Holding

Specific performance may be granted despite price escalation and time lapse, provided the plaintiff proves the contract and the defendants’ misconduct precludes them from denying relief, and the court may impose reasonable additional payment conditions.

Summary

The plaintiff sought specific performance of a 1979 agreement whereby the first defendant, owner of a one‑third undivided share in a Bangalore property, through his brother (the second defendant) who held a registered power of attorney, agreed to sell the share for Rs 40,000. The plaintiff paid the full consideration but the defendants failed to execute the sale deed, denying the agreement and alleging fraud and undervaluation. The trial court granted specific performance; the High Court set it aside, ordering a refund of consideration. On appeal, the Supreme Court held that specific performance is an equitable remedy and the court’s discretion under Section 20 of the Specific Relief Act must be exercised reasonably, not arbitrarily. The defendants’ concealment of material facts and misuse of the power of attorney barred them from invoking discretion, and a rise in property price alone cannot defeat specific performance, though a reasonable condition of additional payment may be imposed. Consequently, the trial court decree was affirmed with a condition that the plaintiff pay an extra Rs 15 lakh, and the High Court’s order was set aside.

Issues considered

The validity and scope of the power of attorney to sell the property under Sections 65 and 66 of the Evidence Act
Whether the plaintiff proved the essential ingredients for specific performance under Section 20 of the Specific Relief Act
Whether the escalation in property price and the lapse of time justify denial of specific performance
The court’s authority to impose additional monetary conditions when granting specific performance
Whether the defendants’ alleged concealment and misrepresentation preclude them from invoking the court’s discretionary jurisdiction

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 31
Indian Evidence Act, 1872s. 65, s. 66
Specific Relief Act, 1963s. 20

Subjects

Specific performanceEquitable remedyPower of attorneyEscalation of property priceJudicial discretionBreach of contractAdditional considerationMisrepresentationEvidence Act

Judgment

[2014] 14 S.C.R. ·455

ZARI NA SIDDIQUI
v.
A. RAMALINGAMALIAS R.AMARNATHAN
(Civil Appeal No. 9947 of2014)
B OCTOBER 29, 2014
[M. Y. EQBALAND SHIVA KIRTI SINGH, JJ.]
Specific Relief Act; 1963 - s. 20- Specific performance
of agreement - First defendant-owner of 1/3rd undivided
C share in the property appointed his brother-second
respondent as power of attorney holder - Plaintiff's case that
second respondent entered into an agreement to sell the said
property to the plaintiff for certain amount- Payment of the
entire consideration amount by the plaintiff, however, failure
D of defendants to execute sale deed in favour of plaintiff -
Suit for specific performance by plaintiff- Written statement
by both the defendants - Defendant no. 1 pleading that the
power of attorney was given for limited purpose and denied
agreement to sell in favour of plaintiff as also payment of
E advance consiqeration; and that the value of the property
was much more than the price agreed between the parties -
Second defendant pleading that sale agreement was
obtained by the plaintiff by playing fraud - Suit for specific
performance allowed by trial court, however, dismissed by
the High Court- On appeal, held: Necessary ingredient has
F lo be proved and established by the plaintiff so that discretion
to grant relief of specific performance would be exercised
judiciously in favour of the plaintiff- If a party to a /is does
not disclose all material facts truly and fairly but states them
in distorted manner and mislead the Court, the Court has
G inherent power to exercise its discretionary jurisdiction in
order to prevent abuse of the process of/aw- On the facts of
the case, in view of the conduct of the defendants and
considering the phenomenal increase in price during the

H
456
ZARINASIDDIQUlv.A. RAMALINGAMALIAS 457
R. AMARNATHAN

period the matter remained pending in different courts, order A
passed by the trial court upheld and that of the High Court
set aside, with the condition that the plaintiff would pay
additional amount to the first defendant.
Allowing the appeal, the Court
B
HELD: 1.1 The remedy for specific performance is
an equitable remedy. The Court while granting decree
of specific performance exercises its discretionary
jurisdiction. Section 20 of the Specific Relief Act
specifically provides that Court's discretion to grant C
decree of specific performance is discretionary but not
arbitrary. Discretion must be exercised in accordance
with sound and reasonable judicial principles. The
equitable discretion to grant or not to grant a relief for
specific performance also depends upon the conduct
of the parties. The necessary ingredient has to be proved D
and established by the plaintiff so that discretion would
be exercised judiciously in favour of the plaintiff. At the
same time, if the defendant does not come with clean
hands and suppresses material facts and evidence and
mislead the Co.urt then such discretion should not be E
exercised by refusing to grant specific performance.
[Para 25, 34][470-G-H; 471-A; 476-A-B]
1.2 Efflux of time and escalation of price of the
property by itself cannot be a valid ground to deny the F
relief of specific performance. But the Court in its
discretion may impose reasonable conditions including
payment of additional amount to the vendor. The plaintiff
is not to be denied specific performance only on account
of phenomenal increase of price during the pendency G
of litigation. [Para 37][477-B-D]
2.1 Although defendant no.2 held a registered
power of attorney on behalf of defendant no.1 to sell and
dispose of the property, but the defendants not only
H
458 SUPREME COURT REPORTS [2014] 14 S.C.R.

A made a false statement on affidavit that the power of
attorney had authorized him only to look after and
manage the property but also withheld the said power
of attorney from the Court in order to misguide the Court
from truth of the facts. Further, by registered agreement
B the defendants agreed to sell the suit premises after
receiving advance consideration but they denied the
existence of the agreement in their pleading. Such
conduct of the defendants disentitle them to ask the
Court for exercising discretion in their favour by refusing
c to grant a decree for specific performance. If a party to a
tis does not disclose all material facts truly and fairly but
states them in distorted manner and mislead the Court,
the Court has inherent power to exercise its discretionary
jurisdiction in order to prevent abuse of the process of
o law. [Para 35][476-8-F]
2.2 In the facts and circumstances of the case and
considering the phenomenal increase in price during the
period the matter remained pending in different courts,
the impugned order is set aside and decree· of the trial
E court is affirmed but with a condition imposed upon the
appellant-plaintiff to pay a sum of Rs.15,00,000/- in
addition to the amount already paid by the appellant to
the respondent. [Para 39, 40][477-E-G]
H. Siddiqui v. A. Rama/ingam 2011 (5) SCR 587
F : (2011) 4 SCC 240 ; Rajinder Kumar v. Ku/deep
Singh & Ors. (2014) 2 SCC 135; Vima/eshwar
Nagappa Shetty v. Noor Ahmed Sheriff & Ors.
2011 (6) scR 392 : (2011). 12 sec 658 ;
K.S. Vidyanadam & Ors. v. Vairavan 1997 (1)
G SCR 993 : (1997) 3 SCC 1 ; Satya Jain v. Anis
Ahmed Rushdie 2013 (3) SCR 319 : (2013) 8
SCC 131 ; Nirmala Anand .v. Advent Corpn. (P) .
Ltd. 2002 (2) Suppl. scR 706 : (2002) 8 sec

H
ZARINASIDDIQUlv.A. RAMALINGAMALIAS 459
R. AMARNATHAN

146 ; V. Pechimuthu v. Gowrammal 2001 (1) A
Suppl. SCR 199: (2001) 7 SCC 617; K. Prakash
· v. B.R. Sampath Kumar, Vimaleshwar Nagappa
Shet v. Noor Ahmed Shariff and others 2011 (6)
SCR 392: (2011) 12 SCC 658 - referred to.
Rookey's Case 77 ER 209 ; (1597) 5 Co. Rep.99; B
Attorney General v. Wheat (1759) 1 Eden 177;
28 ER 652 - referred to.
CASE LAW REFERENCE
2011 (5) SCR 587 referred to Para 11 c
(2014) 2 sec 135 · referred to Para 15
2011 (6) SCR 392 referred to Para 15
1997 (1) SCR 993 referred to Para 15
D
77 ER 209 referred to Para 26
(1759) 1 Eden 177 referred to Para 27
2013 (3) SCR 319 referred to Para 28
2002 (2) Suppl. SCR 706 referred to Para 29
E
2001 (1) Suppl. SCR 199 referred to· Para.30
2011 (6) SCR 392 referred to Para 32
CIVILAPPELLATE JURISDICTION: Civil Appeal No(s).
9947 of 2007.
F
From the Judgment and Order dated 01-03-2012 of the
High Court of Karnataka at Bangalore in Regular First Appeal
No. 265of1999.
K.K. Mani, Ms. T. Arch an a, Abhishek Krishna, Advs. for
the Appellant. G
V. Prakash, Sr. Adv., Vinodh Kanna B., Ms. Khushboo ·
Arora, L. K. Pandey, M/s K. Ramkumar &Associates for the
Respondent.

H
460 SUPREME COURT REPORTS [2014] 14 S.C.R.

A The Judgment of the Court was delivered by
M. Y. EQBAL, J. 1. Leave granted.
2. This appeal by special leave is directed against the
judgment and order dated 1.3.2012 passed by the High Court
of Karnataka whereby Regular First Appeal No.265of1999
8
filed by_ the defendant-respondent was allowed. and the
judgment and decree passed by the trial court in the suit of the
appellant-plaintiff was set aside.
3. The facts giving rise to the present appeal are that the
c respondent-first defendant is the absolute owner of 1/3'd
undivided share in the property bearing no.43, Mission Road,
Bangalore (hereinafter referred to as the 'suit schedule
property') and his elder brother-second defendant is his power
of attorney holder. It is the case of the plaintiff that on 25.6.1979,
0 the second defendant-respondent as registered power of
attorney holder entered into an agreement to sell 1/3'd share in
the suit property to the appellant-plaintiff for consideration of
Rs.40,000/- and received advance of Rs.5,000/-. As per the
aforesaid registered agreement, the balance consideration
E was to be paid on or before 30.12.1980 and the parties to the
agreement had to take necessary steps for obtaining
permission from the competent authority under the Urban Land
(Ceiling and Regulation) Act. Plaintiff's further case is that he
paid the entire sale consideration to the second defendant
F who received the same on behalf of the first defendant. It is
contended that the plaintiff had been always ready and willing
to perform his part of the contract and that the plaintiff has been
requesting the defendants to take necessary steps to obtain
permission from the Urban Land Ceiling Authority. Since the
G defendants failed to take necessary steps, the plaintiff issued
legal notice to the defendants on 5.3.1980 and 25.5.1980
calling upon the defendants to complete the sale in favour of
the plaintiff and to perform their part of the contract. The
defendants sent reply to notice on 4.10.1980 wherein they
repudiated the agreement in question. As averred, the plaintiff
H
ZARINASIDDIQUI v.A. RAMALINGAMALIAS 461
R.AMARNATHAN [M. Y. EQBAL, J.]

has been in possession of the undivided share of the A
defendants in the schedule property in pursuance of the above
agreement for sale. Since the defendants failed to execute
the sale deed, the plaintiff filed a suit for specific performance
praying for a direction to the defendants to execute the sale
deed in respect of 1/3•d share in the suit property. B
4. In the suit, the defendants 1 and 2 have filed separate
written statements. In the written statement filed by first
defendant he has admitted that he is the owner of 1/3'd share
in the suit property. He has also admitted that the 2"d defendant
is the brother and registered power of attorney holder of the C
first'defendant. But he pleaded that the power of attorney was
given by him to the second defendant only for the limited
purpose of looking after and managing the suit property. He
denied that there was an agreement to sell the suit property in
favour of the plaintiff and also denied of having received D
advance amount of Rs. 5000/-. Respondent:first defendant
alleged that the said agreement was prepared by his elder
brother by misusing the power of attorney and second
defendant had acted on the ill-advise.of the plaintiff, to play
fraud on him. He contended that the suit property was worth E
· more than Rs.3,00,000/- on the date of the said agreement
and he had sent a registered notice to the plaintiff on 1.10. 1983
den·ying the execution of the said agreement.
5. It has been further alleged by the respondent-first
defendantthat one D. Narendra had filed a suit O.S. No.767/ F
78, re-numbered as O.S.2762/80, seeking partition of 1/3'd
'
share in the suit scheduled property. Appellant-plaintiff herein
was the 41h defendant in the said.suit and he had filed his written
statement on 27.2.1979, wherein he pleaded that he had
agreed to purchase the suit property. He contended that the G
same goes to show that the plaintiff had planned to snatch the
property and that the agreement in question came into
existence in collusion with the second defendant.

H
462 SUPREME COURT REPORTS [2014J 14 s:c.R.

A 6. The respondent-defendant has further pleaded thatthe
plaintiff occupied the premises in question as a tenant by virtue
of allotment order in HRC(ACC) 306/1970 and that thereafter
he has sublet the portion of the suit property to various persons.
It is further stated that the plaintiff has not been paying rent to
B the defendant in proportionate to the income that he derives
by such sub letting. The defendant alleged that he had no
intention to sell the full property to any person much less to the
plaintiff, and he wants to retain the suit property.
7. The second defendant, elder brother of the respondent
C and his power of attorney holder, by way of separate written
statement denied that the agreement for sale .in question was
executed with the consent of the first defendant. According to
him, the plaintiff obtained the said agreement by playing fraud
and giving assurance that he would get certain benefits. He
D also pleaded in his written statement that one D. Narendra,
who had alleged to have purchased 1/3'" share in the suit
property from Thyagarajan, had filed a suit being O.S.767178
seeking decree of p~rtition and separate possession. In the
said suit, the plaintiff stated that he is holding agreement from
E Thyagarajan to purchase the property. Thyagarajan is the son
of the second defendant, who in good faith that his son would
retain his 1/3'" share and to save the property obliged the
plaintiff to execute the sale agreement and not with an intention
to sell the property. It is pleaded that the plaintiff had promised
F that he would not enforce the sale agreement and it is only to
see that the suit filed by D. Narendra is dismissed. The second
defendant contended that the receipts issued by him to the
plaintiff were not towards P?Yment of consideration, but ti·~
same was towards payment of rents. Moreover·he had not
G issued any receipt for having received money towards sale
consideration.
8. On consideration of entire facts and evidence brought
on record, the trial court decreed the suit directing the first
·defendant to execute the sale-deed in favour of the plaintiff in
H respect of 1/3'" share in the suit schedule property. The trial
ZARINASIDDIQUlv.A. RAMALINGAMALIAS 463
R. AMARNATHAN [M. Y. EQBAL, J.]

court held that defendant no.1 has admitted to have executed A
the power of attorney (Ex. P22) and it clearly states that the
second defendant was authorized to sell the suit property.
Further, defendant has utterly failed to prove that the plaintiff
had obtained the agreement for sale in question by playing
fraud. On the contrary. the evidence clearly proves that the B
first defendant had authorized the second defendant to sell
the suit property to the plaintiff and that the second defendant
has agreed to sell the suit property to the plaintiff having full
authority to do so. Defendant no.1. who was examined as
DW-1. has admitted the signatures of defendant no.2 in the C
receipts produced by the plaintiff. which are at Ex.P8(a) to
P8(g). The trial court came to the conclusion that the
defendants have received the amount of consideration and
the plaintiff performed his part of the agreement by paying full
consideration and was always ready and willing to get the sale o
deed executed. However. the defendants have not performed
their part of the agreement and have evaded to execute the
sale deed in favour of the plaintiff. Therefore, trial court came
to the conclusion that it is a fit case to grant specific
performance of agreement and to direct defendant no.1 to E
execute the sale deed in favour of the plaintiff.
9. Aggrieved by the judgment and decree, the
respondent-defendant preferred appeal before the High Court.
10. By judgment dated 3.2.2004, learned Single Judge
of the High Court partly allowed the appeal modifying the F
· judgment and decree of the trial court by refusing to grant
specific performance and directing the first defendant to pay
back the consideration amount with interest at 12% from the
date of agreement till the date of payment after deducting rent
payable to him by the plaintiff in respect of 1/3'd share. G
11. Aggrieved by the aforesaid decision of the High Court,
petitioner approached this Court preferring an appeal by
special leave being Civil Apeal No.6956 of 2004. This Court
by judgment dated 4.3.2011 in that appeal titled as H. Siddiqui H
464 SUPREME COURT REPORTS [2014] 14 S.C.R.

A vs. A. Ramalingam, (2011) 4 SCC 240, set aside the
judgment and order of the High Court and remanded back the
matter to the High Court to decide the same afresh in
accordance with law. This Court in the remand order observed
as under:
B "20. The High Court failed to realise that it was deciding
the first appeal and that it had to be decided strictly in
adherence with the provisions contained in Order 41 Rule
31 of the Code of Civil Procedure, 1908 (hereinafter
called "CPC") and once the issue of the alleged power
c of attorney was also raised as is evident from Point (a)
formulated by the High Court, the Court should not have
proceeded to Point (b) without dealing with the relevant
issues involved in the case, particularly, as to whether
the power of attorney had been executed by the
D respondent in favour of his brother enabling him to
alienate his share in the property.
21. The said provisions provide guidelines for the
appellate court as to how the court has to proceed and
decide the case. The provisions should be read in 'such
E a way as to require that the various particulars mentioned
therein should be taken into consideration. Thus, it must
be evident from the judgment of the appellate court that
the court has properly appreciated the facts/evidence,
applied its mind and decided the case considering the
F material on record. It would amount to substantial
compliance with the said provisions if the appellate
court's judgment is based on the independent
assessment of the relevant evidence on all important
aspects of the.matter and the findings of the appellate
G court are well founded and quite convincing. It is
mandatory for the appellate court to independently
assess the evidence of the parties and consider the
relevant points which arise for adjudication and the
bearing of the evidence on those points. Being the final
H · court of fact, the first appellate court must not record mere
. ZARINASIDDIQUI v.A. RAMALINGAMALIAS 465
R. AMARNATHAN [M. Y. EQBAL, J.]

general expression of concurrence with the trial court A
judgment rather it must give reasons for its decision on
each point independently to that of the trial court. Thus, .
the entire evidence must be considered and discussed
in detail. Such exercise should be done after formulating
the points for consideration in terms of the said provisions B
and the court must proceed in adherence to the
requirements of the said statutory provisions.
){)()()()()()()

23. More so, none of the courts below had taken into C
consideration Clause 11 of the agreement dated
30.6.1979 which reads as under:
"11 .. In the event of any default on the part of the
vendors in completing the sale the earnest money paid
herewith shall be refunded to the purchasers together 0
with a like amount of Rs.5,000/- (Rupees five thousand
only) as liquidated damages for breach of contract."
Thus, in case of non-execution of the sale deed, the
appellant could get the earnest money with damages.
24. So far as the issues of inadequate consideration and E
rise in price are concerned, both the parties have argued
the same at length and placed reliance on a large number
of judgments of this Court, including: Chand Rani (Smt.)
(dead) by Lrs. v. Kamal Rani (Smt.)(dead) by Lrs., AIR
1993 SC 1742; Nirmala Anand v. Advent Corporation F
(P) Ltd. & Ors., (2002) 8 SCC 146; P. 1D'Souza v.
Shondrilo Naidu, (2004) 6 SCC 649; Jai Narain
Parasrampuria (dead) & Ors. v. Pushpa Devi Saraf &
Ors., (2006) 7 SCC 756; Pratap Lakshman Muchandi &
Ors. v: Shamlal Uddavadas Wadhwa &Ors., (2008) 12 G
sec 67.
25. In view of the above, as we are of the considered
opinion that the courts below have not proceeded to
adjudicate upon the case strictly in accordance with law,
we are not inclined to enter into the issue of inadequate H
466 SUPREME COURT REPORTS (2014] 14 S.C.R. ·

A · consideration and rise in price. However, the judgment
impugned cannot be sustained in the eyes of law." ·
12. On remand, High Court considered the matter afresh
and allowed the appeal of first defendant and set aside the
judgment and decree of the trial court, dismissing the suit of
B the plaintiff. Hence, this appeal by wife of the plaintiff (since
deceased).
13. Mr. K.K. Mani, learned courisel appearing for the
· plaintiff-appellant, assailed the impugned judgment passed by
the High Court as being contrary to law and facts and evidence
C on record. Learned counsel firstly contended that the learned
Single Judge gravely erred in law in holding that the Power of
Attorney was not proved as required. under Sections 65 and
66 of the Evidence Act. Learned counsel submitted that the
learned Single Judge of the High Court completely misdirected
D himself in reversing the findings recorded by the trial court
which is based on evidence. Learned counsel contended that
the reasoning given by the High Court in refusing to grant
specific performance merely because ·the part of the
consideration amount was paid by the plaintiff-appellant prior
E to the date of the execution of the agreement is wholly unjustified
and not tenable.
14. Per contra, Mr. V. Prakash, learned senior counsel
appearing for the defendant-respondent, at the very outset
F contended that the agreement in question (PW-1) is not a
genuine transaction and fraud has been played with the
defendant-respondent by getting · the agreement to sell
executed through his elder brother-cum-power of attorney
holder. Learned counsel submitted that as per evidence
G adduced by the plaintiff, the entire consideration amount was
paid but as a matter of fact those payments were admittedly
prior to the date of execution of agreement. Learned counsel
contended that D. Narendra, claiming 1/3'd share in the said
property from one Thyagarajan had filed a suit for partition.
H The present plaintiff-appellant, who was one of the defendants,
ZARI NA SIDDIQUI v. A. RAMALINGAM ALIAS 467
R.AMARNATHAN [M. Y. EQBAL, J.]

vide written statement, contended that he is holding an A
agreement from Thyagarajan for purchase of the property.
Learned counsel submitted that the second defendant-cum-
power of attorney holder in good faith executed agreement for
the 1/3'd share to save the property and not with an intention to
sell the property. Learned counsel further contended that there B
is a specific clause in the agreement i.e. clause (11) providing
that iri the event of any default on the part of the vendors in
completing the sale, the earnest money shall be refunded to
the purchaser together with Rs.5,000/- as liquidated damage.
15. Mr. V. Prakash, learned senior counsel, further C
contended that at the time of execution of the agreement, the
market price of the property was Rs. 3,00,000/- and as against
the said price a sum of Rs.40,000/- was shown in the
agreement as full consideration for the suit property. Learned
counsel submitted that by the passing of time, the price of the D
suit property has increased more than 10-15 times, and in that
view of the matter, the court should not exercise discretion in
granting decree for specific performance. Learned counsel
relied upon the decision in Rajinder Kumar vs. Ku/deep
Singh & Ors., (2014) 2 SCC 135, VimaleshwarNagappa E
Shettyvs. Noor Ahmed Sheriff & Ors., (2011) 12 SCC 658,
K.S. Vidyanadam & Ors. vs. Vairavan, (1997) 3 SCC 1.
16. We have perused the judgment passed by the trial
Court and also the judgment of reversal passed by the High
Court. Firstly, we would like to consider the pleading of the F
parties in the suit.
17. The first defendant through his power of attorney
holder entered into an agreement on 25'h June, 1979 agreeing
to sell his 1/3rd undivided share in the suit property for a sum of G
Rs. 40,000/- and out of the said consideration a sum of Rs.
5,000/-waspaid in advance. Under the terms of registered
agreement the sale was to be completed before 30 1h
December, 1980 on payment of balance consideration of
Rs.35,000/- and, in the meantime, all necessary steps had to H
468 . SUPREME COURT REPORTS (20.14] 14 S.C.R.

A be. taken to obtain permission from the competent authority
under the Urban Land Regulation Act. The plaintiff further
pleaded that he was always ready.and willing to perform his
part of the contract and in furtherance of that' entire sale
consideration was paid long before 30.12.1980.
B 18. Both, the first defendant viz. owner of the property
and his elder brother, who is a power of attorney holder, have
filed separatewritten statement. Defendant No.1 admitted in
hiswritten statement that he is the· owner of 1/3'" share in the
suit-property and thatthe second defendant is his elder brother
C and the power of attorney holder. But the case of the defendant
No.1 is that the power of attorney was given io the second
.defendant only.for the limited purpose for managing the suit
property. He denied that there was an agreement to.sell in
favour of the plaintiff and also denied the payment of advance
D consideration .. The first defendant made out a.case that the
agreement in question is a vexed agreement which was
prepared by his elder brother by misusing the power of attorney.
The defendant further pleaded that the property was worth more
than three lakhs on the date of said agreement and that he
E has not received any part of the consideration amount from
the plaintiff. _, 1. t· ,
19. The second defendant in his·separate·written
statement pleaded that he is the power of attorney holder for
the limited purpose for safeguarding the interest of the first
F defendant. According to his pleading, a sale.agreement was
obtained by the. plaintiff by playing fraud and by giving
assurance that the second defendant would get certain benefits.
20. We have noticed that both the power of attorney and
G the agreement to sale are registered documents. Perusal of
registered power of attorney would show that the first defendant
authorized his elder brother-second defendant to sell the suit
property at any_ price which he may deem fit and collect the
sale proceeds. Clauses (i) to (iii) of the registered·power of
attorney read as under:- . , 1
H
ZARINASIDDIQUlv.A. RAMALINGAMALIAS 469
R.AMARNATHAN [M. Y. EQBAL, J.]

"(i) That my attorney is authorized to sell the above A
property to any person or persons at any price which he
may deem' fit and collect the sale proceeds.
(ii) My attorney is also athorised to get necessary
permission from the competent authority for the sale of
above property or from any other government machinery B
required under law.
(iii) that my attorney is also authorized to execute and
sign document ·of sale/mortgage and a·ny other legal
transfer and get the same registered in the proper office C
_of registration complete in all respect."
21. Similarly by registered agreement of sale dated
25.6.1979, executed by the second defendant, he specifically
agreed to sell the property for a sum of Rs. 40,000/- and out of
that he received a sum of Rs. 5,000/- as advance 0
consideration.
22. Although defendant no.2 filed a separate written
statement, but he did not examine himself as a witness in order
to prove the case pleaded by)"lim. The first defendant examined
himself as DW-1 and deposed in the Court. In his evidence, E
he admitted that he discussed about the sale of the suit
property with the plaintiff, but he wanted to sell at a price of Rs.
3, 00, 0001-. He admitted the signature of his elder brother as
power of attorney holder in the agreement and also in the
receipt of payment of consideration amount. Certain F
correspondences made by plaintiff with DW-1 and exhibited
in the suits would show that by one letter (exhibit P-14) DW-1
confirmed that he authorized his elder brother to negotiate and
sell the suit property. By another letter (exhibit P-15), DW-1
further confirmed that his brother was authorized to negotiate G
for sale of the property and receive consideration. Another letter
· (Exhibit P-20) would show that he was aware about the sale
agreement executed by his brother, who had received some
advance consideration:
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470 SUPREME COURT REPORTS [2014] 14 S.C.R.
' \

A 23. Curiously enough, although it was··pleaded by
defendant no.1 that the power of attorney was given to
-defendant no.2 for limited purpose df managing the property,
the said power of attorney was not produced in the Court. DW-
1 did not produce the original power of attorney to prove his
B case that the second defendant, his elder brother, was only
authorized to manage the property. , It is the plaintiff, who
produced the xerox copy of the registered power of attorney,
which was shown to the DW-fduring cross-examination, who
admitted the signature in the power of attorney. All these
c relevant pieces of evidence have riot been appreciated by the
High Court in its right perspective. Instead of drawing adverse
inference against the defendant, in not producing the original
power-of attorney, which was in their power and possession,
the High court has committed grave error in holding that the
o power df attorney has not been proved a's' required under
Sections65 and 66 of the Evidence Act. In our view, when the
xerox copy of power of attorney produced by the plaintiff in
evidence and the signature and the contents of the said power
of attorney were admitted by the defendant, there was no
E question of proving the said document as required under the
Evidence Act. The judgment of reversal passed by the High
Court by coming to the aforesaid conclusion is wholly perverse
and contrary to law. A certified copy of the power of attorney is
now on record·and it falsifies the case of the defendants/
F respondent undisputedly.
24. The last contention of Mr. t
Prakash,
~..
learned senior
'
counsel appearing for the respondent is that having regard to
the increasing market price of the suit property, the discretion
to grant specific performance should not be exercised in favour
G of the plaintiff-appellant and against the defendant-respondent. .
25. It is well settled that remedy for specific performance
is an equitable remedy. The C~urt while granting decree of
specific performance exercises its discretionary jurisdiction.
Section 20 of the Specific Relief Act specifically provides that
H Cou_rt's discretion to grant decree of specific performance is
ZARINASIDDIQUlv.A. RAMALINGAMALIAS 471
R.AMARNATHAN [M. Y. EQBAL, J.]

discretionary but not arbitrary. Discretion must be exercised A
in accordance with sound and reasonable judicial principles.
26. The King's Bench in Rookey's Case [77 ER 209;
(1597) 5 Co.Rep.99] it is said:
"Discretion is a science, not to act arbitrarily according
8
to men's will and private affection: so the discretion which
is exercised here, is to be governed by rules of law and
equity, which are to oppose, but each, in its turn, to be
subservient to the other. This discretion, in some cases
follows the law implicitly, in others or allays the rigour of
it, but in no case does it contradict or overturn the grounds
c .
or principles thereof, as has been sometimes ignorantly
imputed to this Court. That is a discretionary power,
which neither this nor any other Court, not even the
highest, acting in a judicial capacity is by the constitution D
entrusted with"
27. The Court of Chancery in Attorney General vs.
Wheat[(1759) 1 Eden 177; 28 ER 652]followed the Rookey's
case and observed : ·
"The law is clear and courts of equity ought to follow it in E
their judgments concerning titles to equitable estates;
otherwise great uncertainty and confusion would ensue.
And though proceedings iri equity are said to be
secundum discretionem boni vin, yet when it is asked,
vir bonus est quis? The answer is, qui consu/ta parlum, · F
qui /eges juraq servat. Anq as it is said in Rooke's case,
5 Rep. 99 b, that discretion is a science not to act
arbitrarily according to men's will and private affection:
so the discretion which is exercised here, is to be
governed by rules of law and equity, which are to oppose, G
but each, in its turn, to be subservient to the other. This
discretion, in some cases follows the law implicitly. in
others or allays the rigour of it, but in no case does it
contradict or overturn the grounds or principles thereof,
as has been sometimes ignorantly imputed to this Court. H
4"12 SUPREME COURT REPORTS [2014] 14 S.C.R.

A That is a discretionary power. which neither this nor any
other Court. not even the highest •. acting .in a judicial
capacity is by the constitution entrusted with. This
description is full and judicious. 'and what ought to be
imprinted on the mihd of every judge."
B 28. In Satya Jain vs. Anis Ahmed Rushdie, (2013) a
SCC 131, at page .145. this Court ob'served:-
"40. The discretion to direct specific performance of an
agreement and that too after elapse of a long period of
time, ·Undoubtedly, has to be exercised on sound,
c reasonable. rational and acceptable principles. The
parameters for the exercise of discretion vested by
Section 20 of the Specific Relief Act, 1963 cannot be
entrapped within any precise expression of language and
'the contours thereof will always depend on the facts and
D circumstances of each .case. The ultimate guiding test
would be the principles of fairness and reasonableness
as may be dictated by the peculiar facts of any given
case, which features the experienced judicial mind can
perceive without any real difficulty. It must however be
E emphasised that efflux of time and escalation of price of
property. by itself. cannot be a valid ground to deny the
relief of specific performance.' Such a view has been
consistently adopted by this Court. By way of illustration
opinions rendered in PS. Ranakrishna Reddy v. M.K.
F . Bhagya/akshmi (2007) 10 SCC 231 and more recently
in Narinderjit Singh v, North' Star Estate Promoters
Ltd. (2012) 5 sec 712 may be usefully recapitulated."
29. In Nirmala Anand vs. Advent Corpn. (P) Ltd.,
G (2002) 8 SCC 146, at page 150. a three Judge Bench of
this Court on a similar issue 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
H performance simply for the reason that it is legal to do
ZARINASIDDIQUlv.A. RAMALINGAMALIAS 473
R.AMARNATHAN [M. Y. EQBAL, J.)

so. It is further well settled that the court in its discretion A
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 B
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 C
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 v.alue of the property during o
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 E
to the defendant by directing specific performance. There
may be other circumstances on which parties may not
have any control. The totality of the circumstances is
required to be seen."
30. In If. Pechimuthu vs. Gowrammal, (2001) 7 SCC F
617, at page629 this court held as under:- ·
"25. Counsel for the respondent finally urged that specific
performance should not be granted to the appellant now
because the price of land had risen astronomically in the
last few years and it would do injustice to the respondent G
to compel her to reconvey property at prices fixed in 1978.
26. The argument is specious. Where the court is
considering whether or not to grant a decree for specific
performance for the first time, the rise in the price of the H
474 SUPREME COURT REPORTS [2014] 14S.C.R.

A land agreed to be conveyed may be a relevant factor in
denying the relief of specific performance. (See KS.
Vidyanadam v, 'Vaitavan): But in this case, the decree
for specific performance has·already been passed by
the trial court and affirmed by the first appellate court.
B lThe only question before us is whether the High Court in
· second appe.al was correct'in reversing the decree.
,. Consequently the principle enunciated in· K. S.
.
Vidyanadam (1997) 3 SCC 1 will not apply." .
.
31. In a recent judgment dated 22.9.2014 in Civil Appeal
C No. 9047 of 2014 entitled K. Prakash vs~ 'B.R. Sampath
Kumar. this Court tlb'Served that: ···
i I ·~ , ,, '

"17. The principles which can be enunciated is that where
the plaintiff brings a suit for specific performance of
contract for sale, the law insists a condition precedent to
D the grant of decree for specific performance that the
plaintiff must show his continued readiness and
willingness to perform his part of the contract in
accordance with its terms from the date of contract to
the date of hearing. Normally,· wh_en the trial court
E exercises its discretion in one way or other after
appreciation of entire evidence and materials on record, ·
the appellate court should. not interfere unless it is
established that the discretion has been exercised
perversely, arbitrarily or against judicial principles. The
F appellate court should also not exercise its discretion
against the grant of specific performance on extraneous
considerations or sympathetic considerations. It is true,
as contemplated under Section 20 of the Specific Relief
Act, that a party is not entitled to get a decree for specific
G performance merely because itfis lawful to do so.
Nevertheless once an agreement to sell is legal and
validly proved and furtherrequirements for getting such
a decree is established then the Court has to exercise
its discretion in favour of granting relief for specific
H performance.
ZARINASIDDIQUI v.A. RAMALINGAMALIAS 475
R. AMARNATHAN [M. Y. EQBAL, J.]

19. Subsequent rise in price will not be treated as a A
· hardship entailing refusal of the decree for specific
performance. Rise in price is a normal chc:mge of
circumstances and, therefore, on that ground a decree
for specific performance cannot be reversed.
20. However, the court may take notice of the fact that B
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 C
property: This aspect of the matter is considered by a
three Judge Bench of this Court in Nirmala Anand vs.
Advent Corporation (P) Ltd. and Others, (2002) 8
sec 146."
32. In the case of Vimaleshwar Nagappa Shet vs. D
Noor Ahmed Shariff and others, (2011) 12 SCC 658, an
agreement to sell a dwelling house was entered into by some
of the co-sharers and the matter was ultimately compromised
on payment of higher price. On those facts the Court held that
since the value of the property escalates in urban areas very E
li'
fast, it would not be equitable to grant relief of specific
performance after the lapse of a long period qf time. The said
decision has no application in the present case.
33. Similarly, inthe case of K.S. Vidyanadam (supra). F
this Court on facts found that there was a total lapse and
negligence for a period of more than 2Y:. years from the side
of the plaintiff in taking any 'step to perform his part of contract
under the agreement and there was gross violation of the terms
of the agreement which required him to pay the balance,
purchase the stamp paper and then seek for execution of the G
sale deed. Further the delay was coupled with substantial rise
in price, which brought about a situation where it would not be
equitable to give the relief of specific performance to the
plaintiff. With due respect, this decision is ali;o not applicable H
in the facts of the present case.
476 SUPREME COURT REPORTS .... [2014) .14 S.C.R.
.... ,:.·1. )._;, '' , ... t •)1.,
•• ' ~
..--' 'j '.. ' • ; (•-
,.
. . .
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,,_...
,~.

A • 34. Th~ equitable d.is.cretion to grant or not to grant a
relief for specific performance also depends upon ttiebonduct
of the parties.. ·The necessary' ingredient has to be proved
and established by the plaintiff s'o that discretion would be
exercised judidously in favour of the plaintiff. At the same time,
B if the defendant does not come with clean hands· and
.. • I : , > '

. suppresses material facts and evidence and misled the Court
. then·such discretion should not be exercised by refusing to
~ : '':!. -- - • ' • '
grantspecificperformance. ·· · :;;, '' "'., ;·~.;,r.. ··
~·,;·;:-..:;,~ •. , ,.,! -.·1··, .. , ..... "'~ •. ~· '. ·.• ~ ... -,' ' ; . . , ..... ,
:,.,' :··, 35. 1.n the instant, case, a~ noticed abov~. ,i11though
C defendant no.2 h~ld a registered power of attorney on behalf
' .I ' of defendant n6.1 to sell and dispose of the property: butthe

defendantsnot only niade a false statement on affidavit that
~ < • • ' ·• - . •• ; ~ ' • - , . - • • -~ ' • ' •I . -

-
the power of attorney had authorized the second defendant
( • • ~ . ' " • . ' • ~ • • ~ - ._ - 1 . • ' < • , •

only to look after and manage the property but also withheld
D the said ppwer of attorney from the Court iri orde'r to misguide
the Cciurt from .truth of the 'tacts'. Further, by registered
agreement the defendants agreed to sell the 'suit premises
after receiving advance consideration bufthey denied the
·existence of the agreement in their pleading.: Such conduct of
E the defendants iri our opinion, disentitle them to ask the Court
f()r exercising discretion in their favour by refusing to grant a
'decree for specific performance. Further, if a party to a lis
'does not disclose all material facts truly and fairly but states
them in distorted manner and mislead the Court; the Court
F has inherent power to exercise its discretionary jurisdiction in
ordertopreventabuseoftheprocessoflaw.,t, , ,, , . ·
" : · 36.: Hi:iwei1er, it is' noticed from the facts that the registered
agreement to sell was· executed between the parties on ·
25. 6.1979 and the suit for specific 'performance was filed by ·
G the plaintiff-appellant in January, 1981. The suit was decreed
by the trial court in November, 1998.' The.·defendant-
. respondent challenged the said decree before the High Court· I
in April, 1999. The High Court allowed the appeal by terms of
judgment dated 3.2.2004 and s'etaside the trial court's
H judgment and decree. The plaintiff-appellant preferred special
I
"
ZARINASIDDIQUI v.A. RAMALINGAMAUAS · 477
R.AMARNATHAN [M. Y. EQBAL, J.]

leave petition, which was numbered as Civil Appeal No.6956 A
of 2004. The Civil Appeal was finally decided on 4.2.2011
settirig aside the High Court's judgmenfand remanding the
matter back to the High Court to decide the appeal afresh. On
remand, the learned Single Judge in terms of order dated
1.3.2012 allowed the appeal and set aside the judgment.and B
decree of the trial court. In this way, the matter remained
pending before the High Court and this Court for a number of
years.
37. As held by this Court time and again, efflux of time
and escalation of price of the property by itself cannot be a C
valid ground to deny the relief of specific performance. [3ut
the Court in its discretion may impose reasonable conditions
including payment of additional amount to the vendor. It is
equally well settled that the plaintiff is not to be denied specific
performance only on account of phenomenal increase of price D
during the pendency of litigation.
38. The defendant-respondent alternatively pleaded in
the written statement that even at the relevant time the price of ·
the suit property was Rs.3,00,000/-when the said agreement
was executed for Rs.40,000/- only. But on the other hand it E
has come in evidence that against Rs.40, 000/-, the plaintiff-
appellant has paid a total amount of Rs.65,000/-.
39. Be that as it may, in the facts and circumstances of
the case and considering the phenomenal increase in price F
during the period the matter remained pending in different·
courts, we are of the considered opinion that impugned order
under appeal be set aside but with a condition imposed upon
the appellant (plaintiff) to pay a sum of Rs.15,00,000/-(Rupees
Fifteen Lacs) in addition to the amount already paid by the G
appellant to the respondent. On deposit in trial court of
aforesaid amount by the appellant, for payment to the
respondent, within three months from today, the respondent
shall execute and register the sale deed in favour of the plaintiff
in respect of the suit property. In the event the aforesaid
H
478 SUPREME COURT REPORTS , "' (2014) 14 S.C.R.

A condition of deposit of Rs.15 lacs is fulfilled within the time
stipulated hereinabove but the defendant fails to comply with
the direction, then the appellant shall b~ entitled to execute the
decree in accordance with the procedure provided in law.
· 40. In the result, this appeal is allowed. The impugned
B judgment passed by the High Court is set aside and decree of
the trial court is affirmed with the conditions imposed as
indicated hereinabove. There shall be no order as to costs.

Nidhi Jain Appeal allowed.

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