SATISH KUMARversusKARAN SINGH AND ANOTHER

                           [2016] 11S.C.R.614


A                           SATISH KUMAR
                                    v.
                    KARAN SINGH AND ANOTHER
                      (Civil Appeal No. 7385 of2013)
B                          JANUARY 21, 2016
               (M.Y. EQBAL AND ARUN MlSHRA, JJ.)
         Specific Relief Act, 1963 - s.20 - Specific performance of
  contract - Requirement of law for passing decree for specific
C performance - Lease-hold plot recommended by DDA to be allotted
  to appellant- Receipt-cum-Agreement executed whereunder
  appellant agreed to sell his rights in the plot to respondent for
  consideration - Part consideration paid by respondent - Balance
  amount was to be paid by respondent subsequently - Responde11t
  filed suit for specific performance - Trial court held that the said
D receipt-cum-agreement was an enforceable contract and on that
  finding decreed the suit which was affirmed by the High Court -
  Held: Specific performance cannot be ordered if the contract itself
  suffers from some deject which makes the contract invalid or
  unenforceable - The plot In question was allotted by DDA on certain
  terms and conditions, which were embodied in the lease deed - One
E
  such condition was that property will remain non-transferable for
  a period of ten years - In spite of noticing the aforesaid fact, the
  High Court failed to hold that a decree for specific performance
  cannot be passed - Both trial court and the High Court completely
  misconstrued the facts of the case and misunderstood the law laid
F down by the Supreme Court in the matter of exercising discretionary
  power for granting a decree for specific performance - Appellant
  directed to refund sum paid by the respondents to the appellant
  alongwith interest @ 6% per annum.
         Mayawanti v. Kaushalya Devi, (1990) 3 SCC 1 : 1990
         (2) SCR 350; and Parakunnan Veetill Josephs Son
G
         Mathew v. Nedumbara Kuruivila s Son and others AIR
         1987 SC 2328 - referred to.
                           Case Law Reference
  1990 (2) SCR 350                referred to            Para9
H AIR 1987 SC 2328                 referred to           Para 10
                                 614
        SATISH KUMAR v. KARAN SINGH AND ANOTHER                               615


        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 73 85 of                A
2013.
      From the Judgment and Order dated 24.11.2011 of the High Court
of Delhi at New Delhi, in Regular First Appeal (RFA) No. 405 of2010.
      Pallav Shishodia, Sr. Adv., S. C. Sagar, Nikilesh Ramachandran,
                                                                               B
Advs. for the Appellant.
     Sunil Gupta, Sr. Adv., Sanjay Kumar Tyagi, Mohit Chaudhary,
Ms. Damni Chawla, Imranj Ali, Ms. Puja Sharma, Advs. for the
Respondents.
        The Judgment of the Court was delivered by                             C
       M.Y. EQBAL, J, I. The question that needs consideration in
the instant appeal is as to whether the so called agreement to sell dated
6.1.1995, which is extracted hereinbelow, is enforceable in law for passing
a decree for specific performance of contract. The said agreement
reads as under :-                                                              D
         "RECEIPT+ AGREEMENT DATED 6.1.1995
         Received a sum ofamountRs.2,30,000/-(Two Lac Thirty
         Thousand) from Karan Singh S/o Sh. Basti Ram Rio
         Village and PO Mahipal Pur New Delhi- I I 0 03 7 on sixth
         January, 1995 against our DDA alternative plot                        E
         F.No.32(5)113/87/L&B/Alt.12511 dated 11.8.1989 in the
         name of Sh. Jaishi S/o Sh. Ram Saran R/o V&PO
         Mahipalpur New Delhi. The total area of the above said
         plot is 400 Sq.Yds. The total premium settled for the above
         said plot is Rs.4,60,000/-(Four Lacs Sixty Thousand) will
                                                                               F
         be given at the time of receive the lease after execution
         at the Registrar Office. No payment will be given in
         between."
                                                                      Sd/-
                                                                Jaisi Ram
In the presence of                                       · S/o Ram Saran       G
J .N. Sehrawat                                       Village Mahipal Pur
V&_ PO Mahipal Pur
NewDelhi-110037.
       2. The trial court after recording the evidence decreed the suit of
plaintiff-respondent for specific performance and the High Court by the        H
616             SUPREME COURT REPORTS                           [2016) II S.C.R.



A     impugned judgment dismissed the appeal filed by the appellant and
      affirmed the decree passed by the Trial Court.
            3. We have heard learned counsel appearing for the parties.
             4. The plaintiff's case in the plaint is that a decision was taken by
      the Delhi Development Authority for allotment of a plot of land measuring
 B    400 Sq.yds. in favour of the defendant-respondent. It was pleaded that
      in the year 1995 the defendant had desired to sell his right in the said
      recommendation letter which was to be allotted by the ODA in favour
      of the defendant. It was further pleaded that the defendant agreed to
      sell his right in the aforesaid recommendation letter and the plot to be
c     allotted at a price ofRs.4,60,000/-. For better appreciation para 6 of the
      plaint is extracted hereinbelow :-
             "6. That the negotiations in between the paities had taken
             place and the plaintiffhad agreed to purchase the said rights
             of the defendant in the said recommendation letter and the
 D           plot to be allotted thereto. The dealings were finalized and
             a Receipt-cum-Agreement (for short Agreement) was also
             executed in between the parties on January 6, 1995.
             It is stated that the defendant had agreed to sell his rights in
             the aforementioned recommendation letter and the plot to
 E           be allotted thereunder to the plaintiff for tl1e sale
             consideration ofRs.4,60,000/-(Rupees Four lakhs and Sixty
             thousand only). A sum ofRs.2,30,000/-(Rupees Two Lakhs
             and Thirty Thousand only) was also paid by the plaintiff to
             the defendant on January 6, 1995 itself. Vide the said
             agreement dated January 6, 1995, the defendant had
 F           acknowledged receipt of the sum ofRs.2,30,000/-(Rupees
             Two Lakhs Thirty Thousand only) from the plaintiff. It
             was further agreed that the balance amount of Rs.2,30,000/
             -(Rupees Two Lakhs Thirty Thousand only) would be paid
             by the plaintiff to the defendant when the defendant hands
             over the original lease deed duly executed by the Delhi
 G
             Development Authority in favour of the defendant."
             5. Curiously enough although the total sale consideration fixed
      was Rs. 4,60,000/- but the suit was valued at Rs:6,77,262.75p. on the
      basis of the value fixed by the DDA in respect of the plot in question.
 H
      SATISH KUMAR v. KARAN SINGH AND ANOTHER                                    617
                   [M. Y. EQBAL, J.]

       6. During the pendency of the suit in the trial court the original         A
defendant who was an old person died and his legal representative was
substituted. The original defendant as also the legal representative
contested the suit denying and disputing the alleged receipt-cum-
agreement and stated that no decree for specific performance can be
passed. The trial court held that the receipt-cum-agreement is a legal
                                                                                  B
and valid agreement to sell and shall be enforced by passing a decree
for specific performance. The High Court on the basis of evidence
adduced by the parties affirmed the finding recorded by the trial court.
      7. Prima facie, we are of the view that both the trial court and the
High Court have completely failed to consider the provisions of Specific
ReliefAct and the principles laid down by this Court in catena of decisions       c
as to the requirement of law for passing a decree for specific
performance.
      8. It is well settled thatthe jurisdiction to order specific performance
of contract is based on the existence of a val id and enforceable contract.
Where a valid and enforceable contract has not been made, the Court               D
will not make a contract for them. Specific performance will not be
ordered ifthe contract itself suffers from some defect which makes the
contract invalid or unenforceable. The discretion of the Court will not
be there even though the contract is otherwise valid and enforceable.
    9. This Court in Mayawanti vs. Kaushalya Devi (1990) 3                        E
SCC I held thus:-
            "8. In a case of specific performance it is settled law,
       and indeed it cannot be doubted, that the jurisdiction to order
       specific performance of a contract is based on the existence
       of a valid and enforceable contract. The Law of Contract                   F
       is based on the ideal of freedom of contract and it provides
       the limiting principles within which the parties are free to
       make their own contracts. Where a valid and enforceable
       contract has not been made, the court will not make a
       contract for them. Specific performance will not be ordered
                                                                                  G
       if the contract itself suffers from some defect which makes
       the contract invalid or unenforceable. The discretion of the
       court will be there even though the contract is otherwise
       valid and enforceable and it can pass a decree of specific
       performance even before there has been any breach of the
                                                                                  H
                         -
618            SUPREME COURT REPORTS                            [2016] 11 S.C.R.


A           contract. It is, therefore, necessary first to see whether
            there has been a val id and enforceable contract and then to
            see the nature and obligation arising out of it. The contract
            being the foundation of the obligation the order of specific
            performance is to enforce that obligation."
B           10. Exercise of discretionary power under Section 20 of the
      Specific Relief Act for granting a decree, this Court in the case of
      Parakunnan Veetill Joseph's Son Mathew vs. Nedumbara
      Kuruivila's Son and others, AIR 1987 SC 2328 observed:-
                   "14. Section 20 of the Specific Relief Act, 1963
c           preserves judicial discretion of courts as to decreeing
            specific performance. The court should meticulously
            consider all facts and circumstances of the case. The court
            is not bound to grant specific performance merely because
            it is lawful to do so. The motive behind the litigation should
            also enter into the judicial verdict. The court should take
D           care to see that it is not used as an instrument of oppression
            to have an unfair advantage to the plaintiff. The High Cout1
            has failed to consider the motive with which Varghese
            instituted the suit. It was instituted because Kuruvila could
            not get the estate and Mathew was not prepared to part
E           with it. The sheet anchor of the suit by Varghese is the
            agreement for sale Exhibit A-I. Since Chettiar had waived
            his rights thereunder, Varghese as an assignee could not
            get a better right to enforce that agreement. He is, therefore,
            not entitled to a decree for specific performance."

 F          11. In the instant case both the Trial Court and the High Court
      have completely overlooked and failed to appreciate the following facts:-
            (a) The receipt+ agreement dated 6.1.1995 is a doc4ment
            by which the defendant alleged to have received a sum of
            Rs.2,30,000/- against the alternative plot in question which
G
            the DDA recommended to give to the defendant. The said
            plot will in turn will be given by the defendant to the plaintiff
            after a lease was executed in favour of the defendant by
            the DDA;
            (b) The total premium amount settled by the said agreement
            in respect of the plot was Rs.4,60,000/. whereas the
H
      SATISH KUMAR v. KARAN SINGH AND ANOTHER                                    619
                   [M. Y. EQBAL, J.)

      defendant deposited a sum ofRs.8, 13,389/- with the DOA                     A
      for the allotment of the said plot;
      (c) The plaintiff pleaded in his plaint that the defendant
      had agreed to sell his rights in the recommendation letter
      and the plot to be allotted thereunder to the plaintiff for a
      consideration ofRs.4,60,000/-;                                              B
      (d) Although the right to get the plot was agreed to be sold
      to the plaintiff by the defendant for Rs.4,60,000/- but the
      suit was valued at Rs. 6,77,262.75p. being the rate fixed by
      the DOA.
       12. On the basis of these admitted facts the Trial Court erroneously       c
held that the receipt-cum-agreement is an enforceable contract and on
that finding decreed the suit which was affirmed by the High Court.
        13. It is interesting to note that the High Court has noticed the fact
mentioned in para 24 of trial court judgment that during the pendency of
the !is ODA allotted the plot in question in favour of the deceased father        D
of the defendant (original plaintiff) by executing a lease deed putting a
condition that the plot in question will remain non-transferable for a period
often years. Para 24 of the trial court judgment is quoted hereinbelow:-
       "It is stated on oath by Urned Singh (DWI) that the DOA
       allotted plot in dispute to his deceased father on ce11ain                 E
       terms and conditions, which were embodied in the lease
       deed. One of such conditions was that suit will remain
       non-transferable for a period of ten years."
       14". In spite of the aforesaid fact noticed by the High Court, that
the land so allotted to the defendant- is not transferable for a period of        F
10 years, the High Court failed to hold that a decree for specific
performance cannot be passed.
       15. We are sorry to hold that both the Trial Court and the High
Court have completely misconstrued the facts of the case and
misunderstood the law laid down by this Court in the matter of exercising         G
discretionary power for granting a decree for specific performance.
       16. After giving our anxious consideration to the matter, we are of
the view that the impugned order passed by the trial court and affirmed
by the High Court cannot be sustained in law inasmuch as no decree for
                                                                                  H
620             SUPREME COURT REPORTS                      [2016] 11 S.C.R.


A     specific performance can be passed on the basis of the alleged receipt-
      cum-agreement. We therefore, allow this appeal and set aside the
      judgments passed by the Trial Court and the High Court.
             17. Consequently, we direct the appellant to refund a sum of
      Rs.4,30,000/-(Rupees Four Lakhs Thirty Thousand) which was paid by
 B    the respondents to the appellant together with interest@ 6% per annum
      from the date of such receipt within two months from today. Any amount
      deposited by the respondents in the High Court shall be withdrawn by
      them.


 C    Bibhuti Bhushan Bose                                      Appeal allowed.