SUKHBIR versus AJIT SINGH
[2021] 4 S.C.R. 169, Supreme Court of India, 2021
Outcome: Case Partly allowed (Granted)
Segment: Facts
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SUKHBIR
v.
AJIT SINGH
(Civil Appeal No. 1653 of 2021)
APRIL 30, 2021
[DR. DHANANJAYA Y CHANDRACHUD AND
M. R. SHAH, JJ.]
Specific Relief Act, 1963: s.21 – Power to award compensation
– Agreement to sell land – Plaintiff-purchaser paid Rs.31.5 lakhs
out of Rs.32 lakhs – Failure on part of defendant to execute sale
deed in terms of the agreement of sale – Suit for specific performance
– During pendency of suit, land in question acquired under Land
Acquisition Act – Trial court passed decree for specific performance
directing defendant to execute sale deed on receiving balance
consideration – First appellate court upheld the order of trial court
– High Court held that plaintiff shall be deemed to have stepped
into the shoes of the defendant-original land owner and shall be
entitled to entire amount of compensation along with solatium and
interest etc. owing to the acquisition of the land in question – On
appeal, held: There are concurrent findings of fact recorded by all
the courts below on the execution of the agreement to sell by the
defendant in favour of the plaintiff; payment of Rs. 31.50 lakhs
towards part sale consideration and the readiness and willingness
of the plaintiff to pay the balance sale consideration of Rs. 50,000/
- – Therefore, as such, the plaintiff is entitled to the decree for
specific performance – However, in view of the fact that before the
final decree could be passed by trial court, the land in question
came to be acquired and, therefore, plaintiff would be deemed to be
in the shoes of the defendant and shall be entitled to the amount of
compensation, determined and awarded under the Land Acquisition
Act – Submission of defendant has no substance that as
compensation was not specifically prayed by the plaintiff in the
suit, the plaintiff shall not be entitled to any amount of compensation
even considering s.21 of the Specific Relief Act – The decree for
compensation is passed as an alternate decree and in lieu of the
decree for specific performance – High Court rightly held that the
plaintiff shall be entitled to the entire amount of compensation
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awarded together with interest and solatium – However, at the same
time, the defendant-original land owner shall also be entitled to the
deduction therefrom of money value of the services, time and energy
expended in pursuing the claims of compensation and the
expenditure incurred by him in the litigation culminating in the
award.
Partly allowing the appeal, the Court
HELD: 1.1 There are concurrent findings of fact recorded
by all the courts below on the execution of the agreement to sell
by the defendant in favour of the plaintiff; payment of
Rs. 31,50,000/- towards part sale consideration by the plaintiff to
the defendant (out of the total sale consideration of Rs. 32 lakhs)
and the readiness and willingness of the plaintiff to pay the balance
sale consideration of Rs. 50,000/-. Therefore, as such, the plaintiff
shall be entitled to the decree for specific performance. However,
in view of the fact that before the final decree could be passed by
the trial court, the land in question came to be acquired under
the provisions of the Land Acquisition Act and therefore the
question arose before the High Court what relief the plaintiff shall
be entitled to in the event the decree of specific performance is
required to be modified by an alternative decree. [Para 7][175-
H; 176-A-C]
1.2 Applying the law laid down by this Court in Jagdish Singh
and Urmila Devi to the facts of the case in hand, it cannot be said
that the High
Court has committed any error in modifying the
decree for specific performance. As rightly held by the High Court,
as such, the plaintiff will be deemed to be in the shoes of the
defendant and therefore shall be entitled to the amount of
compensation, determined and awarded under the provisions of
the Land Acquisition Act. [Para 9][178-B-C]
Jagdish Singh v. Natthu Singh (1992) 1 SCC 647 :
[1991] 2 Suppl. SCR 567; Urmila Devi v. Deity, Mandir
Shree Chamunda Devi (2018) 2 SCC 284 : [2018] 1
SCR 797 – relied on.
2. Now so far as the submission on behalf of the appellant
that as compensation has not been specifically prayed by the
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plaintiff in the suit, the plaintiff shall not be entitled to any amount
of compensation even considering Section 21 of the Specific Relief
Act. The aforesaid has no substance. The decree for compensation
is passed as an alternate decree and in lieu of the decree for
specific performance. [Para 10][178-C-D]
3. Now so far as the amount of compensation is concerned,
as observed by this Court in the case of Jagdish Singh, the
compensation determined and awarded under the Land
Acquisition Act may safely be taken into consideration. Therefore,
the High Court has rightly observed and held that the plaintiff
shall be entitled to the entire amount of compensation awarded
under the Land Acquisition Act together with interest and
solatium. However, at the same time, the defendant – original
land owner shall also be entitled to the deduction therefrom of
money value of the services, time and energy expended in
pursuing the claims of compensation and the expenditure incurred
by him in the litigation culminating in the award. As such, nothing
is on record to suggest that any expenses have been incurred by
the appellant. However, in the facts and circumstances of the
case and considering the decisions of this Court in the cases of
Jagdish Singh and Urmila Devi, ends of justice will be served if
the plaintiff is awarded the entire amount of compensation
determined under the Land Acquisition Act together with interest
and solatium less Rs. 2,50,000/- + Rs.50,000/-
(towards the
balance sale consideration). [Para 11][178-D-H]
Case Law Reference
[1991] 2 Suppl. SCR 567 
relied on
Para 3.1
[2018] 1 SCR 797  
relied on
Para 6
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1653
of 2021.
From the Judgment and Order dated 23.09.2016 of the High Court
of Punjab and Haryana at Chandigarh in RSA No. 4848 of 2016.
Sushil Sardana, Shafik Ahmed, Kaushal Yadav, Advs. for the
Appellant.
Rakesh Talukdar, Abhimanyu Tewari, Ankit Jaglan, Ashray Chopra,
Advs. for the Respondent.
SUKHBIR v. AJIT SINGH
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The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 23.09.2016 passed by the High Court of Punjab and
Haryana at Chandigarh in R.S.A. No. 4848/2016, by which the High
Court has disposed of the said second appeal modifying the judgment
and decree for specific performance qua agreement to sell which was
in favour of the original plaintiff to the extent holding that the respondent-
original plaintiff shall be deemed to have stepped into the shoes of the
vendor and shall be entitled to the entire amount of compensation along
with solatium and interest etc. owing to the acquisition of the land, the
original defendant has preferred the present appeal.
2. The facts leading to the present appeal in nutshell are as under:
That an agreement to sell was executed by the appellant – original
defendant (hereinafter referred to as the ‘defendant’) in favour of the
respondent – original plaintiff (hereinafter referred to as the ‘plaintiff’)
on 9.3.2010 with respect to the land in question for a total sale
consideration of Rs. 32 lakhs. That out of the total sale consideration of
Rs. 32 lakhs, the plaintiff paid Rs. 31, 50,000/- to the defendant. That as
per the agreement the sale deed was to be executed on 8.7.2010. Upon
failure of the defendant to execute the sale deed, the plaintiff served a
legal notice dated 13.7.2020 requesting the defendant
to remain present
at Sub-Registrar’s office on 6.8.2010 to execute the sale deed. But instead
of remaining present on the said date at the office of the Sub-Registrar,
the defendant refused to do so on 4.8.2010. That thereafter the plaintiff
instituted a suit on 5.8.2010 being Civil Suit No. RBT-34/2010 in the
Court of learned Civil Judge, Senior Division, Jhajjar, Haryana for specific
performance of the agreement to sell and to handover the possession of
the land in question. By way of an alternative prayer, it was prayed for
recovery of Rs. 31,50,000/- with interest @ 24% per annum from
9.3.2010 till the date of payment. That after the filing of the suit but
before passing of the final decree, the land in question came to be
acquired by the acquiring body for which a notification under Section 6
of the Land Acquisition Act was issued on 6.7.2012. That the learned
trial Court decreed the suit by judgment and decree dated 19.12.2012
and passed a decree for specific performance. That the learned trial
Court specifically gave findings in favour of the plaintiff on the execution
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of the agreement to sell; readiness and willingness on the part of the
plaintiff. That the learned trial Court directed the defendant to execute
the sale deed in favour of the plaintiff by receiving the balance sale
consideration of Rs. 50,000/- and handover the possession of the suit
property to the plaintiff. The judgment and decree passed by the learned
trial Court came to be affirmed by the learned first appellate court.
At this stage, it is required to be noted that before the learned trial
court, it was not brought to the notice of the court that with respect to
the land in question a notification under Section 6 of the Land Acquisition
Act has been issued on 6.7.2012.
3. Feeling aggrieved and dissatisfied with the judgment and decree
passed by the learned trial Court, affirmed by the first appellate court,
the defendant preferred second appeal before the High Court being R.S.A.
No. 4848/2016. Before the High Court, it was submitted on behalf of the
defendant that in view of the fact that the land in question has been
acquired under the provisions of the Land Acquisition Act, the defendant
has no saleable right and interest in the suit property and therefore the
agreement to sell cannot be executed. Submissions on merits were also
made on behalf of the defendant on the findings recorded by the learned
trial court on execution of the agreement to sell by the defendant in
favour of the plaintiff; accepting Rs. 31,50,000/- by way of part sale
consideration; and readiness and willingness on the part of the plaintiff
to pay the balance sale consideration of Rs. 50,000/-.
3.1 On behalf of the plaintiff, heavy reliance was placed on the
decision of this Court in the case of Jagdish Singh v. Natthu Singh,
(1992) 1 SCC 647. It was submitted that an identical situation had
arisen before this Court where during the pendency of the suit the land
in question was acquired and after considering Section 21 of he Specific
Relief Act it was held by this Court that the plaintiff is entitled to take all
the benefits of compensation along with interest and solatium, less the
cost of litigation incurred by the original land owner – vendor for recovery
of the amount of compensation.
3.2 The High Court accepted the same and after following the
decision of this Court in the case of Jagdish Singh (supra), has modified
the judgment and decree for specific performance passed by the learned
trial Court, affirmed by the first appellate court and has held that the
plaintiff shall be deemed to have stepped into the shoes of the defendant
SUKHBIR v. AJIT SINGH [M. R. SHAH, J.]
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– original land owner and shall be entitled to the entire amount of
compensation along with solatium and interest etc., owing to the
acquisition of the land in question. The High Court also affirmed the
findings recorded by the courts below qua execution of the agreement
to sell; and readiness and willingness which were in favour of the plaintiff.
4. Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court, the original defendant has preferred
the present appeal.
5. Shri Sushil Sardana, learned Advocate appearing on behalf of
the defendant has vehemently submitted that in the facts and
circumstances of the case and more particularly when during the
pendency of the suit the land in question came to be acquired under the
provisions of the Land Acquisition Act, the defendant had no saleable
right and interest in the suit property and therefore no relief for specific
performance of the agreement to sell could have been passed. It is
submitted that in fact in the appeal preferred by the defendant – appellant
herein the High Court has modified the decree passed by the learned
trial court, affirmed by the first appellate court, and held that in lieu of
decree for specific performance, the plaintiff shall be entitled to the
entire amount of compensation with solatium and interest.
5.1 It is further submitted that in view of Section 21 of the Specific
Relief Act r/w Section 73 of the
Indian Contract Act, the plaintiff at the
most shall be entitled to the refund of the amount of sale consideration
paid with interest.
5.2 It is further submitted that in the present case the plaintiff
never claimed for any compensation. It is submitted that as per Section
21(1) of the Specific Relief Act if the contract is broken by the defendant,
in that event, compensation may be granted, but again Section 21(5)
says that no compensation shall be awarded under Section 21 unless the
plaintiff has claimed such compensation in his plaint. It is submitted that
in the present case the plaintiff himself by an alternate prayer prayed
that if the specific performance cannot be performed by any reason, in
that event, decree for refund of Rs. 31,50,000/- along with interest @
24% per annum may be passed.
It is submitted that at the most in view of the judgment and decree
passed by the courts below, the plaintiff shall be entitled to recover the
amount of Rs. 31,50,000/- along with interest only. It is submitted that
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pursuant to the judgment and order passed by the High Court, the plaintiff
shall be entitled to receive Rs. 80 lakhs (approximately), which is lying
with the concerned acquiring body of the State of Haryana. It is submitted
that therefore the High Court has fallen in error in holding and directing
that the plaintiff shall be entitled to the entire amount of compensation
awarded under the Land Acquisition Act along with solatium and interest.
6. While opposing the present appeal, Shri Rakesh Talukdar,
learned Advocate appearing on behalf of the plaintiff has heavily relied
upon the decisions of this Court in the cases of Jagdish Singh (supra)
and Urmila Devi v. Deity, Mandir Shree Chamunda Devi, (2018) 2
SCC 284. It is submitted that in both the cases this Court had an occasion
to consider the very submission made on Section 21 of the Specific
Relief Act and it is held by this Court that the original plaintiff shall be
entitled to the amount of compensation awarded under the Land
Acquisition Act less the amount of expenses incurred by the defendant
– original land owner for receiving the compensation. It is submitted that
in the present case, as such, there is nothing on record that any amount
was incurred by the defendant for receiving the amount of compensation
under the Land Acquisition Act.
6.1 It is submitted by the learned Advocate appearing on behalf
of the plaintiff that as held by this Court in the case of Jagdish Singh
(supra), which has been
subsequently considered by this Court in the
case of Urmila Devi (supra), having regard to Section 21 of the Specific
Relief Act when the contract becomes impossible with no fault of the
plaintiff, Section 21 of the Specific Relief Act enables the Court to award
compensation in lieu and substitution of the specific performance.
6.2 It is submitted that so far as the findings on execution of the
agreement to sell; the payment of the sale consideration of Rs. 31,50,000-
and readiness and willingness to pay the balance amount of sale
consideration, there are concurrent findings recorded by all the three
courts below which are on appreciation of evidence on record.
6.3 Making the above submissions, it is prayed to dismiss the
present appeal.
7. We have heard the learned counsel for the respective parties
at length.
At the outset, it is required to be noted that as such there are
concurrent findings of fact recorded by all the courts below on the
SUKHBIR v. AJIT SINGH [M. R. SHAH, J.]
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execution of the agreement to sell by the defendant in favour of the
plaintiff; payment of Rs. 31,50,000/- towards part sale consideration by
the plaintiff to the defendant (out of the total sale consideration of Rs. 32
lakhs) and the readiness and willingness of the plaintiff to pay the balance
sale consideration of Rs. 50,000/-. Therefore, as such, the plaintiff shall
be entitled to the decree for specific performance. However, in view of
the fact that before the final decree could be passed by the learned trial
court, the land in question came to be acquired under the provisions of
the Land Acquisition Act and therefore the question arose before the
High Court what relief the plaintiff shall be entitled to in the event the
decree of specific performance is required to be modified by an alternative
decree.
7.1 Relying upon the decisions of this Court in the cases of Jagdish
Singh (supra) and Urmila Devi (supra) and considering Section 21 of
the Specific Relief Act, the High Court, by the impugned judgment and
order has modified the judgment and decree for specific performance
and held that the plaintiff shall be entitled to the amount of compensation
as there was no fault on the part of the plaintiff. It is held that the plaintiff
shall be entitled to the amount of compensation as awarded under the
Land Acquisition Act together with interest and solatium by way of
compensation. Therefore, the short question which is
posed for the
consideration of this Court is, whether in the facts and circumstances of
the case, the High Court is justified in modifying the judgment and decree
passed by the learned trial court for specific performance?
8. An identical question came to be considered by this Court in
the case of Jagdish Singh (supra). In the case before this Court, the
learned trial court as well as the first appellate court dismissed the suit
for specific performance. However, the High Court in second appeal
reversed the findings of the courts below and held that the plaintiff was
ready and willing to perform the contract and was entitled for decree.
However, during the pendency of the second appeal before the High
Court, proceedings for compulsory acquisition of the land were initiated
and the land was acquired. Therefore, the question arose as to whether
the plaintiff was entitled for the amount of compensation received in the
land acquisition proceedings or was entitled only to the refund of the
earnest money. The High Court modified the decree of the specific
performance of the contract with decree for a realisation of compensation
payable in lieu of acquisition. The matter was carried before this Court.
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After referring to Section 21 of the Specific Relief Act, this Court has
held that where the contract for no fault of the plaintiff becomes
impossible, Section 21 enables award of compensation in lieu and
substitution of the specific performance. So far as the determination of
the amount of compensation, this Court observed and held that the
compensation awarded under the Land Acquisition Act may safely be
taken to be the measure of damages subject, of course, to the deduction
therefrom of money value of the services, time and energy expended by
the original land owner in pursuing the claims of compensation and the
expenditure incurred by him in the litigation culminating in the award. In
paras 24, 29 and 30, it is observed and held as under:
“24. When the plaintiff by his option has made specific
performance impossible, Section 21 does not entitle him to seek
damages. That position is common to both Section 2 of Lord Cairn’s
Act, 1858 and Section 21 of the Specific Relief Act, 1963. But in
Indian law where the contract, for no fault of the plaintiff, becomes
impossible of performance Section 21 enables award of
compensation in lieu and substitution of specific performance.
xxx
xxx
xxx
29. In the present case there is no difficulty in assessing the
quantum of the compensation. That is ascertainable with reference
to the determination of the market value in the land acquisition
proceedings. The compensation awarded may safely be taken to
be the measure of
damages subject, of course, to the deduction
therefrom of money value of the services, time and energy
expended by the appellant in pursuing the claims of compensation
and the expenditure incurred by him in the litigation culminating in
the award.
30. We accordingly confirm the finding of the High Court that
respondent was willing and ready to perform the contract and
that it was the appellant who was in breach. However, in
substitution of the decree for specific performance, we make a
decree for compensation, equivalent to the amount of the land
acquisition compensation awarded for the suit lands together with
solatium and accrued interest, less a sum of Rs 1,50,000 (one lakh
fifty thousand only) which, by a rough and ready estimate, we
quantify as the amount to be paid to the appellant in respect of his
SUKHBIR v. AJIT SINGH [M. R. SHAH, J.]
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services, time and money expended in pursuing the legal claims
for compensation.”
The aforesaid view has been followed by this Court in the case of
Urmila Devi (supra).
9. Applying the law laid down by this Court in the aforesaid two
decisions to the facts of the case in hand, it cannot be said that the High
Court has committed any error in modifying the decree for specific
performance. As rightly held by the High Court, as such, the plaintiff will
be deemed to be in the shoes of the defendant and therefore shall be
entitled to the amount of compensation, determined and awarded under
the provisions of the Land Acquisition Act.
10. Now so far as the submission on behalf of the appellant that
as compensation has not been specifically prayed by the plaintiff in the
suit, the plaintiff shall not be entitled to any amount of compensation
even considering Section 21 of the Specific Relief Act. The aforesaid
has no substance. The decree for compensation is passed as an alternate
decree and in lieu of the decree for specific performance.
11. Now so far as the amount of compensation is concerned, as
observed by this Court in the case of Jagdish Singh (supra), the
compensation determined and awarded under the Land Acquisition Act
may safely be taken into consideration. Therefore, the High Court has
rightly observed and held that the plaintiff shall be entitled to the entire
amount of compensation awarded under the Land
Acquisition Act
together with interest and solatium. However, at the same time, the
defendant – original land owner shall also be entitled to the deduction
therefrom of money value of the services, time and energy expended in
pursuing the claims of compensation and the expenditure incurred by
him in the litigation culminating in the award. As such, nothing is on
record to suggest that any expenses have been incurred by the appellant.
However, in the facts and circumstances of the case and considering
the decisions of this Court in the cases of Jagdish Singh (supra) and
Urmila Devi (supra), ends of justice will be served if the plaintiff is
awarded the entire amount of compensation determined under the Land
Acquisition Act together with interest and solatium less Rs. 2,50,000/- +
Rs.50,000/- (towards the balance sale consideration).
12. In view of the above and for the reasons stated above, the
present appeal is disposed of by modifying the impugned judgment and
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order passed by the High Court to the extent directing and holding that
the plaintiff – respondent herein shall be entitled to recover the entire
amount of compensation along with solatium and interest awarded under
the provisions of the Land Acquisition Act, which is reported to be lying/
deposited with the acquiring body with respect to the land in question
minus Rs. 3,00,000/- (Rs. 2,50,000/- towards the expenses which might
have been incurred in pursuing the claims of compensation and the
expenditure incurred by him in the litigation culminating in the award +
Rs. 50,000/- towards balance sale consideration). Therefore, the appellant
– defendant shall be entitled to Rs. 3,00,000/- from the amount of
compensation deposited with the acquiring body and the balance amount
of compensation together with interest and solatium to be paid to the
original plaintiff.
13. The appeal is partly allowed to the aforesaid extent only. Rest
of the judgment and order passed by the High Court is hereby confirmed.
No costs.
Devika Gujral
Appeal partly allowed.
SUKHBIR v. AJIT SINGH [M. R. SHAH, J.]