RSA No.4331 of 2011 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.4331 of 2011 (O&M) Date of Decision: 3.11.2011 Gamdoor Singh ...Appellant Vs. Ajaib Singh ...Respondent BEFORE: HON'BLE MR.JUSTICE A.N.JINDAL Present: Mr.R.S.Dhaliwal, Advocate, for the appellant. --- A.N.Jindal, J. CM No.12506-CII of 2011 For the reasons stated in the application, the same is allowed and the appellant is permitted to make the deficiency in court fee good. RSA No.4331 of 2011 The trial court vide judgment and decree dated 4.09.2009, while declining the relief of specific performance, decreed the suit of the plaintiff/respondent (herein referred as the plaintiff) for an alternative relief for recovery of Rs.3,50,000/- along with interest at the rate of 12% per annum, since 7.6.2002 till the date of institution RSA No.4331 of 2011 2 of the suit along with future interest at the rate of 6% per annum. Whereas, the District Judge accepted the appeal and passed the decree for specific performance of the contract. As such it is defendant's appeal. On 7.6.2002, the plaintiff Ajaib Singh entered into an agreement to purchase the land measuring 24 kanals i.e. 480/511th share out of 255 kanals 11 Marlas, as fully detailed in the head-note of the plaint from the defendant at the rate of Rs.20,5000 per acre. Vide said agreement, the defendant after receiving a sum of Rs.3,50,000/- as earnest money from the plaintiff, agreed to execute the sale deed on or before 25.5.2005 on receipt of balance sale consideration of Rs.2,65,000/-. It was also termed vide the said agreement that in case of failure on the part of the defendant to perform his part of the contract, the plaintiff would be entitled to recover rupees seven lacs. The plaintiff has always been ready and willing to perform his part of the contract. He also served upon him a notice on 18.5.2005 so also approached him personally on 20.5.2005 and requested him to come present before the Sub-Registrar on 25.5.2005 i.e. the stipulated date and the plaintiff remained present in the office of Sub-registrar on the date fixed, whereas the defendant failed to fulfill his obligations, which compelled him to file the suit. Defendant contested the cause by filing written statement. Besides, various legal and technical objections raised by him, it was also averred that the agreement is forged and fabricated document, and is without consideration. It was prepared at the RSA No.4331 of 2011 3 instance of M/s Chiman Lal and sons, Commission Agents Pattran, in connivance with the attesting witnesses and one partner of the said firm. It is also the case of the defendant that actually he used to sell his crop through M/s Chiman Lal and Sons but no accounts were rendered to him by the said firm. It was also alleged that since the land under the agreement was already lying mortgage with the bank, as such, the defendant was not competent to sell the land, consequently, he prayed for dismissal of the suit. Replication was also filed. Finding both the parties at variance, the trial court framed the following issues:- 1. Whether defendant executed an agreement for the sale of suit land in favour of plaintiff for consideration of Rs.8,20,000/- after receiving Rs.3,50,000/- as earnest money?OPP 2. Whether plaintiff was and is still ready and willing to perform his part of contract? OPP 3. Whether plaintiff is entitled to the relief of specific performance of contract dated 7.6.2002 or in the alternative recover Rs.7,00,000/- (Rs.3,50,000/- being earnest money and Rs.3,50,000/- as liquidated damages) along with further interest @ 18% per annum as stipulated? OPP 4. Whether plaintiff is entitled to permanent injunction as prayed for?OPP RSA No.4331 of 2011 4 5. Whether plaintiff has no locus standi and cause of action to file the present suit? OPD 6. Whether the suit is not maintainable in the present form? OPD 7. Whether the alleged agreement to sell dated 7.6.2002 is forged and fabricated document? OPD 8. Relief. Both the parties led evidence. The trial court, while -declining the relief of specific performance, passed money decree but the appellate court while accepting the appeal passed the decree for specific performance in the terms of the agreement. Arguments heard. Record perused. Counsel for the appellant defendant has advanced manifold contentions alleging that it is a forged and fabricated document and, even if it is proved, then it indicates only a money transaction and not an agreement for sale to be specifically performed. Execution of agreement could not be proved. So the suit is liable to be dismissed in toto. Having heard the contentions advanced by Mr.R.S.Dhaliwal, the same were found to be without any merit. The execution of the document dated 7.6.2002 and passing of consideration thereunder stand proved through PW 1 and Sanjeev Kumar, an attesting witness PW 2. PW 3 Gulab Singh Stamp Vendor has also stated that the defendant Gamdoor Singh RSA No.4331 of 2011 5 had purchased the stamp papers from him for the purpose of execution of the agreement and he had made the entry in this regard in his register Ex.PW 3/2. That apart, Dr.Inderjit Singh, Handwriting and Finger Prints Expert (PW 4), who compared the disputed thumb impressions of the defendant Gamdoor Singh on the agreement Ex.P.1 with the admitted specimen thumb impressions of the defendant on the power of attorney and written statement, has opined the same to be that of one and the same person. No particulars of fraud as alleged have been proved on the record by any cogent evidence. As such the agreement cannot be said to be fabricated or forged one. As regards the readiness and willingness, it may be observed that the plaintiff has specifically stated that he was ready and willing to perform his part of the agreement and requested the defendant to perform his part of the contract. Defendant even did not respond to the notice issued by him. The plaintiff had also appeared before the Sub-Registrar on the stipulated date but the defendant did not turn up. Therefore, readiness and willingness to perform the contract stand fully proved. The bare argument that since the land was already mortgaged with Punjab & Sind Bank, therefore, the defendant had no right to sell the property, in this regard it may also be observed that the mere fact that the land was mortgaged with the bank, relief of specific performance could not be denied because the encumbrance RSA No.4331 of 2011 6 attached to the land could be removed by the defendant before effecting the sale and no objection could be obtained from the bank or the prospective vendee stepping into the shoes of the mortgagor, is liable to pay the mortgage money if the terms are so settled. It is also observed that when the property, already under mortgage, is sold to some other person, the purchaser steps into the shoes of mortgagor and is liable to pay the mortgage amount. It was also observed that the mortgage does not create any further right on the creditor to debar the owner of the property from selling it even if it was under attachment at the time of sale. At the most safeguard to be created in such a situation is to secure 'no objection certificate' before execution of the sale deed. Learned Civil Judge did not exercise the judicial discretion while declining the relief of specific performance. Though the relief of specific performance is a discretionary in nature yet the court has to exercise its discretion judiciously. It has also been observed time and again that the court at the time of granting such relief would keep in mind the justice, equity and good conscience and also the comparative hardship to be suffered by the parties. The first appellate court appears to have decided all the issues by appreciating the evidence in the right perspective. It is also well settled that in cases of contract for sale of immovable property the grant of relief of specific performance is a rule and its refusal an exception based on valid and cogent grounds. RSA No.4331 of 2011 7 Further, the defendant cannot take advantage of his own wrong and then plead that decree for specific performance would be an unfair advantage to the plaintiff. Escalation of price during the period may be a relevant consideration under certain circumstances for either refusing the decree for specific performance or for decreeing the specific performance with a direction to the plaintiff to pay an additional amount to the defendant and compensate him, it would depend on the facts and circumstances of each case. It is also beyond doubt that relief of specific performance is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the specific performance; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Section 20 (2) of the Specific Relief Act, 1963 refers to certain circumstances where the court shall exercise such discretion. If under the terms of the contract, the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff. It depends on the facts of each and every case that the court while using its inquisitive eye while sitting in the arm chair of a RSA No.4331 of 2011 8 prudent vendor and considering that vendee was standing before him segregate the cases of specific performance from the cases of ordinary money transactions; the documents obtained by coercion, fraud, oppression and executed under compulsion, and make out the real intent and purport of the document, however, neither any law in absolute terms to that effect has been laid down by Apex Court nor is discernible. In the case of P.D.Souza V. Shondrilo Naidu, 2004 (3) RCR (Civil) 668 SC it has been held that Explanation-I appended to section 20 clearly stipulated that mere fact that the contract is onerous to the defendant or improvident in its nature would not constitute an unfair advantage within the meaning of Section 20 (2). In the case of Mademsetty Satyanarayana V. Yelloji Rao and Ors. AIR 1965 SC 1405 it has been held as under:- “ 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; that in cases where one of the three circumstances mentioned in section 20(2) is established, no question of discretion arises. Hence, in this case, we are required to examine, on facts, whether the circumstances in section 20(2)(a) or Section 20(2)(b) are established. The delay in performance of the contract due to pendency of proceedings in Court cannot by itself be a ground to refuse relief of specific performance in absence of any compelling circumstances to take a contrary view. RSA No.4331 of 2011 9 The respondent herein has always been ready and willing to perform his part of the contract at all stages. He has not taken any advantage of his own wrong. The respondent herein is in no way responsible for the delay at any stage of the proceedings. Having thoroughly examined the defence plea set up by the defendant, the same stands unsubstantiated by any cogent and convincing evidence. Had there been any truth in the pleas set up by him, then he would have reacted forthwith on coming to know about the agreement. The defendant even did not react to the notice. In these circumstances, the discretion could not be exercised in favour of the appellant but the interest of the Bank could be safeguarded. In the facts and circumstances of this case grant of decree for specific performance will not be inequitable, unfair or unreasonable. The vendee is not going to get an unfair advantage over the defendant or he would be put to special hardship. Consequently, no exception could be made to the judgment passed by the first appellate court. No substantial question of law arises for consideration in the present appeal; hence the same is dismissed in limine. (A.N.Jindal) 3.11.2011 Judge rp