Holding

The private arbitrator's award did not create a new right in immovable property and therefore is not compulsorily registrable; an unregistered award is admissible as evidence of the parties' conduct, and specific performance is limited to the half‑share of the vendor.

Summary

Sardar Singh claimed a half‑share in a house purchased by his brother Kartar Lal, which was later sold by Kartar Lal to Joginder Nath (respondent). A private arbitration award declared that both brothers were co‑owners, each holding an equal share, but the award was not registered. The respondent sued for specific performance of the sale of the entire property; the trial court and the Delhi High Court held that the award was compulsorily registrable under Section 17 of the Registration Act, and because it was unregistered it could not be used as evidence of title, thus granting specific performance of the whole house. The Supreme Court held that the award merely declared a pre‑existing right and therefore did not create a new right in immovable property; consequently it was not compulsorily registrable and an unregistered award is not per se inadmissible. The Court further held that specific performance could be granted only for the half‑share belonging to Kartar Lal, not the entire property, and modified the decree accordingly.

Issues considered

The award of a private arbitrator concerning immovable property is compulsorily registrable under Section 17(1)(b) of the Registration Act, 1908.
Whether an unregistered award is inadmissible as evidence of title under Section 49 of the Registration Act, 1908.
Whether the trial court was justified in granting specific performance of the entire sale contract under Section 20 of the Specific Relief Act, 1963.
Whether specific performance can be granted for part of a contract under Section 12 and Section 20 of the Specific Relief Act, 1963.

Legislation cited

Subjects

Arbitration awardCompulsory registrationImmovable propertySpecific performanceRegistration ActSpecific Relief ActCo‑ownershipHalf shareEvidence of title

Judgment

.... SARDAR SINGH
v.
A

SMT. KRISHNA DEVI AND ANR.

APRIL 26, 1994

[K. RAMASWAMY AND N. VENKATACHALA, JJ.) B

Registration Act, 1908 : Sections 17 and 4'>--Compulsory registration
;
of documents-:lmmovable property-Dispute-Arbitrators-Award-Registra-
tion of-When Compulsory-Held unregistered award is not per se inadmis-
sible in evidence-Registration is compulsory if the award creates a title or c
interest in immova.ble propertyfor the first time-lf it contains a mere dee/a-
ration of a pre-existing right then registration is not compulsory.

Private Arbitrator-Award pertaining to immovable property-Nature
of-Held non-testamentary instrument under section 17(/)(b).
D
~ Specific Relief Act, 1963 : Section 20-Suit for specific peifor-
mance-Coult-l'ower to grant relief is discretionaiy-Conduct of parties may
> disentitle them to relief

Section !];-Specific peiformance of part of contracr-House-Co-par-
ceners and co-owner brothers in joint possession-Sale by one brothe,-Other E
brother not a party io the agreement-Purchaser not making. enquiries as to
whether vendor-brother had exclusive title-Suit for specific peifor-
mance-Grant of decree in respect of entire property held not justified-Held
purchaser was entitled to enforce decree to the extent of half-share of vendor-
brother only. F
t
The appellant's brother pnrchased a house from the Ministry of
Rehabilitation for which a sale certificate was issued in bis name. The
appellant raised a dispute claiming half share in the property which was
referred to private arbitrators for adjudication. The arbitrators gave their
award holding that (i) though the sale deed was taken by the appellant's G
brother in his name benami but actually the appellant and his brother
were the owners of the said house in equal shares from the date of
purchase; (ii) the price of the house was contributed half and half by both
/-,; the brothers. The said award was not got registered but on au application
made by the appellant under section 14 of the Arbitration Act, 1940 it was H
717
718 SUPREME COURT REPORTS [1994] 3 S.C.R.

A made a rule of the Court. Thereafter the appellant obtained orders for
eviction of the tenants from the building in question for his personal
occupation and consequently got possession also. In the meantime the
appellant's brother entered into an agreement of sale with the respondent,
who was bis neighbourer, for the entire property and the latter tiled a suit
for specific performance of the contract. The appellant got himself im-
B pleaded in the said suit as defendant but the Trial Court negatived bis
claim that be was owner of half of the property and decreed· the suit in
respect of entire property holding that (i) the appellant's title was founded
upon the award to acquire title or to divest the title of the appellant's
brother; (ii) the award was compulsorily registrable under section 17 of
C the Registration Act, 1908 and being unregistered it was inadmissible in
evidence as .a source of title under section 49. On appeal the High Court
confirmed the decree of the trial court.

In appeal to this Court Court on the question whether (i) the award
was compulsorily registrable under section 17 of the Registration Act; and
D (ii) the Courts below were justified in decreeillg the suit for specific
performance :

Allowing the appeal and setting aside the decree of the High Court,
this Court.
E HELD : 1. The award did not create any right, title or interest in the
appellant for the first time, but it declared the pre-existing factum namely
the. appellant and bis brother purchased the property jointly and that bis
brother was the henamidar and that both of them bad half share in the
house with a right to enjoyment of the property in equal moiety. Thus the
F award is not compulsorily registrable. (726-H, 727-A)
7
\
Salish Kumar v. Surinder Kumar, (1969) 2 SCR 244; Ratan Lal
Shanna v. Purshottam Harit, [1974] 2 SCR 109; Lackman Dass v. Ram Lal
& Anr., [1989] 2 SCR 250; Uttam Singh Duggal & Co. v. Union of India, CA
G No. 162 of (1962) decided by Supreme Court on 11.10.1962; Kashinathsa
Yamosa Kabadi v. Narsingsa Bhaskarsa Kabadi, [1961] 3 SCR 792; Cham- 'r
pa/a/ v. Mst. Samarath Bai, [1960] 2 SCR 810; Addanki Narayanappa v.
Bhaskara Krishtappa, [1966] 3 SCR 400; Commissioner of Income-tax West
Bengal Calcutta v. Juggi/al Kamalapat, [1967) 1 SCR 784; Kale & Ors. v. Dy.
Director of Consolidation, [1976) 3 SCR 202 and Ajudhia Pershad Ram
H Pershad v. Sham Sunder & Ors., ILR 28 Labore 417, referred to.
''
SARDARSINGH v, KRISHNA(SMT,), 719

2. The award made by a private abritrator is non· testamentary A
instrument under section 17(l)(b). The unregistered award per se is not
inadmissible in evidence. It is a valid award and not a mere waste paper.
It creates rights and obligations between the parties thereto and is con-
clusive between the parties. It can be set up as a defence as evidence of
resolving the disputes and acceptance of it by the parties. If it is a B
foundation, creating right, title and interest in presents or future or
extinguishes the right, title or interest in immovable property of the value
of Rs. 100 or above it is compulsorily registrable and non-registration
renders it· inadmissible in evidence. If it contains a declaration of a
pre-existing right, it is not creating a right, title and interest in present, in
which event it is not a compulsorily registrable instrument. It can be C
looked into as evidence of the conduct of the parties .ofaccepting the award,
acting upon it that they have pre-existing right, title or interest in the
immovable property. [722-H, 723-A, 726-E-G]

3. The Courts below have committed manifest error of law in exer·
cising their discretion directing specific performance of the con.tact for the D
., entire property. [729-G]
',
' y
4. Section 20(1) 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; but the E
discretion or the court is not arbitrary but sound and reasonable, guided by
judicial principle and capable of. correction by a court of appeal. The
circumstances specified in section 20 are only illustrative and not exhaus-
tive. The Court would take into consideration the circumstances iu each
case, the conduct of the parties and the respective interest under the con·
t tract. In this case evidence of mutation of names in the Municipal Register F
establishes that the property was mutated in the joint names of the appel·
' lant and his brother and was in their joint possession and enjoyment. As a
prudent purchaser enquiries ought to have been made whether appellant's
brother had exclusive title to the property. [727-E-F, 729-F]

Spry, Equitable Rememdies, 4th Edition 1990 Pages 59-60, 106, 135,
G
158, 199 and 312, referred to.
1
1 5. In view or the finding that the appellant had half share in the
,,--...... property contracted to be sold by his brother, the agreement of sale does
,
not.bind the appellant. The house being divisible and the appellant being H
•
720 SUPREME COURT REP OR TS [1994] 3 S.C.R.

A not a consenting party to the contract, equity and justice demand partial
enforcrment of the contract, instead of refusing specific performance in its
entirely, which would meet the ends of justice. Accordingly the contract for
purchase of the property must be referable only in respect of half the right,
title and interest held by the appellant's brother. Therefore, the first
f
respondent becomes entitled to the enforcement of the contract of the half
B share by specific performance. The decree of the trial court is confirmed
only to the extent of half share in the aforesaid property. [729-E-H, 730-A] ''
CIVIL APPELLATE JURiSDICTION : Civil Appeal No. 2637 of •
1994.
c From the Judgment and Order dated 21.11.90 of the Delhi High
Court in R.F.A. No. 206 of 1986.

M.C. Bhandara, Ranjit Thomas and Ashok Groyer for the Appellant.

D Kailash Vasdev and K.K. Mohan for the Respondents.

The Judgment of the Court was delivered by

K. RAMASWAMY, J. Leave granted. ' .
•
''
E While the appellant was in Govt. service, Kartar Lal (First defendant
in the snit), his brother had purchased on April 7, 1959 the house bearing
Municipal No. 313, with land admeasuring 222 sq. yards in Karol Bagh
from the Ministry of Rehabilitation. On January 22, 1963 the sale certificate
was issued in favour of Kartar Lal. Finding it exclusively in the name of
Kartar Lal, the appellant raised a dispute which was referred to named
F private arbitrators for resolution. The two arbitrators by their award dated
October 16, 1963 declared that : '\
'We award that Shri Sardar Singh is the owner of half house
bearing Municipal 313. Ward No. XVI situate at Gali No. 10, Faiz
Road, Karol Bagb, New Delhi, from the date of purchase of the
G said house, i.e. from 7.4.1959 as he paid Rs. 18,100 to Shri Kartar
Lal in the shape of claim bonds valued at Rs. 11,560.00 and Rs.
6,540.00 in cash towards the purchase price of the said house and
.Shri Kartar Lal paid half of the price of the said house in the shape
of claim bond and cash. The price of the said house was con-
H tributed half and half by both of them. Though, the sale deed was
).

SARDAR SINGH v. KRISHNA (SMT.) [K. RAMASWAMY, J.] 721

.._. taken by Shri Kartar Lal in his name benami but actually Shri A
Kartar Lal and Shri Sardar Singh, are the owners of the said house
in equal share from the date of its purchases; i.e. from 7.4.1959
and Shri Sardar Singh, is also entitled to half the amount of rent
of the said house from the date of its purchase after deducting
property taxes paid by Shri Kartar Lal."
B
On an application made under s.14 of the Arbitration Act, 1940 by
the appellant, the arbitrators produced the award in Suit No. 299/63 in the
·' Court of .the Judge, First Class, Delhi which was made rule of the court
under s.17 thereof by decree dated December 28, 1963. The appellant laid
proceedings before the Rent Controller for eviction of their tenants for c
personal occupation on the ground .that he being a Government servant
was entitled to possession under special procedure prescribe.d under that
Act and accordingly had possession. Kartar Lal entered into a contract of
sale of the entire property with Joginder Nath, husband of the first respon-
dent on January 15, 1973 for Rs. 90,000 and had received part considera-
, tion. The time to execute the sale deed was extended from time to time D
upto December 31, 1979 by which date Joginder Nath died and the first
• respondent had entered into fresh contract with Kartar Lal and laid the
suit in O.S. No. 2/83 against Kartar Lal. The appellant, becoming aware of
the contract of sale and pending suit, got himself impleaded in that suit as
second defendant. The trial court by decree dated May 5, 1986 decreed E
I
the suit. On appeal the High Court of Delhi in R.F.A. No. 206 of 1986 by
judgment and decree dated November 21, 1990 confirmed the decree.

The courts below found that the appellant's title is founded upon the
award to acquire title to or to divest the title of Kartar Lal; it is compul-
sorily registerable under s.17 of the Registration Act, 1908 and being an F
~

unregistered award the same was inadmissible in evidence as source of title
under s.49 thereof. The appellant's claim as owner of the half share in the
property was thus negatived. The question, therefore, is whether the award,
on the facts and in the circumstances, is compulsorily registerable under
s.17 of the Registration Act which reads thus: G
"17. Documents of which registration is compulsory :

(1) The following documents shall be registered, if the property to
"- which they relate is situated in a district in which, and if they have
bee~ executed on or after the date on which, Act No. XVI of 1864 H
.~.

722 SUPREME COURT REPORTS [1994] 3 S.C.R.

A or the Indian Registration Act 1866 (20 of 1866) or the Indian ,. ... -
'

Registration Act, 1877 (3 of 1877) or this Act came or comes into
force, namely :

(a) xxi<xxx xxxxxx xxxxxxx

B (b) other non-testamentary instruments which purport or operate
to create, declare, assign, limit or extinguish, whether in present
or in future, any right title or interest, whether vested or contingent,
of the value of one hundred rupees and upwards, to or in immove-
able property."
c Section 49 declares the effect of non-registration that no document
required under s.17 ......... :...... to be registered shall have an effect in any
immovable property comparised therein ........ or be received as evidence of
any transaction affecting such property.......... unless it has been registered.
A conjoint reading of sub-s.17(1) (b) and s.49 of the Registration Act
D establishes that a non-testamentary instrument which purports or operates
to create, declare, assign, limit or extinguish in present or future any right,
title or interest, whether vested or contingent to or in any immoveable
property of the value of Rs. 100 and above, shall compulsorily be
registered, otherwise the instrument does not affect any immoveable
E property comprised therein or shall not be received as evidence of any
transaction affecting such immovable property, this Court in Lachhman
Dass v. Ram Lal & Anr., (1989] 2 SCR 250 at 259C & D, held the purpose
of registration that :

"............. In other words, it is necessary to examine not so much
F what it intends to do but what it purports to do.
\
The reai purpose of registration is to secure that every person
dealing with the property, where such document requries registra-
tion, may rely with confidence upon statements contained in the
register as a full and complete aceount of all transactions by which
G
title may be affected. Section 17 of the said Act being a disabling
section, must be construed strictly. Therefore, unless a document
is clearly brought within the provisions of the section, its non-
registration would be no bar to its being admitted in evidence.

H The award made by a private arbitrator is non-testamentary instru-
)

SARDARSINGH v. KRISHNA(SMT.)(K.RAMASWAMY,J.] T13

, .,, men! under s.17(1)(b), though the counsel for the appellant contended A
contra and we need not dilate on this aspect. In Satish Kumar v. Surinder
Kumar, (1969] 2 SCR 244 an arbitrator was appointed by the parties
without reference to the court to partition their immovable properties. An
award in that behalf was made and on an application under s.14 of the
Arbitration Act, the award was made a rule of the court. The question B
arose whether such award was admissible in evidence as affecting partition
of the immovable property. This Court held that the award required
registration under s.17 (l)(b). Therefore, the award is a non-testamentary
instrument.

The question, therefore, is whether the award in favour of the C
appellant creates any right, title and interest in half share of the house in
his favour or extinguishes the right, title and interest therein of Kartar Lal.
It is, therefore, necessary to examine the award.not so much to find what
the award intended to do, but what it purports to do and the consequences
that would flow therefrom. In this behalf we cannot accept the contention D
of Sri M.C. Bhandare, learned senior counsel, that award does not require
registration as it merged in the decree of the civil court making it as a rule
of the court. As seen in Salish Kumar's case, this court found that in case
the award, if it creates for the first time a right in the immovable property
of the value of Rs. 100 or above, in the absence cif its registration, the
awarded would not get title on the award and the title would remain with E
the party against whom the award was made. The same view was reiterated
in Raton Lal Shanna v. Purshottam Harit, (1974) 3 SCR 109 and in
Lachhman Dass's case. In all these cases this court found that the tile was
founded on the award.
F
But as said earlier, the crucial question is what the award purports
to do? As seen, the arbitrators in the award dated October 19, 1%3
declared that Kartar Lal is benamidar, the appellant had contributed half
the consideration of the sale price and is the owner of half the house with
effect from the date of the purchase, namely April 4, 1959 and both the
brothers, each as owner, are entitled to half the rent. G

The contention of the counsel for the respondents that the award
,,---- I creates .therein right, title and interest in favour of the appellant and
extinguishes that of Kartar Lal who had sale certificate in accordance with
IM l~wo his title gets divCStcd only when the award was registered; its non H
724 SUPREME COURT REPORTS (1994) 3 S.C.R.

A registration renders it inadmissible as evidence of title; since the foundation :l>·-., -

of title, therefore, of the appellant, is based on the award, it cannot be
looked into, nor can it be considered are devoid of force. In Uttam Singh
& Co. v. Union of India, (C.A. No. 162 of 1962 dated October 11, 1962)
the facts therein were that pending civil suit the Union of India called upon
the arbitrator to adjudicate the dispute between the appellant and the
B Union. The award was made after deciding the dispute. It was contended
for the appellant that since the award was earlier made and became fina~
but was not registered, there cannot be a second reference on the same
dispute. The High Court held that the first award did not create any bar
against the competence of the second reference. On appeal, relying on
C ss.33 and 17 of the Arbitration Act this court held that "all claims which
are the subject matter of the reference to arbitration merged in the award
which is pronounced in the proceeding before the arbitrator and that after
the award has been pronounced the rights and liabilities of the parties in
respect of the said claims can be determined only on the basis of the said
D award'', and thereafter no action can be started on the original claim which
had been the subject matter of the reference. An award between the parties
is entitled to that respect which is due to the judgment of a court of law
to serve. Therefore, it was held that the second reference was incompetent.
In Kashinathsa Yamosa Kabadi v. Narshingsa Bhaskarsa Kabadi, (1961) 3
SCR 792 at 806 on a question whether an award made in arbitration out
E of court and accepted by the parties. In the absence of registration, could
be pleaded in defence as a biriding decision between the parties, this court
held at p.806 thus:

"It may be sufficient to observe that .where an award made in
F arbitration out of court is accepted by the parties and it is acted
upon voluntarily and a suit is thereafter sought to be filed by one
of the parties ignoring the acts done in pursuance of the acceptance
of the award, the defence that the suit is not maintainable is not
founded on the plea that there is an award which bars the suit but
that the parties have by mutual •greement settled the dispute, and
G that the agreement and the subsequent actings of the parties are
binding. By setting up a defence in the present case that there has
been a division of the property and the parties have entered into
possession of the properties allotted. Defendant No. 1 is not
seeking to obtain a decision upon the existence, effect or validity
H of an award. He is merely seeking to set up a plea that the property
IAiU>ARSINGH v. KRISHNA(SMT.)[K.RAMASWAMY,J.] 725

was divided by coasent of parties. Such-a plea is in our judgment A
not precluded by anything contained in the Arbitration Act."

It is, therefore, clear that though the award was not registered, it
could be relied on as a defence to show that parties had agreed to refer
the dispute to private arbitration, the award made thereon was accepted
B"
by the parties and acted upon it.

) In Chanrpalal v. Mst. Samarath Bai, (1960) 2 SCR 810 at 816, this
> court held that

'the filing of an unregistered award under s.49 of the Registration c
Act is not prohibited; what is prohibited is that_ it cannot be taken
into evidence so as to affect immoveable property falling under
s.17 of that Act."

In Addanki Narayanappa v. Bhaskara Krishtappa, (1966] 3 SCR 400 D
at 410 & 411, this court held that a document of dissolution only records
" the fact that the partnership had come to an end. It cannot be said to
convey any immovable property by a partner to another expressly or by
'
necessary implication, nor is there any implication. It was held that such a
deed was not compulsorily registrable under s.17(1)(b) of the Registration E
Act. In Commissioner of Income-tax, West Benga~ Calcutta v. Juggilal
Kamalapat, [1967] 1 SCR 784 at 790 the deed of relinquishment was
accepted by one partner in favour of the other partners in the partnership
firm including immovable property. This court held that the deed of
relinquishment was in respect of individual interest of a partner in the
assets of the partnership firm including immovable property was valid
F
' without registration. All the assets of the partnership firm vested in the new
partners of the firm. This court approved the full bench judgment of the
Lahore High Court in Ajudhia Pershad Ram Parshad v. Sham Sunder &
Ors., LL.R. 28, Lahore 417 wherein the full bench held tliat assignment of
the interest of partnership of a partner is to be regarded as movable G
property, notwithstanding the fact that at that time when it was charged or
sold, the partnership assets included immovable property. In Luchhman
Dass's case this court noted the distinction between the declaration of an
,.~
existing right as a full owner of the property in question and creation of a
right in immovable property in presenti. In that case since a new right was H
726 SUPREME COURT REPORTS (1994) 3 S.C.R.

A created under the award in favour of the respondent, it was held that the
award required registration and non-registration rendered the award inai>
~ '-
missible in evidence under s.49.

In Kale & Ors. v. Dy. Director of Consolidation, (1976] 3 SCR 202,
this Court held that a family arrangement is an agreement between mem-
B bers of the same family, intended to be generally and reasonably for the
benefit of the family either by compromising doubtful or disputed rights or
by preserving the family property or the peace and security of the family
by avoiding litigation or by saving its honour. Family arrangements are "
governed by principles which are not applicable to de?Jings betw;:en the
c strangers. The court when deciding the rights of parties under family
arrangements, consider what is the broadest view of the matter, having
regard to considerations which, in dealing with transactions between per-
sons not members 'lf the same family, would not be taken into account. If
the terms of the family arrangement made under the document_ as a mere
memorandum itself does not create or extinguish any right in immovable
D
property and, therefore, does not fall within the mischief of s.17(1)(b) of
the Registration Act and is, therefore, not compulsorily registrable. •
•
It is, thus, well settled law that th' unregistered award per se is not
inadmissible in evidence. It is a valid award and not a mere waste paper.
E It creates rights and obligations between the parties thereto and is con-
elusive between the parties. It can be set up as a defence as evidence of
resolving the disputes and acceptance of it by the parties. If it is a
foundation, creating right, title and interest in presenti or future or extin-
guishes the right, title or interest in immovable property of the value of Rs.
100 or above it is compulsorily registerable and non- registration render it
F ;-
inadmissible in evidence. If it contains a mere declaration of a pre-existing
right, it is not creating a right, title and interest in presenti, in which even
i! is not a compulsorily registerable instrument. It can be looked into as
evidence of the conduct of the parties of accepting the award, acting upon
it that they have pre-existing right, title or interest in the immovable
G property.

In the light of the above conclusion and of the contents of the award
referred to hereinbefore, the necessary conclusion is that the award did not
_,,;,.",,
create any right, title or interest in the appellant for the first time, but it
H declared the pre-existing factum, namely the appellant and Kartar Lal
SARDARSINGH v. KRISHNA(SMT.)[K RAMASWAMY,J.] 727

purchased the property jointly and that Kartar Lal was the benamidar and A
that both of the brothers had half share in the house with a right to
enjo}ment of the property in equal moiety. Thus the award is not compul-
sorily registrable. The contention of the counsel for the respondent is that
if the unregistered award is accepted as a foundation and received in
evidence effecting inte•est in immovable property, there is possibility of B
avoiding registration and by indirect process title get conferred, defeating
the mandate of s.17 and s.49 of the Registration Act. Each case must be
considered from its own facts and circumstances; the pre-existing relation-
ship of the parties: the rights inter vivos and the interest or rights they
claimed and decided in the award and the legal consequences. On the facts C
of this case we hold that the appellant and Kartar Lal being tenants in
common, migrants from Pakistan after partition, the appellant being Govt.
servant, obviously, his brother Kartar Lal purchased the property for their
benefit as co-parceners or co-owners. In that view it must be held that the
award does not have the effect of creating any right in presenti, nor is it an
attempt to avoid law. The award was made rule of the court a decade D
earlier to the date of the initial agreement of sale.

) The next question is whether the courts below were justified in
decreeing the suit for specific performance. Section 20(1) of the Specific
Relief Act, 1963 provides that the jurisdiction to decree specific perfor- E
mance 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. The grant of relief of specific
performance is discretionary. The circumstances specified in s.20 are only
illustrative and not exhaustive. The court would take into consideration the
F
circumstances is each case, the conduct or the parties and the respective
interest under the contract.

Section 12 provides for specific performance of part of contract.
Sub-section (1) thereof postulates that except as otherwise hereinafter G
provided in the section, the court shall not direct the specific performance
of a part of a contract. Sub-section ( 4) thereto envisages that when a part
of the contract which, taken by itself, can and ought to be specifically
• - performed, stands on a separate and independent footing from another
part of the same contract which cannot or ought not to be specifically H
728 SUPREME COURT REPORTS (1994] 3 S.C.R.

A performed, the court may direct specific performance of the former part.
Section lO(b) protjdes that "except as otherwise provided in this Chapter,
the specific performance of any contract may, in the discretion of the court,
be enforced - (b) when the act agreed to be done is such that compensation
in money for its non- performance would not afford adequate relief. It is
contended for the appellant that the first respondent prayed for refund of
B
the earnest money; since the agreement was in respect of the entire
property including_the half share of the appellant, the courts below, instead
of decreeing specific performance of the contract, ought to have awarded I

refund of the earnest money. The decree for specific performance in the •
circumstances is illegal. Spry in his "Equitable Remedies, 4th Edn., 1990"
c stated at 6.59 that "in the absence of special circumstances rendering
equitable relief appropriate - the courts will not grant specific perfor-
mance, if damages would leave. the plaintiff in as favourable a position in
all material respects, it is now necessary to re-assess ea~lier decisions in
which damages have been held to be an adequate remedy". At p.60 it is
D stated that, "A special difficulty arises where even if the agreement in
question is performed in specie, the right that the purchaser will obtain
will probably not amount to more than a rigbt to receive payments of
money, such as when the land in question will probably be compulsorily
acquired pursuant to statutory authority, but the better view is that
E damages are not an adequate remedy even in cases of this kind". At p.106
it was further stated that "although it was said in a number of early cases
that courts of equity will not order specific performance of part only of a
contract, this limitation has no basis in principle, and it is now accepted
that in a-nuffiber of diverse circumstances partial enforcement in specie is
F appropriate". At p.135 it is stated that, "it is well established that generally
a plaintiff will not succeed in obtaining an order of specific performance '>
unless he is able to show sufficiently and clearly the existence of a contract
that is valid and enforceable at law at the time when the order is sought"
At. p.158 it is stated that, 11whenever there is an active misrepresentation,
G whether it is innocent or fraudulent, or a non-disclosure in circumstances
where there is a duty of disclosure, and according to the appropriate legal
and equitable rules, the defendant against whom proceedings for specific
performa~ce are brought has a right to rescind, it follows as a matter of
course that specific enforcement will not be ordered against him". At p.199
it is stated that the court may take account of the fact that there are "third -~ •
H
SARDAR SINGH v. KRISHNA (SMT.)[K. RAMASWAMY, J.] 729

persons so connected with the defendant that, by reason of some legal or A
moral duty which he owes them, it would be highly unreasonable for the
court actively to prevent the defendant from discharging bis duty". At p.312
it is stated. that, "it has been held by courts of equity that specific perfor-
mance will not be granted to a vendor if, although he has established a
good title on the balance of probabilities, that title is sufficiently uncertain B
to be regarded as a doubtful title in the sense in which that term is
understood in the material authorities; for otherwise it might appear in
subsequent proceedings that a title that the purchaser has obtained a
deficient, and there might be no way in which he could be properly
compensated 11
•

c
The contention of the respondent that the appellant and Kartar °Lal
colluded to bring the award into existence to defeat the rights of the first
respondent is devoid of substance. The award was made the rule of the
Court io years prior to the contract of sale. Kartar Lal even in this court
stood by his contract in favour of the respondent which would belie the D
plea of collusion.

\. In view of the finding that . the appellant had half share in the
property contracted to be sold by Kartar Lal, his brother, the agreement
of sale does not bind the appellant. The. decree for specific performance E
as against Kartar Lal became final. Admittedly the respondent and her
husband are neighbours. The appellant and bis brother being co-parceners
or co-owners and the appellant after getting the tenant ejected both the
brothers started living in the house. As a prudent purchaser Joginder Nath
ought to have made enquiries whether Kartar Lal had exclusive title to the
property. Evidence of mutation of names in the Municipal Register estab- F
lishes that the property was mutated in the joint names of the appellant
and Kartar Lal and was in joint possession and enjoyment. The courts
below, therefore, have committed manifest error of law in exercising their
discretion directing specific performance of the contract of the entire

- property. The house being divisible and the appellant being not a consent- G
ing party to the contract, equity and justice demand partial enforcement of
the contract, instead of refusing specific performance in its entirety, which
would meet the ends of justice. Accordingly we hold that Joginder Nath
having contracted to purchase the property, it must be referable only in
respect of half the right, title and interest held by Kartar Lal, his vendor. H
730 SUPREME COURT REPORTS [1994] 3 S.C.R.

A The first respondent being successor in interest, becomes entitled to the
enforcement of the contract of the half share by specific performance. The
decree of the trial court is confirmed only to the 'extent of half share in
the aforestated property. The appeal is accordingly allowed and the decree
of the High Court is set aside and that of the trial court is modified to the
B above extent. .The parties are directed to bear their own costs throughout.

Appeal allowed.

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