Case: B.K. Sri Harsha (D) By L.R.  Vs. M/S. Bharath Heavy Electricals Ltd

Two suits were filed by the respondent, which were consolidated. The respondents as plaintiff sought specific performance in respect of certain properties which were allegedly agreed to be sold by the appellants Smt. B. Saroja Devi and her husband Sri B.K. Harsha under the contract. Since the validity and the genuineness of two agreements Exhibits P-1 and P-2 were not disputed, the Trial Court was of the view that the only question which arises for consideration was whether the respondent was entitled to the relief of specific performance. The Trial Court came to hold that the respondent-company was always ready and willing to perform its part of the contract. It was also found that the two agreements were never revoked or cancelled by the appellants at any time. Further, it was held that the suit for specific performance was filed within the period of limitation. The Trial Court further came to hold that the respondent-company being in possession of the suit property from 2.5.1974, equality lies in its favour in granting specific performance and more so, when major portion of the agreement consideration had already been paid. Therefore, both these suits were decreed. The High Court as noted above, dismissed the First Appeals.

Court's reasoning:
A bare reading of the High Courts judgment shows that there was no serious effort to analyse the various points raised. It was submitted that there was notice terminating the agreement. It was categorically stated that plaintiffs were never ready and willing to fufil their part ofnature of suit for specific performance of contract has been highlighted by this Court in several cases. In Rajeshwari v. Puran Indoria (2005 (7) SCC 60 ), it was inter-alia observed asNormally, a suit for specific performance of an agreement for sale of immovable property involves the question whether the plaintiff was ready and willing to perform his part of the contract in terms of Section 16 of the Specific Relief Act, whether it was a case for exercise of discretion by the court to decree specific performance in terms of Section 20 of the Specific Relief Act and whether there were laches on the part of the plaintiff in approaching the court to enforce specific performance of the contract. In some cases, a question of limitation may also arise in the context of Article 54 of the Limitation Act on the terms of the agreement for sale. Other questions like the genuineness of the agreement, abandoning of the right to specific performance, a novation and so on, may also arise in some cases. No doubt, a finding on the three primary aspects indicated earlier would depend upon the appreciation of the pleadings and the evidence in the case in the light of the surroundingright to specific performance of an agreement for sale of immovable property, when filed, raises questions of substantial importance between the parties as to whether the plaintiff has satisfied the requirements of Section 16 of the Specific Relief Act, whether it is a case in which specific performance of the contract is enforceable in terms of Section 10, whether in terms of Section 20 of the Act, the discretion to decree specific performance should be exercised by the court and in some cases, whether the suit was barred by limitation and even if not, whether the plaintiff has been guilty of negligence or laches disentitling him to a decree for specific performance. These questions, by and large, may not be questions of law of general importance. But they cannot also be considered to be pure questions of fact based on an appreciation of the evidence in the case. They are questions which have to be adjudicated upon, in the context of the relevant provisions of the Specific Relief Act and the Limitation Act (if the question of limitation is involved). Though an order in exercise of discretion may not involve a substantial question of law, the question whether a court could, in law, exercise a discretion at all for decreeing specific performance, could be a question of law that substantially affects the rights of parties in thatHigh Court has also given a finding regarding adverse possession in a suit for specific performance. Above being the position, there is total non-application of kind. The manner in which the appeals were dismissed cannot be said to be