institute a suit for correcting the
description of the suit property, but the proviso to s.26 clearly
permits that where a party has not claimed any such relief in
his pleading, the court shall at any stage of the proceeding allow
him to amend the plaint on such terms as may be just for
including such claim. From a plain reading of the provisions
under s.26 of the Act, there is no reason why the prayer for
amendment of the agreement to correct a part of the description
of the suit property

. could not be granted. It is only a

correction or rectification of a part of the description of the suit


property, which cannot involve either the question of limitation
or the change of nature of suit. The relief claimed in the suit
remained the same i.e. a decree for specific performance of the

Sridhara babu. N

contract for sale and by amendment, no declaration has been


sought for in respect of the instrument. So far as the question of
limitation is concerned, the suit, admittedly, was filed within the
period of limitation. Therefore, even if the amendment of plaint
or agreement is allowed, that will relate back to the filing of the
suit which was filed within the period of limitation.
The High Court ought not to have interfered with the order of
the trial court when the order of the trial court was passed on
sound consideration of law and facts and when it cannot be said
that the order of the trial court was either without jurisdiction
or perverse or arbitrary.
The court may, in its discretion, allow an application for
amendment of the plaint even where the relief sought to be
added by amendment is allegedly barred by limitation. It is well
settled

that

allowing

and

rejecting

an

application

for

amendment of a plaint is really the discretion of the Court and


amendment of the plaint also should not be refused on
technical grounds.
The question of limitation would not arise when mis-description
of the name of the original plaintiff or mis-description of the suit
property arose in a particular case. Apart from that in the
present case, although, the relief claimed before as well as after
the amendment remained the same i.e. a decree for specific
performance of the contract for sale, even then, in the facts and
circumstances of the case, the High Court should not have

Sridhara babu. N

interfered with the discretion used by the trial court in allowing


the application for amendment of the plaint.
Submissions that the application for amendment could not be
allowed inasmuch as the same was barred by limitation was
repelled by Supreme court in the above case holding that: We
are unable to accept this contention .. In this regard, we
may observe that the court may, in its discretion, allow an
application for amendment of the plaint even where the relief
sought to be added by amendment is allegedly barred by
limitation. This view was also expressed by this Court in
Pankaja & Anr. Vs. Yellappa (Dead) by LRs. & Ors. [(2004) 6
SCC 415]. In that decision, it was held that there is no absolute
rule that in such a case, the amendment should not be allowed
and the discretion of the court in that regard depends on the
facts and circumstances of the case and such discretion has to
be exercised on a judicious evaluation thereof. It was further
held in that decision that an amendment, which subserves the
ultimate cause of justice and avoids further litigation, should be
allowed. It is well settled by a catena of decisions of this Court
that allowing and rejecting an application for amendment of a
plaint is really the discretion of the Court and amendment of the
plaint also should not be refused on technical grounds. In this
connection reliance can be placed on a decision of this court in
Jai Jai Ram Manohar Lal Vs. National Building Material Supply,
Gurgaon [ AIR 1969 SC 1267 ]. In paragraph 8 of the said
decision this Court observed that "since the name in which the
action was instituted was merely a misdescription of the original
plaintiff, no question of limitation arises; the plaint must be

Sridhara babu. N

deemed on amendment to have been instituted in the name of


the real plaintiff on the date on which it was originally
instituted."

The requirement to comply with the mandatory provisions of


Section 16(c) of the Specific Relief Act came up for consideration
of Court in Ouseph Varghese vs. Joseph Aley & Ors. (1969) 2
SCC 539 wherein it was held: "The plaintiff did not plead either
in the plaint or at any subsequent stage that he was ready and
willing to perform the agreement pleaded in the written
statement of defendant. A suit for specific performance has to
conform to the requirements prescribed in Forms 47 and 48 of
the 1st Schedule in the Civil Procedure Code. In a suit for
specific performance it is incumbent on the plaintiff not only to
set out agreement on the basis of which he sues in all its
details, he must go further and plead that he has applied to the
defendant specifically to perform the agreement pleaded by him
but the defendant has not done so. He must further plead that
he has been and is still ready and willing to specifically perform
his part of the agreement. Neither in the plaint nor at any
subsequent stage of the suit the plaintiff has taken those pleas.
As observed by

Court in Pt. Prem Raj vs. D.L.F. Housing and

Construction (Private) (Ltd.) and Another, [reported in 1968 (3)


SCR 648] that it is well settled that in a suit for specific
performance the plaintiff should allege that he is ready and
willing to perform his part of the contract and in the absence of
such an allegation the suit is not maintainable."

Sridhara babu. N

R.C. Chandiok and Anr. vs. Chuni Lal Sabharwal and Ors.
reported in (1970) 3 SCC 140 stated: "6.Readiness and
willingness cannot be treated as a straight jacket formula. These
have

to

be

determined

from

the

entirety

of

facts

and

circumstances relevant to the intention and conduct of the


party concerned. In our judgment there was nothing to indicate
that the appellants at any stage were
not ready and willing to perform their part of the contract."
In Abdul Khader Rowther vs. P.K. Sara Bai and Ors. reported in
AIR 1990 SC 682
this Court followed Ouseph Varghese (supra) holding: "His
plaint does not contain the requisite pleadings necessary to
obtain a decree for specific performance. This equitable remedy
recognized by the Specific Relief Act cannot be had on the basis
of such pleadings and evidence."
The question again came up for consideration before a three
Judge bench of Court in Syed Dastagir vs. T.R. Gopalakrishna
Setty reported in (1999) 6 SCC 337. "13. It was held in the case
of R.C. Chandiok v. Chuni Lal Sabharwal (1970) 3 SCC 140 that
readiness and willingness cannot be treated as a strait-jacket
formula. This has to be determined from the entirety of the facts
and circumstances relevant to the intention and conduct of the
party concerned. Finally, we have no hesitation to hold that the
pleading as made by the plaintiff not only shows his readiness
and willingness to perform his part of the obligation under the

Sridhara babu. N

contract but by tendering the total amount shows he has


performed his part of the obligation. We also construe such a
plea to be a plea of "readiness and willingness" as required
under Section 16(c). In view of the aforesaid findings we hold
that the High Court committed an error by defeating the claim
of the plaintiff on the basis of a wrong interpretation of his plea
in terms of the said section." In that case the requisite
averments of the plaintiff in the Plaint was to the following
effect: "6.The defendant has entered into an agreement with the
plaintiff on 1-8-1960 ... for a consideration of Rs. 9500.00 ... the
plaintiff has agreed to that on adjustment of the mortgage
amount of Rs. 5000.00 and Rs. 500.00 paid towards advance
payment of the sale price, that on payment of the obtaining sum
of Rs. 4000.00 and off, he would execute a proper sale deed
conveying the suit schedule properties. ... the defendant has
accordingly received a sum of Rs. 3680.00 ... from the plaintiff
and has endorsed the same on the agreement on 21-12-1965.
He has further received Rs. 100.00 on 21-3-1966 and Rs.
100.00 on 4-5-1966 and in all Rs. 3880.00. These payments are
also duly written up in the account-book of the defendant. The
plaintiff approached the defendant to receive the balance
amount of Rs. 120.00 towards the sale price and execute the
proper sale and he agreed. He evaded and hence a legal notice
was issued on 23-2-1967 calling upon him to perform his part
of the contract. ... He (plaintiff) has today deposited in court Rs.
120.00 under RO No. being the balance due to the defendant."
The said averments were held to be in spirit and substance
although may not be in letter and form of "readiness and
willingness" on the part of the Plaintiff stating: "10. ..It is true

Sridhara babu. N

that in the pleading the specific words "ready and willing to


perform" in this nomenclature are not there but from the
aforesaid plea, could it be read that the plaintiff was not ready
and willing to perform his part of that obligation ? In other
words, can it be said that he has not pleaded that he is "ready
and willing" to perform his part ? Courts cannot draw any
inference in the abstract or to give such hypertechnical
interpretation to defeat a claim of specific performance which
defeats the very objective for which the said Act was enacted.
The

section

makes

it

obligatory

to

plaintiff

seeking

enforcement of specific performance that he must not only come


with clean hands but there should be a plea that he has
performed or has been and is ready and willing to perform his
part of the obligation. Unless this is there, Section 16(c) creates
a bar to the grant of this discretionary relief. As we have said,
for this it is not necessary to plea by any specific words, if
through any words it reveals the readiness and willingness of
the plaintiff to perform his part of the obligation then it cannot
be said there is non-compliance of the said section."

Motilal Jain vs. Ramdasi Devi and Ors. reported in (2000) 6 SCC
420. In that case also this Court took into consideration the
averments made by the plaintiff in Paragraphs 6 to 11 of the
plaint and opined: "9.It is thus clear that an averment of
readiness and willingness in the plaint is not a mathematical
formula which should only be in specific words. If the averments
in the plaint as a whole do clearly indicate the readiness and
willingness of the plaintiff to fulfil his part of the obligations

Sridhara babu. N

under the contract which is the subject-matter of the suit, the


fact that they are differently worded will not militate against the
readiness and willingness of the plaintiff in a suit for specific
performance of contract for sale. In the instant case a perusal of
paras 6 to 11 of the plaint does clearly indicate the readiness
and willingness of the plaintiff. The only obligation which he
had to comply with was payment of balance of consideration. It
was stated that he demanded the defendant to receive the
balance of consideration of Rs. 8000 and execute the sale deed.
The defendant was in Patna (Bihar) at the time of notices and
when he came back to his place the plaintiff filed the suit
against him. In support of his case, he adduced the evidence of
PW 1 and PW 2. The plaintiff had parted with two-thirds of the
consideration at the time of execution of Ext. 2. There is no
reason why he would not pay the balance of one- third
consideration of Rs. 8000 to have the property conveyed in his
favour."
In Pushparani S. Sundaram and Ors. vs. Pauline Manomani
James and Ors. Reported in (2002) 9 SCC 582 it is stated: "5
So far there being a plea that they were ready and willing to
perform their part of the contract is there in the pleading, we
have no hesitation to conclude, that this by itself is not
sufficient to hold that the appellants were ready and willing in
terms of Section 16(c) of the Specific Relief Act. This requires
not only such plea but also proof of the same. Now examining
the first of the two circumstances, how could mere filing of this
suit, after exemption was granted be a circumstance about
willingness or readiness of the plaintiff. This at the most could

Sridhara babu. N

be the desire of the plaintiff to have this property. It may be for


such a desire this suit was filed raising such a plea. But Section
16(c) of the said Act makes it clear that mere plea is not
sufficient, it has to be proved. Next and the only other
circumstance relied upon is about the tendering of Rs. 5000,
which was made on 2.3.1982 which was even prior to the grant
of the exemption. Such small feeder to the vendor is quite often
made to keep a vendor in good spirit. In this case the only other
payment made by the plaintiff was Rs.5000 at the time of
execution of the agreement of sale. Thus, the total amount paid
was insignificantly short of the balance amount for the
execution of the sale deed. Thus in our considered opinion the
said two circumstances taken together, is too weak a filament to
stand even to build an image of readiness and willingness.
Section 16(c) of the Specific Relief Act requires that not only
there be a plea of readiness and willingness but it has to be
proved so. It is not in dispute that except for a plea there is no
other evidence on record to prove the same except the two
circumstances. It is true that mere absence of a plaintiff coming
in the witness box by itself may not be a factor to conclude that
he was not ready and willing in a given case as erroneously
concluded by the High Court."

In Veerayee Ammal vs. Seeni Ammal reported in (2002) 1 SCC


134 the law is stated in the following terms: "11. When,
concededly, the time was not of the essence of the contract, the
appellant-plaintiff was required to approach the court of law

Sridhara babu. N

within a reasonable time. A Constitution Bench of this Hon'ble


Court in Chand Rani v. Kamal Rani (1993) 1 SCC 519 held that
in case of sale of immovable property there is no presumption as
to time being of the essence of the contract. Even if it is not of
the essence of contract, the court may infer that it is to be
performed in a reasonable time if the conditions are (i) from the
express terms of the contract; (ii) from the nature of the
property; and (iii) from the surrounding circumstances, for
example, the object of making the contract. For the purposes of
granting relief, the reasonable time has to be ascertained from
all the facts and circumstances of the case.
In K. S. Vidyanadam v. Vairavan (1997) 3 SCC 1 this Court held
: (SCC p. 11, para 14) "Even where time is not of the essence of
the contract, the plaintiff must perform his

cxpart of the

contract within a reasonable time and reasonable time should


be determined by looking at all the surrounding circumstances
including the express terms of the contract and the nature of
the property."

In

Lourdu

Mari

David

and

Ors.

vs.

Louis

Chinnaya

Arogiaswamy and Ors. Reported in (1996) 5 SCC 589 this Court


observed: "2. It is settled law that the party who seeks to avail of
the equitable 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

Sridhara babu. N

come with clean hands and is not entitled to the equitable


relief."

In Lalit Kumar Jain and Anr. vs. Jaipur Traders Corporation


Pvt. Ltd. Reported in (2002) 5 SCC 383 this Court observed: "9.
We are of the view that the High Court failed to address itself to
certain crucial factors which disentitles the plaintiff to equitable
relief. The High Court reversed a well-considered judgment of
the trial court without adverting to the reasoning of the trial
court except in a cursory manner. In the view we are taking, it
is not necessary for us to dilate on various legal issues debated
before us. We shall proceed on the basis that in law the plaintiff
could annul the contract of sale before the act of registration got
completed and title passed to the appellants. We shall further
assume that the plaintiff in fact rescinded the contract with
effect from the date of expiry of the time stipulated in the fourth
and

final

notice

dated

3-7-1973.

If

such

rescission

or

termination of contract is not justifiable on facts or having


regard to the conduct of the plaintiff, the equitable relief under
Section 27 or 31 of the Specific Relief Act has to be denied to the
plaintiff, no further question arises for consideration. In such a
case, the appellants' plea has to be accepted and the suit is
liable to be dismissed."
Yet again in Nirmala Anand vs. Advent Corporation (P) Ltd. and
Ors. reported in (2002) 8 SCC 146 this Court observed: "6. It is
true that grant of decree of specific performance lies in the

Sridhara babu. N

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."

In Manjunath Anandappa Urf Shivappa Hanasi v. Tammanasa


and Others [(2003) SCC 390], it was held : "There is another
aspect of the matter which cannot be lost sight of. The plaintiff
filed the suit almost after six years from the date of entering into
the agreement to sell. He did not bring any material on record to
show that he had ever asked Defendant 1, the owner of the
property, to execute a deed of sale. He filed a suit only after he
came to know that the suit land had already been sold by her in
favour of the appellant herein. Furthermore, it was obligatory on
the part of the plaintiff for obtaining a discretionary relief having
regard to Section 20 of the Act to approach the court within a
reasonable time. Having regard to his conduct, the plaintiff was
not entitled to a discretionary relief." It was further observed : "It
is now also well settled that a court of appeal should not
ordinarily interfere with the discretion exercised by the courts
below."

In K. Venkoji Rao v. M. Abdul Khuddur Kureshi AIR 1991 KAR


119, this Court has held that, where the time for execution of a

Sridhara babu. N

sale deed was extended up to certain fixed date but in view of


the fact that a suit was filed by the first purchaser, the sale
deed could not be executed. The time was again extended till
disposal of suit filed by the first purchaser i.e. up to happening
of certain subsequent event. The suit for specific performance of
an agreement to sell, filed within three years from the decision
in first suit dismissing it, would not be time barred, but would
be within limitation. It has been further held that though the
word "date" is used in Article 54 of the Limitation Act, it should
not be taken that a particular date should be specifically stated
in the agreement. Even if the time of performance cannot be
ascertained at the time of agreement itself, it could be
ascertained at the time of performance, it may be said to be a
case where the date is fixed for performance of the contract.

SPECIFIC PERFORMANCE SUIT-AMENDMENT APPLICATION


TYPOGRAPHICAL ERROR-DUE DILIGENCE EXPLAINED
2012 SC
Justice P. Sathasivam, & Justice J. Chelameswar in the case of
J.Samuel & Ors. vs Gattu Mahesh & Ors. Decided on 16
January, 2012 Held It is clear that in a suit for specific
performance of a contract, unless there is a specific averment
that he has performed or has always been ready and willing to
perform the essential terms of the contract, the suit filed by him
is liable to be dismissed On proper interpretation of proviso
to Rule 17 of Order VI, the party has to satisfy the Court that he
could not have discovered that ground which was pleaded by
amendment, in spite of due diligence. No doubt, Rule 17 confers

Sridhara babu. N

power on the court to amend the pleadings at any stage of the


proceedings. However, proviso restricts that power once the trial
has commenced. Unless the Court satisfies that there is a
reasonable cause for allowing the amendment normally the
court has to reject such request. The only reason stated so
in

the

form

of an

affidavit

is

omission

by

"type

mistake". Admittedly, it is not an omission to mention a


word or an arithmetical number. The omission is with reference
to specific plea which is mandated in terms of Section 16(c) of
the Specific Relief Act. Due diligence is the idea that
reasonable investigation is necessary before certain kinds of
relief are requested. Duly diligent efforts are a requirement for a
party seeking to use the adjudicatory mechanism to attain an
anticipated relief. An advocate representing someone must
engage in due diligence to determine that the representations
made are factually accurate and sufficient. The term `Due
diligence' is specifically used in the Code so as to provide a test
for determining whether to exercise the discretion in situations
of

requested

amendment

after

the

commencement

of

trial..A party requesting a relief stemming out of a claim is


required to exercise due diligence and is a requirement which
cannot be dispensed with. The term due diligence determines
the scope of a party's constructive knowledge, claim and is very
critical to the outcome of the suit..In the given facts, there is
a clear lack of `due diligence' and the mistake committed
certainly does not come within the preview of a typographical
error. The term typographical error is defined as a mistake
made in the printed/typed material during a printing/typing
process. The term includes errors due to mechanical failure or

Sridhara babu. N

slips of the hand or finger, but usually excludes errors of


ignorance. Therefore the act of neglecting to perform an action
which one has an obligation to do cannot be called as a
typographical error. As a consequence the plea of typographical
error cannot be entertained in this regard since the situation is
of lack of due diligence wherein such amendment is impliedly
barred under the Code.
SPECIFIC PERFORMANCE AND CASE LAW

The requirement to comply with the mandatory provisions of


Section 16(c) of the Specific Relief Act came up for consideration
of this Court in Ouseph Varghese vs. Joseph Aley & Ors. (1969)
2 SCC 539 wherein it was held: "The plaintiff did not plead
either in the plaint or at any subsequent stage that he was
ready and willing to perform the agreement pleaded in the
written statement of defendant. A suit for specific performance
has to conform to the requirements prescribed in Forms 47 and
48 of the 1st Schedule in the Civil Procedure Code. In a suit for
specific performance it is incumbent on the plaintiff not only to
set out agreement on the basis of which he sues in all its
details, he must go further and plead that he has applied to the
defendant specifically to perform the agreement pleaded by him
but the defendant has not done so. He must further plead that
he has been and is still ready and willing to specifically perform
his part of the agreement. Neither in the plaint nor at any
subsequent stage of the suit the plaintiff has taken those pleas.
As observed by this Court in Pt. Prem Raj vs. D.L.F. Housing
and Construction (Private) (Ltd.) and Another, [reported in 1968

Sridhara babu. N

(3) SCR 648] that it is well settled that in a suit for specific
performance the plaintiff should allege that he is ready and
willing to perform his part of the contract and in the absence of
such an allegation the suit is not maintainable."
Without noticing the said decision, however, another two
Judges bench in R.C. Chandiok and Anr. vs. Chuni Lal
Sabharwal

and

Ors.

reported

in

(1970)

SCC

140

stated: "6.Readiness and willingness cannot be treated as a


straight jacket formula. These have to be determined from the
entirety of facts and circumstances relevant to the intention and
conduct of the party concerned. In our judgment there was
nothing to indicate that the appellants at any stage were not
ready and willing to perform their part of the contract."
In Abdul Khader Rowther vs. P.K. Sara Bai and Ors. reported in
AIR 1990 SC 682 this Court followed Ouseph Varghese (supra)
holding: "His plaint does not contain the requisite pleadings
necessary to obtain a decree for specific performance. This
equitable remedy recognized by the Specific Relief Act cannot be
had on the basis of such pleadings and evidence."
The question again came up for consideration before a three
Judge

bench

of

this

Court

in

Syed

Dastagir

vs.

T.R.

Gopalakrishna Setty reported in (1999) 6 SCC 337. "13. It was


held in the case of R.C. Chandiok v. Chuni Lal Sabharwal
(1970) 3 SCC 140 that readiness and willingness cannot be
treated as a strait-jacket formula. This has to be determined
from the entirety of the facts and circumstances relevant to the

Sridhara babu. N

intention and conduct of the party concerned. Finally, we have


no hesitation to hold that the pleading as made by the plaintiff
not only shows his readiness and willingness to perform his part
of the obligation under the contract but by tendering the total
amount shows he has performed his part of the obligation. We
also construe such a plea to be a plea of "readiness and
willingness" as required under Section 16(c). In view of the
aforesaid findings we hold that the High Court committed an
error by defeating the claim of the plaintiff on the basis of a
wrong

interpretation

section."
specific

of

his

plea

in

terms

of

the

said

................."10. ..It is true that in the pleading the


words

"ready

and

willing

to

perform"

in

this

nomenclature are not there but from the aforesaid plea, could it
be read that the plaintiff was not ready and willing to perform
his part of that obligation ? In other words, can it be said that
he has not pleaded that he is "ready and willing" to perform his
part ? Courts cannot draw any inference in the abstract or to
give such hypertechnical interpretation to defeat a claim of
specific performance which defeats the very objective for which
the said Act was enacted. The section makes it obligatory to a
plaintiff seeking enforcement of specific performance that he
must not only come with clean hands but there should be a plea
that he has performed or has been and is ready and willing to
perform his part of the obligation. Unless this is there, Section
16(c) creates a bar to the grant of this discretionary relief. As we
have said, for this it is not necessary to plea by any specific
words, if through any words it reveals the readiness and
willingness of the plaintiff to perform his part of the obligation

Sridhara babu. N

then it cannot be said there is non-compliance of the said


section."

Motilal Jain vs. Ramdasi Devi and Ors. reported in (2000) 6 SCC
420. "9.It is thus clear that an averment of readiness and
willingness in the plaint is not a mathematical formula which
should only be in specific words. If the averments in the plaint
as a whole do clearly indicate the readiness and willingness of
the plaintiff to fulfil his part of the obligations under the
contract which is the subject-matter of the suit, the fact that
they are differently worded will not militate against the
readiness and willingness of the plaintiff in a suit for specific
performance of contract for sale. In the instant case a perusal
of paras 6 to 11 of the plaint does clearly indicate the readiness
and willingness of the plaintiff. The only obligation which he
had to comply with was payment of balance of consideration. It
was stated that he demanded the defendant to receive the
balance of consideration of Rs. 8000 and execute the sale deed.
The defendant was in Patna (Bihar) at the time of notices and
when he came back to his place the plaintiff filed the suit
against him. In support of his case, he adduced the evidence of
PW 1 and PW 2. The plaintiff had parted with two-thirds of the
consideration at the time of execution of Ext. 2. There is no
reason why he would not pay the balance of one-third
consideration of Rs. 8000 to have the property conveyed in his
favour."

Sridhara babu. N

In Pushparani S. Sundaram and Ors. vs. Pauline Manomani


James and Ors. reported in (2002) 9 SCC 582 it is stated: "5So
far there being a plea that they were ready and willing to
perform their part of the contract is there in the pleading, we
have no hesitation to conclude, that this by itself is not
sufficient to hold that the appellants were ready and willing in
terms of Section 16(c) of the Specific Relief Act. This requires
not only such plea but also proof of the same. Now examining
the first of the two circumstances, how could mere filing of this
suit, after exemption was granted be a circumstance about
willingness or readiness of the plaintiff. This at the most could
be the desire of the plaintiff to have this property. It may be for
such a desire this suit was filed raising such a plea. But Section
16(c) of the said Act makes it clear that mere plea is not
sufficient, it has to be proved. ................ Next and the only
other circumstance relied upon is about the tendering of Rs.
5000, which was made on 2.3.1982 which was even prior to the
grant of the exemption. Such small feeder to the vendor is quite
often made to keep a vendor in good spirit. In this case the only
other payment made by the plaintiff was Rs.5000 at the time of
execution of the agreement of sale. Thus, the total amount paid
was insignificantly short of the balance amount for the
execution of the sale deed. Thus in our considered opinion the
said two circumstances taken together, is too weak a filament to
stand even to build an image of readiness and willingness.
Section 16(c) of the Specific Relief Act requires that not only
there be a plea of readiness and willingness but it has to be
proved so. It is not in dispute that except for a plea there is no
other evidence on record to prove the same except the two

Sridhara babu. N

circumstances. It is true that mere absence of a plaintiff coming


in the witness box by itself may not be a factor to conclude that
he was not ready and willing in a given case as erroneously
concluded by the High Court."
In Veerayee Ammal vs. Seeni Ammal reported in (2002) 1 SCC
134 the law is stated in the following terms: "11. When,
concededly, the time was not of the essence of the contract, the
appellant-plaintiff was required to approach the court of law
within a reasonable time. A Constitution Bench of this Hon'ble
Court in Chand Rani v. Kamal Rani (1993) 1 SCC 519 held that
in case of sale of immovable property there is no presumption as
to time being of the essence of the contract. Even if it is not of
the essence of contract, the court may infer that it is to be
performed in a reasonable time if the conditions are (i) from the
express terms of the contract; (ii) from the nature of the
property; and (iii) from the surrounding circumstances, for
example, the object of making the contract. For the purposes of
granting relief, the reasonable time has to be ascertained from
all the facts and circumstances of the case.
In K. S. Vidyanadam v. Vairavan (1997) 3 SCC 1 this Court held
: "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 of the contract and the nature of the property."

Sridhara babu. N

In

Lourdu

Mari

David

and

Ors.

vs.

Louis

Chinnaya

Arogiaswamy and Ors. reported in (1996) 5 SCC 589 this Court


observed: "2. It is settled law that the party who seeks to avail of
the equitable 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."
In Lalit Kumar Jain and Anr. vs. Jaipur Traders Corporation
Pvt. Ltd. reported in (2002) 5 SCC 383 this Court observed: "9.
We are of the view that the High Court failed to address itself to
certain crucial factors which disentitles the plaintiff to equitable
relief. The High Court reversed a well-considered judgment of
the trial court without adverting to the reasoning of the trial
court except in a cursory manner. In the view we are taking, it
is not necessary for us to dilate on various legal issues debated
before us. We shall proceed on the basis that in law the plaintiff
could annul the contract of sale before the act of registration got
completed and title passed to the appellants. We shall further
assume that the plaintiff in fact rescinded the contract with
effect from the date of expiry of the time stipulated in the fourth
and

final

notice

dated

3-7-1973.

If

such

rescission

or

termination of contract is not justifiable on facts or having


regard to the conduct of the plaintiff, the equitable relief under
Section 27 or 31 of the Specific Relief Act has to be denied to the
plaintiff, no further question arises for consideration. In such a
case, the appellants' plea has to be accepted and the suit is
liable to be dismissed."

Sridhara babu. N

Yet again in Nirmala Anand vs. Advent Corporation (P) Ltd. and
Ors. reported in (2002) 8 SCC 146 this Court observed: "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."

SPECIFIC PERFORMANCE SUIT - ESCALATION OF PRICE


NO GROUND TO REFUSE - UNLESS PLEADED HARDSHIP
AND UNDUE ADVANTAGE 2012 SC
Justice

G.S.

Singhvi,

and

Justice

Sudhansu

Jyoti

Mukhopadhaya of The Supreme Court of India in the case


of

Narinderjit Singh vs North Star Estate Promoters Ltd.

Decided on 8 May, 2012


TRIAL COURT FINDINGS:- In this case, the trial Court declined
the relief of specific performance by observing that the price of
the land had considerably increased and it would be unfair to
compel the appellant to execute the sale deed at the rate agreed
to by the parties. For arriving at this conclusion, the trial Court
relied upon the judgments of this Court in Sargunam (Dead) by
L.R. v. Chidambaram (2005) 1 SCC 162 and Janardhanam
Prasad v. Ramdas (2007) 15 SCC 174 and of the Division Bench

Sridhara babu. N

of the Punjab and Haryana High Court in Mohan Singh v.


Kulwinder Singh 2006 (2) P.L.J. 748 and of the Allahabad High
Court in Ramawati Devi v. Idris Ahmad 2008 (2) Civil Court
Cases 332. The trial Court finally held that the respondent is
entitled to refund of the earnest money with interest at the rate
of 12% per annum.

LOWER

APPELLATE

COURT

FINDINGS:- The

respondent

challenged the judgment and decree of the trial Court by filing


an appeal. The appellant and his father did not file appeal or
cross objection to challenge the findings recorded by the trial
Court on the issues of execution of the agreement and readiness
and willingness on the respondents part to perform its part of
the

agreement. The

lower

appellate

Court

independently

analysed the pleadings and evidence of the parties and agreed


with the trial Court that the respondent had succeeded in
proving execution of the agreement and its readiness and
willingness to pay the balance amount and perform its part of
the obligation. ..... The lower appellate Court disagreed with the
trial Court that the respondent is not entitled to decree of
specific performance because cost of the suit property had
increased and observed that there was no justification to relieve
the appellant of his obligation to execute the sale deed in terms
of the agreement.
HIGH COURT SECOND APPELLATE COURT :- The second
appeal filed by the appellant was dismissed by the learned
Single Judge of the Punjab and Haryana High Court who

Sridhara babu. N

concurred with the lower appellate Court that the trial Court
was not justified in invoking the provisions of Section 20 (2) (c)
of the Specific Relief Act, 1963 (for short, the Act) for the
purpose of declining substantive relief to the respondent. The
learned Single Judge relied upon the judgments of this Court
in K. Narendra v. Riviera Apartments (P) Ltd. (1999) 5 SCC 77,
Sargunam (Dead) by LRs. v. Chidambaram (supra) 1 SCC 162
and Gobind Ram v. Gian Chand 2000 (7) SCC 548, and held
that inadequacy of consideration or the fact that the contract is
onerous to the defendant is not sufficient to deny the relief of
specific performance.

Supreme Court held: The question whether the respondent


was ready and willing to perform its part of the agreement is
required to be decided in the light of the pleadings of the
parties, evidence produced by them and their conduct........ The
thrust of the case set up by the appellant was that his father
had neither executed the agreement nor received the earnest
money. According to him, the agreement was an end product of
criminal conspiracy hatched by the respondent with the help of
Col. Harjit Singh and Vijay Bhardwaj for defrauding him. The
appellant also pleaded that the agreement relied upon by the
respondent was a fake and fabricated document. In reply to the
averments contained in para 5 of the plaint that the respondent
was always ready and willing and is still ready and willing to
perform its part of the contract, the following statement was
made in the written statement: 5. Para no.5 of the plaint is
wrong and therefore denied. The question of readiness and

Sridhara babu. N

willingness on the part of the defendants does not arise at all.


Question of receiving of Rs. nine lac also does not arise at all.
..............
The trial Court comprehensively analysed the pleadings and
evidence of the parties and held that the respondent has
succeeded in proving execution of the agreement by the
appellants father and receipt of Rs.1,00,000/- by him. The trial
Court then considered the question whether the respondent was
ready

and

willing

to

pay

the

balance

price

and

observed: ........... The defendants are also estopped from taking


the plea that plaintiff was not ready and willing to perform his
part of the contract and that the plaintiff did not have the
capacity to make the payment when the defendants have denied
the very execution of the agreement in question. ..........
After Finger Prints and Handwriting Expert, who has specifically
stated on oath before the Court .......... So, the agreement in
question ...............duly stands proved in accordance with
provisions of law. It stands sufficiently proved on record that
defendants ................. had executed an agreement to sell in
favour of the plaintiff after receiving earnest amount of Rs.one
lacs

from

the

plaintiff

in

the

presence

of

marginal

witnesses........... The appellant did not question the aforesaid


findings of the trial Court by filing an appeal. Not only this, he
did not file cross-objection in the appeal filed by the respondent.
Therefore, the lower appellate Court was not required to
consider whether execution of the agreement for sale has been
proved and whether respondent was ready and willing to

Sridhara babu. N

perform its part of the agreement, but it considered both the


questions ..............
On the other hand, the defendants/respondents have denied
the agreement in question and it is not their plea that
appellant/plaintiff was not ready and willing to perform its
contract. Under these circumstances, the evidence produced by
the appellant/plaintiff to prove their readiness and willingness
to perform their part of contract can be accepted without any
hesitation and in this regard I find support from the judgment of
Hon'ble Punjab and Haryana High Court in Santa Singh Vs.
Binder Singh and Ors 2006(4) Civil Court Cases-608 wherein it
was held as under:- "Since the case of the defendant is that of
one of denial, therefore, the statement of the plaintiff that he
was ready and willing to perform his part of the contract is
sufficient to infer that plaintiffs were ready and willing to
perform their part of contract. It was a meager amount of
Rs.2000/- alone which was required to be paid at the time of
registration of the sale deed. The substantial amount was paid
at the time of execution of the agreement. More than
Rs.12000/- was kept for payment to the mortgagee. Therefore,
the argument raised by the learned counsel for the appellant
that the plaintiffs have led evidence to prove his ready and
willingness to perform the contract is not tenable.
In R.C. Chandiok v. Chuni Lal Sabharwal (1970) 3 SCC 140,
this Court observed that readiness and willingness cannot be
treated as a straitjacket formula and the issue has to be decided
keeping in view the facts and circumstances relevant to the

Sridhara babu. N

intention and conduct of the party concerned. The same view


was reiterated in D'Souza v. Shondrilo Naidu, (2004) 6 SCC
649. In N.P. Thirugnanam v. R. Jagan Mohan Rao (Dr) (1995) 5
SCC 115, the Court found that the appellant was dabbling in
real estate transaction without means to purchase the property
and observed: Section 16(c) of the Act envisages that plaintiff
must plead and prove that he had 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 those terms the
performance of which has been prevented or waived by the
defendant. The continuous readiness and willingness on the
part of the plaintiff is a condition precedent to grant the relief of
specific

performance.

This

circumstance

is

material

and

relevant and is required to be considered by the court while


granting or refusing to grant the relief. If the plaintiff fails to
either aver or prove the same, he must fail. To adjudge whether
the plaintiff is ready and willing to perform his part of the
contract, the court must take into consideration the conduct of
the plaintiff prior and subsequent to the filing of the suit along
with

other

attending

circumstances.

The

amount

of

consideration which he has to pay to the defendant must of


necessity be proved to be available. Right from the date of the
execution till date of the decree he must prove that he is ready
and has always been willing to perform his part of the contract.
As stated, the factum of his readiness and willingness to
perform his part of the contract is to be adjudged with reference
to the conduct of the party and the attending circumstances.
The court may infer from the facts and circumstances whether

Sridhara babu. N

the plaintiff was ready and was always ready and willing to
perform his part of the contract.
We are also inclined to agree with the lower appellate Court that
escalation in the price of the land cannot, by itself, be a ground
for denying relief of specific performance. In K. Narendra v.
Riviera Apartments (P) Ltd. ((1999) 5 SCC 77), this Court
interpreted Section 20 of the Act and laid down the following
propositions: 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 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.
In the present case, the appellant had neither pleaded hardship
nor produced any evidence to show that it will be inequitable to
order specific performance of the agreement.

Sridhara babu. N

TRANSFER TO NON AGRICULTURISTS BARRED - SPECIFIC


PERFORMANCE

OF

SUCH

AGREEMENT

TO

BUY

AGRICULTURAL LAND
JUSTICE S Bannurmath, and JUSTICE S B Adi of Karnataka
High court in the case of Manasa Housing Co-Op vs
Marikellaiah Decided on 20-03-2006, held that "No doubt
Section 79B bars for holding an agricultural land by a person
who is not an agriculturist personally cultivating the land.
Similarly, Section 80 also bars transfer of agricultural land in
favour of a person who is not an agriculturist or agricultural
labourer or for non-agricultural purpose. However, the Assistant
Commissioner having jurisdiction over the area or any officer
not below the rank of an Assistant Commissioner is authorised
by the State Government in this behalf in respect, of any area
may grant permission for such sale, gift or exchange, (to enable
a person other than a person disentitled to acquire or hold the
land under Section 79A or Section 79(B) who bona-fide intend of
taking up agriculture to acquire land on such conditions
enumerated therein. It is true that Section 80 bars the sale, gift
or exchange or lease of any land to a person who is not an
agriculturist and it. also bars for transfer of such lands for nonagricultural purpose. What is contemplated under Section 80 is
a prohibition of sale, gift, exchange or lease or interest therein
on

the

agricultural

land

in

favour

of

non-agriculturist.

Admittedly, the suit is one for specific performance of the


contract. There is no concluded contract between the parties

Sridhara babu. N

nor is there any transfer of agricultural land either by sale, gift,


exchange or lease or there is any transfer of interest therein.
The violation contemplated under Section 80 of the Act arises
only when the actual transfer takes place and not otherwise. By
mere filing of suit for specific performance of the contract or the
decree by itself does not amount to violation of Section 80 of the
Act. Apart from this, Section 83 contemplates an enquiry
regarding illegal transaction ......... Under this provision the
prescribed authority shall hold summary enquiry and determine
as to whether the transactions reported to it under Section 82
or coming to its notice in any other manner is in contravention
of the provisions of the Act, such an authority has been
conferred with a power to make a declaration accordingly
declaring that the transaction is null and void. ......... By reading
of the provisions of Section 132, it makes it clear that it is not
for the Civil Court to decide as to whether there is a
contravention of the provisions of Sections 79B or 80 of the Act,
when such a power is conferred exclusively on the authority
prescribed under Section 83. .......... Thus from the provisions of
Sections 79B, 82, 83 and 132, it clearly emerges that the
enquiry, in respect of any allegations of illegality or legality of
the transactions has to be done by the specific statutory
authority prescribed under the Act and such an enquiry cannot
be held by the Civil Court. Much less, before the contract is
concluded by execution of the sale deed. The counsel appealing
for the appellant submitted that the plaintiff-appellant has
made an application before the competent authority seeking
necessary

permission

for

holding

the

agricultural

land.

However, we do not propose to go into the question as to

Sridhara babu. N

whether permission could be granted or not. For the purpose of


this case, it is suffice to say that the civil Court while granting
decree for specific performance of the contract need not go into
the question of legality or illegality of the transactions. In the
light of the above discussion, we hold that Sections 79B, 82 and
83 will not create any bar on the civil Court to decide as to
whether

the

plaintiff

is

entitled

for

decree

for

specific

performance or not.
In this regard it is useful to refer to the decision in the matter of
State

Of

Karnataka

v.

Krishnaji

Srinivas

Kulkarni

and

Ors. 1994 SCC (2) 558 , wherein it. is held that the
questions which are required to be decided by the authorities
under the Act, the Civil Court, is not conferred with the
jurisdiction to decide the same. In this case undisputedly, the
question raised by the learned Counsel for the respondents
requires to be decided only by the authority prescribed under
Section 83 of the Act.

In the similar circumstances, the Apex Court in a judgment


reported in AIR 1986 SC 1912 in the case of Rojasara Ramjibhai
Dahyabhai v. Jani Narottamdas Lallubhai, (Dead By Lr has held
that the decree for specific performance of the contract cannot
be denied on the ground of the non-fulfilment of the conditions
of procuring necessary sanction from the Collector and it also
held that there is no legal impediment in the way of executing
the sale deed.

Sridhara babu. N

This aspect of the matter is also further fortified by a judgment


in Kanvihalli Chinnappa v. Tigari Shivappa and Ors. AIR 1977
Kant 162, ILR 1977 KAR 676, 1977 (1) KarLJ 300 wherein
Court interpreting the provisions of Sections 79B and 80 of the
Act has held: The Executing Court cannot examine the question
whether the sale is in contravention of Sections 79-A and 80 of
the Karnataka Land Reforms Act. The executing Court without
going into the question confirmed the sale.
In Chayappa Santammappa v. Mahammad Hasan, (1964 (1)
Mys LJ 166) similar question relating to the validity of a sale
with reference to S. 63 of the Bombay Tenancy and Agricultural
Lands Act, came for consideration. The said S. 63 is analogous
to Section 80(1) of the Act. While dealing with the said question,
Somnath Iyer, J., speaking for the Bench observed: " ... ... ...
What it declares is that a sale to one who is not an agriculturist
is invalid. The Question therefore whether a sale is or is not
invalid under S. 63 can arise it there is a completed sale and
that question could not have therefore arisen in an application
under R. 90 of O. XXI of the Civil P. C."
The above principles have been reiterated in Mutteppa v.
Bhimappa Giriappa Desai, (1966 (1) Mys LJ 679) and extended
even to a matter falling under the Karnataka Land Reforms Act,
1961 in H. N. Vinayaka v. Firm of H. Venkatasastry and
Sons, 1975 (2) Kant LJ 12: (AIR 1975 Kant 97). In view of these
cases, it must be stated that the executing Court cannot

Sridhara babu. N

examine the question whether the sale is in contravention of Ss.


79-A and 80 of the Act, since the sale is not completed before it
is confirmed. It is only a completed sale which could be
challenged as being in contravention of the provisions of the Act
and not the sale which has not yet been confirmed.

The court, in an identical case in Jose v. Anantha Bhat reported


in 1987(1) KLJ 16 while interpreting the provisions of Section
79A(1) and (3), 82 and 83 has held: The Civil Court which is not
competent to determine in terms of Section 132 of the Land
Reforms Act that question as to the illegality or legality of such a
transaction cannot create a bar to itself to enforce the Contract
on plausible result on such enquiry under Section 83 of the
Land Reforms Act.
Even before the amended Karnataka Land Reforms Act. came
into force, this Court in identical circumstances in a decision in
Rangarao v. Raghavendracharya reported in ILR 1973 KAR 211
has held: Mysore Land Reforms Act. - Section 83 -whether a
transaction is contrary to any provisions of the Act - only
prescribed authority is competent to decide. In this judgment, it
is observed by this Court that, the question whether the
transaction is contrary to any of the provisions of the Act has to
be decided by the prescribed authority under Section 83 of the
Act and not by any other authority. It follows that the Civil
Court cannot decide whether the transaction is void or not.
From this judgment, it clearly follows that the Civil Court while
granting decree for specific performance, is not. vested with the

Sridhara babu. N

jurisdiction to decide whether the transaction is in violation of


the provisions of the Karnataka Land Reforms Act or not.

SPECIFIC RELIEF CASE LAWS

Indian Oil Corporation Ltd. v. Amritsar Gas Service & Ors.


[(1991) 1 SCC 533] in which this Court has held that a contract
which is in its nature determinable cannot be enforced by the
Court.

Percept DMark (India) (P) Ltd. v. Zaheer Khan & Anr.


[(2006) 4 SCC 227] in which this Court has held relying on the
judgment of the Chancery Division in Page One Records Ltd. v.
Britton [(1968) 1 WLR 157: (1967) 3 All ER 822], that where the
totality of the obligations between the parties give rise to a
fiduciary relationship injunction would not be granted because
the performance of the duties imposed on the party in the
fiduciary relationship could not be enforced at the instance of
the other party.

Sridhara babu. N

Settled principle of law is that even where prima facie case is in


favour of the plaintiff, the Court will refuse temporary injunction
if the injury suffered by the plaintiff on account of refusal of
temporary injunction was not irreparable. In Dalpat Kumar
& Anr. v. Prahlad Singh & Ors. [(1992) 1 SCC 719]
this Court held: Satisfaction that there is a prima facie case by
itself is not sufficient to grant injunction. The Court further has
to satisfy that non-interference by the Court would result in
irreparable injury to the party seeking relief and that there is
no other remedy available to the party except one to grant
injunction and he needs protection from the consequences of
apprehended

injury

or

dispossession.

Irreparable

injury,

however, does not mean that there must be no physical


possibility of repairing the injury, but means only that the
injury must be a material one, namely, one that cannot be
adequately compensated by way of damages.
Court in K. Narendra v. Riviera Apartments (P) Ltd. (1999) 5
SCC 77, Sargunam (Dead) by LRs. v. Chidambaram (supra) 1
SCC 162 and Gobind Ram v. Gian Chand 2000 (7) SCC 548,
and held that inadequacy of consideration or the fact that the
contract is onerous to the defendant is not sufficient to deny the
relief of specific performance.

In R.C. Chandiok v. Chuni Lal Sabharwal (1970) 3 SCC 140,


this Court observed that readiness and willingness cannot be
treated as a straitjacket formula and the issue has to be decided
keeping in view the facts and circumstances relevant to the

Sridhara babu. N

intention and conduct of the party concerned The same view


was reiterated in D'Souza v. Shondrilo Naidu, (2004) 6 SCC
649. In N.P. Thirugnanam v. R. Jagan Mohan Rao (Dr) (1995) 5
SCC 115, the Court found that the appellant was dabbling in
real estate transaction without means to purchase the property
and observed: Section 16(c) of the Act envisages that plaintiff
must plead and prove that he had 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 those terms the
performance of which has been prevented or waived by the
defendant. The continuous readiness and willingness on the
part of the plaintiff is a condition precedent to grant the relief of
specific

performance.

This

circumstance

is

material

and

relevant and is required to be considered by the court while


granting or refusing to grant the relief. If the plaintiff fails to
either aver or prove the same, he must fail. To adjudge whether
the plaintiff is ready and willing to perform his part of the
contract, the court must take into consideration the conduct of
the plaintiff prior and subsequent to the filing of the suit along
with

other

attending

circumstances.

The

amount

of

consideration which he has to pay to the defendant must of


necessity be proved to be available. Right from the date of the
execution till date of the decree he must prove that he is ready
and has always been willing to perform his part of the contract.
As stated, the factum of his readiness and willingness to
perform his part of the contract is to be adjudged with reference
to the conduct of the party and the attending circumstances.
The court may infer from the facts and circumstances whether

Sridhara babu. N

the plaintiff was ready and was always ready and willing to
perform his part of the contract.

In K. Narendra v. Riviera Apartments (P) Ltd. ((1999) 5 SCC


77),

Court interpreted Section 20 of the Act and laid down the

following propositions: 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 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.

WHEN COURT CAN ORDER TO PAY HIGHER SUM IN


SPECIFIC PERFORMANCE OF CONTRACT

Sridhara babu. N

The Court noticed that somewhat a different note was struck


in Nirmala Anand vs. Advent Corpn. (P) Ltd & Ors. [(2002) 5
SCC 481] and opined: "The said decision cannot be said to
constitute a binding precedent to the effect that in all cases
where there had been an escalation of prices, the court should
either refuse to pass a decree on specific performance of
contract or direct the plaintiff to pay a higher sum. No law in
absolute terms to that effect has been laid down by this Court
nor is discernible from the aforementioned decision."
In Surinder Singh vs. Kapoor Singh (Dead) through LRs. &
Ors. [(2005) 5 SCC 142], it was emphasized that discretionary
jurisdiction must be exercised reasonably and having regard to
the fact situation obtaining in each case. The present market
value of the property is also a relevant fact. The prices must
have gone up manifold. It is situate in a metropolitan town. It
has a great potential value.

CONTRACT TO BE PERFORMED WITHIN A REASONABLE


TIME
Hon'ble Court in Chand Rani (Smt.) (Dead) By Lrs. v. Kamal
Rani (Smt.)(Dead) By Lrs. [1993 (1) SCC 519 held that in 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 contract, the court may infer that it is to be performed in a
reasonable time if the conditions are (i) from the express terms
of the contract; (ii) from the nature of the property; and (iii) from
the surrounding circumstances, for example, the object of
making the contract. For the purposes of granting relief, the

Sridhara babu. N

reasonable time has to be ascertained from all the facts and


circumstances of the case.
In K.S. Vidyanadam & Ors. v. Vairavan [1997 (3) SCC 1] this
Court held: "Even where time is not of the essence of the
contract, the plaintiffs 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 of the contract and the nature of
the property."

WILLINGNESS

TO

PERFORM

CONTRACT

IN

SPECIFIC

PERFORMANCE
Piarey Lal vs. Hori Lal (1977 (2) SCC 221) for adopting such
view. It was also concluded that the materials on record did not
justify the conclusion that the plaintiffs were ready and willing
to perform their part of the contract.
FALSE PLEA IN SPECIFIC PERFORMANCE SUIT - NO
RELIEF
K.Venkatasubbayya v. K.Venkateswarlu and others AIR 1971
AP 279, plaintiff who sets up false plea of payment, is not
entitled to the discretionary relief of specific performance.

CHECKED AND ADDED


MORTGAGE BY CONDITIONAL SALE

Sridhara babu. N

A mortgage by conditional sale must be evidenced by one


document whereas a sale with a condition of re-transfer may be
evidenced by more than one document - A sale with a condition
of retransfer, is neither mortgage nor a partial transfer - By
reason of such a transfer all rights have been transferred
reserving only a personal right to the purchaser, and such a
personal right would be lost, unless the same is exercised
within the stipulated time - Transfer is complete and not partial,
no stipulation has been made that the appellant cannot transfer
the property. Bishwanath Prasad Singh v. Rajendra Prasad
and Another (SUPREME COURT OF INDIA) D.D : 24/2/2006

DATE ON WHICH PERFORMANCE REFUSED


No time for performance was fixed - It was for the Courts to find
out the date on which the plaintiff had notice that the
performance was refused and on arriving at a finding in that
behalf, to see whether the suit was filed within three years
thereafter. Janardhanam Prasad v. Ramdas (SUPREME COURT
OF INDIA) D.D: 2/2/2007
SPECIFIC PERFORMANCE OF CONTRACT OF SALE
Suit is for specific performance of contract of sale of a house
property - High Court held that the respondent was competent
to file the suit and that the Courts below were not justified in
holding that Exhibit P-I was not proved though execution of the
same was admitted by the defendant - Appeal against - Held,

Sridhara babu. N

First Appellate Court had indicated the reasons as to how it


found Exhibit P-1 was not a genuine document - It analysed the
factual position and held that execution of Ex.P-I was not
established and it was not a genuine document - High Court's
abrupt reasoning that the defendant appears to have accepted
execution of the document is indefensible - Plaintiff- respondent
is not competent to file the suit - Appeal partly allowed....
Dyaneshwar Ramachandra Rao Patange v. Bhagirathibai
(SUPREME COURT OF INDIA) D.D: 18/8/2006
WHEN NO TIME FIXED IN AGREEMENT COURT TO FIND
OUT WHEN IT IS REFUSED
Suit for specific performance of agreement of sale and for a
perpetual injunction - Dismissed as barred by limitation Decision confirmed by first appellate court and High Court Appeal against - No time for performance was fixed in the
agreement for sale - Held, in a case where no time for
performance was fixed, court had to find the date on which the
plaintiff had notice that the performance was refused and on
finding that date, to see whether the suit was filed within three
years thereof - Trial court should have insisted on parties
leading evidence, on this question or the court ought to have
postponed the consideration of the issue of limitation along with
the other issues arising in the suit, after a trial - Suit as regards
prayer for perpetual injunction to protect possession of the
plaintiff over the suit property on the claim that the predecessor
of the plaintiffs was put in possession of the property pursuant
to the agreement for sale, on a subsequent date, could not have
been held to be not maintainable on any ground - Suit is

Sridhara babu. N

remanded to trial court for a proper trial of all issues - Appeal


allowed.... Gunwantbhai Mulchand Shah and Others v. Anton
Elis Farel and Others (SUPREME COURT OF INDIA) D.D:
6/3/2006
Suit for specific performance - Suit dismissed as time barred by
lower court - Second Appeal by respondent allowed decreeing
the suit for specific performance - Appeal against - Held, even
though time for performance was not fixed in the agreement for
sale, on receipt of the notice, the respondent had notice that the
performance was being refused, if he failed to fulfill his
obligation under the contract within 15 days of receipt of the
notice - Suit should have been filed within a period of three
years from the date of expiry of fifteen days from the date of
receipt of the said notice - Suit time barred.... R.K. Parvatharaj
Gupta v. K.C. Jayadeva Reddy (SUPREME COURT OF INDIA)
D.D: 2/2/2006

PERSONAL RIGHT TO PURCHASE BACK


Respondent's suit for a declaration that transaction although
ostensibly expressed in the shape of a deed of sale, was in fact a
transaction of usufructuary mortgage and for a further
declaration that the said transaction stands redeemed under s.
12 - Relief granted in second appeal - Held, a mortgage by
conditional sale must be evidenced by one document whereas a
sale with a condition of re-transfer may be evidenced by more
than one document - A sale with a condition of retransfer, is
neither mortgage nor a partial transfer - By reason of such a

Sridhara babu. N

transfer all rights have been transferred reserving only a


personal right to the purchaser, and such a personal right
would be lost, unless the same is exercised within the stipulated
time - Transfer is complete and not partial, no stipulation has
been made that the appellant cannot transfer the property Appeal allowed..... Bishwanath Prasad Singh v. Rajendra
Prasad and Another (SUPREME COURT OF INDIA) D.D:
24/2/2006
PARTITION IN A SUIT FOR SPECIFIC PERFORMANCE
Suit for specific performance of undivided property - Minor's
share

Conditions

mentioned

to

obtain

the

necessary

permission from Civil Court relating to minor's share - Trial


Court not only granted a decree for specific performance of
contract but also a preliminary decree for partition - High Court
held that it is an essential term for execution of contract and
since such permission had not been granted, the entire contract
failed - Appeal against - S. 22 enacts a rule of pleading that in
order to avoid multiplicity of proceedings, plaintiff may claim a
decree for possession and/ or partition in a suit for specific
performance - Impugned judgment set aside - Appeal allowed....
P.C. Varghese v. Devaki Amma Balambika Devi and Others
(SUPREME COURT OF INDIA) D.D: 7/10/2005
JURISDICTION
Suit for declaration, specific performance of agreement, for
possession of property and for permanent injunction - Order

Sridhara babu. N

that Delhi Court has no jurisdiction to try the suit and plaint
should be returned to the plaintiff for presentation to proper
court - Appeal against - In which court a suit for specific
performance of agreement relating to immovable property would
lie? - Held, s. 16 recognizes a well established principle that
actions against res or property should be brought in the forum
where such res is situate - A court within whose territorial
jurisdiction the property is not situate has no power to deal with
and decide the rights or interests in such property - Delhi Court
has no jurisdiction since property is not situate within
jurisdiction of that court - Trial court was, therefore, right in
passing an order returning the plaint to the plaintiff for
presentation to the proper court - Appeal dismissed.... Harshad
Chiman Lal Modi v. Dlf Universal and Another (SUPREME
COURT OF INDIA) D.D: 26/9/2005
WRONGFULLY WITHHELD PROPERTY OF THE COMPANY
Companies Act, 1956, s. 630 - Wrongfully withheld property of
the

company

Held,

possession

of

company's

flat

by

Respondents, after service of notice to vacate premises by


company, is wrongful withholding of property of company Decision of High Court that s. 630 of Act being penal in nature,
proceeding there under cannot be construed to be a proceeding
taken in due process of law, cannot be sustained - Appeal partly
allowed.... Shubh Shanti Services Limited v. Manjula S.
Agarwalla and Others (SUPREME COURT OF INDIA) D.D:
11/5/2005
TRUE NATURE OF DEED

Sridhara babu. N

What is true nature of deed though called a Settlement Deed,


what was intention of executant behind executing deed Settlement as per terms of document was not a transfer of
property in favour of adopted son; it was merely an arrangement
or at best an entrustment of scheduled property to his adopted
son

and

latter's

natural

father

for

purpose

of

proper

management without obstruction by anyone else including


himself so that welfare of himself, his wife and his children
specially unmarried daughters was assured - Deed was capable
of being cancelled or revoked under power of revocation - Appeal
dismissed... Subbegowda (Dead) By Lr v. Thimmegowda
(Dead) By Lrs (SUPREME COURT OF INDIA) D.D: 16/4/2004

AGREEMENT OF REPURCHASE OF PROPERTY

Whether the terms of the agreement of repurchase contain any


implied prohibition on the original contracting parties from
transferring or assigning their rights in favour of third party Held, in the absence of any words or expressions in the
documents indicating prohibition on assignment or transfer of
right of repurchase and in the face of s. 15(b), Specific Relief
Act, 1963, an implied prohibition cannot be read into the terms
of the documents. Merely because in the documents, there is
mention of 'heirs' of the contracting parties but not their
'assignees' or transferees', the legal right of assignment available
to the benefit of original contracting party under s. 15(b) cannot

Sridhara babu. N

be denied to it - Further held, the plaintiff as 'assignee' or


'transferee' from the original contracting party is entitled to seek
specific performance of the contract from contesting respondent
- Case remanded to the trial court for deciding additional issues
arising on facts and law.... Shyam Singh v. Daryao Singh
(Dead) by LRs and Others (SUPREME COURT OF INDIA) D.D:
19/11/2003

TERRITORIAL JURISDICTION OF COURT IN CASE OF


SPECIFIC PERFORMANCE
In A.B.C. Laminart Pvt. Ltd. and Another v. A.P. Agencies,
Salem, (1989) 2 SCC 163, the Supreme Court while dealing with
the issue of territorial jurisdiction of the Court observed that the
jurisdiction of the Court in the matter of a contract will depend
on the situs of the contract and the cause of action arising
through connecting factors. It was further observed that a cause
of action is a bundle of facts, which, taken with the law
applicable to them, gives the plaintiff a right to relief against the
defendant and comprise every fact necessary for the plaintiff to
prove to enable him to obtain a decree, through it has no
relation whatever to the defence which may be set up by the
defendant. It was also held that the performance of a contract
being part of cause of action, a suit in respect of its breach can
always be filed at the place where the contract should have been
performed or its performance completed. It was further held

Sridhara babu. N

that part of cause of action arises where money is expressly or


impliedly payable under the contract.
SALE AGREEMENT
An agreement of sale does not creates any interest in the
property, but it creates an obligation that is inherent to
ownership. Soni Lalji case AIR 1967 SC 978. Bai Dosa bai case:
AIR 1980 SC 1334.

Sale of property transfers ownership. Inderjit Singh case: AIR


1996 SC 247.

As a consequence of an agreement to sell, land was transferred


under an unregistered sale deed. The transferor becomes owner
even if he is not put into possession. State of A.P case: AIR 1982
SC 913.

Unless there is a written agreement for sale is executed, the


vendee cannot defend his possession merely on the basis of oral
agreement

and

certain

correspondence

M.C.Bakhru case: AIR 2002 SC 812.

with

the

vendor.

Sridhara babu. N

A contract for sale or an agreement for sale does not create any
title in favour of the transferee. But the provision section 53A of
T.P.Act creates a bar on the transferor to seek possession from
the transferee. Patel Natwarlal Rupji case: AIR 1996 SC 1088.
The person who acquired the property with notice that another
person has entered into a contract affecting that property does
not acquire title to that property but imposes on him the
obligation to hold the property for the benefit of the other person
to the extent necessary to give effect to the contract provided
that the contract is one of which specific performance can be
enforced. Khaja Bi and Others case: AIR 1964 Mys 269 (275).
(FB).{ see section 40 of T.P.Act and Section 91 of Indian Trusts
Act }
Way to transfer to non agriculturist:- Bar under Kar Land
Reforms Act sec 80, Kar Land Revenue act sec 95(2) and
Registration Act sec 22A operates only if under deed of transfer,
possession of agriculture land is delivered to purchaser, who is
not agriculturist. Where deed is only agreement to sell
agricultural land after getting necessary permission to divert for
non- agricultural use, and agreement does not involve delivery
of possession, agreement cannot be construed as one opposed
to public policy or contrary to law. Township Enterprises case
before Karnataka High Court, Decided on 16-11-2004. Reported
in 2005 (1) KarLJ 385.
Consequence of possession given in Sale agreements: It has to
be executed with stamp paper equal to that of Conveyance or

Sridhara babu. N

else it attracts duty penalty of 10 times that of actual stamp


duty. In this case property agreed to be bought at Rs 18 lakhs
with delivery of possession on stamp paper of Rs 200=00. Rs 19
Lakhs duty penalty imposed to enforce the same. Kapoor
Constructions Bangalore case before KHC decide on 03-032005. Reported in 2005 (5) KarLJ 602.
NOTE: After the amendment of Registration act in 2001 such
agreements coupled with delivery of possession needs to be
compulsorily registered.

Where the property is sold with condition to repurchase, the


seller can assign his right to repurchase. Andalammal case: AIR
1962 Mad 378.
Where under an agreement an option to vendor is reserved for
repurchasing the property sold by him, the option is in the
nature of a concession or privilege and may be exercised on
strict fulfillment of the conditions it can be exercisable. If the
original vendor fails to act punctually according to the terms of
the contract, the right to repurchase will be lost and cannot be
specifically enforced. Refusal to enforce the terms specifically for
failure to abide by the conditions does not amounts to
enforcement of a penalty and the court has no power to afford
relief against the forfeiture arising as a result of breach of such
condition. K. Simrathmull case: AIR 1963 SC 1182 (1188).
In K. Venkoji Rao v. M. Abdul Khuddur Kureshi AIR 1991
KAR 119, this Court has held that, where the time for

Sridhara babu. N

execution of a sale deed was extended up to certain fixed date


but in view of the fact that a suit was filed by the first
purchaser, the sale deed could not be executed. The time was
again extended till disposal of suit filed by the first purchaser
i.e. up to happening of certain subsequent event. The suit for
specific performance of an agreement to sell, filed within three
years from the decision in first suit dismissing it, would not be
time barred, but would be within limitation. It has been further
held that though the word "date" is used in Article 54 of the
Limitation Act, it should not be taken that a particular date
should be specifically stated in the agreement. Even if the time
of performance cannot be ascertained at the time of agreement
itself, it could be ascertained at the time of performance, it may
be said to be a case where the date is fixed for performance of
the contract.
Court in N.Srinivasa v. Kuttukaran Machine Tools Ltd.[2009
(5) SCC 182] that "in the contract relating to immovable
property, time cannot be the essence of the contract", the
appellant put forth the contention that in all contracts relating
to sale of immovable property, time stipulated for performance,
even if expressed to be the essence, has to be read as not being
the essence of the contract and consequently the contract does
not become voidable by the failure to perform before the
specified time. A careful reading of the said decision would show
that the sentence relied on (occurring in para 31) apparently
was not the statement of legal position, but a conclusion on
facts regarding the contract that was being considered by the
court in that case, with reference to its terms. In fact the legal

Sridhara babu. N

position is differently stated in para 27 of the said decision,


thus: "27. In a contract for sale of immoveable property,
normally it is presumed that time is not the essence of the
contract. Even if there is an express stipulation to that effect,
the said presumption can be rebutted. It is well settled that to
find out whether time was the essence of the contract. It is
better to refer to the terms and conditions of the contract
itself."

Constitution Bench of this court in Chand Rani v. Kamal Rani


[1993 (1) SCC 519], wherein this court outlined the principle
thus: "It is a well-accepted principle that in the case of
sale of immovable property, time is never regarded as the
essence of the contract. In fact, there is a presumption against
time being the essence of the contract. This principle is not in
any way different from that obtainable in England. Under the
law of equity which governs the rights of the parties in the case
of specific performance of contract to sell real estate, law looks
not at the letter but at the substance of the agreement. It has to
be ascertained whether under the terms of the contract the
parties named a specific time within which completion was to
take place, really and in substance it was intended that it
should be completed within a reasonable time. An intention to
make time the essence of the contract must be expressed in
unequivocal language." Relying upon the earlier decisions
of

this

court

inGomathinayagam

Pillai

v.

Pallaniswami

Nadar [1967 (1) SCR 227] and Govind Prasad Chaturvedi v. Hari
Dutt Shastri [1977 (2) SCC 539], this Court further held that

Sridhara babu. N

fixation of the period within which the contract has to be


performed does not make the stipulation as to time the essence
of the contract. Where the contract relates to sale of immovable
property, it will normally be presumed that the time is not the
essence of the contract. Thereafter this court held that even if
time is not the essence of the contract, the Court may infer that
it is to be performed in a reasonable time : (i) from the express
terms of the contract; (ii) from the nature of the property and
(iii) from the surrounding circumstances as for example, the
object of making the contract. The intention to treat time as the
essence

of

the

contract

may

however

be

evidenced

by

circumstances which are sufficiently strong to displace the


normal presumption that time is not the essence in contract for
sale of land. In Chand Rani, clause (1) of the agreement of sale
required the balance consideration to be paid as under:
"Rs.98,000/- will be paid by the second party to the first
party within a period of ten days only and the balance
Rs.50,000 at the time of registration of the sale deed....".
This court held that time regarding payment of Rs.98,000 was
the essence, on the following reasoning: "The analysis of
evidence would also point out that the plaintiff was not willing
to pay this amount unless vacant delivery of possession of one
room on the ground floor was given. In cross-examination it was
deposed that since income-tax clearance certificate had not
been obtained the sum of Rs. 98,000 was not paid. Unless the
property was redeemed the payment would not be made. If this
was the attitude it is clear that the plaintiff was insisting upon
delivery of possession as a condition precedent for making this
payment. The income-tax certificate was necessary only for

Sridhara babu. N

completion of sale. We are unable to see how these obligations


on the part of the defendant could be insisted upon for payment
of Rs. 98,000. Therefore, we conclude that though as a general
proposition of law time is not the essence of the contract in the
case of a sale of immovable property yet the parties intended to
make time as the essence under Clause (1) of the suit
agreement."

A correct perspective relating to the question whether time is


not of the essence of the contract in contracts relating to
immovable property, is given by this court in K.S. Vidyanadam
and Others vs. Vairavan - (1997) 3 SCC 1 (by Jeevan Reddy J.
who incidentally was a member of the Constitution Bench in
Chand Rani). This Court observed:
"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.
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. .........We cannot be oblivious
to the reality and the reality is constant and continuous rise in
the values of urban properties - fuelled by large scale migration
of people from rural areas to urban centres and by inflation.
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

Sridhara babu. N

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."

J. Baby Ammal W/O Sri Jayaram vs P. Sumithra Devi ILR


2006 KAR 2552, 2006 (6) KarLJ 220 When a party entered
into an agreement of sale, and when the agreement of sale could
not be executed within the time limit even after receipt of major
part of the sale consideration and the vendor fails to furnish the
encumbrance certificate, within the stipulated period as agreed
to by the parties, then the remedy available for the purchaser is
to file a suit for recovery of the amount paid together with
interest.
In N.L. Devender Singh and Ors. v. Syed Khaja, 1973 AIR
2457, 1974 SCR (1) 312 the following tatement of law appears:
"The question always is: What is the contract? Is it that one
certain act shall be done, with a sum annexed, whether by way
of penalty or damages, to secure the performance of this very
act? Or, is it that one of the two things shall be done at the
election of the party who has to perform the contract, namely,
the performance of the act or the payment of the sum of money?
If the former, the fact of the penal or other like sum being
annexed will not prevent the Court's enforcing performance of
the very act, and thus carrying into execution the intention of
the parties; if the latter, the contract is satisfied by the payment
of a sum of money, and there is no ground for proceeding

Sridhara babu. N

against the party having the election to compel the performance


of the other alternative.
From what has been said it will be gathered that contracts of
the kind now under discussion are divisible into three classes:
(i) Where the sum mentioned is strictly a penalty-a sum named
by way of securing the performance of the contract, as the
penalty is a bond:
(ii) Where the sum named is to be paid as liquidated damages
for a breach of the contract:
(iii) Where the sum named is an amount the payment of which
may be substituted for the performance of the act at the election
of the person by whom the money is to be paid or the act done.
Where the stipulated payment comes under either of the two
first - mentioned heads, the Court will enforce the contract, if in
other respects it can and ought to be enforced, just in the same
way as a contract not to do a particular act, with a penalty
added to secure its performance or a sum named as liquidated
damages, may be specifically enforced by means of an
injunction against breaking it. On the other hand, where the
contract comes under the third head, it is satisfied by the
payment of the money, and there is no ground for the Court to
compel the specific performance of the other alternative of the
contract."
32. This Court further stated:
"20. The fact that the parties themselves have provided a sum to
be paid by the party breaking the contract does not, by itself,
remove the strong presumption contemplated by the use of the
words "unless and until the contrary is proved." The sufficiency

Sridhara babu. N

or insufficiency of any evidence to remove such a presumption


is a matter of evidence. The fact that the parties themselves
specified a sum of money to be paid in the event of its breach is,
no doubt, a piece of evidence to be considered in deciding
whether the presumption has been repelled or not. But, in our
opinion, it is nothing more than a piece of evidence. It is not
conclusive or decisive.
21. The second assumption underlying the contentions on
behalf the Defendants-Appellants is that, once the presumption,
contained in explanation to Section 12 of the old Act, is
removed, the bar contained in Section 21 of the old Act, against
the specific enforcement of a contract for which compensation
in

money

is

an

adequate

relief,

automatically

operates,

overlooks that the condition for the imposition of the bar is


actual proof that compensation in money is adequate on the
facts and circumstances of a particular case before the Court.
The effect of the presumption is that the party coming to Court
for the specific performance of a contract for sale of immovable
property need not prove anything until the other side has
removed the presumption. After evidence is led to remove the
presumption, the plaintiff may still be in a position to prove, by
other evidence in the case, that payment of money does not
compensate him adequately."

In

P.S.Ranakrishna

Reddy

vs.

M.K.Bhagyalakshmi

and another {2007 (10) SCC 231}, an identical contention was


raised that the transaction was a loan transaction and not an
Agreement of Sale. But the said contention was rejected by the

Sridhara babu. N

Supreme Court on the ground that the document in question


was described as an Agreement of Sale; that the Agreement
disclosed negotiations between the parties and that no part of
the Agreement contained an indication that it was not intended
to be acted upon. Therefore in paragraph-13, the Court
reiterated the well settled principle that a document must be
read in its entirety and that the intention of the parties must be
gathered from the document itself. The Court further held that a
default clause contained in the document would not make it a
contract of loan.
In Chand Rani vs. Kamal Rani {1993 (1) SCC 519}, a
Constitution Bench of the Supreme Court held in paragraph-19,
as follows:"19. It is a well accepted principle that in the case of sale
of immovable property, time is never regarded as the essence of
the contract. In fact, there is a presumption against time being
the essence of the contract. This principle is not in any way
different from that obtainable in England. Under the law of
equity which governs the rights of the parties in the case of
specific performance of contract to sell real estate, law looks not
at the letter but at the substance of the Agreement. It has to be
ascertained whether under the terms of the contract, the parties
named a specific time within which completion was to take
place, really and in substance, it was intended that it should be
completed within a reasonable time. An intention to make time
the essence of the contract must be expressed in unequivocal
language." In paragraph-25 of the said judgment, the
Court elicited the principles on the issue, as follows:-

Sridhara babu. N

"25. From an analysis of the above case law, 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:- (i) from the express terms of the contract;
(ii) from the nature of the property and
(iii) from the surrounding circumstances, for eg., the object of
making the contract."

While formulating the above principles, the Constitution Bench


relied upon the earlier decisions in Gomathinayagam Pillai vs.
Palaniswami Nadar {AIR 1967 SC 868} and Govind Prasad
Chaturvedi vs. Hari Dutt Shastri {1977 (2) SCC 539}, where it
was held that "it is settled law that the fixation of the
period within which the contract has to be performed does not
make

the

stipulation

as

to

time

the

essence

of

the

contract".

It was held by the Supreme court in P.D'souza vs. Shondrilo


Naidu {2004 (6) SCC 649} that the readiness and willingness
on the part of the plaintiff to perform his part of the contract
would also depend upon the question as to whether the
defendant did everything which was required of him to be done
in terms of the Agreement of Sale. It was further held in the
same case that the mere inadequacy of consideration or the
mere fact that that the contract is onerous to the defendant or

Sridhara babu. N

improvident in its nature would not constitute an unfair


advantage within the meaning of sub-section (2) of Section 20.
While holding so, the Court distinguished the earlier decision
in Nirmala Anand vs. Advent Corporation (P) Ltd {2002 (5) SCC
481}.
As seen from section 3 of the Transfer of Property Act, which we
have extracted above, a wilful abstention from an enquiry or
search which a purchaser ought to have made, would give rise
to a presumption of constructive notice. The effect of abstention
on the part of a subsequent purchaser, to make enquiries with
regard to the possession of a tenant, was considered in Ram
Niwas vs. Bano {2000 (6) SCC 685}. It was held in paragraphs
16 and 18 therein as follows:- "16. The purchasers have
acquired a legal right under sale deed (Ext.4). The right of the
tenant under Ext.1, if it is true and valid, though earlier in time,
is only an equitable right and it does not affect the purchasers if
they are bona fide purchasers for valuable consideration
without notice of that equitable right." "18. .. ... .. ..
... If the purchasers have relied upon the assertion of the vendor
or on their own knowledge and abstained from making inquiry
into the real nature of the possession of the tenant, they cannot
escape from the consequences of the deemed notice under
Explanation II to Section 3 of the Transfer of Property
Act." The wilful abstention of the defendants 4 and 5 to
make an enquiry or search, is writ large on the face of the
records due to-(i) their failure to demand the production of the original title
deeds before going ahead with the registration,

Sridhara babu. N

(ii) the knowledge that they admittedly had at least about the
other encumbrances existing in the property and
(iii) their retention of an amount of Rs.2.5 crores from out of the
total sale consideration of Rs.4,11,08,000/-, specially for the
purpose of settling the claim of the plaintiffs.

In Parakunnan Veetill Joseph's Son Mathew vs. Nedumbara


Kuruvila's Son {1987 Supp. SCC 340}, the Supreme Court
held as follows:"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."

In Jugraj Singh -vs- Labh Singh {(1995) 2 SCC 31}, the Apex
Court held that the plea that the plaintiff was not ready and
willing to perform his part of the obligations, was not available
to the subsequent purchaser.
Bench in Lakhi Ram -vs- Trikha Ram {(1998) 2 SCC 720}, a
different view was not settled. However, in Ram Awadh (dead)
by L.R.s -vs- Achchaibar Dubey {(2000) 2 SCC 428}, the

Sridhara babu. N

question was referred to a Bench of 3 Judges. There the larger


Bench held that the view taken in Jugraj Singh was erroneous
and that since the obligation imposed by section 16 is upon
court, it would be open to any of the defendants to raise the
plea and establish it. Therefore, what applies to section 16, may
equally apply to section 20(2), at least in so far as the exception
carved out in Explanation-2 is concerned. In other words, a
subsequent purchaser can be heard to contend that the
performance of the contract would involve hardship on him, due
to the acts of the plaintiff after entering into the contract.

In Mademsetty Satyanarayana vs. G.Yelloji Rao {AIR 1965


SC 1405}, the Supreme Court considered the question as to
whether mere delay in filing a suit for specific performance
could be a ground for the exercise of discretion against the
plaintiff. After referring to the provisions of Section 22 of the old
Specific Relief Act and the provisions of the Limitation Act, the
Supreme Court held that the cases providing for a guide to
Courts to exercise discretion one way or the other, are only
illustrative and not intended to be exhaustive. The Court also
held that the mere delay without more, extending upto the
period of limitation, cannot possibly be a reason for a Court to
exercise

discretion

not

to

grant

the

relief

of

specific

performance. But at the same time, the Court also cautioned


that the scope of the discretion, after excluding the cases
mentioned in Section 22 cannot be confined to waiver,
abandonment or estoppel. The Court pointed out that if one of
the three cases viz., waiver, abandonment or estoppel is

Sridhara babu. N

established, no question of discretion would arise, for there


would then be no subsisting right. Unless some discretionary
field is left unoccupied by these three cases, the Court pointed
out, that the substantive section would become otiose.

Gomathinayagam Pillai vs. Palaniswami Nadar {AIR 1967 SC


868}, Bachawat, J., pointed out (in his minority view) that mere
delay, short of waiver and abandonment of the contract, was no
ground for refusing the relief of specific performance of the
contract. There was no difference of opinion in the majority
view, on this aspect.
In Motilal Jain vs. Smt.Ramdasi Devi {2000 (6) SCC 420},
the Supreme Court pointed out various aspects of delay, in
paragraph 6 as follows:"6. It may be apt to bear in mind the following aspects of
delay which are relevant in a case of specific performance of
contract for sale of immovable property:
(i) delay running beyond the period prescribed under the
Limitation Act;
(ii) delay in cases where though the suit is within the period of
limitation, yet:
(a) due to delay the third parties have acquired the rights in the
subject-matter of the suit;
(b) in the facts and circumstances of the case, delay may give
rise to plea of waiver or otherwise it will be inequitable to grant
a discretionary relief.".

Sridhara babu. N

In Arjun Singh vs. Kartar Singh {AIR 1951 SC 193}, the


Supreme Court pointed out that the discretion to receive and
admit additional evidence is not an arbitrary one, but is a
judicial one circumscribed by the limitations specified in Order
XLI, Rule 27 CPC. The Court quoted with approval, the opinion
of the Privy Council in Kessowji vs. G.I.P. Railway {34 IA 115}, to
the effect that the legitimate occasion for the application of the
Rule is when on examining the evidence as it stood, some
inherent lacunae or defect becomes apparent and not where a
discovery is made outside the Court, of fresh evidence and the
application is made to import it. Ultimately, the Court held that
"the true test is whether the Appellate Court is able to
pronounce judgment on the materials before it, without taking
into consideration, the additional evidence sought to be
adduced".

The decision in Arjun Singh was relied upon by the Apex


Court, in Natha Singh vs. Financial Commissioner {AIR
1976 SC 1053}. But both these decisions were rendered before
Clause (aa) was inserted into sub Rule (1) of Rule 27 of Order
XLI, by the CPC (Amendment) Act, 1976. As a matter of fact, by
the very same Amendment, Rule 17A was inserted under Order
XVIII, for producing additional evidence before the trial Court.
In N.Kamalam vs. Ayyasamy {2001 (7) SCC 503}, rendered
much after the Amendment, the Supreme Court pointed out in
paragraph 19 that the provision has not been engrafted in the

Sridhara babu. N

Code so as to patch up the weak points in the case and to fill up


the omission in the Court of Appeal and that it does not
authorise any lacunae or gaps in evidence to be filled up.

However, in K.Venkataramiah vs. Seetarama Reddy {AIR


1963 SC 1526}, a Constitution Bench of the Supreme Court
held as follows:- "It is well to remember that the Appellate
Court has the power to allow additional evidence not only if it
requires such evidence 'to enable it to pronounce judgment' but
also for 'any other substantial cause'. There may well be cases
where even though the Court finds that it is able to pronounce
judgment on the state of the record as it is and so it cannot
strictly say that it requires additional evidence to enable it to
pronounce judgment, it still considers that in the interest of
justice something which remains obscure should be filled up so
that it can pronounce its judgment in a more satisfactory
manner. Such a case will be one for allowing additional evidence
for 'any other substantial cause' under Rule 27(1)(b) of the
Code."
In Gulabbai vs. Nalin Narsi Vohra {1991 (3) SCC 483}, the
Supreme Court referred to its various earlier decisions and held
in para 25 that it is beyond the pale of any doubt that in
appropriate cases, events subsequent to the filing of the suit
can be taken notice of and can be duly considered provided the
same are relevant.

Sridhara babu. N

Again in Om Prakash Gupta vs. Ranbir B. Goyal {2002 (2)


SCC 256}, the Supreme Court in para 11 held as follows:"11. The ordinary rule of civil law is that the rights of the
parties stand crystallised on the date of the institution of the
suit and, therefore, the decree in a suit should accord with the
rights of the parties as they stood at the commencement of the
lis. However, the Court has power to take note of subsequent
events and mould the relief accordingly subject to the following
conditions being satisfied: (i) that the relief, as claimed originally
has, by reason of subsequent events, become inappropriate or
cannot be granted; (ii) that taking note of such subsequent
event or changed circumstances would shorten litigation and
enable complete justice being done to the parties; and (iii) that
such subsequent event is brought to the notice of the Court
promptly and in accordance with the rules of procedural law so
that the opposite party is not taken by surprise."

K.Narendra vs. Riviera Apartments (P) Ltd {1999 (5) SCC 77}
as follows:- "30. Chitty on Contracts (27th Edn., 1994,
Vol. 1., at p. 1296) states:
"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

responsible."

which
The

the

above

plaintiff
decision

is
was

in V.Muthusami vs. Angammal {2002 (3) SCC 316}.

in

no

relied

way
upon

Sridhara babu. N

Supreme Court rejected the prayer for specific performance,


in Janardhanam Prasad vs. Ramdas 2007(15) SCC 174 It
was held in paragraph-18 of its said decision as follows:"18. Furthermore, the applicant is in possession of the
said land. He had dug a well. He had made improvement on the
suit land. Digging of well as also making improvements was
within the notice of the respondent. The witnessess examined
on his behalf had categorically admitted the same. In that view
of the matter too, in our opinion, it was a fit case where the
discretionary jurisdiction of the Court under Section 20 of the
Specific Relief Act should not have been exercised and, instead,
monetary compensation could be granted (See M.Meenakshi
and Others vs. Metadin Agarwal (Dead) by LRs. And Others
{2006 (7) SCC 470}"

(2006) 2 SUPREME COURT CASES 428 R.K.PARVATHARAJ


GUPTA V. K.C.JAYADEVA REDDY, certain excerpts from it
would run thus: 9. Article 54 of the Limitation Act reads thus:
For specific performance of a contract. Three years. The date
fixed for the performance, or, if no such date is fixed, when the
plaintiff has notice that performance is refused.

Ram Baran Prasad v. Ram Mohit Hazra AIR 1967 SC 744 it


is held thus : "In the case of an agreement for sale entered into

Sridhara babu. N

prior to the passing of the Transfer of Property Act, it was the


accepted doe-trine in India that the agreement created an
interest in the land itself in favour of the purchaser, and
following this doctrine the view was that a covenant for preemption contained in a deed of partition, which was unlimited
in point of time, was not enforce able in law. But, there has
been a change in the legal position in India since the passing of
the Transfer of Property Act and Section 54 of that Act stales
that contract for sale of immovable property "does not of itself,
create any interest in or charge on such property". The second
paragraph of Section 40 of that Act taken with the illustration
under that section establishes two propositions : (i) that a
contract for sale docs not create any interest in the land, but is
annexed to the ownership of the land and (2) that the obligation
can be enforced against a subsequent gratuitous transferee
from the vendor or a transferee for value but with notice.

(i) 1987 (Supp) SCC 340 (Parakunnan Veetill Joseph's Son


Mathew v. Nedumbara Kuravila's son and others ) wherein,
the Hon'ble Supreme court held as follows:
"Section 20 of the Specific Relief Act, 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

Sridhara babu. N

instrument of oppression to have an unfair advantage to the


plaintiff."
(ii) 2012(2) CTC 94 J.Samuel & others v. Gattu Mahesh &
others) wherein, the Hon'ble Apex Court held that the claim of
typographical error/mistake is baseless and cannot be accepted
when the person who prepared the plaint, signed and verified
the plaint showed some attention, this omission could have
been

noticed

and

rectified

there

itself

and

in

such

circumstances, it cannot be construed that due diligence was


adhered

to

and

in

any

event,

omission

of

mandatory

requirement running into 3 to 4 sentences cannot be a


typographical error as claimed by the plaintiffs. (iii) 2010(3) CTC
297 (Jugraj v. P.Sankaran and others) wherein, I had an
occasion to deal with the mandatory requirement of readiness
and willingness and held that it is a condition precedent for
obtaining the relief of specific performance of contract under
section 16-C of the Specific Relief Act, to prove the plea of
readiness and willingness on the part of agreement holder and
in the absence of the same, no relief could be granted.
(i) AIR 2000 SCC 2408 (Motilal Jain v. Ramdasi Devi and
others) wherein, the Hon'ble Supreme Court held that the
averment of readiness and willingness in the plaint is not a
mathematical formula which should only be in specific words. If
the averments in the plaint as a whole do clearly indicate the
readiness and wiliness of the plaintiff to fulfill his part of the
obligations under the contract which is a subject matter of the
suit the fact that they are differently worded will not militate

Sridhara babu. N

against the readiness and willingness of the plaintiff in a suit for


specific performance of contract for sale.
(ii) 1999 (6) SCC (Syed Dastagir v. T.R. Gopalakrisna
Setty) wherein, the Hon'ble Supreme Court held that language
in section 16(c) does not require any specific phraseology but
only that the plaintiff must aver that he has performed or has
always been and continues to be willing to perform his part of
the contract. To insist on mechanical reproduction of the exact
words of the statute would be to insist on the form rather than
the essence.
(iii)

2006

SCC

420 (Motilal

Jain

v.

Ramdasi

Devi

and otehrs)) wherein, the Hon'ble Supreme Court held that


when a major portion of the sale consideration was paid at the
time of execution of the contract, his willingness to pay the
remaining amount is apparent.
(iv) 2003 (12) SCC 160 ( Shyam Singh Daryasingh (dead by
LRs and others) wherein, the Hon'ble Supreme Court held that
the under the provisions of Section 15(b) of the Specific Releif
act, 1963, specific performance of the contract may be obtained
by "any party thereto" or their "representative-in-interest". This
expression clearly includes the transferees and assignees from
the contracting party in whose favour the right exists. Such
right of seeking specific performance would, however, be not
available in terms of the proviso below clause (b) where the
contract provides that the "interest shall not be assigned". The
Apex Court further held that merely because in the documents

Sridhara babu. N

there is mention of "heirs" of the contracting parties but not


their "assignees" or "transferees", the legal rights of assignment
available to the benefit of original contracting party under
section 15(b) of the Act cannot be denied to it.
(v) 1997(7) SCC 452(Habiba Khatoon v. Ubadul Huq and
others) wherein, the Hon'ble Supreme Court held that normally
any interest in the contract could be assigned to any
representative-in-interest who also can enforce the specific
performance of the contract against the contracting party.
However, if the terms of the contract, expressly, or by necessary
implication, prohibited the beneficiary from transferring his
contactual interest to third parties, then only such an assignee
cannot sue for specific performance. Generally speaking, the
benefits of the contract of repurchase must be assignable,
unless the terms of the contract are such as to show that the
rights of repurchase is personal to the vendor.
(vi) 2000 (6) SCC 685 (Ram Niwas (dead through LRs Bano
and others) wherein, the Hon'ble Supreme Court held that a
person may not have actual knowledge of a fact but he may
have notice of it having regard to the definition and Explanation
II of Section 3 of Transfer of Property Act. If the purchasers have
relied upon the assertion of the vendor or on their own
knowledge and abstained form making inquiry into the real
nature of the possession of the tenant, they cannot escape from
the consequences of the deemed notice under Explanation II to
3 of Transfer of Property Act.

Sridhara babu. N

(vii) 2007(1) CTC 505 (Mohideen Sahib v. A.Amea Bi and


others)

wherein,

this

court

held

that

section

places

constructive notice on purchaser about property proposed to be


purchased by him and when owner of property enters into
agreement with plaintiff for sale of property and receives sale
consideration under such agreement and person who attests
such agreement.
(viii) AIR 2000 HP 53 ((Krishna Swarup Bhatnagar v.
Chander Mohan Rewal and another) wherein, a Division
Bench of Himachal Pradesh High Court held that when the
defendant found to have repudiated agreement for sale in view
of his stand in the written statement as well as his acts and
conduct in not accepting notices requiring him to execute sale
deed and get it registered, plaintiff is absolved in such case from
proving that he was ready and willing to perform his part o the
contract. The Division Bench also held that it was more so when
evidence on record showed that plaintiff was ready and willing
to perform his part of contract and had finances to pay balance
sale consideration.

LAXMAN TATYABA KANKATE & ANR. V/S. SMT. TARAMATI


HARISHCHANDRA DHATRAK reported in AIR 2010 SC 3025
whereunder it has been held that mere escalation in price of the
suit land would not be a ground to deny specific performance
and it has been held by the Apex Court as under: "17. It was

Sridhara babu. N

contended on behalf of the appellants that there has been


considerable increase in the price of the land in question.
Though that may be true, it cannot be a ground for denying the
decree of specific performance to the respondent. The learned
First Appellate Court, by a well reasoned judgment, has granted
the relief of specific performance instead of only granting refund
of money, as given by the Trial Court. The judgment of the First
Appellate Court has been upheld by the High court and we see
no reason whatsoever to interfere with the concurrent findings
of facts and law as stated in the judgment under appeal.
However, the learned counsel appearing for the respondent
volunteered and after taking instructions stated that they would
be willing to pay a sum of Rs.1,50,000/- instead of Rs.40,000/as the total sale consideration. We find this offer of the
respondent to be very fair."

FAILURE TO COMPLY PRELIMINARY DECREE DIRECTIONS


AND SUBSEQUENT TIME ALLOWED ORDER SUCH DECREE
CANNOT BE EXECUTED 2015 SC
JUSTICE J. Chelameswar & JUSTICE Pinaki Chandra Ghose of
Supreme court of India in the case of P.R. Yelumalai

vs N.M.

Ravi Decided on 27-03-2015, observed that From a perusal of


the judgment and decree dated 15.2.2007 passed by the Trial
Court, it is clear that the period of one month granted for
depositing the balance consideration started from the date of
decree. From the records it appears that the decree was signed
on 27.2.2007. Therefore, the period of one month started from

Sridhara babu. N

27.2.2007 and ended on 26.3.2007. After extension of two


months was granted, the last date for depositing the amount of
balance consideration fell on 26.5.2007. As the

Civil

Court

was not working on 26.5.2007 and next date i.e., 27.5.2007


was Sunday, the Plaintiff-Buyer was to deposit the amount on
28.5.2007, which was the re-opening day. However, there is
no evidence on record to show that he made efforts to deposit
the

balance

consideration

application on 28.5.2007.

on

28.5.2007

or

made

an

The R.O. is dated 29.5.2007 and

deposit was made on 29.5.2007. Thus, the Plaintiff-Buyer failed


to

comply

with

the

decree and the suit stood dismissed

automatically.
SALE CONSIDERATION ORDERED TO BE REFUNDED WITH
INTEREST CONSIDERING MUTUAL HARDSHIP AND DELAY
2015 SC
JUSTICE V. GOPALA GOWDA & JUSTICE R. BANUMATHI of
Supreme

Court

of

India

in

the

case

of

NANJAPPAN

Vs.RAMASAMY & ANR Decided on 24-02-2015 held that Under


Section 20 of the Specific Relief Act, grant of
performance of contract is discretionary.

Though the

specific
decree

for specific performance is discretionary, yet the court is not


bound to grant such a 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 of law


and capable of correction by a court of appeal and should be
properly exercised keeping in view the settled principles of
law as envisaged in Section 20 of the Act. The jurisdiction of

Sridhara babu. N

decreeing specific performance is a discretion of the court and


it depends upon facts and circumstances of each case. The
court would take into consideration circumstances of each
case, conduct of the parties, recitals in the sale agreement
and the circumstances outside the contract have to be seen.