India: What Are The Material Questions To Be Addressed By Parties In A Suit For Specific Performance?

Last Updated: 4 April 2019
Article by Renjith Nair and Sonam Mhatre

-The Supreme Court's view in Kamal Kumar v. Premlata Joshi & Ors.1

The Hon'ble Supreme Court of India ("Supreme Court"), vide its judgment in the matter of Kamal Kumar v. Premlata Joshi & Ors. bearing Civil Appeal No. 4453 of 2009 ("the said judgment") has reiterated that the relief of specific performance is a discretionary and equitable relief and that the same may be declined if the Plaintiff fails to plead in accordance with the statutory requirements laid down under the Specific Relief Act, 1963 ("Principal Act"). The Division Bench comprising of Justice Abhay Mohan Sapre and Justice Indu Malhotra has listed down a set of material questions which are sine qua non for grant of relief of specific performance and which must be addressed by the parties in their pleadings with the aid of evidence in accordance with law.

Facts of the case:

The Appellant (Original Plaintiff) filed a civil suit bearing Civil Suit No. 19-A/97 ("Suit") before the Ld. Additional District Judge, Harda, Madhya Pradesh ("Additional District Judge") against the Respondents (Original Defendants) seeking specific performance of a contract with respect to the suit land. The Ld. Additional District Judge dismissed the said suit vide judgment and decree dated 31st August, 2000 on the ground that the Plaintiff had failed to aver and prove that he was ready and willing to perform the essential terms of the contract which were to be performed by him.

Being aggrieved by the order passed by the Ld. Additional District Judge, the Appellant filed First Appeal No. 808 of 2000 ("First Appeal") before the High Court of Madhya Pradesh at Jabalpur ("High Court"). The Hon'ble High Court affirmed the judgment and decree dated 31st August, 2000 passed by the Ld. Additional District Judge and consequently dismissed the First Appeal vide Order dated 08th January, 2008.

Thereafter, the Appellant filed Civil Appeal No. 4453 of 2009 before the Hon'ble Supreme Court challenging the Order dated 08th January, 2008 passed by the Hon'ble High Court.

View of the Hon'ble Supreme Court:

The Hon'ble Supreme Court observed that it is a settled principle of law that the relief of specific performance is a discretionary and equitable relief. Further, it was held that in order to grant the relief of specific performance, certain material questions, which are statutory requirements under the Principal Act, must be gone into by the adjudicating court. The Hon'ble Court listed out the following questions as sine qua non for granting the relief of specific performance which have been reproduced from Paragraph 10 of the said judgment:

  1. Whether there exists a valid and concluded contract between the parties for sale/purchase of the suit property;
  2. Whether the Plaintiff has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract;
  3. Whether the Plaintiff has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed and whether such performance was in conformity with the terms of the contract;
  4. Whether it will be equitable to grant the relief of specific performance to the plaintiff against the defendant in relation to suit property or it will cause any kind of hardship to the defendant and if so, how and in what manner and the extent if such relief is eventually granted to the plaintiff;
  5. Whether the plaintiff is entitled for grant of any other alternative relief, namely refund of earnest money, etc. and if so, on what grounds.

[Emphasis supplied]

The Hon'ble Supreme Court has culled out the aforementioned questions by relying upon the provisions of the Principal Act (Section 16(c), Section 20, Section 21, Section 22 and Section 23) and Forms 47 and 48 of Appendix A (3) of the Code of Civil Procedure, 1908. The Hon'ble Supreme Court observed that the burden is on the parties to address these material questions in their pleadings and prove their submissions by adducing appropriate evidence in accordance with law. Once the parties succeed in satisfying the aforementioned questions, the adjudicating court may exercise its discretion to grant or refuse the relief of specific performance.

It was observed by the Hon'ble Supreme Court that the subordinate courts had decided the matter in light of the material questions posed hereinabove and that the Petitioner had failed to prove that he was ready and willing to perform his obligations under the concerned contract. Further, it was remarked by the Hon'ble Supreme Court that the issue of readiness and willingness on the part of the Petitioner to perform his part of the contract is the most important issue for considering the grant of relief of specific performance. Thus, the Hon'ble Supreme Court held that it was not inclined to freshly appreciate the entire evidence pertaining to the case while exercising extraordinary jurisdiction under Article 136 of the Constitution. Thus, the appeal was dismissed.

Observation:

It is an established position of law that the principles of equity are to be considered by the court while granting the relief of specific performance, although the relief is the creature of a statute.2 The view of the Hon'ble Supreme Court in the matter of K Prakash v. BR Sampath Kumar3 is noteworthy here:

"The discretion which is exercised here is to be governed by rules of law and equity, which are not to oppose, but each, in its turn to be subservient to the other. This discretion follows the law implicitly, in others, allays the rigour of it, but in no case does it contradict it or overturn the grounds or principles thereof."

[Emphasis supplied]

The said judgment of the Hon'ble Supreme Court discussed hereinabove clarifies that as a precursor to a court exercising its discretion, it must scrupulously attempt to find the answers to the material questions laid down in the judgment within the pleadings of the parties and the evidence produced by them. If the Plaintiff fails to answer these material questions, then the suit fails on such count and the question of exercise of discretion as per Section 20 of the Principal Act does not arise at all.

The Principal Act has been largely amended by way of the Specific Relief (Amendment) Act, 2018 ("Amending Act") which came into force on 01st October, 2018. For the purpose of the present discussion, it is pertinent to note that Section 20 of the Principal Act, which empowered the court to exercise discretion in granting the relief of specific performance has been removed by way of the Amending Act. In fact, the Amending Act mandates that the specific performance of a contract must be enforced by the court, subject to Section 11(2), Section 14 and Section 16 of the Act. However, other provisions of the Principal Act which have been referred to in the said judgment, namely Section 16 (c), Section 21, Section 22, Section 23 and Forms 47 and 48 of Appendix A(3) of the Code of Civil Procedure, 1908 remain unamended. Thus, the material questions laid down by the Hon'ble Supreme Court in the said judgment would hold the field today, but for one. Since the discretionary nature of the relief of specific performance has been amended, the following question would no longer be required to be addressed by the parties in the pleadings:

4.Whether it will be equitable to grant the relief of specific performance to the plaintiff against the defendant in relation to suit property or it will cause any kind of hardship to the defendant and if so, how and in what manner and the extent if such relief is eventually granted to the plaintiff;

A bare perusal of the abovementioned question shows that the same is derived from Section 20(2)(b) of the Principal Act. However, the same has been amended vide the Amending Act and therefore, the parties will no longer be required to plead its stand with respect to the abovementioned question. The intention of the Legislature in amending the Principal Act is to bring the relief of specific performance to the fore as opposed to claiming damages in cases of breach of contract. Further, by taking away the discretionary powers of the court in granting specific performance, the Legislature has given consideration to not merely contractual obligations but also the moral obligations of the contracting parties. Thus, it would not be in consonance with the scheme of the Amending Act to deny relief to the Plaintiff on the ground that grant of specific performance would cause hardship to the defendant.

The said judgment of Kamal Kumar v. Premlata Joshi & Ors. provides a crucial clarification with respect to the statutory requirements posed by the scheme of the Principal Act upon the parties seeking relief of specific performance. As stated hereinabove, although the said judgment does not consider the amendments made to the Principal Act, it is the view of the author that it would be applicable to cases under the Amending Act also, with a minor exception which has been pointed out in the foregoing paragraph.

Footnotes

1 Authored by Renjith Nair, Associate, Dhaval Vussonji & Associates and contributed by Sonam Mhatre, Associate Partner, Dhaval Vussonji & Associates.

2 Saukhi Sah v. Mahamaya Prasad Singh, AIR 1934 Pat. 518

3 (2015) 1 SCC 597

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