Case: Jayakantham  Vs. Abaykumar

3. The subject matter of the suit for specific performance is a property bearing survey No. 314/1A at Kallakurichi village admeasuring 735 square feet upon which a residential house is situated. An agreement to sell was entered into between the appellants and the father of the respondent on 2 June 1999. The consideration agreed upon was rupees one lakh sixty thousand of which an amount of rupees sixty thousand was received as advance. The balance was to be paid when the sale deed was executed. Time for completion of the sale transaction was reserved until 2 June 2002. A legal notice seeking performance of the agreement was issued on 7 May 2002. In response, the defence that was set up was inter alia that the agreement to sell was executed only as a security for a loan transaction.4. In support of the plea for specific performance, the father of the respondent was examined as PW1. Evidence on behalf of the appellants was adduced by DW1 and DW2. The trial court by a judgment and order dated 5 January 2007 decreed the suit for specific performance and directed the appellants to execute a sale agreement in favour of the respondent against receipt of the balance consideration of rupees one lakh. The trial court noted that the agreement to sell had been registered and rejected the defence that it is merely a document executed by way of security for a loan transaction. In the view of the trial court, there was nothing in the agreement to indicate that it was executed merely by way of a security. A finding of fact was arrived at to the effect that the respondent was ready and willing to perform the agreement. The suit was decreed. The judgment of the trial court was confirmed in appeal on 26 August 2008 by the Principal District Judge, Villupuram.5. A second appeal was initially admitted on a substantial question of law but was eventually dismissed by a learned Single Judge of the Madras High Court on 11 June 2015.6. When the Special Leave Petition came up on 29 January 2016, this Court observed that there was no error in the finding of facts recorded by three courts concurrently and hence those findings could not be reversed on merits. However, the alternative submission which was urged on behalf of the appellants was that the suit property is the only property held by them and has an extremely high value. The appellants stated that they are ready to pay a sum of rupees ten lakhs or even more to retain it. Notice was issued to the respondent limited to the above contention.

Court's reasoning:
8. While evaluating whether specific performance ought to have been decreed in the present case, it would be necessary to bear in mind the fundamental principles of law. The court is not bound to grant the relief of specific performance merely because it is lawful to do so. Section 20(1) of the Specific Relief Act, 1963 indicates that the jurisdiction to decree specific performance is discretionary. Yet, the discretion of the court is not arbitrary but isto beThe exercise of discretion is capable of being corrected by a court of appeal in the hierarchy of appellate courts.In the present case, the material on the record contains several aspects which will have to weigh in the balance. There is no dispute about the fact that the father of the respondent who entered into an agreement on his behalf (and deposed in evidence) carried on moneylending business. The consistent case of the appellants in reply to the legal notice, in the written statement as well as in the course of evidence was that there was a transaction of a loan with the father of the respondent.11. In our view the material which has been placed on record indicates that the terms of the contract, the conduct of parties at the time of entering into the agreement and circumstances under which the contract was entered into gave the plaintiff an unfair advantage over the defendants. These circumstances make it inequitable to enforce specific performance.12. For the above reasons a decree for the payment of compensation in lieu of specific performance would meet the ends of justice. As we have noted earlier the father of the respondent paid an amount of rupees sixty thousand to the appellants in June 1999 of the total agreed consideration of Rs. 1.60 lakhs. The appellants have voluntarily offered to pay an amount of rupees ten lakhs, as just compensation in lieu of specific performance.