Holding

Appeals involving triable issues, such as adverse possession in a specific performance suit, cannot be summarily dismissed under Order 41 Rule 1 CPC.

Summary

MIS Bharath Heavy Electricals Ltd filed two suits for specific performance of contracts for sale of certain properties against the appellants, B.K. Sri Harsha and others. The trial court held that the respondent was in adverse possession, ready to perform, and that the agreements were valid and within the limitation period, and consequently decreed specific performance. The Karnataka High Court dismissed the appeals under Order 41 Rule 1 of the CPC without a detailed analysis, effectively summarily disposing of them. The Supreme Court held that because the trial court had recorded findings on adverse possession, there were triable issues that required consideration, and therefore the appeals could not be summarily dismissed. The Court set aside the High Court’s dismissal and remitted the matter to the High Court for fresh consideration of the issues.

Issues considered

When can an appeal under Order 41 Rule 1 CPC be summarily dismissed in a suit for specific performance?
Do findings of adverse possession in a specific performance suit create triable issues that preclude summary dismissal?

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 1
Specific Relief Act, 1963s. 16, s. 20

Subjects

Specific performanceAdverse possessionSummary dismissalOrder 41 Rule 1Triable issuesCivil appealSpecific Relief Act

Judgment

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[2008] 2 S.C.R. 598

A B.K. SRI HARSHA (D) BY L.R. & ANR. -l "'" ·~
v.
MIS BHARATH HEAVY ELECTRICALS LTD:
(Civil Appeal Nos. 6329-6330 of 2004)

B
FEBRUARY 8, 2008 ?
(DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.)

Specific Relief Act, 1963; Ss. 16 & 20:
l:- ~

Suit for specific performance of contract of sale of certain
c properties - Decreed by trial Court holding that Vendee was
in adverse possession of suit property, willing to perform his
\
part of contract and paid major portion of consideration amo_unt ,
- Appeal dismissed by High Court in exercise of power u/o.
,_
41 r. 1 CPC - On appeal, Held: Though suit was for specific '
D performance but the trial Court recorded finding of adverse
possession - Thus, triable issues involved - When triable _J,,
issues involved, appeal should not be summarily dismissed/
~
disposed of - Issues arose were not analysed seriously by '
l

E
the High Court - Hence, matter remitted to High Court for
COfJSideration afresh - Code of Civil Procedure, 1908 - 0. 41 - r

r

i: 1 - Appeal - Summary disposal """ Triable issue.
Respondent-company filed two suits for specific
performance of the contract in respect of certain
properties which were allegedly agreed to be sold by the
F appellants under the agreements. The validity and the ~ ~

l
genuineness of the agreements were not disputed before
the Trial Court. The Trial Court decreed the suits holding
that the respondent-company was always ready and
t'
'
willing to perform its part of the contract; that agreements
G were never revoked or cancelled by the appellants at any
time; that the suit for specific performance was filed within ~
the period of limitation. Since, the respondent-company
was in possession of the suit property from 2.5.1974,
equity lies in its favour in granting specific performance,
H 598
I
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(
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B.K. SRI HARSHA (D) BY L.R. & ANR. v. MIS 599
BHARATH HEAVY ELECTRICALS LTD.
'..... -+
' more so, when major portion of the consideration amount A
had already been paid by the company. Appeals filed
.......
against the order of the trial Court were dismissed by the
High Court. Hence the present appeals.
Disposing of the appeals, the Court
B
HELD: 1.1 Single Judge of the High Court dismissed
the appeals in purported exercise of power under Order
""' ~
) 41 Rule 1 CPC. Though, the judgment cannot be said to ...
be limine dismissal of the appeals, yet the manner of
disposal of the First Appeals leaves much to be desired. c
-.fl
The suit was for specific performance and the Trial Court
recorded findings about adverse possession. That being
so, triable issues are involved. When triable issues are
involved, the appeals should not be summarily dismissed
or disposed of in the manner done. (Para - 6) [601-D, E]
D
,.. 1.2 A bare reading of the High Court's judgment
shows that there was no serious effort made by it to
~ analyse the various points raised. (Para - 7) [601-G]
Rajeshwari v. Puran lndoria (2005) 7 SCC 60 - relied
on. E

1.3 The High Court has given a finding regarding.
adverse possession in a suit for specific performance.
There is total non-application of mind by the High Court.
The manner in which the appeals were dismissed cannot F
be said to be proper. Hence, the matter is remitted to the
High Court to consider the same afresh. (Para - 8, 9)
[603-C, DJ
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
6329-6330 of 2004 G
From the Judgment and final Order dated 4.6.2003 of the
' High Court of Karnataka at Bangalore in R.F.A. No. 60812002
C/W R.F.A. No. 609/2002.
K. Parasaran, S.K. Kulkarni, M. Gireesh Kumar and Vijay H
t
600 SUPREME COURT REPORTS [2008] 2 S.C.R.
..

A Kumar for the Appellants. 4: . .;
B. Dutta, A.S.G. B.K. Satija and.Banamali Shukla for the
Respondent.
The Judgment of the Court was delivered by
B Dr. ARIJIT PASAYAT, J. 1. _Challenge in these appeals is
to the judgment of the learned Single Judge of the Karnataka
High Court ~ismissing the First Appeals filed under Section 96
of the~Gode of Civil Procedure, 1908 (in short 'CPC'). The First
t
Appeals were filed against the judgment and decree passed in
c OS No.285/1.984 and. OS No.286/1984 on the file of XXXI
Additional City Civil Judge, Bangalore, decreeing the suit for
specific performance.
· 2. Background facts in a nutshell are as follows:
D Two suits were filed by the respondent, which were \.

consolidated. The respondents as plaintiff sought specific
J:
performance in respect of certain properties which were
allegedly agreed to be sold by the appellants Smt. B. Saroja )o-
'
Devi'and her husband Sri B.K. Harsha under the contract. Since
E 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
F 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
G
from 2.5.1.974, 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.
H
B.K SRI HARSHA (D) BY L.R.. & ANR. v. M/S 601
BHARATH HEAVY ELECTRICALS LTD. [PASAYAT, J.]

3. Learned counsel for the appellants submitted that. A
though the judgment and decree impugned run to several pages,
major part of it consists of the averments and reproduction of
the part of the trial Court's judgment.
4. It is submitted that this was not an appropriate way ·for
disposal of the First ~ppeals. It was also submitted that some ' 8
of the conclusions were legally unsupportable. It was submitted ·
that when the suit is for specific performance, the special features '
of such a suit have to be kept in view, which has not been done. ·
5. Learned counsel for the respondent on the other hand · c
submitted that the High Court had referred to the factual and '
legal position in detail and, therefore, the judgment and decree
do not suffer from any infirmity to warrant interference.
6. It is to be noted that pages 4 to 18 of judgment (in the
paper book) are quotations from the Trial Court's judgment. The ·D
quotation was made after briefly referring to the major issues.
Upto page 21 contentions were noted. Learned Single Judge
dismissed the appeals in purported exercise of power under
Order 41 Rule 1 CPC. Though strictly speaking, the judgment
cannot be said to be in limine dismissal of the appeals, yet the E
manner of disposal of the First Appeals leaves much to be
desired. When triable issues are involved, the appeals should
not be summarily dismissed or disposed of in the manner done.
The suit was for specific performance and the Trial Court
recorded findings about adverse possession. That being so, F
according to learned counsel for the appellants, triable issues
are involved. It was pointed out that the stand of the appellants
was relatable to lack of readiness, alleged latches, limited
novation.
7. A bare reading of the High Court's judgment shows that G
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 of contract.
H
t-
602 SUPREME COURT REPORTS [2008] 2 S.C.R.

A 8. The nature of suit for specific performance of contract ...
~
,

has been. highlighted by this Court in several cases. In
Rajeshwari v. Puran lndoria (2005 (7) SCC 60), it was inter-
alia observed as under:
"5. Normally, a suit for specific performance of an
B agreement for sale of immov;:ible property involves, the
question whether the plaintiff was ready and willing to
perform his part of the contract in terms of Section 16 of t
.4.
the Specific Relief Act, whether it was a case for exercise
of discretion by the court to decree specific performance
c 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
D 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
E appreciation of the pleadings and the evidence in the case.
in the light of the surrounding circumstances.
6. The right to specific performance of an agreement for
sale of immovable property, when filed, raises questions
of substantial importance between the parties as to
F 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 )-

G 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
H law of general importance. But they cannot also be

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•
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8.K. SRI HARSHA (D) BY L.R. & ANR. v. MIS
BHARATH HEAVY ELECTRICALS LTD. [PASAYAT, J.]
603

~ considered to be pure questions of fact based on an A
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 B
a substantial question of law, the question whether a court
1, 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 that suit."

8. The High Court has also given a finding. regarding c
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 proper.
D
.. 9. Above being the position, the impugned judgment
deserves to be set aside. The matter is remitted to the High
~ Court to consider the matter afresh. The appeals are accordingly
disposed of. There shall be no order as to costs.
S.K.S. Appeals disposed of. E.