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Specific Performance of Contract Cases [Latest Judgements]

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The Specific Performance of Contract, for the implementation of a civil transaction, agreed and contracted between the parties in a suit. The Parliament enacted the Specific Relief Acts, 1963 for the proper redressal of default conducted by any of the contracting parties. The law protects the interest of the parties and ensures proper implementation of the agreement.

The law is the crux of civil disputes and a basis for specific relief. The law gives a party in a contract to enforce its interest through different natures of suits becoming a law enforcing contracts in India.

This article complies specific performance of contract case laws which recently adjudicated by different high courts in India.

Index


Suggestion: Specific Performance For Sale of Immovable Property [Latest Judgements]

Case 1: Deepak Kumar vs Mithun Khajuria and Others

[Honโ€™ble Justice Mr. Sanjeev Kumar in CR No 48 of 2020 of the Jammu & Kashmir High Court at Jammu]

โ€œThe Courts have the discretion to add parties in the suit even if the plaintiff has no cause against such party.โ€

The question produced by a party impleaded and tried before the Civil Court was challenged by the petitioner on the ground that, the party being questioned is irrelevant and the consequences of the said suit will not affect the general legal position of the non-applicant in the said civil suit.

In a civil suit, a cause of action determines the reason for filing a civil suit by the plaintiff. By bringing such cause before the civil court, the plea may hamper the rights of the parties which are not impleaded by the plaintiff for bringing such a cause. In this case which answers whether a party not impleaded in a suit by the plaintiff can be brought before the Court?

The argument put forward by the petitioner, that the respondent no. 7 is a dominus litis i.e., who cannot be forced to or compelled as a defendant against whom there is no cause of action. The trial court in its judgement rejected the argument and allowed respondent no.7 to be impleaded as a party in the civil suit.

Facts- As per the facts of the case, the suit property which is a subject matter of the dispute, of which the physical possession is with the Respondent No.7. Therefore, with the intent of protecting its interest respondent no. 7 adjudicated in a lis to array as a party defendant.

The fact of the case is the petitioner has filed the suit for possession, declaration, and an injunction against respondent No. 1 to 6 before the learned trial Court. Respondent no. 7 is the possession of one of the shops in the suit premises and that; respondent no. 6 and 7 both are in the holder of the said shop.

Although respondent No. 7 submits that he is in the possession of the said shop for 50 years and that, his father and Respondent no. 6 were originally given the possession over the said suit shop.

The Learned trial Court accepted the argument of the Respondent No. 7 as per Order 1 Rule 10(2) of the CPC through the trial court having the discretionary power allowing Respondent no. 7 pleaded as the party in the suit.

The Petitioner/plaintiff challenged the discretionary power of the Trial Court on the ground that only the petitioner has the right to sue against the parties it deems necessary for justice. Therefore, the petitioner filed this writ petition under Art 227 of the Constitution to quash the order passed under Order 1 Rule 10(2) of the Code of Civil Procedure, 1908.

Held- The Court agreed with the legal principle as framed in Gurmit Singh Bhatia vs Kiran Kant Robinson and others wherein, the petitioner in a lis is entitled to decide the parties, he should be litigating against. The civil court cannot compel him to implead someone as a party, more so, when the plaintiff has no grievance or cause of action against such a party.

However, Order 1 rule 10 confers discretionary power to the Court to strike out or add parties in a civil suit with two limitations

  • That the Court has no power to join a person as a party, if he could not have been originally impleaded under Order 1 Rule 1 and Rule 3 CPC and
  • That the presence of a person added must be necessary to effectively and completely adjudicate upon and settle all questions involved in the suit.

Although, the Court accepted that no defendant should be added against the plaintiffs will even when the defendant asserts that his interest will be adversely affected by such a suit. The plaintiff in his case is the best judge of his own interest.

The Court delved into the principle of โ€˜dominus litisโ€™ whereby in the judgement of the Supreme Court in Mumbai International Airport Private Limited vs. Regency Conventions Centre and Hotels Pvt. Limited. Another [], which dealt with the question of proper and necessary parties in a suit. The judgement propounded that, the Courts have full discretion without any application before it, to add the following persons as a party:

  • any person who ought to have been joined as plaintiff or defendant but not added
  • any person whose presence before the Court may be necessary in order to enable the court to effectively and completely adjudicate upon and settle the question involved in the suit.

Also, a โ€œnecessary partyโ€ is a person who ought to have been joined as a party and in whose absence no effective decree cannot be passed by the Court. If a necessary party is not added then the suit itself is liable to be dismissed.

The Court kept the view that respondent no. 7 may not be a necessary party to the frame of the suit filed by the petitioner but nonetheless, his claim in possession of the suit property as tenant thereof is a proper party and not a mere intermeddler.

The petitioner may not have grievances against respondent No. 7 but looking at the situation of the parties in the suit, it is evident that Respondent No. 1 and 7 both claiming to be the tenant of the suit premises. Respondent No.1 claiming to be the joint tenant along with Respondent No. 7. Whereas Respondent No. 7 claiming to be in exclusive possession for 50 years. Therefore, it is necessary to enable the Court to effectively adjudicate the controversy involved in the suit.


Also Read: 5 Mistakes Public Inforation Officers Do In Rejecting Information

Case 2: Vikas Aggarwal vs Bal Krishna Gupta &Ors

[Bench: Honโ€™ble Justice Mr Rajiv Sahai Endlaw in CS (OS) No. 2353 of 2013 of the High Court of Delhi]

โ€œA suit for recession of contract by the Buyer is not maintainable after a decree of specific performance of contract is availedโ€

The case features general applicability of rescission of contract as per Section 27 and 28 of the Specific Relief Act, 1963 after the decree of specific performance of the contract has been granted by any court of law. The case delves into the legal aspect and also based upon the equity in interpreting the non-applicability of the recession of contract after a decree for specific performance has been granted.

Facts- The petitioner was decreed for specific performance of an agreement to sell dated 1st Feb 2013 whereby the petitioner has to deposit balance sale consideration and the defendants to deliver possession and execute sale deed as per the judgment of the trial court.

As per the said agreement, the plaintiff had paid Rs 3 crores to the defendants out of which Rs 1 crore was forfeited but the remaining Rs 2 Crores not forfeitable which was liable to be refunded back to the plaintiff parties rescinded from the agreement.

The plaintiff, however, using all legal opportunities for setting aside the decree preferred a separate suit for Recession of the Contract under Section 27 of the Specific Relief Act, 1963.

Thus, raising the question before the Court, whether, plaintiff under Section 27 of the Act comes under the โ€œsuitโ€ or an โ€œapplicationโ€ and can a contract be rescinded even a suit had already decreed for specific performance.

Held- The plaintiff relied on the case of Hungerford Investment Trust Limited vs Haridas Mundhra [(1972) 3 SCC 684] wherein a Court which passes a decree for specific performance can grant relief under Section 27 of the Act. However, the Court inferred from the case that, as per Section 28 of the Act giving recession post-decree for specific performance relating to sale or lease of immovable property only be given to the vendor or lessor, i.e., against whom the decree is passed but not on the purchaser/lessee in favour of whom the decree was passed.

The Court viewed that proceedings under Section 27 of the Act are only for original proceedings. This can be derived from the expression โ€œadjudicated by the Courtโ€ in the provision and also, requires determination of whether the contract is voidable or terminable and โ€œdefendant is more to blame than the plaintiffโ€.

The primary reason, in this case, is that plaintiff being not desirous of continuing with the decree of specific performance and wants a refund of his monies paid to the defendant.

The Court referred to Section 35 of the Specific Relief Act, 1877 (old Act) which was replaced by the new Act of 1963. Section 35 gave a recession of the contract being permissible even after the decree of specific performance.

Comparing it with Section 27 of the Act of 1963 which does not permit rescission post-decree of specific performance. As per Section 28, only the vendor/seller or lessor has the permissible right to rescission post-decree for specific performance.

The law of recession of contract as per Section 27, recessions can only be granted in the following conditions

  1. That is voidable or terminable by the plaintiff.
  2. Where the contract is unlawful for causes not apparent on its face.
  3. That, the defendant is more to be blamed than the plaintiff.

Here, in this case, the contract cannot be termed voidable or terminable or unlawful because a decree for specific performance has already passed. The plaintiff has himself ratified expressively the decree of specific performance which was upheld by the Supreme Court.

The Court held that the re-enactment of the Specific Relief Act did not permit a recession after the decree for specific performance as permitted under the earlier old Act. The permission in recession post decree can only be at the instances of the seller or the lessor under the ambit of Section 28 of the Act.

Therefore, no right to recession of contract was allowed by the Court.


Read: What are the Defenses A Tenant Establishes in A Tenancy Dispute?

Case 3: Smt. Arati Das & Ors. Vs. Shri Promodh Ranjan Das & Anr.

[Bench: Honโ€™ble Justice Bibek Chaudhuri in SA No. 40 of 2001 of Calcutta High Court]

โ€œAny objection against an inconsitant plea of the plaintiff in a civil suit has to raise it in the earliest stage of the trial.โ€

The case involves questions related to inconsistent pleas raised by the plaintiff in a civil suit. The plaintiff files a suit for declaration of title over the suit property and with it also admits that he is the tenant in one part of the suit property. Thus, raising a question of the inconsistent plea raised before the Trial Court which is resolved in this case.

Facts- The second appeal is filed by the defendant no.1 against the order passed by the First Appellate Court. The plaintiff filed the suit for declaration of title, permanent injunction, and partition of 1/3 shares in the suit property.

In the year 1953/54 the plaintiff, defendant No.1 and No.2 and the father of defendant no. 3 purchased the suit property. The property was registered with the names of defendant no.1 and 3 which was paid by the joint family fund of the plaintiff, defendant no 1, 2, and the father of defendant no.3.

On, 13th December 1954, a partition was conducted among the parties whereby the title of the property was divided between defendant no.1 and defendant no 3. On 10th May 1955 defendant no.1 executed a registered deed of the lease in favour of the plaintiff and defendant no.2 to the extent of 2/3rd share of the suit property at a yearly rent of Rs.9/- .

Defendant no.1 entrusted to record the names of the plaintiffs and the defendant no.2 in the RS records of rights. The plaintiff believed that defendant no.1 would place the name of the plaintiff and defendant no.1 in the Records of Rights which as a result did not happened.

Subsequently in the year 1977 defendant no.1 disclosed that plaintiff and defendant no.2 had no share or right, title, and interest over the suit property. So, the plaintiff filed the title suit.

The defendant no. 1 alleged that he purchased the suit property on the half of total consideration money. A partition was executed between him and the defendant no. 3 over the suit property. Therefore, the plaintiff and proforma defendant no.2 have no right, title, and interest over the suit property.

The learned Munisf decreed in favour of the plaintiff and an appeal was also filed and dismissed affirming the judgement of Munsif court.

Held- The Second Appellate Court framed two substantial questions of law

  1. Whether the plea filed by the plaintiff claiming, the title over the suit property and tenancy is an inconstant plea as per Order IV Rule7 of the CPC
  2. Whether the Courts below has erred in holding that the defendant no. 1 is debarred from taking the defence of Benami transaction.

The Court considered that the suit property was jointly paid by the plaintiff, defendant no. 1 & 2, and the father of defendant no.3. A partition took place and the property was divided between defendant no.1 and the defendant no.3. Wherein, the defendant no. 1 was given the title over the suit property.

To further accommodate defendant no.2 and plaintiff in the suit property, the defendant no. 2 executed a registered patta in favour of the proforma defendant no.2 and the plaintiff.

Defendant no.2 alleged that the Learned Courts below did not appreciate the fact, that plaintiff did not have ownership over the suit property from the date of purchase of the suit property. The plaintiff even did not have any grounds to prove that, the consideration amount was paid jointly by the parties in the suit, as there is no account of it.

The Court observed that the plaintiff with proforma defendant no. 2 paid the 2/3rd share of the money, whereas, defendant No. 1 gave 1/3rd of the half of the consideration price and the other half was paid by the father of defendant no. 3. Though, the suit property was purchased in the name of defendant no. 1. Therefore, the plaintiff and proforma defendant no. 2 is the real owner in respect of the suit property. Defendant No. 1 was a mere lender in respect of the alleged share of consideration. Thus, the plaintiff plea of Benami Transaction held proved.

The Court referred to the Supreme Court case in Bhim Singh by Lrs and Anr vs Kan Singh [AIR 1980 SC 727], that to determine the question of Benami Transaction the following circumstances must be observed:-

  • The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction;
  • If it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima-facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary;
  • The true character of the transaction is governed by the intention of the person who has contributed the purchase money and
  • The question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of the parties the motives governing their action in bringing about the transaction and their subsequent conduct, etc.

On point of Inconsistency Plea of tenancy and Title of the Plaintiff

The respondent/plaintiff in its defense argued that the applicant/defendant no.1 cannot raise such plea in the appellate stage because such an issue of maintainability of the suit on point of inconsistent was not raised before the lower courts. The plaintiff cited the case of Smt. Minati Sen vs Kalipada Ganguly [AIR 1997 Cal 386] wherein it was held that if a plea or issue was not pressed by the plaintiff in the trial court then a party has deliberately abandoned it and he cannot be allowed to raise it again at the appellate stage.

The counsel for respondent cited the case of the Supreme Court in Prem Raj vs The DLF Housing and Construction (Private) Ltd & Anr [AIR 1968 SC 1355] wherein a suit for declaration of a contract is void and an alternative plea for specific performance of the same contract was taken by the plaintiff in the case. The Honโ€™ble Court held, that as per the old Specific Relief Act 1877 the plaintiff can sue for the specific performance of a contact and an alternative plea for a recession of the agreement. The omission is deliberate and the intention of the Act is that no such alternative prayer is open to the plaintiff. However, the Court held that such plea cannot be justified under Order VII Rule 7 of the CPC, the plaintiff must show that each of such plea is maintainable.

The Court below held plaintiff possession in the suit property through a registered patta executed by the defendant no.1. The defendant no.1 opposed by stating that the patta was a part of benami transaction. Therefore, the burden to prove the defendant as benamidar was upon the defendant no.1 claiming it. Since the defendant failed to prove that the plaintiff title over the suit property was established.

The Court also held, that Order VII Rule 7 of the Code of Civil Procedure authorizes the appellant to claim relief in the alternative on the facts stated in the plaint and it is open to him to pray even for inconsistent relief. But it must be shown by the plaintiff that each of such pleas is maintainable.

Therefore, the plaintiff/respondent claim of title over the 1/3rd share of the suit property was maintainable because of the registered deed of patta was executed by defendant No. 1.

On the issue of the name of the plaintiff not in the Records of Rights, the Court held that it is not a proof for the document of title. It is a document of possession through the Act that provides a presumption as regards the correctness of the record.

As to which whether the Record of Rights published in respect of the suit property would disentitle the plaintiff to institute a suit for declaration of title. As referred in the case Ayubali Sardar and another vs Derajuddin Mallick and others [1975(2) CLJ 305] wherein, the division bench of Calcutta HC held that notwithstanding any entry adverse to the plaintiffโ€™s claim a suit for declaration of the title based on an independent cause of action is maintainable in law and nothing prevents correction of false entry in the Records of Rights.

Also cited in Jharana Ghosal vs Satyendra Prosad Dhar [1978(1) CLJ 193] held that Section 57B of West Bengal Land Reforms Act, 1955 did no either expressly or by necessary implication exclude the jurisdiction of civil courts to decide a question of title.

The Court did not find any substantial question of law involved in the appeal and was dismissed affirming the judgement and decree of Lower Courts.


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