RSA No.3106 of 1987 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.3106 of 1987 (O&M) Date of decision: 1.4.2010 Kulwant Singh and another ............ Appellants Versus Bhinder Singh and others .......... Respondents CORAM: HON'BLE MR. JUSTICE ALOK SINGH -.- Present: Mr. Gur Rattan Pal Singh, Advocate for the appellants. Mr. Amarjeet Markan, Advocate for the respondents. 1. Whether Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporters or not? Yes 3. Whether the judgment should be reported in the Digest? Yes ALOK SINGH, J. (ORAL) 1. This second appeal is filed by the plaintiffs/appellants challenging judgment and decree dated 7.5.1985 passed by learned trial Court as well as judgment and decree dated 17.7.1987 passed by the first Appellate Court/Addl. District Judge, Ludhiana. 2. The brief facts of the present case are that the plaintiffs/appellants have filed suit for specific performance of the contract on the basis of the agreement to sell dated 16.9.1971 executed by the defendants pertaining to the suit property measuring RSA No.3106 of 1987 (O&M) -2- 2 kanals 11 marlas. Plaintiffs also sought relief of recovery of advance money with damages in alternative. 3. The allegations in the plaint inter-alia are that defendants have entered into the agreement to sell with the plaintiffs pertaining to suit land for total consideration of Rs.3600/-; Plaintiffs have paid Rs.2800/- as an earnest money; Defendants have agreed to execute sale deed in favour of the plaintiffs after receiving balance sale consideration of Rs.700/- within two months from the date of the sanction of the mutation in favour of the defendants over the suit land; Defendants failed to honour their part of contract; hence the suit. 4. Defendants filed their written statement and denied the factum of agreement to sell. Defendants also took formal and legal pleas. 5. Learned trial Court has recorded finding of fact that agreement to sell dated 16.9.1971 is proved to be genuine and valid document. Learned trial Court however dismissed the suit of the plaintiffs for grant of decree for specific performance and for recovery of the advance money alongwith the damages for one simple reason that plaintiffs could not prove readiness and willingness. However, learned trial Court has passed decree of injunction in favour of the plaintiffs against the defendants restraining the defendants not to interfere in the possession of the plaintiffs and not to alienate the property in dispute in favour of the third party. 6. Feeling aggrieved from the judgment and decree passed by the learned trial Court dated 7.5.1985, plaintiffs preferred first RSA No.3106 of 1987 (O&M) -3- appeal. First appeal was heard and decided by the learned Addl. District Judge, Ludhiana vide impugned judgment dated 17.7.1987. Learned first Appellate Court agreed with the findings of the learned trial Court that plaintiffs could not prove readiness and willingness. Learned first Appellate Court therefore dismissed the appeal filed by the plaintiffs/appellants. 7. Feeling aggrieved from the judgments and decrees passed by both the Courts below refusing to grant relief for specific performance of the contract plaintiffs have approached this Court by way of filing second appeal under Section 100 C.P.C. 8. Having heard learned Counsel for the parties and having perused the record, in my opinion, following substantial questions of law arise for just and fair decision of this appeal:- i) As to whether plaintiffs could prove readiness and willingness? ii) As to whether on proving agreement to sell, even if willingness and readiness is not proved, Court ought to have granted decree of refund of earnest money alongwith damages? iii) As to whether relief for specific performance is discretionary and can be substituted by any appropriate relief? 9. Both the substantial questions of law No.(i) and (ii) are interconnected and are being taken up together. This is now well settled position of law that question of readiness and willingness is to RSA No.3106 of 1987 (O&M) -4- be answered after gathering entire evidence and pleadings and conduct of the parties together. It is also well settled principle of law that no hyper-technical view should be taken on the question of readiness and willingness. If plaintiffs are approaching the Court and that too within time and paying Court fee and requesting the defendants to execute the sale deed after receiving the balance amount, it shows readiness and willingness on the part of the plaintiffs/appellants. Having perused entire pleadings, conduct and evidence available on record, particularly important aspect i.e. prior to the filing of the present suit for specific performance, plaintiffs also filed suit for permanent injunction restraining the defendants not to create third party interest over the property in dispute, I find plaintiffs are able to prove readiness and willingness. 10. Both the Courts below found agreement to sell having been proved. In the humble opinion of this Court if agreement to sell stands proved, decree for refund of earnest/advance money should be granted even if question of readiness-willingness is not proved. The moment agreement to sell stands proved, in the event of non grant of specific performance, vendee is at least entitled for refund of earnest money unless time was made essence of the contract with condition of forfeiture of advance paid by vendee. Both substantial questions of law are answered in favour of appellants. 11. To answer the substantial question of law No.(iii), this Court thinks to reproduce Section 20 of the Specific Relief Act:- “20. Discretion as to decreeing specific performance:- (1) The jurisdiction to decree specific RSA No.3106 of 1987 (O&M) -5- performance is discretionary, and the court is not bound to grant such 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 and capable of correction by a court of appeal. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance- (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. Explanation1.-Mere inadequacy of 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). RSA No.3106 of 1987 (O&M) -6- Explanation 2.-The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.” 12. After simple reading of Section 20 of the Act, this Court has no doubt to hold that Court is not bound to grant such relief merely because it is lawful to do so. Discretion of the Court in the suit for specific performance of the contract should be guided by principles of reasonableness and judicial principles. In a suit for specific performance of the Contract, Court has to judge/weigh the equity and hardship between the parties beside the requirements as provided under sub-Section (2)(a), (b), (c), (3) and (4) of Section 20 of the Act. 13. Although substantial questions of law No.(i) and (ii) are answered in favour of the appellants/plaintiffs but keeping in mind RSA No.3106 of 1987 (O&M) -7- principles of equity, hardship and particularly principle of Section 20 of the Specific Relief Act, this Court is of the opinion that grant of decree for specific performance at this junction particularly after almost 29 years would not be justified. This Court finds one more reason not to grant decree for specific performance after long gap of 29 years i.e. after the agreement in question third party interest was created over the property in dispute. 14. In view of this, this Court called upon both the learned Counsel to suggest what should be the amount which can be directed to be paid to the appellants/plaintiffs. Mr. Gur Rattan Pal Singh, learned Counsel appearing for the appellants/plaintiffs fairly stated that appellants wanted to recover Rs.5600/- from the defendants (advance money + damages). Now after almost 29 years, amount should be increased adding bank interest thereon which would have been accrued till date. 15. Mr. Amarjeet Markan, learned Counsel for the respondents with all fairness submitted that suggestion made by learned Counsel for the appellants is justified. 16. This Court must record its appreciation for the fairness shown by both the learned Counsel appearing for the parties. 17. The present appeal is allowed. With the consent of both the counsel, decrees passed by both the Courts below are modified to the extent that suit of the plaintiffs shall stand decreed for recovery of Rs.30,000/-. Plaintiffs shall also be entitled for interest thereon @ 6% per annum from the date of decree till the actual recovery. Property in question shall remain with the defendants. No order as to RSA No.3106 of 1987 (O&M) -8- costs. ( ALOK SINGH ) 01st April, 2010 JUDGE ashish