Supreme Court of India
PARSWANATH SAHAversusBANDHANA MODAK (DAS) AND ANR.
- Citation
- 2024 INSC 1022
- Decided
- 19 December 2024
- Disposal
- Disposed off
- Bench
- B PARDIWALA
Holding
The High Court erred in refusing specific performance because the alleged hardship was not unforeseeable at the time of contract and the discretion under Section 20 was not exercised soundly.
Summary
The plaintiff, Parswanath Saha, entered into a registered agreement of sale with the deceased predecessor of the defendants for a residential property and paid earnest money. After the predecessor's death, the defendants refused to execute the sale deed, prompting the plaintiff to sue for specific performance. The trial court decreed specific performance, ordering the defendants to execute the deed upon payment of the balance consideration. The High Court set aside that decree, holding that enforcing the deed would cause hardship to the defendants who would become homeless. The Supreme Court held that the High Court erred because the hardship must be assessed at the time of contract formation and the defendants failed to prove any unforeseen hardship. Consequently, the Supreme Court restored the trial court's decree with a modification increasing the balance consideration to Rs.20,00,000. The appeal was allowed, and the specific performance decree was reinstated with the modified terms.
Issues considered
- The High Court erred in setting aside the trial court's decree for specific performance on the ground of alleged hardship to the defendants.
- Whether the hardship alleged by the defendants falls within Section 20(2)(b) of the Specific Relief Act, 1963, considering the time of contract formation.
- Whether the discretion under Section 20 of the Specific Relief Act, 1963, was exercised soundly and reasonably by the High Court.
- Whether the trial court correctly held that the plaintiff was ready and willing to perform his part of the contract.
Legislation cited
Headnote
Issue for Consideration Whether the High Court committed any error in passing the impugned judgment setting aside the decree of specific performance passed by the Trial Court in favour of the plaintiff-appellant. Headnotes† Specific Relief Act, 1963 – s.20, prior to the 2018 Amendment specific performance – Agreement of Sale was executed by the predecessor of the defendants- respondents (husband of respondent no.1 and father of respondent no.2) in favour of the plaintiff-appellant however, he died before the execution of the Sale deed – Defendants declined to
Subjects
Specific performanceHardshipSpecific Relief ActSection 20Discretionary jurisdictionContract lawSale deedAppellate courtDecree modification
Judgment
[2024] 12 S.C.R. 1186 : 2024 INSC 1022
Parswanath Saha
v.
Bandhana Modak (Das) and Anr.
(Civil Appeal No. 14804 of 2024)
20 December 2024
[J.B. Pardiwala* and R. Mahadevan, JJ.]
Issue for Consideration
Whether the High Court committed any error in passing the
impugned judgment setting aside the decree of specific performance
passed by the Trial Court in favour of the plaintiff-appellant.
Headnotes†
Specific Relief Act, 1963 – s.20, prior to the 2018 Amendment –
Discretion as to decreeing specific performance – Agreement
of Sale was executed by the predecessor of the defendants-
respondents (husband of respondent no.1 and father of
respondent no.2) in favour of the plaintiff-appellant however,
he died before the execution of the Sale deed – Defendants
declined to execute the Sale Deed – Decree of specific
performance passed by Trial Court in favour of the plaintiff –
Decree set aside by High Court holding that the predecessor
of the defendants was unable to foresee the hardship that
would be caused to him and the family at the time when he
executed the Agreement of Sale w.r.t the suit property and the
defendants were able to establish that except the suit property
they did not have any other property and if they had to part
with it that would cause hardship to them – Correctness:
Held: Not correct– High Court erred in taking the view that the
plaintiff was not entitled to the decree for specific performance
as it would cause hardship to the defendants – It overlooked the
fact that the question of hardship in terms of Section 20(2)(b) r/w
explanation (2) bears reference to hardship, which the defendant did
not foresee at the time of entering into the contract – The issue of
hardship would come into play only if it was established by cogent
evidence that predecessor of the defendants who executed the
Agreement of Sale was unable to foresee the hardship at the time
* Author
[2024] 12 S.C.R. 1187
Parswanath Saha v. Bandhana Modak (Das) and Anr.
of entering into the contract – The explanation elucidates the point
of time at which the hardship has to be determined with reference
to the circumstances existing at the time of the contract, except
where the hardship has been caused from an act of the plaintiff
subsequent to the contract – Nothing in the pleadings or evidence
shows that there was a hardship of the kind which the predecessor
of the defendants did not foresee at the time he executed the
Agreement of Sale or that the hardship which the defendants would
face is the result of an act of the plaintiff based on his supervening
acts – Defendants brought nothing on record to show that the
suit property was the only shelter available to them – In fact, the
evidence on record shows that the predecessor of the defendants
was not getting along well with them and the defendants were
residing separately – It was only when he passed away that the
defendants tried to take over the suit property – Impugned order
set aside, decree of the Trial Court restored with modification as
stated. [Paras 33-36, 43]
Specific Relief Act, 1963 – s.20, prior to the 2018 Amendment –
Discretion as to decreeing specific performance – Refusal
to decree specific performance on the ground of ‘hardship’:
Held: The jurisdiction to decree specific performance is
discretionary – The discretion is not arbitrary but is “sound and
reasonable”, to be “guided by judicial principles” – The exercise
of discretion is capable of being corrected by a court of appeal
in the hierarchy of appellate courts – Sub-section (2) of Section
20 contains a stipulation of those cases where the court may
exercise its discretion not to grant specific performance – Section
20 as it stood prior to the 2018 Amendment shows as to under
what circumstances ‘hardship’ can be taken into consideration in
refusing specific performance – It is not possible to enumerate
the different circumstances which constitute a hardship and the
question of hardship will have to be adjudged in the facts and
circumstances of the case. [Paras 27, 28]
Words and Phrases – “mere” – Specific Relief Act, 1963 –
ss.20(4), 20(2)(a)-(c) – Explanations – Discussed. [ Paras 8, 29]
Case Law Cited
K. Narendra v. Riviera Apartments (P) Ltd. [1999] 3 SCR 777 :
(1999) 5 SCC 77; Nirmala Anand v. Advent Corpn. (P) Ltd. & Ors.
1188 [2024] 12 S.C.R.
Supreme Court Reports
[2002] Supp. 2 SCR 706 : (2002) 8 SCC 146; K. Prakash v. B.R.
Sampath Kumar [2014] 13 SCR 702 : (2015) 1 SCC 597; Nanjappan
v. Ramasamy & Anr [2015] 2 SCR 606 : (2015) 14 SCC 341;
Ferrodous Estates (Pvt.) Ltd. v. P. Gopirathnam (Dead) & Ors., 2020
INSC 586 : [2020] 13 SCR 673; Sanghi Bros (Indore) Pvt. Ltd. v.
Kamlendra Singh, 2023 SCC OnLine Del 5528; Jayakantham &
Ors. v. Abhaykumar [2017] 2 SCR 355 : (2017) 5 SCC 178; Kamal
Kumar v. Prem Lata Joshi and Ors. [2019] 1 SCR 54 : (2019) 3
SCC 704; Shenbagam and Ors. v. K. K. Rathinavel (1969) 2 SCC
539; Ouseph Varghese v. Josph Aley [1970] 1 SCR 921 : (1969)
2 SCC 539; G.W. Davis v. Maung Shwe Go, 1911 SCC OnLine
PC 25; Prakash Chandra v. Narayan [2012] 5 SCR 444 : (2012)
5 SCC 403 – referred to.
Books and Periodicals Cited
Chitty on Contracts (27th Edn., 1994, Vol. 1., at p. 1296).
List of Acts
Specific Relief Act, 1963.
List of Keywords
Section 20 of the Specific Relief Act, 1963; Prior to the 2018
Amendment; Decree of specific performance; Hardship; Refusing
specific performance/Refusal of specific performance of the
contract; Act of the plaintiff subsequent to the contract; Agreement
of Sale; Sale Deed; Predecessor of the defendants; Residing
separately; Hierarchy of appellate courts; Discretion not to grant
specific performance; Court of appeal.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14804 of
2024
From the Judgment and Order dated 29.07.2022 of the High Court
of Tripura at Agartala in RFA No. 28 of 2019
Appearances for Parties
Pijush Kanti Roy, Sr. Adv., Mrs. Kakali Roy, Rajan K. Chourasia,
Advs. for the Appellant.
Ajit Pravin Wagh, Advs. for the Respondents.
[2024] 12 S.C.R. 1189
Parswanath Saha v. Bandhana Modak (Das) and Anr.
Judgment/Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
1. Leave granted.
2. This appeal arises from the judgment and order passed by the
High Court of Tripura in Regular First Appeal No. 28 of 2019 dated
29.07.2022 by which the High Court allowed the appeal filed by the
respondents herein (Original Defendants) and thereby quashed and
set aside the judgment and decree passed by the Civil Judge West
Tripura, Agartala granting Specific Performance of Agreement of
Sale in Title Suit No.135 of 2016 instituted by the appellant herein
(Original Plaintiff).
3. Facts giving rise to this appeal may be summarised as under:
(a) The appellant herein (Original Plaintiff) instituted Case No.
T.S. 135 of 2016 in the Court of Civil Judge Senior Div. (Court
No. 1) West Tripura, Agartala and prayed for the following reliefs:
(i) A decree for declaration of the entitlement of the
Plaintiff to get the execution, registration and
possession of the suit land from the Defendants
as part performance of the contract following
the registered deed of Agreement for Sale dated
27.05.2016.
(ii) A decree for mandatory injunction directing the
Defendants to execute and register the sale deed
in respect of the suit land in favour of the plaintiff
and to handover the possession of the suit land to
the plaintiff as part performance of the contract in
pursuance of the deed of Agreement for Sale within a
specified period failing which to execute and register
the sale deed in respect of the suit land in favour of
plaintiff and to hand over possession of the suit land
to the plaintiff through the Ld. Court by enforcing the
decree as may be passed.
1190 [2024] 12 S.C.R.
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(iii) A decree for permanent injunction restraining the
defendants and their agents from making any kind
of transfer of the suit land to others or to give any
mortgage, lease, etc of the suit land till disposal of
the present suit.
(b) It appears from the materials on record that the husband of
the respondent no. 1 herein and father of the respondent no. 2
herein namely Late Prabha Ranjan Das was the lawful owner
of the suit property.
(c) The appellant herein entered into a registered Agreement of
Sale dated 27.05.2016 with respect to the suit property. The
total sale consideration fixed was of Rs. 17,50,000.00 (Rupees
Seventeen Lakh Fifty Thousand only). An amount of Rs.
4,00,000.00 (Rupees Four Lakh only) was paid to Late Prabha
Ranjan Das by the appellant herein towards earnest money.
(d) Prabha Ranjan Das passed away on 05.07.2016 leaving behind
the respondents (Original Defendants) as his lawful heirs.
(e) The appellant herein called upon the respondents herein to
execute the Sale Deed in accordance with the terms of the
Agreement of Sale dated 27.05.2016 duly executed by Prabha
Ranjan Das.
(f) The respondents herein declined to execute the Sale Deed. In
such circumstances, the appellant herein was left with no other
option but to institute the suit, seeking specific performance of
the contract.
(g) In the suit, the Trial Court framed the following issues:
(i) Is the suit maintainable in its present form and nature?
(ii) Has the plaintiff any cause of action to institute the
instant suit?
(iii) Has the plaintiff entered into a registered agreement
for sale dated 27.05.2016 with Prabha Ranjan Das
(predecessor of the defendants) to purchase the
suit land?
(iv) Are the averments available in the plaint in respect of
readiness and willingness to perform the part of the
[2024] 12 S.C.R. 1191
Parswanath Saha v. Bandhana Modak (Das) and Anr.
contract in its true construction sufficient to enforce
specific performance as prayed for?
(v) Is the plaintiff entitled to get a registered sale deed
in terms of agreement for sale?
(vi) Is the plaintiff entitled to get a decree as prayed for?
(vii) What other relief / reliefs the plaintiff is entitled to?
(h) The suit ultimately came to be allowed in favour of the appellant
herein vide judgment and decree dated 20.11.2018. The
operative part of the order passed by the Trial Court reads thus:
“In the result, the suit is decreed with cost in favour
of the plaintiff with following directions:
(a) the defendant No. 1 Smt. Bandana Modak (Das)
shall execute a Registered Deed of Sale on behalf of
herself and also being the guardian on behalf of her
minor son i.e. defendant No. 2 Master Diptanu Das
in favour of the plaintiff Shri Parswanath Saha for the
suit land measuring 1 ganda 1 kara of land alongwith
building thereon measuring 529 sq.ft appertaining
to Khatian No.347 having R.S. Plot No.151 within a
period of forty five days from the date of drawing up
of decree failing which the plaintiff will be entitled to
get the Sale Deed be executed through this Court
as per law subject to payment of rest consideration
amount of Rs.13,50,000/- (thirteen lac fifty thousand)
only by the plaintiff to the defendants;
(b) the defendants shall hand over the possession of
the suit land to the plaintiff immediately after execution
of the above mentioned Sale Deed along with all the
documents of title relating to the suit property which
are in the defendants’ possession or power.
Prepare decree accordingly.
Sheristadar of my Court is hereby directed to prepare
the decree in the light of my above judgment and to
place it before me for my signatures within 15 (fifteen)
days from the date of passing of this judgment.
1192 [2024] 12 S.C.R.
Supreme Court Reports
Make necessary entry in the Trial Register.
Thus this case is disposed of without contest.”
(i) The respondents herein (Original Defendants) went in appeal
before the High Court. The High Court allowed the appeal
essentially on the ground that Late Prabha Ranjan Das was
unable to foresee the hardship that would be caused to him and
the family at the time when he executed the Agreement of Sale
with respect to the suit property. The High Court accepted that
Late Prabha Ranjan Das executed the registered Agreement of
Sale with respect to the suit property and had also accepted Rs.
4,00,000.00 (Rupees Four Lakh only) by way of earnest money.
However, as stated above, the High Court took the view that
the defendants have been able to establish that except the suit
land they do not have any other property and if they had to part
with the suit property that would cause lot of hardship to them.
(j) The High Court while allowing the First Appeal filed by the
defendants observed as under:
“17. Apart from the aforesaid facts, we find that the
submission of learned senior counsel appearing on
behalf of the plaintiff that the defendants have not
pleaded the fact of hardship in their written statement
is not correct. The defendants have specifically stated
in their written statement that except the suit land
they have no other piece of land and they require
the suit land for their own residential purpose and
they cannot expect to dispose of their only piece
of land and building standing thereon which would
render them homeless, shelterless and roofless. This
pleading is also supported by their evidence. Even
from the evidence of the witnesses of the plaintiff, it is
established that the defendant no. 1 used to reside in
the house of her father at Beltali. The plaintiff deposing
as PW-1 specifically stated that he along with his
staff met with the defendant No.1 personally in the
house of her father at Beltali, Agartala on 21.08.2016
and told her as to whether she could obtain the said
Survivor Certificate and the Guardianship Certificate.
[2024] 12 S.C.R. 1193
Parswanath Saha v. Bandhana Modak (Das) and Anr.
18. From such evidence of the plaintiff, there cannot
be any doubt that the defendants had no shelter other
than the father of the defendant no.1 and according to
us, this admitted fact is enough to prove the hardship
of the defendants that the defendant no.1, who along
with her minor son would be rendered homeless and
shelterless, if the suit for specific performance of the
agreement of sale (Exbt.1) is decreed in favour of
the plaintiff.”
19. Applying the well settled principle that it is not
always necessary to grant specific performance
simply for the reason that it is legal to do so, we are
of the opinion, that the case in hand is a fit case to
exercise our discretion rejecting the plaintiffs claim
to ask the defendants to execute the deed of sale in
terms of Exbt.1 as decreed by learned court below.
20. As a sequel, we hold that the plaintiff is not
entitled to get a decree for specific performance of
the agreement of sale (Exbt.-1) and the defendants
are not under any obligation to execute the sale deed
in favour of the plaintiff in the light of the agreement
of sale (Exbt.-1). However, the plaintiff is definitely
entitled to get refund of the earnest money, which
he paid to late Prabha Ranjan Das, the predecessor
of the defendants along with interest at the rate of
8% per annum. The defendants shall refund the said
earnest money of Rs.4,00,000 (Rupees four lakhs)
along with simple interest at the rate of 8% per annum
to the plaintiff from the date of the institution of the
suit within a period of 3(three) months from today.”
4. The appellant herein being dissatisfied with the impugned judgment
and order passed by the High Court is here before this Court with
the present appeal.
RELEVANT PROVISIONS OF LAW
5. Section 20 of the Specific Relief Act, 1963 as it then stood i.e., prior
to the 2018 amendment reads as under:
1194 [2024] 12 S.C.R.
Supreme Court Reports
“20. Discretion as to decreeing specific performance.-(1)
The jurisdiction to decree specific performance is
discretionary, and the Court is not bound to grant such
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 and capable of correction by
a Court of Appeal.
(2) The following are cases in which the Court may properly
exercise discretion not to decree specific performance.-
(a) where the terms of the contract or the conduct
of the parties at the time of entering into the
contract or the other circumstances under which
the contract was entered into are such that the
contract, though not voidable, gives the plaintiff
an unfair advantage over the defendant; or
(b) where the performance of the contract would
involve some hardship on the defendant which
he did not foresee, whereas its non-performance
would involve no such hardship on the plaintiff; or
(c) where the defendant entered into the contract
under circumstances which though not rendering
the contract voidable, makes it inequitable to
enforce specific performance.
Explanation 1. — Mere inadequacy of consideration, or the
mere fact that the contract is onerous to the defendant or
improvident in its nature, shall not be deemed to constitute
an unfair advantage within the meaning of Clause (a) or
hardship within the meaning of clause (b).
Explanation 2.— The question whether the performance of
a contract would involve hardship on the defendant within
the meaning of clause (b) shall, except in cases where
the hardship has resulted from any act of the plaintiff
subsequent to the contract, be determined with reference
to the circumstances existing at the time of the contract.
(3) The Court may properly exercise discretion to decree
specific performance in any case where the plaintiff has
[2024] 12 S.C.R. 1195
Parswanath Saha v. Bandhana Modak (Das) and Anr.
done substantial acts or suffered losses in consequence
of a contract capable of specific performance.
(4) The Court shall not refuse to any party specific
performance of a contract merely on the ground that the
contract is not enforceable at the instance of the other
party.”
6. The relief of specific performance having its roots in equity, the
Specific Relief Act, 1963, prior to its amendment has preserved
the discretion of the Court not to grant the relief even though the
agreement is specifically performable in law. The only fetters imposed
by the statute on the exercise of the discretion are that the discretion
must not be exercised arbitrarily but soundly and reasonably and
guided by judicial principles. The phrase “capable of correction by a
Court of appeals” has been inserted possibly to indicate the necessity
for the Trial Court to state the reasons for exercising its discretion
in a particular way. The circumstances when specific performance
mentioned in the Clauses (a), (b) and (c) of Sub-section (2) of Section
20 cannot be granted are not expressly exhaustive. They indicate
the situations in which the Court may properly exercise discretion
not to decree specific performance. However, certain considerations
have been excluded as relevant factors. These are contained in
Explanations 1 and 2 to the Section as well as in Section 20(4).
It is to be noticed that each of these exclusions are preceded by
the word “mere”. The word “mere” in the context means “sole”. In
other words, any one of those factors by itself would not justify the
exercise of discretion against granting specific performance. The
factors cumulatively or with other factors may form the basis of a
decision not to grant specific performance.
7. Hardship of the defendant may be one of the grounds which may
be taken into consideration for exercising its discretion by the Court
in refusing to grant a decree for specific performance of contract.
POSITION OF LAW
8. In K. Narendra v. Riviera Apartments (P) Ltd., reported in (1999)
5 SCC 77 this Court held as under:
“29. Section 20 of the Specific Relief Act, 1963 provides
that the jurisdiction to decree specific performance is
1196 [2024] 12 S.C.R.
Supreme Court Reports
discretionary and the court is not bound to grant such relief
merely because it is lawful to do so; the discretion of the
court is not arbitrary but sound and reasonable guided by
judicial principles and capable of correction by a court of
appeal. Performance of the contract involving some
hardship on the defendant which he did not foresee
while non-performance involving no such hardship on
the plaintiff, is one of the circumstances in which the
court may properly exercise discretion not to decree
specific performance. The doctrine of comparative
hardship has been thus statutorily recognized in India.
However, mere inadequacy of consideration or the
mere fact that the contract is onerous to the defendant
or improvident in its nature, shall not constitute an
unfair advantage to the plaintiff over the defendant or
unforeseeable hardship on the defendant. The principle
underlying Section 20 has been summed up by this
Court in Lourdu Mari David and others v. Louis Chinnaya
Arogiaswamy and others (1996) 5 SCC 589 by stating that
the decree for specific performance is in the discretion of
the Court but the discretion should not be used arbitrarily;
the discretion should be exercised on sound principles of
law capable of correction by an appellate court.
xxx xxx xxx
35. … Possession over a meagre part of the property
was delivered by the appellant to the respondents, not
simultaneously with the agreement but subsequently
at some point of time. To that extent, the recital in the
agreement and the averments made in the plaint filed by
the respondents are false. On a major part of the property,
the appellant has continued to remain in possession.
As opposed to this, the respondents have neither
pleaded nor brought material on record to hold that
they have acted in such a way as to render inequitable
the denial of specific performance and to hold that
theirs would be a case of greater hardship over the
hardship of the appellant. Upon an evaluation of the
totality of the circumstances, we are of the opinion
that the performance of the contract would involve
[2024] 12 S.C.R. 1197
Parswanath Saha v. Bandhana Modak (Das) and Anr.
such hardship on the appellant as he did not foresee
while the non-performance would not involve such
hardship on the respondents. The contract though
valid at the time when it was entered, is engrossed
into such circumstances that the performance thereof
cannot be secured with precision. The present one is
a case where the discretionary jurisdiction to decree the
specific performance ought not to be exercised in favour
of the respondents. …”
(Emphasis supplied)
9. In Nirmala Anand v. Advent Corpn. (P) Ltd. & Ors., reported in
(2002) 8 SCC 146 this Court held as under:
“6. It is true that grant of decree of specific performance
lies in the discretion of the court and it is also well settled
that it is not always necessary to grant specific performance
simply for the reason that it is legal to do so. It is further
well settled that the court in its discretion can impose any
reasonable condition including payment of an additional
amount by one party to the other while granting or refusing
decree of specific performance. Whether the purchaser
shall be directed to pay an additional amount to the seller or
converse would depend upon the facts and circumstances
of a case. Ordinarily, the plaintiff is not to be denied
the relief of specific performance only on account of
the phenomenal increase of price during the pendency
of litigation. That may be, in a given case, one of
the considerations besides many others to be taken
into consideration for refusing the decree of specific
performance. As a general rule, it cannot be held that
ordinarily the plaintiff cannot be allowed to have, for
her alone, the entire benefit of phenomenal increase
of the value of the property during the pendency of
the litigation. While balancing the equities, one of the
considerations to be kept in view is as to who is the
defaulting party. It is also to be borne in mind whether
a party is trying to take undue advantage over the
other as also the hardship that may be caused to the
defendant by directing specific performance. There
1198 [2024] 12 S.C.R.
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may be other circumstances on which parties may not
have any control. The totality of the circumstances is
required to be seen.”
(Emphasis supplied)
10. In K. Prakash v. B.R. Sampath Kumar, reported in (2015) 1 SCC
597 this Court held as under:
“18. Subsequent rise in price will not be treated as a
hardship entailing refusal of the decree for specific
performance. Rise in price is a normal change of
circumstances and, therefore, on that ground a decree
for specific performance cannot be reversed.
19. However, the court may take notice of the fact that
there has been an increase in the price of the property
and considering the other facts and circumstances of
the case, this Court while granting decree for specific
performance can impose such condition which may
to some extent compensate the defendant-owner of
the property …”
(Emphasis supplied)
11. In Nanjappan v. Ramasamy & Anr., reported in (2015) 14 SCC
341, this Court held as under:
“11. Under Section 20 of the 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. 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 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. The court would take into
consideration circumstances of each case, conduct
of the parties, recitals in the sale agreement and the
[2024] 12 S.C.R. 1199
Parswanath Saha v. Bandhana Modak (Das) and Anr.
circumstances outside the contract have to be seen.
12. In Sardar Singh v. Krishna Devi [(1994) 4 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.
13. 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 Kandaplan vs. Rajalakshmi & Ors., (2011)
12 SCC 18, this 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
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 great hardship to the
appellant-defendant and his family members.”
(Emphasis supplied)
12. In Ferrodous Estates (Pvt.) Ltd. v. P. Gopirathnam (Dead) & Ors.,
reported in 2020 INSC 586, this Court held as under:
“28. … Section 20, as it then stood, makes it clear
that the jurisdiction to decree specific performance is
discretionary; but that this discretion is not arbitrary but
has to be exercised soundly and reasonably, guided by
judicial principles, and capable of correction by a court of
appeal - see section 20(1). Section 20(2) speaks of cases
in which the court may properly exercise discretion not to
decree specific performance. Significantly, under clause
(a) of sub-section (2), what is to be seen is the terms
of the contract or the conduct of the parties at the time
of entering into the contract. Even “other circumstances
under which the contract was entered into” refers only to
1200 [2024] 12 S.C.R.
Supreme Court Reports
circumstances that prevailed at the time of entering into
the contract. It is only then that this exception kicks in -
and this is when the plaintiff gets an unfair advantage over
the defendant. Equally, under clause (b) of subsection
(2), the hardship involved is again at the time of
entering into the contract which is clear from the
expression “which he did not foresee”. This is made
clear beyond doubt by Explanation II of section 20
which states that the only exception to the hardship
principle contained in clause (b) of sub-section (2)
is where hardship results from an act of the plaintiff
subsequent to the contract. In this case also, the act
cannot be an act of a third party or of the court - the
act must only be the act of the plaintiff. Clause (c) of
sub-section (2) again refers to the defendant entering
into the contract under circumstances which makes it
inequitable to enforce specific performance. Here again,
the point of time at which this is to be judged is the time
of entering into the contract.”
(Emphasis supplied)
13. In Sanghi Bros (Indore) Pvt. Ltd. v. Kamlendra Singh, reported
in 2023 SCC OnLine Del 5528, Delhi High Court held as under:
“101. In view of the above-mentioned judgments, it is
apparent that the view taken by the Court is applicable
to the instant Suit. The MOU in the instant Suit was
executed in the year 1998. Since then, almost 25 years
have elapsed. The performance of the contract would
involve considerable hardship on the parties. The same
is being said considering that a third-party interest has
been created to such an extent that the revocation of
that contract would lead to an increase in hardships
warranting unjustified litigations.
xxx xxx xxx
112. In view of the material which has been placed on
record, it is indicated that a third-party interest has
been created in the property against which the plaintiff
is seeking specific performance. Such a circumstance
[2024] 12 S.C.R. 1201
Parswanath Saha v. Bandhana Modak (Das) and Anr.
makes it inequitable to grant and enforce the specific
performance decree. The said observation is made
to balance the interests of justice and equity for
the parties involved. Hence, the decree for specific
performance is not to be granted.
113. This Court is further of the view, that there will be
undue hardship caused to the defendant as well as to
the third party who purchased the property in dispute,
in case the plaintiff is granted specific performance.
Taking into consideration the facts of the case, this Court is
of the view that the plaintiff may have been entitled to the
relief as claimed for specific performance in the year 2004.
However, presently, the plaintiff cannot be granted the
relief of specific performance by this Court due to the
defendant’s conduct of not adhering to the terms of
the MOU entered into between him and the plaintiffs,
creation of third-party interests and the other factors
involved, as discussed hereinabove.”
(Emphasis supplied)
SUBMISSIONS ON BEHALF OF THE APPELLANT (ORIGINAL
PLAINTIFF)
14. PW-4 Smt. Pratima Debnath who used to look after Prabha Ranjan
Das, has in no uncertain terms deposed that the Defendants did
not stay with Mr. Prabha Ranjan Das. The Defendants used to stay
at Beltali, A.D Nagar, which was her parental house. According to
PW-4, the Defendants used to come and visit Mr. Prabha Ranjan
Das and stayed in the suit property for a day or two. PW-4 has also
deposed that even when Prabha Ranjan Das was ill, the Defendant
No. 1 i.e. his wife did not bother to come and see her husband and
the PW-4 would help him for his medical treatment. The PW-4 has
further deposed that she was aware of the agreement of sale and
receiving of earnest amount from the Plaintiff and was aware of the
fact that the balance amount would be paid within 3 months and the
sale deed would be executed and registered.
15. The Trial Court vide Judgment and Order dt. 20.11.2018 has held
that the Plaintiff is entitled to get a decree for specific performance
1202 [2024] 12 S.C.R.
Supreme Court Reports
of contract and accordingly decreed the suit in favour of the Plaintiff
on 23.11.2018. The Trial Court held that:
i. The Defendants failed to establish that the suit property was
mortgaged to the Agartala Co-operative Urban Bank Ltd. and
they were not necessary parties to the suit;
ii. The suit in question was filed within limitation;
iii. The Registered Agreement of Sale dated 27.05.2016 was
signed by Mr. Prabha Ranjan Das himself and the same was
identified by PW-2 and PW-3 respectively (Attesting witnesses)
iv. Prabha Ranjan Das was mentally fit at the time of signing and
registration of the Agreement of Sale. The Defendants lead no
evidence or produced any document to their claim that Prabha
Ranjan Das was mentally unfit to give effect to the transaction.
v. Plaintiff was always ready & willing to perform his part of the
contract.
vi. Defendants failed to prove that the performance of a contract
would involve hardship on them which Prabha Ranjan Das
had not foreseen at the time of execution of the Agreement of
Sale. subsequent to the contract from any act of the plaintiff.
16. The Trial Court after dealing with all the issues so framed, came
to the conclusion that since the Defendants were not residing with
deceased Prabha Ranjan Das during his lifetime, therefore, no
hardship would be caused to the Defendants if they are asked to
execute the sale deed in favour of the Plaintiff.
17. The Trial Court was right in holding that no hardship had resulted from
any of the acts of the Plaintiff post execution of the contract. In the
instant case the Defendants have failed to show any circumstance
existing at the time of the contract that if the suit land was sold, it
would cause hardship to them and they would become homeless.
The Trial Court rightly decreed the suit & directed the Defendants
to execute the registered sale deed in favor of the Plaintiff upon
receipt of balance consideration amount of Rs. 13.50 lakhs and also
to hand over the vacant & peaceful possession of the suit land after
execution of the sale deed.
18. The High Court while setting aside the judgment and decree passed
by the Trial Court, failed to consider Sec. 20(2)(b) of the Specific
[2024] 12 S.C.R. 1203
Parswanath Saha v. Bandhana Modak (Das) and Anr.
Relief Act, 1963 and wrongly concluded that it will cause hardship
to the Defendants because such performance of contract would
render the Defendants homeless being conscious of the fact that
the defendants were residing in the parental house of Defendant
No.1 at Beltali, A.D. Nagar, which she has mentioned and admitted
in her examination in chief filed by way of Affidavit.
19. In such circumstances referred to above, the learned counsel
appearing for the appellant prayed that there being merit in his appeal
the same may be allowed and the impugned judgment of the High
Court may be set aside.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS (ORIGINAL
DEFENDANTS)
20. It is not in dispute that Prabha Ranjan Das, the husband of Defendant
no. 1 and the father of Defendant no. 2, signed the Bainapatra on
27-05-2016 which was registered on 28-05-2016 for the sale of suit
property (residential house), while he was ailing and he died on
05-07-2016 and he had no other property to offer to the defendants
to reside.
21. The defendants are the legal heirs of Late Prabha Ranjan Das
(Wife and minor Son). An amount of Rs 4,00,000/- was received by
cheque by Late Prabha Ranjan Das as advance towards the total
sale consideration of Rs 17,50,000/-,
22. In the written statement filed by the defendants, it was specifically
pleaded that if the suit premises were to be handed over to the
plaintiff pursuant to the subject agreement for sale, the defendants
would be rendered shelter-less and therefore, it was prayed that it
was a fit case to deny the relief of specific performance.
23. The Trial Court failed to frame the issue regarding the readiness and
willingness on the part of plaintiff to perform his part of the contract.
24. In support of the aforesaid submissions, the learned counsel placed
reliance on the following decisions:
(i) Jayajantham & Ors. v. Abaykumar reported in (2017) 5 SCC
178;
(ii) Kamal Kumar v. Prem Lata Joshi and Ors. reported in (2019)
3 SCC 704;
1204 [2024] 12 S.C.R.
Supreme Court Reports
(iii) Shenbagam and Ors. v. K. K. Rathinavel reported in (1969)
2 SCC 539;
(iv) Ouseph Varghese v. Josph Aley reported in (1969) 2 SCC 539.
25. In such circumstances referred to above, the learned counsel prayed
that there being no merit in this appeal the same may dismissed.
ANALYSIS
26. Having heard the learned counsel appearing for the parties and
having gone through the materials on record the only question that
falls for our consideration is whether the High Court committed any
error in passing the impugned judgment.
27. While evaluating whether specific performance ought to have been
decreed in the present case, it would be necessary to bear in mind
the fundamental principles of law. The court is not bound to grant
the relief of specific performance merely because it is lawful to do
so. Section 20(1) of the Specific Relief Act, 1963 indicates that the
jurisdiction to decree specific performance is discretionary. Yet, the
discretion of the court is not arbitrary but is “sound and reasonable”,
to be “guided by judicial principles”. The exercise of discretion is
capable of being corrected by a court of appeal in the hierarchy of
appellate courts. Sub-section (2) of Section 20 contains a stipulation
of those cases where the court may exercise its discretion not to grant
specific performance. (See: Jayakantham & Ors. v. Abaykumar
reported in (2017) 5 SCC 178.)
28. A perusal of Section 20 of the Specific Relief Act, 1963 as it then
stood would go to show as to under what circumstances ‘hardship’
can be taken into consideration in refusing specific performance.
It is not possible to enumerate the different circumstances which
constitute a hardship. It will suffice if it is noted that the question of
hardship will have to be adjudged in the facts and circumstances of
the case. In this connection, the observations of the Privy Council
in the decision in G.W. Davis v. Maung Shwe Go reported in 1911
SCC OnLine PC 25 throw light on an important aspect of the matter.
Among other things, it is observed in the said case as under:
“In the absence of any evidence of fraud or misrepresentation
on the part of the plaintiff which induced the defendant
to enter into the contract, their Lordships see no reason
[2024] 12 S.C.R. 1205
Parswanath Saha v. Bandhana Modak (Das) and Anr.
to accede to the argument. The bargain is onerous, but
there is nothing to show that it is unconscionable. The
defendant knew all along that a lakh was the plaintiff’s
limit; it is in evidence that he had frequently urged the
defendant’s daughter to advise him to sell the land if he
was getting a higher offer. It is difficult to say under the
circumstances that he took an improper advantage of his
position or the difficulties of the defendant.”
(Emphasis supplied)
29. Then again, it is necessary to remember that mere rise in price
subsequent to the date of the contract or inadequacy of price is not
to be treated as a hardship entailing refusal of specific performance
of the contract. Further, the hardship involved should be one not
foreseen by the party and should be collateral to the contract. In
sum, it is not just one factor or two, that is relevant for consideration.
But it is the some total on various factors which is required to enter
into the judicial verdict.
30. The High Court seems to have been carried away by the fact that in
the written statement the defendants did plead that hardship would
be caused if they would be asked to execute the Sale Deed of the
suit property.
31. The Trial Court had not framed any issue as regards hardship that
may be caused to the defendants. It is also pertinent to note that
the High Court concurred with the Trial Court on all other issues
but thought fit to reverse the decree only on the ground that if the
defendants are asked to execute the Sale Deed of the suit property,
i.e., the residential house they would be rendered shelterless.
32. In the aforesaid context, we may refer to a decision of this Court in
Prakash Chandra v. Narayan reported in (2012) 5 SCC 403 wherein
para 17 of the report, it has been held:
“17. The question as to whether the grant of relief for
specific performance will cause hardship to the defendant
within the meaning of clause (b) of sub-section (2) of
Section 20 of the Specific Relief Act, 1963, being a
question of fact, the first appellate court without framing
such an issue ought not to have reversed the finding of the
1206 [2024] 12 S.C.R.
Supreme Court Reports
trial court while concurring with it on all other issues with
regard to the appellant’s entitlement to relief for specific
performance of contract.”
33. Thus, in view of the aforesaid the High Court committed an error in
taking the view that the plaintiff is not entitled to the decree for specific
performance as the same would cause hardship to the defendants.
34. The High Court seems to have overlooked the fact that the question
of hardship in terms of Section 20(2)(b) of the Act, 1963 read with
explanation (2) bears reference to hardship, which the defendant did
not foresee at the time of entering into the contract. In other words,
the issue of hardship would come into play only if it is established
by cogent evidence that Late Prabha Ranjan Das who executed the
Agreement of Sale was unable to foresee the hardship at the time
of entering into the contract.
35. The explanation elucidates the point of time at which the hardship
has to be determined with reference to the circumstances existing at
the time of the contract, except where the hardship has been caused
from an act of the plaintiff subsequent to the contract.
36. There is nothing to indicate in the pleadings or evidence that there
was a hardship of the kind which Late Prabha Ranjan Das did not
foresee at the time he executed the Agreement of Sale or that the
hardship which the defendants herein would face is the result of an
act of the plaintiff based on his supervening acts.
37. This Court in K. Narendra (supra) in paras 29 and 30 held as under:
“29. Section 20 of the Specific Relief Act, 1963 provides
that the jurisdiction to decree specific performance is
discretionary and the court is not bound to grant such
relief merely because it is lawful to do so; the discretion
of the court is not arbitrary but sound and reasonable,
guided by judicial principles and capable of correction by
a court of appeal. Performance of the contract involving
some hardship on the defendant which he did not foresee
while non-performance involving no such hardship on the
plaintiff, is one of the circumstances in which the court
may properly exercise discretion not to decree specific
performance. The doctrine of comparative hardship has
been thus statutorily recognized in India. However, mere
[2024] 12 S.C.R. 1207
Parswanath Saha v. Bandhana Modak (Das) and Anr.
inadequacy of consideration or the mere fact that the
contract is onerous to the defendant or improvident in
its nature, shall not constitute an unfair advantage to the
plaintiff over the defendant or unforeseeable hardship on
the defendant. The principle underlying Section 20 has
been summed up by this Court in Lourdu Mari David v. Louis
Chinnaya Arogiaswamy [(1996) 5 SCC 589 : AIR 1996 SC
2814] by stating that the decree for specific performance
is in the discretion of the Court but the discretion should
not be used arbitrarily; the discretion should be exercised
on sound principles of law capable of correction by an
appellate court.
30. Chitty on Contracts (27th Edn., 1994, Vol. 1., at
p. 1296) states:
“Severe hardship may be a ground for refusing specific
performance even though it results from circumstances
which arise after the conclusion of the contract, which
affect the person of the defendant rather than the subject-
matter of the contract, and for which the plaintiff is in no
way responsible.”
38. It may not be out of place to state at this stage that in K. Narendra
(supra) there is a reference with approval to Chitty on Contracts
(27th Edn., 1994, Vol.1 at p.1296), where the passage quoted clearly
indicates that one of the grounds for refusing specific performance,
though they arise from circumstances post-contract, are factors which
affect the person of the defendant rather than the subject-matter of
the contract, and to which the plaintiff is in no way a contributory. It
is these personal circumstances of the defendant, which this Court
has alluded to in the earlier part of this judgment while dwelling upon
the issue of hardship under Section 20(2)(b) of the Specific Relief
Act, 1963. The discretion there being wide, it is certainly not limited
to what is illustratively mentioned in the statute. At the cost of some
repetition, it, therefore, deserves emphasis that circumstances of the
plaintiff also are very relevant in the exercise of discretion to grant
specific performance, based on the parameters of hardship to the
defendant.
39. Even if we go by what Chitty as said in his Book Chitty on Contracts,
27th Ed. 1994 referred to above, there is nothing which the defendants
1208 [2024] 12 S.C.R.
Supreme Court Reports
have been able to bring on record that the suit property is the only
shelter available to them.
40. It appears from the evidence on record that Late Prabha Ranjan
Das was not getting along well with his wife and son. His wife and
son, i.e., the defendants were residing separately. It appears that
they were residing at the parental home of the defendant No. 1. It
is only when Prabha Ranjan Das passed away that the defendants
tried to take over the suit property.
41. The learned counsel appearing for the respondents (Original
defendants) vehemently submitted that the Trial Court failed to
frame any issue whether the plaintiff was always ready and willing to
perform his part of the contract. It seems that the learned counsel is
under some misconception of fact that the Trial Court did not frame
the issue as regards whether the plaintiff was ready and willing to
perform his part of the contract. The Trial Court did frame the issue
as regards readiness & willingness & answered in the affirmative,
i.e., in favour of the plaintiff. The High Court does not seem to
have touched this issue at all. The High Court has not disturbed
the findings recorded by the Trial Court on the issue of readiness
& willingness. The plaintiff was always ready and willing to perform
his part of the contract.
42. In the overall view of the matter, we are convinced that the High
Court committed an error in setting aside the decree passed by the
Trial Court of specific performance.
43. In the result, this appeal succeeds and is hereby allowed.
44. The impugned order passed by the High Court is hereby set aside.
However, we would like to restore the original decree passed by the
Trial Court with a little modification.
45. The Trial Court directed that the appellant herein (Original plaintiff) shall
pay the balance consideration of Rs. 13,50,000/- to the defendants
and upon receipt of the said amount, the defendants shall execute
the Sale Deed in favour of the appellant herein (Original plaintiff).
46. In the facts and circumstances of this case, more particularly, keeping
in mind that the defendant No. 1 is a widow and defendant No. 2
is her minor son, we deem fit to enhance the amount to be paid
towards the balance consideration to Rs. 20,00,000/-.
[2024] 12 S.C.R. 1209
Parswanath Saha v. Bandhana Modak (Das) and Anr.
47. The decree of the Trial Court stands modified to the aforesaid extent.
In short, the appellant herein (Original plaintiff) shall pay an amount
of Rs. 20,00,000/- to the defendants and upon receipt of the same
the defendants shall execute the Sale Deed in favour of the appellant
(Original plaintiff).
48. The appeal stands disposed of in the aforesaid terms.
Result of the Case: Appeal disposed of.
†
Headnotes prepared by: Divya Pandey
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