HEMANTA MONDAL AND OTHERSversusSRI GANESH CHANDRA NASKAR

                         [2015] 9 S.C.R. 300


A                   HEMANTAMONDALAND OTHERS
                                    v.
                 SRI GANESH CHANDRA NASKAR
                   (Civil Appeal   No. 7893 of 2015)
B                      SEPTEMBER 23, 2015
          [DIPAK MISRA AND PRAFULLA C. PANT, JJJ

         Specific Relief Act, 1963 - s. 20 - Agreement to sale -
    Payment of earnest money- Balance amount agreed to be
C   paid on execution of sale-deed - Refusal to execute the
    agreement offering to pay back the earnest money- Suit for
    specific performance, possession and injunction - Trial court
    directed the defendant to refund the earnest money - In
    appeal by the plaintiff, direction to the defendants to execute
0
    the sale-deed after accepting balance amount - In second
    appeal, High Court modified the decree of first appellate
    court, directing to measure the land in question afresh and
    to confirm the decree on the basis of the fresh measurement
E   - On appeal, held: s. 20 provides for discretion to the court in
    grating relief of specific performance - Such discretion is
    not to be exercised arbitrarily, but should be guided by judicial
    principles - The court may in proper exercise of discretion,
    grant decree of specific performance in a case where plaintiff
F   has done substantial acts or suffered losses in consequence
    of a contract capable of specific performance - In the present
    case, it cannot be said that plaintiff had done substantial acts
    or suffered losses due to expenditure in constructions etc; in
    consequence of a contract capable of specific performance
G   - Measurement of land agreed to be sold also not clear -
    Therefore, defendants directed to pay back the earnest
    money with 18% interest per annum.

        Disposing of the appeal, the Court
H                                  300
    HEMANTA MONDALAND OTHERS v. SRI GANESH                    301
              CHANDRA NASKAR

      HELD: 1. Section 20 of Specific Relief Act, 1963 gives A
  discretion to the court, and provides that the court is not
· bound to grant relief of specific performance merely
  because it is lawful to do so. It further provides that the
  discretion is not to be exercjsed arbitrarily but guided
  by judicial principles. Sub-section (2) of Section 20 B
  enumerates three conditions when discretion is not to
  be exercised to grant decree of specific performance.
  Sub-section (3) of s.20 provides that court may properly
  exercise discretion to decree specific performance in any
  case where plaintiff has done substantial acts or suffered C
  losses in consequence of a contract capable of specific
  performance. [Para 15) [306-F; 307-E]

      2. In the present case, possession was not given to
 the plaintiff at the time of execution of the agreement,      D
 nor the area of land agreed to be sold was clear, as such,
 it cannot be said that the plaintiff has done substantial
 acts or suffered losses due to expenditure in
 constructions etc., in consequence of a contract capable
 of specific ·performance. The direction given by High         E
 Court in the impugned order shows that the
 measurements of land actually agreed to be sold, are
 not final. Therefore, instead of affirming the decree of
 specific performance as modified by High Court, it will       F
 be equitable, just and proper to direct the appellants to
 pay back amount of Rs.60,000/- accepted by the original
 defendant with interest @ 18% per annum to the plaintiff/
 respondent from the date of the agreement till date.
 [Paras 16 and 17] [307-F-H; 308-A]                            G

    CIVIL APPELLATE JURISDICTION: Civil Appeal No.
 7893 of2015.

     From the Judgment and Order dated 01.08.2013 of the
 High Court of Calcutta in S.A. No. 430 of 2004..              H
302         SUPREME COURT REPORTS                    [2015] 9 S.C.R.


A         Rauf Rahim, P. Das for the Appellants.

          Sukesh Ghosh, Dr. Kailash Chand, Arjun Singh Bawa, .
      Nishant Das for the Respondents.

          The Judgment of the Court was delivered by
B
          PRAFULLA C. PANT, J. 1: Leave granted.

          2. This appeal is directed against judgment and order
      dated 01.08.2013, passed by High Court of judicature at
C     Calcutta in Second Appeal No. 430 of 2004, whereby said
      court has modified the decree passed by Additional District
      Judge 3'd, Howrah in Title Appeal No. 139 of2002.

          3. We have heard learned counsel for the parties and
D     perused the papers on record.

       4. Brief facts of the case are that plaintiff/respondent filed
  Title Suit No. 4 of 1993 for specific performance of agreement.
  possession and injunction before Civil Court at Howrah, in
E respect of 'Danga' land measuring 8 cottahs 14 .chittacks 24
  sq. ft., recorded as 16 shatak in R.S. Dag No. 271 Khatian
  No.74, and in recent settlement record the same has been
  recorded in Dag No. 273, Khatian No. 602 within Mouza-
  Pakuria, P.S. Domjur, District Howrah. As per the agreement
F dated 04.02.1992, defendant (Mishrilal Monda!) agreed to sell
  the land at the rate of Rs.15,000/- per cottah in favour of plaintiff
  (Ganesh Chandra Naskar), and received Rs.60,000/- as
  earnest money, and rest of the consideration was agreed to
  be paid at the time of the execution of sale deed. It was also
G stipulated in the agreement that. if entire area comes out as
  10 cottah, the lump sum consideration would be
  Rs.1,50,000/-. According to plaintiff, measurements were
  made on 07.03.1992, by surveyors in the presence of parties,
  and it was found that the area of land was 8 cottah 14 chitaks
H 24 sq.ft., as such amount of consider::ition was Rs.1,33, 125/-
   · HEMANTA MONDALAND OTHERS v. SRI GANESH                       303
       CHANDRANASKAR [PRAFULLAC. PANT, J.]

, i.e., at the rate of Rs.15,000/- per cottah. It is pleaded in the A
suit that plaintiff was/is always ready and willing to pay balance
amount of Rs. 73, 125/- to get the sale deed executed, but the
defendant declined to execute the same. On this, the plaintiff
gave notice to the defendant to execute the sale deed but he
questioned the correctness of the measurements, and offered B
to pay back Rs.60,000/- accepted by him as earnest money.
Consequently, the suit for specific performance, possession
and injunction was filed by the plaintiff.

     5. The original defendant contested the suit and filed his C
written statement. It appears that during the pendency of suit
due to the death of the original defendant his heirs were
substituted. The case of the appellants as contained in
amended written statement is that Mishrilal Mondal had
undivided share in the property and he was owner in respect D
of only 16 % shataks of the land out of 33 shataks of Dag no.
271.

     6. The trial court framed issues, and after recording
evidence of the parties disposed of the suit directing the         E
defendant to refund the earnest money of Rs. 60,000/-to the
plaintiff. Said judgment and decree dated 29.06.2002, passed
by the Civil Judge (senior division), 3'd Court, Howrah, was
challenged by the plaintiff who filed Title Appeal No. 139 of
2002. The same, after hearing the parties, was allowed, and_ it    F
was directed by the first appellate court that the defendants
shall execute sale. deed after accepting balance amount of
Rs. 73, 125/- from the plaintiff.

    7. The judgment and decree dated 22.12.2003, passed            G
in Title Appeal No. 139 of 2002 was challenged by the
defendants in Second Appeal no. 430 of 2004, and the High
Court passed impugned judgment, modifying the decree
passed by the first appellate court. It is directed by the High
Court that the decree of specific performance of contract shall    H
304        SUPREME COURT REPORTS                    (2015] 9 S.C.R.


A  stand affirmed in respect of the agreement dated 04.02.1992,
   but not on the basis of measurements taken by PW-2. The
   High Court remanded the matter to first appellate court, with
   further direction that the defendant shall be allowed to apply
   for appointment of a Commissioner for doing the survey of the
 B land to be transferred. It is also clarified by the High Court that
   if no such application is moved the suit shall stand decreed,
   as per the measurements made by PW-2. Unsatisfied with
   the modified decree, passed by High Court, the defendants
   are before us, in this appeal, through special leave.
c
       8. Copy of the agreement between plaintiff Ganesh
  Chandra Naskar and original defendant Mishrilal Mondal
  (since died) is annexed asAnnexure P-8 with affidavit dated
  16.09.2014, filed by Dilip Mondal (appellant no.2), which
D discloses that Mishrilal Mondal agreed to sell 16 shataks or
  10 cottahs of land mentioned in the schedule, to the plaintiff,
  on payment of Rs.15,000/- per cottah which was the market
  rate. It is also mentioned in the agreement that Mishrilaf Monda I
  (original defendant) accepted Rs. 60,000/- as part payment.
E The terms and conditions mentioned in th.e agreement contains
  following relevant stipulation:-

            "3. After executing this Advance Agreement, while
         measuring the land if it is found that the total area of the
 F       land which will be sold is less than 10 Cottahs as
         mentioned in schedule below, you will pay the balance
         amount which will be calculated for ttie less area of land
         @ Rs.15,000/- and I alongwith my heirs and
         representatives shall remain bound to register the Sale
G        Deed in your favour for the land as mentioned in the
         schedule below."

      9. The description of the schedule property for which
  advance is taken, gives following details at the end of the terms
H mentioned in the agreement (Annexure P-8):-
   HEMANTA MONDALAND OTHERS v. SRI GANESH                                 305
     CHANDRANASKAR [PRAFULLAC. PANT, J.]

    "DESCRIPTION OF SCHEDULE PROPERTY FOR                                  A
    WHICH ADVANCES TAKEN

    Under District-Howrah, District Registrar Office-Howrah,
    Sub-Registry Office- Domjur, P.S. Domjur and within
    Mouza-Pakura mentioned in old 'Parcha' (record) in B
    Khatian No. 177 (one hundred seventy seven) in Dag No.
    271 (Two hundred seventy one), high land measuring 33
    (thirty three) shataks under permanent tenancy right, half
    portion from the western side which is according to
    Revisional Settlement's 'Parcha' (record) in Khatian No. C
    746 (seven hundred forty six), Dag No. 271 (two hundred
    seventy one) and in Parcha (Record) of pre!)ent Revisional
    Settlement it is recorded in Khatian No. 602 (six hundred
    two), Dag No. 273 (two hundred seventy three) under
    permanent tenancy right as high land measuring 16 D
    (sixteen) shataks".

    10. In the second para of the agreement, following
declaration is made by the original defendant:-
                                                                           E
    "I am the absolute Owner and possessor of the said
    property. Besides me, there is no co-sharer or heir. I have
    never transferred or joint liability with any person. It is
    abso.lutely free from all sorts of liability and encumbrances.
    If any type of liability reveals, you will get time till it is made    F
    free from liability and encumbrances and in this condition
    I and my successors are bound to execute the deed."

     11. Admittedly, the appellant no. 1 to 4 are sons, appellant
no. 5 is widow, and appellant no. 6 is daughter of Mishrilal G
Mondal (original.qefendant). Appellant no. 8 and appellant
no. 9 are son and daughter of Netai Mondal (brother of Mishrilal
Mondal), appellant no. 10 wife of Basudev Nasakar and
appellant no. 11 is wife of Natabar Monda I, the relatives of
original defendant.                                               H
306         SUPREME COURT REPORTS                     [2015] 9 S.C.R.


A          12. On behalf of the plaintiff/respondent, copy of challan
      depositing Rs. 73, 125/- on 13.01.2004/16.01.2004 with the
      Civil Court, in favour of the appellants, is annexed with the
      counter affidavit.

B          13. Though the appellants have pleaded that Mishrilal
      Mondal was not absolute owner of the land, however, said plea
      appears to have not been accepted by none of the courts below.
      Moreover, the legal heirs of the original defendant are not only
      bound by the agreement executed by him, but also by the pleas
C     taken by the original defendant in his written statement before
      the trial court.

           14. Having heard learned counsel for the parties, we are
      not inclined to interfere with the findings affirmed by the High
o     Court. On consideration of submissions of rival parties in the
      present appeal the only point before us is whether in the facts
      and circumstances of the case, a decree of specific
      performance of agreement of sale should have been passed,
      or the decree of refund of part consideration received by the
E     defendant, with interest, would have served the ends of justice.

            15. Section 20 of Specific Relief Act, 1963 gives discretion
      to the court, and provides that the court is not bound to grant
      relief of specific performance merely because it is lawful to do
F     so. It further provides that the discretion is not to be exercised
      arbitrarily but guided by judicial principles. Sub-section (2) of
      Section 20 enumerates three conditions when discretion is
      not to be exercised to grant decree of specific performance:-

G         "(a) where the terms of the contract or the conduct of the
          parties at the time of entering into the contract or the other
          circumstances under which the contract was entered into
          are such that the contract, though not voidable, gives the
          plaintiff an unfair advantage over the defendant; or
H
          (b) where the performance of the contract would involve
    HEMANTAMONDALAND OTHERS v. SRI GANESH                            307
      CHANDRA NASKAR [PRAFULLA C. PANT, J.]

    some hardship on the defendant which he did .not foresee,         A
    whereas its non-performance would involve no such
    hardship on the plaintiff; or

    (c) where the defendant entered into the contract under
    circumstances which though not rendering the contract             B
    voidable, makes it inequitable to enforce specific
    performance."

     Explanation (1) to sub-section (2) provides that mere
inadequacy of consideration shall not be deemed to be an              c
unfair advantage within the meaning of clause (a) or hardship
within the meaning of clause (b). Explanation (2) provides that
the question whether the performance of a contract when
involved hardship on the defendant within the meaning of clause
(b) shall, except in cases where the hardship has resulted from       o
any act of the plaintiff subsequent in the contract, be determined
with reference to the circumstances accepting at the time of
contract. Sub-section (3) provides that court may properly
exercise discretion to decree specific performance in any case
where plaintiff has done substantial acts or suffered losses in       E
consequence of a contract capable of specific performance.

      16. In the present case, it appears that possession was
not given to the plaintiff at the time of execution of the
agreement, nor the area of land agreed to be sold was clear, F
as such, it cannot be said that the plaintiff has done substantial
acts or suffered losses due to expenditure in constructions etc.,
in consequence of a contract capable of specific performance.
The direction given by High Court in the impugned order shows
that the measurements of land actually agreed to be sold, are G
not final.

     17. In the above facts and circumstances of the case, we
are of the view that instead of affirming the decree of specific
performance as modified by High Court, it will be equitable,          H
308         SUPREME COURT REPORTS                    [2015] 9 S.C.R.


A. just and proper to direct the appellants to pay back amount of
   Rs.60,000/- accepted by the original defendant with interest
   @ 18% per annum to the plaintiff/respondent from 04.02.1992
   till date, within a period of three months from today, failing which
   this appeal shall stand dismissed. We order accordingly. The
B amount of Rs. 73, 125/- deposited by the plaintiff may also be
   withdrawn by him after appellants pay or deposit the sum in
   favour of plaintiff as directed above. Appeal stands disposed
   of.

C     Kalpana K. Tripathy                           Appeal disposed of.