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Suit for Specific Performance

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2020 SCeJ 1758

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Facts:  Agreement was a composite agreement for sale of 300 sq. yards of land at a lump sum consideration of Rs.75,000/-.  Court held  that the Vendee was entitled to relief of specific performance in respect of 200 square yards of land out of 300 sq yards covered by the Agreement (that is, less 100 sq. yards sold earlier to P by a registered deed of conveyance), at a reduced consideration on pro rata basis of Rs 50, 0000/-. Order upheld.

 

(i) Specific Relief Act 1963 Section 10 (amended) -  After the amendment  1.10.2018 , relief of specific performance of a contract is no longer discretionary  - After the amendment of Section 10 of, the words "specific performance of any contract may, in the discretion of the Court, be enforced" have been substituted with the words "specific performance of a contract shall be enforced subject to ..." -  Court is, now obliged to enforce the specific performance of a contract, subject to the provisions of sub-section (2) of Section 11, Section 14 and Section 16 of the Section 10. #2020 SCeJ 1758 [Para 70]

 

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(ii) Suit for specific performance – Relief of – Prior to amendment  1.10.2018 -  Discretionary - Relief of specific performance of an agreement, was at all material times, equitable, discretionary relief, governed by the provisions of the Specific Relief Act, 1963 - Even though the power of the Court to direct specific performance of an agreement may have been discretionary, such power could not be arbitrary -  The discretion had necessarily to be exercised in accordance with sound and reasonable judicial principles. #2020 SCeJ 1758 [Para 67]

 

 

(iii) Suit for Specific Performance – Time granted by trial court  to deposit amount - Appeal  - Extention of  - Trial Court had directed the Vendor to pay the balance of Rs.5,000/- on or before 15.4.1994, failing which the suit for specific performance would stand dismissed -  However, any time granted by the Court at its discretion, can always be extended by the Court - In any case, the Vendor had filed an appeal against the decree in the suit for specific performance - The Vendee, who had been litigating for about 10 years by April, 1994 and had already paid Rs.45,000/- over 10 years ago, but not got the suit land, could not be expected to put in more money, until the decree assumed finality, upon disposal of the appeal -  Since there was an appeal of the Vendor pending, the failure of the Vendor to put in Rs.5,000/- within the time stipulated by Court, would not, in itself, disentitle the Vendor to the relief of specific performance -  It was for the Court to decide whether or not to extend the time for payment of Rs.5,000/- -  The Appellate Court rightly expressed its discretion in favour of the Vendee. #2020 SCeJ 1758 [Para 62, 63, 64]

 

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(iv) Suit for specific performance - Transferee  - Necessary party  - A transferee to whom the subject matter of a sale agreement or part thereof is transferred, is a necessary party to a suit for specific performance  – On facts, unfortunately, the Vendee omitted to implead P to whom part of the land had been transferred though a registered sale deed - By the time she filed an application to implead P in 1989, the suit for specific performance of the agreement (dated 21.3.1984) had become barred by limitation as against P – Limitation being 3 years  - Vendee knew of the registered deed of conveyance in favour of P, when she instituted the suit in 1984 - Vendee neither amended her pleadings in the plaint nor amended the prayers – P was simply added defendant p  The Court adding Pratap Reddy as defendant in the suit for specific performance, did not make any direction in terms of the proviso to Section 21(1) of the Limitation Act, that the suit against P be deemed to be instituted at any earlier date. There could therefore be no question of any relief against P in the suit for specific performance - Limitation Act, 1963 Section 21(1). #2020 SCeJ 1758 [Para 79, 81, 83]

 

(v) Suit for declaration – Executant of document  not impleaded  - Suit that the Deed of conveyance by the Vendor in favour of P was null and void - Vendee did not implead the Vendor as defendant  - Suit has rightly been dismissed for non joinder of the Vendor as defendant -  There could be no question of a document being adjudged null and void without impleading the executant of the document, as defendant. #2020 SCeJ 1758 [Para 84]

Held, the suit for specific performance being time barred against P, and the suit against P also having been dismissed for non joinder of the Vendor, there could be no question of nullifying the rights that had accrued to P, pursuant to the Deed of Conveyance executed by the Vendor transferring 100 sq. yards of the suit land to P. Moreover, there was apparently an agreement in writing executed between the Vendor and P on before execution of the agreement between the Vendor and the Vendee. [Para 85]

 

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(vi) Pleadings - Onus of proof lies on the party who makes an allegation -  It was for the Vendor to establish that the agreement was subject to the condition as alleged by the Vendor, that the Vendee and/or her husband would negotiate with P to get his earlier agreement with the Vendor cancelled -  The Vendor failed to discharge her onus of proving that there was such a condition in the agreement - Suit for Specific Performance. #2020 SCeJ 1758 [Para 59]

 

(vii) Specific Relief Act, 1963, Section 12 - Suit for specific performance – Allowed in part – Where a party to the contract is unable to perform the whole of his part of the contract, the Court may, in the circumstances mentioned in Section 12 of the Specific Relief Act, 1963 - Direct the specific performance of so much of the contract, as can be performed, particularly where the value of the part of the contract left unperformed would be small in proportion to the total value of the contract and admits of compensation - The Court may, under Section 12 of the Specific Relief Act  direct the party in default to perform specifically, so much of his part of the contract, as he can perform, provided the other party pays or has paid the consideration for the whole of the contract, reduced by the consideration for the part which must be left unperformed. #2020 SCeJ 1758 [Para 73, 74]

 

(viii) Agreement to sell immoveable property - Generally creates a right in personam in favour of the Vendee -  The Vendee acquires a legitimate right to enforce specific performance of the agreement - Suit for specific performance. #2020 SCeJ 1758 [Para 71]

 

(ix) Suit for Specific performance  -  Limitation Act, 1963  - Under the Limitation Act, 1963 the period of limitation for filing a suit for specific performance is three years from the date fixed for performance of the contract, or if no date is fixed, then three years from the date on which the Vendee is put to notice of refusal to perform the agreement  - Limitation Act, 1963  Item No.54 in Part II of the Schedule. #2020 SCeJ 1758 [Para 81].

 

(x) Civil Procedure Code, 1908 (V of 1908) Order II Rule 2 - Clubbing of suits for hearing them together and disposal thereof by a common judgment and order is for practical reasons -  Such clubbing together of the suits do not convert the suits into one action - The suits retain their separate identity - The clubbing together is done for convenience, inter alia, to save time, costs, repetition of procedures and to avoid conflicting judgments. Mahalaxmi Coop. Housing Society Ltd. and Ors. v. Ashabhai Atmaram Patel (supra), followed.  #2020 SCeJ 1758 [Para 91]

 

(xi) Civil Procedure Code, 1908 (V of 1908) Order II Rule 2 -  If the plea of bar under Order II Rule 2 is not taken, the Court should not suo moto decide the plea  - Court is not under an obligation to reject the subsequent suit, irrespective of whether objection of bar under Order II Rule 2 of the CPC was raised or not - The plea of bar under Order II Rule 2 of the CPC is a technical plea which has to be pleaded and satisfactorily established - Plea cannot be raised before Supreme Court if not raised in the High Court. R. A. Oswal v. Deepak Jewellers, (1999) 6 SCC 40 , Dalip Singh v. Mehar Singh Rathee and Ors., (2004) 7 SCC 650, followed. #2020 SCeJ 1758 [Para 92, 93]