RSA No.611 of 1982 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. RSA No.611 of 1982 Date of Decision: 6.1.2009 Surinder Kaur and others .....Appellants Vs. Bahadur Singh dead through legal representatives ......Respondent .... CORAM : HON'BLE MR.JUSTICE RAJIVE BHALLA **** Present : Mr.V.K. Jain, Sr.Advocate with Mr.Prashant Vashisht, Advocate for the appellants. Mr. Amarjit Markan, Advocate for the respondent. .... RAJIVE BHALLA, J The defendants-appellants impugn judgements and decrees dated 29.5.1979 and 12.11.1981, passed by the Sub-Judge, Ist Class, Ajnala and the Additional District Judge, Amritsar, decreeing the suit for specific performance, filed by the respondent and dismissing their appeal, respectively. Mohinder Kaur (since deceased), executed an agreement to sell, land measuring 75 Kanals 7 Marlas, situated in Village Isapur, Tehsil Ajnala, Distt. Amritsar, dated 13.5.1964 for a consideration of Rs.5605/- i.e. @ Rs.590/- per acre to Bahadur Singh. She received Rs.1000/- as earnest money and agreed that balance consideration would be paid at the time of registration of the sale deed. It was agreed that the sale deed would be RSA No.611 of 1982 2 executed in July 1965 or within a month of the decision of a civil appeal pending before the Punjab and Haryana High Court. The agreement further provides that as possession has been delivered to the plaintiff- respondent, he would pay customary rent upto execution and registration of the sale deed. The civil appeal, referred to in the agreement, was decided on 17.1.1977. The plaintiff-respondent requested Mohinder Kaur to execute the sale deed but as she failed to appear before the Sub-Registrar, Ajnala, a registered legal notice dated 23.2.1977, was served calling upon her to execute and register the sale deed within seven days. As Mohinder Kaur failed to execute the sale deed, Bahadur Singh filed a suit for specific performance of the agreement to sell. In the alternative, he prayed that a decree be passed for recovery of Rs.5605/- i.e. Rs.1000/- paid as earnest money and Rs.4605/- as damages. Mohinder Kaur, who was arrayed as defendant no.3, filed a written statement raising an objection that the suit is barred by limitation. In addition, she asserted that the agreement is void for fraud, coercion and misrepresentation. It would be necessary to mention that as Mohinder Kaur had already sold the suit land to her daughter and grandson, they were arrayed as defendants no.1 and 2. The plaintiff- respondent filed a replication. After considering the pleadings, the learned trial Court framed the following issues :- “1.Whether the suit is within time ? OPP.” 2. Whether the plaintiff is estopped by his own acts and conduct from filing the present suit ? OPD. 3. Whether the plaintiff has been ready and willing to RSA No.611 of 1982 3 perform his part of the contract ? OPP. 4. Whether the defendant no.3 has been ready and willing to perform her part of the contract ? 5. Whether the agreement dated 13.5.1964 is a void document ? OPD. 6. Whether the defendants no.1 and 2 are bonafide purchasers for valuable consideration and without notice ? OPD. 7. Whether the plaintiff is entitled to the specific performance of the contract for sale dated 13.5.1964 ? 8. If issue no.7 is not proved whether the plaintiff is entitled to the recovery of Rs.5605/- ? OPP. 9. Relief.” Upon an appraisal of the pleadings, a consideration of the evidence adduced and the arguments addressed, the trial Court decreed the suit by granting the prayer for specific performance. Aggrieved by the aforementioned judgement and decree, the appellants filed an appeal. The Additional District Judge, Amritsar, dismissed the appeal and affirmed the findings recorded by the trial Court. Counsel for the appellants submits that the suit was clearly barred by limitation. It is submitted that the cause of action arose when Mohinder Kaur repudiated the agreement by executing a sale deed dated 28.5.1974 in favour of appellants no.1 and 2. The suit filed on 4.6.1977 was, therefore, clearly beyond three years and should have been dismissed summarily. Another argument pressed into service by counsel for the RSA No.611 of 1982 4 appellants is that the agreement contains reciprocal promises, the first requiring Mohinder Kaur to execute a sale deed and the second requiring Bahadur Singh to pay customary rent upto execution of the sale deed. Bahadur Singh,admittedly has not paid any rent, therefore, absolving Mohinder Kaur of her promise to execute the sale deed. It is further submitted that Section 14(d) of the Specific Relief Act postulates that specific performance of a contract cannot be enforced in favour of a person, who violates any essential term of the contract. The respondent has admittedly not paid rent as agreed and has, therefore, violated an essential condition of the contract, thus, disentitling him to any relief. It is also argued that as provided under Section 17(3) of the Indian Contract Act, 1872, a person is said to commit fraud, when he executes a contract without intention to perform his promise. Bahadur Singh admittedly, had no intention to pay customary rent. The contract, therefore, stands vitiated and the suit, therefore, should have been dismissed. The final submission is that the relief of specific performance should be denied as Bahadur Singh has not paid rent and has enjoyed the usufruct of the property for more than three decades. It is further submitted that as the consideration of Rs.5605/- is woefully inadequate, the relief of specific performance should be declined and the respondent should be granted compensation. Counsel for the respondent, on the other hand, submits that concurrent findings of fact recorded by the Courts below do not suffer from any error of law and should, therefore, be upheld. Mohinder Kaur has admitted the execution of the agreement and as held by the Courts below, she has failed to prove her assertion that the agreement was executed by misrepresentation, fraud or coercion. It is further submitted that fraud, RSA No.611 of 1982 5 misrepresentation and coercion are questions of fact that are required to be proved by clear, cogent and reliable pleadings and evidence. Apart from the fact that pleadings are deficient and no evidence has been produced in support of these assertions, Mohinder Kaur has failed to step into the witness box. Even otherwise as the agreement is witnessed by her son Jaswinder Singh, the allegations of fraud, misrepresentation and coercion are baseless and were rightly rejected by the Courts below. It is further submitted that the mere fact that the consideration may appear to be inadequate, after three decades, cannot be a ground to deny specific performance. It is submitted that the agreement consists of separate promises and not reciprocal promises as alleged by the appellants. The promise to pay rent is independent of the promise to execute the sale deed. The failure of Bahadur Singh to pay rent does not absolve Mohinder Kaur of her promise to execute the sale deed but gives rise to a cause to recover rent or to seek ejectment. As regards the plea that specific performance is an equitable and discretionary relief, it is submitted that discretion has to be exercised as per the principles set out in Section 21 of the Specific Relief Act. The grant of specific performance is the rule rather than the exception and cannot be denied merely because the consideration settled in 1964, may seem inadequate in the year 2008. Counsel for the parties are ad-idem that the following questions of law arise for consideration :- 1.Whether the suit is barred by limitation ? 2. Whether failure of Bahadur Singh to pay rent, as agreed, would render the agreement to execute a sale deed null and void ? RSA No.611 of 1982 6 3. Whether the agreement can be said to be void for violation of Section 17(3) of the Indian Contract Act, 1872 and as a result would disentitle the respondents to pray for specific performance? 4. Whether failure to pay rent, as agreed would disentitle Bahadur Singh to the discretionary relief of specific performance? The first question that requires adjudication is, whether the suit is barred by limitation. The agreement required Mohinder Kaur to execute the sale deed in July 1964 or within one month of the decision of an appeal pending before the High Court. The appeal was admittedly decided on 17.1.1977 and the suit was filed on 4.6.1977, clearly within time. The argument that the suit should have been filed within three years from 28.5.1974, the date, on which Mohinder Kaur sold the suit land to her daughter and grandson cannot be accepted. As per the agreement the sale deed was to be executed within one month of the decision of appeal pending before the High Court. The appeal was decided on 17.1.1977, and the suit filed on 4.6.1977 was clearly within time. The collusive sale by Mohinder Kaur to her daughter and grandson on 28.5.1974 would not render the suit barred by time. In this view of the matter, the first question of law is answered by holding that the Courts below were correct in their conclusion that the suit was not barred by time. Answers to the second, third and fourth questions of law, would necessarily depend upon the nature of the promises recorded in the agreement. The agreement, admittedly, contains a promise requiring Mohinder Kaur to execute a sale deed in July 1965 or within a month of the RSA No.611 of 1982 7 decision of the appeal pending before the High Court. Bahadur Singh, on the other hand, promised to pay customary rent, upto the execution and registration of the sale deed, as possession of the land was delivered to him. The agreement, thus, contains two promises, the first binding Mohinder Kaur to execute the sale deed and the second binding Bahadur Singh to pay customary rent. An agreement may contain several promises reciprocal, contingent or separate. Where performance by one party of its promise depends upon the performance by the other party of its promise, parties are said to execute reciprocal promises. Section 51 of the Indian Contract Act, 1872 prescribes that when a contract consists of reciprocal promises to be simultaneously performed, a promisor need not perform his promise unless the promisee is ready and willing to perform his reciprocal promise. An illustration of a reciprocal promise is a promise to sell property for a determined consideration. In such a promise, the promisor agrees to transfer property provided the promisee is ready and willing to pay the consideration so determined. Where the promisee does not express his readiness and willingness to pay the consideration so determined, the promisor would be absolved of his obligation to sell the property. Where however, the agreement consists of separate promises, that do not depend for their performance upon performance of any reciprocal conditions, such promises may be enforced separately. Failure to perform one of the separate promises would not negate the obligation to perform the other promise. The recitals in the agreement, in my considered opinion, disclose two separate promises, to be performed independent of one another. The first is a promise on the part of Mohinder Kaur to execute a sale deed in favour of Bahadur Singh for a determined amount of consideration and the RSA No.611 of 1982 8 second being a promise by Bahadur Singh to pay rent for use and occupation of the suit land. The admitted violation by Bahadur Singh, on account of his failure to pay rent would not absolve Mohinder Kaur of her promise to execute the sale deed. The failure of Bahadur Singh to pay rent would give rise to separate cause of action for recovery of rent or for ejectment. It would require necessary mention that this course was apparently adopted by the appellants. The grounds of appeal, filed before the first appellate Court, contain a positive averment that an application for ejectment was filed on the ground of non payment of rent and the respondent's ejectment was ordered but no further particulars are available. The second question of law is, therefore, answered by holding that failure of Bahadur Singh to pay rent would not absolve Mohinder Kaur of her liability to execute the sale deed, as these promises are separate and not reciprocal. The third question, arises from a submission made by counsel for the appellants that as the respondent had no intention to pay rent, the contract is vitiated for fraud, as set out in Section 17(3) of the Indian Contract Act and therefore the relief of specific performance should be denied as prescribed by Section 14(d) of the Specific Relief Act. For reasons stated herein before, this submission cannot be accepted. The promise to pay rent and its subsequent violation do not render promise to sell the suit property void on the ground of fraud. At best, it would be actionable at the behest of the appellants, as held herein before. The fourth question that requires consideration is whether in the facts and circumstances of the present case, particularly the failure of Bahadur Singh to pay rent for more than four decades, the discretionary relief of specific performance should have been decreed by the courts below RSA No.611 of 1982 9 in his favour. The courts below decreed the suit for specific performance by recording that the execution of the agreement to sell stood proved, and that Bahadur Singh was always ready and willing to pay the consideration amount. The findings, though beyond reproach on facts, would require a considered appraisal particularly in view of the failure of Bahadur Singh to pay rent. The discretion to direct a party to specifically perform a contract is founded on principles of equity, as set out in Section 20 of the Specific Relief Act. Section 20 sets out the circumstances and the manner in which discretion may or may not be exercised and though not exhaustive of the circumstances in which discretion may or may not be exercised, is illustrative of the manner in which a court may exercise discretion. The discretion to accept or reject a prayer for specific performance, indisputably falls to the discretion of a Court and would depend upon the facts and circumstances of each case. It would also be necessary to mention here that while exercising discretion, a Court would be justified in its attempt to balance equities and where the circumstances so warrant, grant adequate compensation in lieu of specific performance or pass such directions that may meet the ends of justice. There is a significant aspect of the case that cannot be ignored. Mohinder Kaur handed over possession to Bahadur Singh in the year 1964. Bahadur Singh agreed to pay customary rent. Admittedly, neither Bahadur Singh nor after his demise, the respondents have paid any rent for the last 44 years. The relief of specific performance is an equitable relief and one who seeks equity must do equity. In an endeavour to do justice between the parties and to balance equities arising in the present case, it RSA No.611 of 1982 10 would be necessary to direct the respondents to deposit the rent from 31.5.1964 upto the execution of the sale deed to be calculated by the Executing Court during execution proceedings and before execution of the sale deed. Any other course in my opinion would perpetuate injustice to the appellants and would enable the respondents to take advantage of their own wrong. The rent shall be paid to the appellants with simple interest @ 6% per annum. The argument that the Courts below should have denied specific performance on the ground that the consideration is woefully inadequate particularly after the lapse of more than four decades cannot be accepted in view of explanation (1) to sub-section (2) of Section 20 of the Specific Relief Act, 1963 which provides that mere inadequacy of consideration shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). The judgements B.R. Mulani V. Dr.A.B. Aswathanarayana and others, AIR 1993 S.C. 1318, Jawahar Lal Wadhwa and another V. Haripada Chakroberty, AIR 1989 S.C. 606, Parakunnan Veetill Joseph's son Mathew V. Nedumbara Kuruvila's son and others, AIR 1987 S.C. 2328, K.S. Vidyanadam and others V. Vairavan, (1997) 3 SCC 1 and Mayawanti V. Kaushalya Devi. (1990) 3 SCC 1, relied upon by the counsel for the appellants are based upon their own peculiar facts, and are therefore, irrelevant for the present case. In view of what has been stated herein above, the appeal is dismissed but the judgements and decrees passed by the Courts below are modified to the extent that the respondent would be required to pay customary rent from 31.5.1964 up to the execution of the sale deed with RSA No.611 of 1982 11 simple interest @ 6% per annum. The customary rent and the interest payable thereon shall be assessed by the executing court and paid by the appellants before the execution of the sale deed. No order as to costs. 6.1.2009 (RAJIVE BHALLA) GS JUDGE