NANJAPPANversusRAMASAMY &ANR

                     [2015) 2 S.C.R. 606



                         NANJAPPAN                                  A

                               v.
                     RAMASAMY &ANR

               (CivilAppeal No. 2373 of2015)                        B

                    FEBRUARY 24, 2015

     [V. GOPALA GOWDAAND R. BANUMATHI, JJ.]

Specific Relief Act, 1963: ss.16(c), 20 - Suit for specific
                                                                    c
performance by respondents on the ground that the appellant
agreed to sell the suit property to him for Rs.45000 but did
not execute the sale deed-Agreement to sell was executed
27 years ago and time for performance of contract was               D
extended again and again totaling period of 8 years - Claim
of appellant that he had agreed to sell property to respondent
for Rs. 3 /akhs but in order to reduce registration charges and
stamp duty, respondents requested the appellant to mention
only Rs.45000 - Trial court declined relief of specific             E
performance - Trial court also did not accept defence version
regarding sale price of Rs.3 Jakhs- First appellate court held
that having paid substantial sale consideration of Rs. 42500,
it cannot be said thaf respondents were not ready and willing
to take sale - High Court affirmed same - On appeal, held:          F
All courts below disbelieved version of appellant regarding
sale price of Rs. 3 lacs - However, in view ofpassage of time
and escalation of value ofproperty, grant of discretionary relief
of specific relief of performance would give an unfair              G
advantage to respondents -Advance amount of Rs. 42, 5001
- to be refunded to the respondents with interest@ 9% p.a. -
In addition, the appellant to pay compensation of
Rs.2,00,0001- to the respondents - Evidence Act, 1872-
s.92- Equity.                                                       H
                           606
607      SUPREME COURT REPORTS               [2015] 2 S.C.R.


A         Allowing the appeal, the court

         HELD: 1. The appellant pleaded that as per the
  agreement between the parties, sale price was agreed
  to be Rs.3 lakhs and only to reduce registration charges
B and stamp duty, in the agreement sale price was written
  as Rs.45,000/-. All three courts below disbelieved the said
  version of the appellant. As per Section 92 of the Indian
  Evidence Act, when the terms of any such contract have
  been reduced to the form of a document, no evidence of
C any oral agreement or statement shall be admitted as
  between the parties to any such instrument for the
  purpose of contradicting, varying, adding to or
  subtracting from terms. There was no reason
  warranting interference in the said concurrent findings
0
  of the courts below. [Paras 9, 1O] (613-B-C, D-F]

  2. As per recitals in the first agreement, an amount of
  Rs.25,000/-was paid by the respondents-plaintiffs to the
  appellant-defendant. Balance amount of Rs.20,000/-was
E to be paid within 2-1/2 years thereafter and getthe sale
  executed. In the second agreement of sale, it was stated
  thatthe plaintiffs were unable to pay the balance amount
  within the stipulated period and get the sale deed
F executed and, therefore, the second sale agreement was
  executed exten~ing the period for execution of sale deed
  for a further period of three years. Thus, the time for
  performance of contract was extended again and again
  totaling period of eight years. Under Section 20 of the
G Specific Relief Act, grant of specific performance of
  contract is discretionary. Though the decree for specific
  performance is discretionary, yet the court is not bound
  to grant such a relief merely because it is lawful to do
  so. The court has to take into consideration the
H
         NANJAPP.AN v. RAMASAMY & ANR.                   608



circumstances of each case, conduct of the parties,          A
recitals in the sale agreement and the circumstances
outside the contract have to be seen. The first sale
agreement was executed about twenty seven years ago.
The property is situated in Coimbatore City and over
these years, value of property in Coimbatore City must       B
have considerably increased. In view of passage of time
and escalation of value of the property, grant of specific
relief of performance would give an unfair advantage to
the respondents whereas the performance of the               C
contract would involve great hardship to the appellant
and his family members. Admittedly, suit property is the
only property of tlie appellant and the appellant is said
to have constructed a house and where he is currently
residing with the family. As compared to respondents,        o
the appellant will suffer significant hardship if a decree
for specific performance is granted against the appellant
Considering the circumstances, such as the
construction of the residential house over the suit
property, sale consideration, passage of time and            E
hardship caused to the appellant, makes it inequitable
to exercise the discretionary. relief of specific
performance. Admittedly, respondents have paid
advance amount of Rs.42,500/-, even though, the
respondents are not entitled to the relief of specific       F
performance, the advance amount of Rs.42,500/- paid by
the respondents is to be refunded fo the respondents
with interest at the rate of 9% per annum. In addition,
the appellant is directed to pay compensation of             G
Rs.2,00,000/- to the respondents. [Paras 11, 12, 14, 15,
16] [614-A-C, F; 615-A, C-F; 616-A, C-D]

   Sardar Singh vs. Smt. Krishna Devi & Anr., (1994) 4
   SCC 18; Saradamani Kandaplan vs. Rajalakshmi &
                                                             H
609         SUPREME COURT REPORTS                   [2015] 2 S.C.R.


 A       Ors. (2011) 12 sec 18 : 2011 (8) SCR 874 - relied
         on.

                          Case Law Reference

         (1994) 4 sec 18             relied on           Para 13
 B
         2011 (8) SCR 874            relied on           Para 14

      CIVILAPPELLATE JURISDICTION: Civil Appeal No. 2373
      OF 2015
 c
      From the Judgment and Order dated 17.11.2011 of the High
      Court of Judicature at Madras in S.A. No. 332 of 2005

      V. Mahana for the.Appellant.

 D Jyoti Prashar, Pram it Saxena for the Respondents.

             The Judgment of the Court was delivered by

          R. BANUMATHI, J.             1. Delay condoned.     Leave
 E granted.

      2. This appeal arises out of the judgment dated 17.11.2011 in
      S.A. No.332 of 2005, whereby the High Court of Madras
      dismissed the second appeal affirming the judgment passed
 F    by the first appellate court which reversed the judgment of the
      trial Court allowing the respondents' plea of specific
      performance of agreement of sale.

   3. Brieffacts, giving rise to the present appeal, are as follows
 G :- Respondents have pleaded that on 30.09.1987, the appellant
   agreed to sell the suit property to the respondents for a sum of
   Rs.45,000/- and an agreement of sale was entered into and
   the appellant received a sum of Rs.25,000/- as advance on
   the same day and it was agreed that the balance amount shall
 H
          NANJAPPAN v. RAMASAMY & ANR.                         610
                 (R. BANUMATHI, J.]

be paid within a period of 2% years and the sale be executed A
and to that effect a Sale Agreement (Ex. P1) was executed.
As the appellant was unable to vacate the house on
21.03.1990, the time stipulated for performance was extended
and Second Agreement (Ex. P-2) was executed, on which day,
the respondents paid a further advance of Rs.15,000/- and B
the period was extended to another three years. According to
the respondents, within the stipulated period, the appellant did
not shift to another house and on 09.03.1993, the respondents
paid a further sum of Rs. 2,500/- to the appellant and third C
Sale Agreement (Ex. P-3) was executed and the period was
extended by another two years. Case of the respondents is
that they were ready and willing to perform their part of contract
in getting the sale executed by paying the balance amount to
the appellant but the appellant did not come forward to execute o
the sale deed. There was exchange of legal notice between
the parties, and thereafter, respondents filed a suit for specific
performance stating that they were always ready and willing to
perform their part of the contract.
                                                                   E
4. Appellant filed written statement controverting the averments
made in the plaint and intera/ia contended that the appellant
and the respondents were friends working under the same
management and taking advantage of this, respondents tried
to grab the property worth Rs.10 lakhs by paying a meagre F
consideration of Rs.45,000/-. In the written statement, the
appellant further pleaded that in the year 1987 itself, entire
area including construction would have fetched more than Rs.
3 lakhs. Since the appellant was in need of money, he decided
to sell the property and sale price was fixed at a sum of Rs. 3 G
lakhs and in order to reduce the registration charges and stamp
duty, the respondents requested the appellant not to mention
the actual sale consideration but to mention only Rs.45, 000/-
in the sale agreement to which he agreed. According to the H
611         SUPREME COURT REPORTS                    [2015] 2 S.C.R.


 A    appellant, the respondents could not pay the balance sale
      consideration and the appellant received Rs.2,500/- under the
      third agreement and executed the same only under compulsion
      of the respondents and that is the reason why he did not turn to
      the Registrar's office to register the same. The appellant also
 B    pleaded that the suit property is their only shelter and the
      decree for specific performance after long period would cause
      serious hardship to him and his family members.

   5. Upon consideration of entire facts and evidence, trial court,
 C vide its judgment dated 21.12.2001, declined the relief of
   specific performance by observing that the respondents did
   not prove that they were ready and willing to make the balance
   sale consideration. The trial court did not accept the defence
   plea that the original sale consideration was agreed at Rs.3
 0
   lakhs and in order to reduce the registration charges and stamp
   duty, in the agreement, the sale consideration was mentioned
   as Rs.45,000/-. Being aggrieved by the dismissal of the suit,
   the respondents filed first appeal which was allowed, vide
 E judgment dated 30.12.2003. While allowing the appeal, the
   first appellate court held that having paid substantial sale
   consideration of Rs.42,500/- and left with only Rs. 2,500/-to
   be paid, it cannot be said that the respondents were not ready
   and willing to take the sale. The first appellate court, inter alia,
 F held that the appellant did not discharge the onus to prove that
   the value of the property was mentioned as Rs.45,000/- as
   against the actual market value of Rs.3 lakhs and that no
   knowledgeable person will agree to sell the property for
   Rs.45,000/- when the true value of the property is more than
 G rupees three lakhs. Being aggrieved by the decree for specific
   performance, the appellant approached the High Court by filing
   second appeal, wtierein the High Court affirmed the view taken
   by the first appellate Court and dismissed the second appeal.

 H
           NANJAPPAN v. RAMASAMY & ANR.                           612
                  [R. BANUMATHI, J.]

6. In this appeal, arising out of special leave petition, the         A
appellant seeks to assail the dismissal of the second appeal
contending that after a lapse of long period, it would be
inequitable to grant discretionary relief of specific performance
and that delay caused serious hardship to him. Learned
counsel for the appellant contended that the first appellate court    B
and the High Court ought to have considered that the actual
value fixed for the suit property was Rs.3 lakhs but on the
request of the respondents, the value of the property was
shown as Rs.45,000/- in the agreement to avoid excess stamp           C
duty and registration ::harges payable at the time of registration
of the conveyance deed. It was submitted that a long period
of eight years was given to the respondents to get the sale
deed executed and even after a lapse of eight years of
extension from 1987, the respondents could not pay the actual         D
sale consideration of rupees three lakhs and therefore, there
is no equity in favour of the respondents. It was submitted that
after obtaining permission from the concerned authorities, the
appellant has constructed a house to an extent of 1165 sq. ft.
in the suit property and that is the only shelter for the appellant   E
and "the decree for specific performance after a lapse of long
period of time, would cause serious hardship to him and his
family members.

7. Per contra, learned counsel for the respondents submitted F
that in the light of the definite recitals in the agreement of sale,
the courts below rightly rejected the defence plea that as against
the value of Rs.3 lakhs, lesser amount of Rs.45,000/- was
entered in the agreement of sale. It was further submitted that
having signed in three agreements, it is not open to the G
appellant to resile from the contract. It was contended that
upon appreciation of evidence, the first appellate court, as
affirmed by the High Court, rightly granted the decree for
specific performance which cannot be said to be perverse H
613         SUPREME COURT REPORTS                     (2015) 2 S.C.R.


 A    warranting interference.

      8. On consideration of the submissions, the point falling for
      our consideration is whether the courts below were justified in
      decreeing the suit for specific performance.
 8
      9. The appellant pleaded that as per the agreement between
      the parties, sale price was agreed to be Rs.3 lakhs and only
      to reduce registration charges and stamp duty, in the
      agreement sale price was written as Rs.45,000/-. All three
 c    courts below disbelieved the said version of the appellant that
      the sale price was fixed at rupees three lakhs and that only for
      the purpose of registration charges and stamp duty, in the
      agreement the sale price was written as Rs.45,000/-.

 o 10. As per Section 92 of the Indian Evidence Act, when the
      terms of any such contract have been reduced to the form of a
      document , no evidence of any oral agreement or statement
      shall be admitted as between the parties to any such instrument
      for the purpose of contradicting, varying, adding to or
 E    subtracting from. terms. Courts have recorded concurrent
      findings rejecting the stand of the appellant that the actual sale
      price was rupees three lakhs and for the purpose of stamp
      duty and registration charges, lesser amount was written and
      this is well in accordance with Section 92 of the Evidence Act
 F    and we do not find any reason warranting interference in the
      said concurrent findings of the courts below.

   11. In a suit for specific performance, the plaintiff has to aver
   and prove with satisfactory evidence that he was always ready
 G and willing to perform his part of contract at all material time
   as mandatorily required under Section 16(c) of the Specific
   Relief Act, 1963. First appellate court and the High Court
   recorded findings that the plaintiff was always ready and willing
 H to perform his part of the contract. By a careful reading of the
          NANJAPPAN v. RAMASAMY & ANR.                        614
                 [R. BANUMATHI, J.]

recitals in the agreement, the concurrent findings so recorded A
do not seem to reflect the conduct of the parties. As per recitals
in (Ex.P-1 agreement dated 30.9.1987), an amount of
Rs.25,000/- was paid by the respondents-plaintiffs to the
appellant-defendant. Balance amount of Rs. 20,000/-was to
be paid within 21/2 years thereafter and get the sale B
executed. In the se:cond agreement of sale (Ex.P-2 dated
21.3.1990) it is stated that the plaintiffs were unable to pay
the balance amount within the stipulated period and get the
sale deed executed and therefore the second sale agreement C
was executed extending the period for execution of sale deed
for a further period of three years. As could be seen from the
recitals from Ex.P-2, respondents were unable to pay the
balance sale consideration and get the sale deed executed.
It is pertinent to note that the time for performance of contract o
was extended again and again totaling period of eight years.
Even though first appellate court and High Court recorded
findings that respondents-plaintiffs were ready and willing to
perform their part of contract, the fact that time was extended
for eight years is to be kept in view while considering the E
question whether discretion is to be exercised in favour of the
respondents-plaintiffs.

12. Under Section 20 of the Specific ReliefAct, grant of specific
performance of contract is discretionary. Though the decree F
for specific performance is discretionary, yet the court is not
bound to grant such a relief merely because it is lawful to do
so. But the discretion of the court is not arbitrary, but sound
and reasonable, guided by judicial principles of law and
capable of correction by a court of appeal and should be G
properly exercised keeping in view the settled principles of
law as envisaged in Section 20 of the Act. The jurisdiction of
decreeing specific performance is a discretion of the court
and it depends upon facts and circumstances of each case. H
615         SUPREME COURT REPORTS                   [2015] 2 S.C.R.


 A    The court would take into consideration circumstances of each
      case, conduct of the parties, recitals in the sale agreement
      and the circumstances outside the contract have to be seen.

      13. In Sardar Singh vs. Smt. Krishna Devi & Anr., (1994) 4
 B    SCC 18, this Court observed that as the court has to see the
      totality of the circumstances, conduct of the parties and
      respective interests under the contract while granting/refusing
      such relief.

 c 14. First sale agreement was executed on 30.9.1987 about
   twenty seven years ago. The property is situated in Coimbatore
   City and over these years, value of property in Coimbatore
   City would have considerably increased. In Saradamani
   Kandap/an vs. Rajalakshmi & Ors., (2011) 12 SCC 18, this
 D Court has held that the value of the property escalate in the
   urban areas very fast and it would not be equitable to grant
   specific performance after a lapse of long period of time. In
   the instant case, first agreement was executed on 30.9.1987
   i.e. twenty seven years ago. In view of passage of time and
 E escalation of value of the property, grant of specific relief of
   performance would give an unfair advantage to the
   respondents-plaintiffs whereas the performance of the contract
   would involve gre.at hardship to the appellant-defendant and
 F his family members.

   15. Considering the totality and the facts and circumstances,
   in our view, it is not appropriate to grant discretionary relief of
   specific performance to the respondents-plaintiffs for more than
 G one reason. Admittedly, suit property is the only property of
   the appellant-defendant and the appellant is said to have
   constructed a house and where he is currently residing with
   the family. As compared to respondents, the appellant will
   suffer significant hardship if a decree for specific performance
 H is granted against the appellant. Considering the
            NANJAPPAN v. RAMASAMY & ANR.                        616
                   [R. BANUMATHI, J.]

circumstances, such as the construction of the residential A
house over the suit property, sale consideration, passage of
time and hardship caused to the appellant, makes it inequitable
to exercise the discretionary relief of specific performance and
the concurrent finding of first appellate court and the High Court
decreeing the suit for specific performance is to be set aside. B

16. The next point falling for determination is the relief to be
granted to the respondents-plaintiffs. Admittedly, respondents
have paid advance amount of Rs.42,500/-, even though, the
respondents are not entitled to the relief of specific C
performance, in our view, the advance amount of Rs.42,500/-
paid by the respondents is to be refunded to the respondents
with interest at the rate of 9% per annum. In addition, the
appellant is directed to pay compensation of Rs.2,00,000/-to
                                                                 0
the respondents.

17. In the result, the impugned judgment dated 17.11.2011
passed by the High Court in Second Appeal No.332/2005 is
set aside and this appeal is allowed. The appellant shall refund
Rs.42,500/- with 9% interest per annum from the date of third       E
agreement of sale dated March 9, 1993. Both parties shall
bear their respective costs.

Devika Gujral                                     Appeal allowed.
                                                                    F




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