CM No.8842-C of 2008 & RSA No.2999 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CM No.8842-C of 2008 & RSA NO.2999 OF 2008 DECIDED ON : 20.10.2009 Pratap Singh & others ...Appellants versus Rakam Singh & others ...Respondents CORAM : HON'BLE MR. JUSTICE AJAY TEWARI Present : Mr. Ashish Aggarwal, Advocate for the appellants. Mr. J.S.Dahiya, Advocate for the respondents No.1 to 3. Mr. D.S.Malik, Advocate for respondent No.4. **** 1.Whether Reporters of local newspapers may be allowed to see the judgment? 2.To be referred to the reporters or not? 3.Whether the judgment should be reported in the Digest? AJAY TEWARI, J. (ORAL) This appeal has been filed against the concurrent judgments of the courts below decreeing the suit of the respondent for specific performance of a part of the agreement to sell the 40 kanals of land. Learned counsel for the respondents states that the appellant had obtained a sum of Rs.6,50,000/- as advance for the same. However, even while representing himself to be owner of 40 kanals, he was actually owner of only 25 kanals 6 marlas of land, the rest having been transferred (i.e. 270/766 share) to his sons by way of a prior relinquishment. In fact, after CM No.8842-C of 2008 & RSA No.2999 of 2008 -2- entering into the agreement to sell, the appellant had made another relinquishment deed with regard to the remaining land meansuring 25 kanals 6 marlas. The plea of the appellant was that in fact no sale agreement had been executed and the whole transaction was a result of fraud. Both the Courts below found that the plea regarding fraud was not established and that the agreement to sell was duly proved. The following questions have been proposed: i) Whether a decree for specific performance could be passed in the matter especially when the agreement is liable to be declared void as the area of the suit land sought to be sold is different from the area mentioned therein and due to the difference in the area of which admittedly the defendant is not the owner, the agreement in question is liable to be declared void in view of the law laid down by the Hon'ble Supreme Court in Tarsem Singh vs. Sukhminder Singh, 1998(2) PLJ 62 (SC)? ii)Whether the suit was liable to be dismissed as not maintainable as defendant No.1 is admittedly not the owner of the suit land and even the Relinquishment Deed executed prior to the filing of the suit in favour of defendants No.2 & 3 has not been impugned in the suit by the plaintiffs? iii)Whether the suit for specific performance was also liable to be dismissed as the transferor i.e. Appellant CM No.8842-C of 2008 & RSA No.2999 of 2008 -3- No.1 had not valid title in himself and no legal contract came into existence in view of Section 20 of the Indian Contract Act and also in view of the law laid down by this Hon'ble Court in Dalip Singh vs. Bachan Singh, 2001(1) PLJ 591? iv)Whether the agreement in question is based on fraud and misrepresentation and from the statement of the plaintiff as PW-3, it is apparent that the writing was executed for giving land on lease and there was no intention to execute an agreement of sale and this aspect of the matter has not been considered and no finding returned in this regard regarding fraud and thus the courts below have erred in decree the suit in question? v)Whether it was incumbent upon the courts below to have returned the finding regarding fraud and validity of the agreement in question especially when the plea of fraud has been raised in the written statement and the particulars have been given in the evidence by the defendants-appellants? vi)Whether in view of the provisions of Section 25 of the Contract Act, the agreement in question is not proved as the passing of consideration has not been proved in the present case? vii)Whether the plaintiffs-respondents have withheld the best evidence and have not proved the source CM No.8842-C of 2008 & RSA No.2999 of 2008 -4- from where they paid the amount of Rs.6,50,000/- especially when all the witnesses show their ignorance regarding payment of amount and there is no evidence on the record in the shape of bank entry etc. to show the source of amount paid? viii)Whether the entire approach of the ld. Courts below to the present case is patently illegal, ultra vires, void and without jurisdiction and the impugned judgments and decrees are liable to be set aside? ix)Whether grave and manifest injustice has been caused to the appellants in the matter? Questions No.(iv) to (vii) are pure questions of fact. Learned counsel has not been able to persuade me that the findings recorded thereon are either based on no evidence or on such misreading of evidence, which render them so perverse as to justify the interference under Section 100 of CPC. Questions No.(i) to (iii) are related. Learned counsel for the appellant has relied upon the decision of Hon'ble Supreme Court in Rachakonda Narayana vs. Ponthala Parvathamma & another, reported as 2001 volume 8 SSC 173 and particularly on para No.8 thereto, which is as follows: “A perusal of sub section (3) of Section 12 shows that the first part of the said provisions mandates refusal of specific performance of a contract on certain conditions. However, the latter part of the provisions permits a Court to direct the party in default to CM No.8842-C of 2008 & RSA No.2999 of 2008 -5- perform specifically so much of his part of the contract as he can perform if the other party pays or has paid the agreed consideration for the whole of the contract and relinquishes all claims to the performance of the remaining part of the contract and all the rights to compensation for the loss sustained by him. If a suit is laid by the other party, the Court may direct the defaulting party to perform that part of the contract which is performable on satisfying to pre-conditions i.e. (i) the plaintiff pays or has already paid the whole of the consideration amount under the agreement, and that (ii) the plaintiff relinquishes all claims to the performance of the other part of the contract which the defaulting party is incapable to perform and all rights to compensation for loss sustained by him. Thus, the ingredients which would attract the specific performance of the part of the contract, are :(i) if a party to an agreement is unable to perform a part of the contract, he is to be treated as defaulting party to that extent, and (ii) the other party to an agreement must, in a suit for such specific performance, either pay or has paid the whole of the agreed amount, for that part of the contract which is capable of being performed by the defaulting party and also relinquish his claim in respect of the other part of the contract which the defaulting party is not capable to perform and relinquishes the claim of compensation in respect of loss sustained by him. If such ingredients are satisfied the discretionary relief of specific performance is ordinarily granted unless there is delay or laches or any other disability on the part of the other party.” Section 12 of the Specific Relief Act, 1963 is to the following effect: CM No.8842-C of 2008 & RSA No.2999 of 2008 -6- 1.Except as otherwise hereinafter provided in this section the court shall not direct the specific performance of a part of a contract. 2.Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed by only a small proportion to the whole in value and admits of compensation in money, the court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency. 3.Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either - a) forms a considerable part of the whole, though admitting of compensation in money; or b) does not admit of compensation in money, he is not entitled to obtain a decree for specific performance; but the court may, at the suit of other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party- (i) in a case falling under clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and a CM No.8842-C of 2008 & RSA No.2999 of 2008 -7- case falling under clause (b), [pays or had paid] the consideration for the whole of the contract without any abatement; and (ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant. 4. When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part. Learned counsel has argued that even as per the best case of the respondent, his claim would be covered by sub clause B of Clause III of Section 12 and thus, the respondent could succeeded only if he had offered to pay the entire amount. Another argument which has been made is that on one of the khasra no. mentioned in the agreement, the revenue record shows that a house exists on that land. It is the contention of the learned counsel for the appellant that it was incumbent upon the respondent to lead evidence as to the value of the house and to show what was the proportionate price thereof. As regards the first argument, learned counsel for the appellant has not been CM No.8842-C of 2008 & RSA No.2999 of 2008 -8- able to persuade me that the part which has been rendered unperformable does not admit of compensation in money. As regards the second argument, it may be noticed that the entire land was agreed to be sold by the appellant at the rate of Rs.2 lac per acre. The appellant had himself not indicated anywhere in the agreement to sell that there was some house on the land in dispute and that the value thereof had been factored into the price of the land. In any case, even if it is accepted that the value of the house was factored into the cost of the land, this fact would actually mitilate against the appellant because then the price of the land per se would be actually less than Rs.2 lac per acre and thus, the appellant would not be entitled to abatement at the rate of Rs.2 lacs per acre (for that portion of the land which he had relinquished prior to the agreement to sell). Yet another argument raised by the learned counsel for the appellant is that one of the parcels of the land mentioned in the agreement viz Rec. No.114 Khasra No.1 (6 kanals 18 marlas) was not the ownership of the appellant at all and that the ld. Courts below have erred in including another parcel of land owned by the appellant to make up 25 kanals 6 marlas. Learned counsel for the respondent has countered by arguing that in fact it was a case of clerical mistake since the land owned by the appellant was in Rec. No.122 and that it bore the same Khasra No.1 and the same area (6 kanals 18 marlas). However, there is no explanation why this alleged mistake in the agreement to sell CM No.8842-C of 2008 & RSA No.2999 of 2008 -9- was never sought to be explained either in the detailed plaint or at any subsequent stage and in fact this explanation has been offered for the first time in the appeal. Consequently, it has to be held that the land comprised in Rec. No.122 Khasra No.1 (6 kanals 18 marlas) has to be excluded from that portion of the land for which the appellant is bound to execute the sale deed. This reduction in the area to be sold would necessarily mean that the respondent is entitled to receive some amount from the appellant. It cannot be disputed that the appellant has utilised illegally and dishonestly the amount of the respondent since 16.02.2001. In these circumstances, it is declared that the respondent will be entitled to refund of his balance amount with interest @ 12% per annum. The land which has been excluded shall be under lien for the recovery of the said amount. With these modifications, the judgments and decrees of the Courts below are upheld and this appeal and all miscellaneous applications are disposed of. October 20, 2009 (AJAY TEWARI) sonia JUDGE