Under S. 21 of the Specific Relief Act, the plaintiff is entitled to compensation with solatium and interest when land has been acquired: Supreme Court

IN THE CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1653 OF 2021 M.R. SHAH J JUDGMENT 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 The facts leading to the present appeal in nutshell are as under That an agreement to sell was executed by the appellant original defendantin favour of the respondent original plaintiffon 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 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. 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 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. The High Court accepted the same and after following the decision of this Court in the case of Jagdish Singhhas 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 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 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court the original defendant has preferred the present 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. 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 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 pursuant to the judgment and order passed by the High Court the plaintiff shall be entitled to receive Rs. 80 lakhs 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 Singhand Urmila Devi v Deity Mandir Shree Chamunda Devi 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 It is submitted by the learned Advocate appearing on behalf of the plaintiff that as held by this Court in the case of Jagdish Singhwhich 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 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 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 defendantand 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 Deviand 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 An identical question came to be considered by this Court in the case of Jagdish Singhwhich by a rough and ready estimate we quantify as the amount to be paid to the appellant in respect of his services time and money expended in pursuing the legal claims The aforesaid view has been followed by this Court in the case of Urmila 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 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 Singhthe 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 Singhand Urmila Deviends 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 In view of the above and for the reasons stated above the present appeal is disposed of by modifying the impugned judgment and 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. 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 Dr. Dhananjaya Y. Chandrachud New Delhi April 30 2021

Summary: When the contract has become impossible for no fault of the plaintiff and land has been acquired by the acquiring body, they are eligible for compensation instead and in substitution of specific performance under section 21 of the Specific Relief Act. This judgment was passed in the case of Sukhbir vs. Ajit Singh [C.A.No.- 1653/2021] by a Double Bench consisting of Hon’ble Shri Justice Dr. D.Y. Chandrachud and Hon’ble Justice M.R. Shah.  An agreement to sell was executed by the appellant in favor of the respondent with respect to land for a consideration of Rs. 32 lakhs, out of which the respondent paid to the appellant Rs. 31,50,000/- to the appellant. Upon the failure of the appellant to execute the sale deed, the respondent served a legal notice to be present at the sub-registrar to register the same. when the appellant refused to remain present, the respondent filed a suit for specific performance of the agreement to sell and hand over the possession of the land. It was also alternatively prayed for the recovery of Rs.31,50,000/- @ 24% per annum from 9.3.2010 till the date of payment. Further before passing the final decree, the land was acquired by the acquiring body under section 6 of the land acquisition act. However, this information was not brought to the attention of the trial court. The trial court passed the judgment in favor of the respondent with all the remedies prayed. The High Court reaffirmed the decision of the Trial Court based on the case of Jagdish Singh vs. Nattu Singh [1992 1 SCC 647] where after the land in question was acquired by way of section 21 of the Specific Relief Act, it was held that the plaintiff is entitled to take all benefits of compensation along with solatium and interest, etc. due to the acquisition of land. The counsel for the appellant argued that as under section 21 (1) of the specific relief act when the contract is broken by the defendant (here appellant) the compensation may be granted. However, under section 21(5) of the Act, when the same has not been prayed for by the other party no compensation shall be awarded. Therefore the Respondent is eligible only for Rs. 31,50,000 along with interest which amounts to approximately Rs. 80 lakhs. The counsel for respondent relying on another case of Urmila Devi vs. Deity, Mandir Shree Chamunda Devi [2018 2 SCC 284] argued that under section 21 of the specific relief act they are eligible for compensation when the contract was impossible for no fault of the plaintiff (here respondent). The Hon’ble Supreme court opined that as held in the case of Jagdish Singh and Urmila Devi, the question specifically was whether the plaintiff (here respondent) was entitled to the amount of compensation received in the land acquisition proceedings or was entitled only to the refund of the earnest money. The Supreme court held that under section 21 it would be an award of compensation instead of and substitution of the specific performance. For calculation of the same, the compensation under the Land Acquisition Act to be damages subject to the deduction of the money value of service, time, etc. put in by the original landowner. Therefore making it clear that the decree for compensation holds good since it was passed as an alternate decree instead of the decree of the specific performance.