India: Specific Performance Cannot Be A Discretionary Relief: Supreme Court Of India

The Hon'ble Supreme Court in a recent decision of in Sughar Singh v. Hari Singh (Dead) Through LRs. & Ors.¹ reiterated that specific performance under the Specific Relief Act, 1963 ("Specific Relief Act") is no longer a discretionary relief. The Apex Court observed that where the agreement's execution, part payment of consideration, and plaintiff's willingness are proven in cases dating prior to the 2018 amendment of the Specific Relief Act, the court should exercise its discretion in favour of the plaintiff to enforce specific performance of the agreement. In this article, we navigate through the facts and findings of the aforementioned case.

Brief Facts

One Ram Singh executed an agreement to sell in favour of original plaintiff – Sughar Singh to sell the suit land for a total sale consideration of INR 56,000. Out of the said INR 56,000, a total of INR 25,000 was received by the executant as a part sale consideration at the time of the agreement. The said agreement to sell was executed on 10 October 1976. At the relevant point of time, the agreement to sell was not required to be registered. As per the sale agreement, the sale deed was to be executed within a period of 2 years. The time period of 2 years was extended at the instance of the vendor by the documents dated 30 September 1978 and 29 September 1981. Despite receiving INR 40,000 towards part sale consideration and despite execution of the agreement to sell, the original vendor executed the sale deed of the suit land on 23 June 1984 in favour of defendant Nos. 2 to 5.

Thereafter, Sughar Singh filed a civil suit against the vendor Ram Singh and others. The persons in whose favour subsequently the sale deed was executed were impleaded as defendants Nos. 2 to 5. Sughar Singh alleged that defendant Nos. 2 to 5 had the subsequent sale deed executed on 23 June 1984 even though they had full knowledge of the agreement to sell executed between Ram Singh and Sughar Singh.

The trial court upon hearing the matter, decided the suit in favour of Sughar Singh. Consequently, the trial court decreed the suit vide judgment and decree dated 7 February 1987 and directed the defendant No. 1 to execute the sale deed upon receipt of the remaining consideration of INR 16,000. Thereafter, the matter went through rounds of litigation before the first appellate court, and second appellate court.

The High Court of Judicature at Allahabad ("High Court") raised inter alia the point of non-compliance of the provisions of Section 16(c) of the Specific Relief Act, 1963 ("Specific Relief Act") to the effect that the Sughar Singh failed to aver and prove that he was always ready and willing to perform his part of the contract. Accordingly, the High Court set aside the judgment and order passed by the first appellate court and remanded the matter back for fresh adjudication on the issue of readiness and willingness of Sughar Singh. The matter once against passed through rounds of litigation before reaching the second appellate court. The High Court reversed the trial court's judgment and decree of specific performance solely on the ground that there was no specific averment in the plaint as required under Section 16(c) of the specific Relief Act and there were no specific averments in the plaint with regard to readiness and willingness. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the original plaintiff preferred the instant appeal before the Hon'ble Supreme Court.

Submissions on behalf of the plaintiff

The plaintiff argued that as per the settled proposition of the law laid down by the Hon'ble Supreme Court for determining the readiness and willingness, the suit has to be read as a whole, the pith and substance being that 'readiness and willingness' has to be in spirit and not in the letter and form. Plaintiff submitted that, in the present case, the plaintiff specifically pleaded in its plaint that he was always ready and willing to get the sale deed executed and registered and perform his part of agreement.

The plaintiff stated that even assuming for the sake of arguments that the pleadings were not as per the prescribed form, the same would not render the suit not maintainable in view of the law laid in Syed Dastagir v. T.R. Gopalakrishna².

Submission on behalf of the defendants

The defendants submitted that the High Court rightly dismissed the suit and refused to grant the relief for specific performance in favour of the plaintiff on the ground that there were no sufficient required averments in the plaint as per Section 16(c) of the Specific Relief Act.

The defendants argued that non-compliance of Section 16(c) of the Act was fatal to the case of the plaintiff and therefore, the plaintiff was not entitled to the discretionary relief of decree for specific performance.

Held

The Hon'ble Supreme Court having gone through the necessary averments in the plaint observed that it could not be said that the averments / pleadings lacked the requirement of Section 16(c) of the Specific Relief Act.

The Apex Court noted that even in the deposition it was the specific case on behalf of the plaintiff that he paid initially INR 25,000 as part sale consideration and the sale deed was to be executed within a period of two years. That, thereafter, the period was extended on the prayer of Ram Singh who as such was the father-in-law of the plaintiff. The time period was extended till 31 October 1984. Then the plaintiff paid a further sum of INR 7000 to Ram Singh for which also the document was executed. Thus, the Apex Court observed that from time to time, a total sum of INR 40,000 was paid out of the total sale consideration of INR 56,000.

Considering the aforesaid facts and circumstances, the Hon'ble Supreme Court opined that the High Court had committed a grave error in holding the issue with respect to readiness and willingness against the plaintiff solely on the ground that there are no specific pleadings in the plaint as required under Section 16(c) of the Specific Relief Act.

Referring to the decision in Syed Dastagir v. T.R. Gopalakrishna (supra), the Hon'ble Supreme Court reiterated that to gather true spirit behind a plea it should be read as a whole. Unless a statute specifically required a plea to be in any particular form, it could be in any form. No specific phraseology or language was required to take such a plea. The language in Section 16(c) did not require any specific phraseology but only that the plaintiff must aver that he has performed or has always been and is willing to perform his part of the contract.

In so far as the finding recorded by the High Court on Section 20 of the Specific Relief Act that even if the agreement is found to be duly executed and the plaintiff is found to be ready and willing to perform his part, the grant of decree of specific performance is not automatic and it is a discretionary relief is concerned, the Apex Court held that the same could not be accepted and/or approved.

The Apex Court observed that the plaintiff could not be punished by refusing the relief of specific performance despite the fact that the execution of the agreement to sell in his favour had been established and proved and that the plaintiff is found to be always ready and willing to perform his part of the contract. For the aforesaid, the Hon'ble Supreme Court noted that an amendment to the Specific Relief Act had been introduced. The Apex Court opined that though the amendment may not be applicable retrospectively but can be a guide on the discretionary relief.

In view of the above findings, the impugned judgment of the High Court was quashed and set aside. The judgment of the trial court was restored and the suit was decreed for specific performance of the agreement dated 10 October 1976 in favour of the plaintiff.

Comment

The instant decision provides much needed guidance on the exercise of discretion by the courts in matters dating prior to the introduction of the 2018 amendment in the Specific Relief Act which takes away the discretionary powers of the court on grant of specific performance of a contract. The Hon'ble Supreme Court has rightly held that allowing the courts to exercise discretion and refuse specific performance in cases with proven record of execution of agreement, and willingness of the plaintiff to perform his part would only encourage dishonestly. Hence, the balance should tilt in favour of plaintiff in such cases rather than the defendant.

Footnotes

1. Sughar Singh v. Hari Singh (Dead) Through LRs. & Ors., Civil Appeal No. 5110 of 2021.

2. Syed Dastagir v. T.R. Gopalakrishna, 1999 6 SCC 337.

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