Reliefs To Be Sought For In A Suit For Specific Performance

In a suit for specific performance, when there are conflicting rights of parties namely, that of the agreement holder and the subsequent purchaser, what relief, the agreement holder should seek, apart from the relief of specific performance of sale agreement? It assumes significance, since the subsequent sale to a bonafide purchaser for value, who was not put on notice of the earlier sale agreement, results in negation for the relief of specific performance. As there is inter play of rights between the agreement holder and the subsequent purchaser, the subsequent purchaser for value, who was not put on notice is protected under section 19(b) of the Specific Relief Act, 1963.  T his article intends to examine the said issue.

The issue raised in the article is based on the decision of the Hon’ble Supreme Court in B. Vijaya Bharathi vs P. Savitri[1] wherein it was held that the subsequent purchaser having purchased the property, even prior to the filing of suit and there was no conveyance in favour of the agreement holder. The agreement holder, who though aware of the conveyances in favour of the subsequent purchaser of the same property which is sought to be enforced, even prior to the filing of the suit, did not seek any relief for their cancellation. It would stand in the way to decree a suit for specific performance, unless the sale deeds in favour of subsequent purchasers are set aside.

The Full Bench of Hon’ble Supreme Court in Durga Prasad vs. Deep Chand[2] has decided the proper form of Decree in a suit for specific performance and it was held that the subsequent purchaser should join with the vendor in executing the conveyance in favour of the agreement-holder. It would assume more significance to analyze, if the proper form of Decree is to be considered in consonance with the pleadings, evidence and nature of reliefs sought for or can it be molded by using the discretionary powers of the Court.

On perusal of facts in Durga Prasad (supra), in my humble view no law was laid down. A cursory reading of paragraph 5 of the said judgment would reveal that there was a compromise between the agreement holder and the subsequent purchaser. The compromise was that the subsequent purchaser had agreed to transfer conveyance in favour of the agreement holder. The only issue that the Court set out to decide was, as to who would be entitled to the consideration of Rs.62,000/- for the re-conveyance which is deposited in Court., namely, whether the subsequent purchaser, or the vendor/custodian. It was held that the subsequent purchaser would be entitled to Rs.58,000/- and the remaining Rs.4000/- would go to the custodian of the vendor’s properties. The Court while disposing posed a question as to what should be the proper form of decree and while embarking on such an exercise, it had held that the vendor and the subsequent transferee to join in the conveyance so as to pass title to the agreement holder.

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Scenarios:

1) If the possession is with the vendor, a mere relief seeking enforcement of the sale agreement simpliciter would give complete relief to the party, as the vendor is duty bound to execute sale deed and deliver possession as defined in section 55(1) (f) of Transfer of Property Act, 1882. 

2) If after the sale agreement, possession of the property is passed on to the subsequent purchaser. A mere relief for specific performance of the sale agreement  without relief of possession, will disentitles the agreement holder from obtaining actual possession of the property. The agreement holder should also specifically seek relief of possession along with the relief for enforcement of sale agreement, as the subsequent purchaser is not bound by the sale agreement which is sought to be enforced. This is mandatory for complete and effective relief.[3]

3) When the property which is sought to be conveyed in the sale agreement, along with its possession, is held jointly by the vendor along with the other persons having right, title and interest in the property, then the agreement holder should also seek relief of partition of the property and possession of the vendor’s share along with the relief for enforcement of sale agreement. It would also be gainful to look into section 22 of Specific Relief Act, 1963, which provides for possession or partition in certain cases, in addition to the relief of specific performance of the sale agreement or refund of the earnest money. However under section 22 (2) there must be a specific prayer for the relief of possession, partition and refund of earnest money.

4) If prior to the filing of suit, the property has been purchased by the subsequent purchaser and also been put into possession. The agreement holder is also aware of the said factum, but no averments/allegations has been pleaded and no reliefs claimed against the subsequent purchaser.

In said scenario, the agreement holder would be constrained to lead any evidence as any amount of evidence without pleadings is not admissible in law. The title of the property is incidentally decided as the validity of sale in favour of subsequent purchaser is normally put to test, only if there are specific averments/allegations made by the agreement holder against the subsequent sale (prior to the suit but after agreement of sale). The subsequent purchaser cannot be expected to prove negative and a mere denial, about the existence of earlier agreement of sale is sufficient to shift the burden of proof on the agreement holder. The suit for specific performance will partly take the character of suit for declaration and without testing the validity of sale, the Hon’ble Courts would be constrained to decide and grant necessary reliefs to the vendor based on the agreement of sale.

Setting aside alienation will assume more significance, since there is a valid sale transaction for consideration and also valuable third party right has come into play.  It would also be gainful to look into section 34 of the Specific Relief Act, 1963 which specifies that mere declaration would not be sufficient, without a consequential prayer. Hence in my humble view, there will be a bar under section 34 (second para) of the act to decree the suit and grant necessary reliefs in the said circumstances. If the principle laid down in Durga Prasad (supra) is applied with full vigor, then it might run counter to the concept of pleadings, evidence and provision of law in a given circumstances.

Unless we are clear about the reliefs, subsequent suit for compensation would be a bar after the dismissal of suit for specific performance. It would also be gainful to look into section 21 of Specific Relief Act, 1963, which also provides for compensation in certain cases, in addition to the relief of specific performance of the sale agreement. However, under section 21(5) there must be a specific prayer for the relief of compensation to be sought for.

Reasoning:

When no relief is sought for against any party to the suit, it would amounts to no cause of action against the said party.[4] A party to the suit cannot introduce a new case without making any attempt to get the same duly incorporated in the plaint in accordance with law.[5] The pleadings and evidence normally determines the issue in dispute hence the courts cannot grant relief when there is no foundation in the pleading and the other party had no opportunity to negate.[6]

The reasoning of one decision cannot be applied in the absence of similarity of circumstances in another case, normally the decision has to be read in the context of the questions which have arose for consideration in the said case.[7] The judgment of the Court could be read only in the context of issue which arose for consideration, it cannot be said to be a law when the issue is decided on compromise.[8] The decision of a Court which is neither express nor proceeds on consideration of issue cannot be deemed to be a law to have a binding effect.[9] It is not a profitable task to extract a sentence, here and there from a judgment, and to build upon it.[10]

If the observations and the directions came to be made more in the peculiar facts and circumstances of the case in order to do complete and substantial justice between the parties in exercise of the discretionary jurisdiction under Article 136 and 142 of the Constitution of India. There is no discussion of the law either and therefore it has no precedential value as laying down any law.[11] The non-executant of a deed, must approach the Court under section 34 of the Specific Relief Act, 1963 seeking cancellation and the said action would be in personam.[12] A small reprieve was granted by the Court on the peculiar facts by clearly holding that the said order is not intended to be used as a precedent.[13]

If the vendor denies his exclusive right, title and interest in the property which is sought to be conveyed in the sale agreement, then the right, title and interest of the vendor is to be determined before deciding on the relief for enforcement of sale agreement.[14]

T here cannot be a differential treatment in granting reliefs in civil suits namely suit for injunction without the relief of declaration and suit for declaration without the relief of possession is not maintainable and vice versa (even if party proves his title / possession).[15]

Author’s view:

In my humble view, no inference could be drawn that the party need not seek any declaratory reliefs challenging the termination of agreement and sale deed in favour of the subsequent purchaser by following Durga Prasad (supra) as straight jacket principle, in doing so it would certainly run contrary to the principle of pleadings and evidence which normally plays a crucial role while deciding the civil suits. Such inference have been drawn by almost all the High Courts on various occasions but it was not brought to the knowledge of the said Courts that the decision in Durga Prasad (supra) (with due respect) was rendered in concession, no law was actually laid down and was a mere decision on facts.

I am therefore of the humble view that the law laid down in Vijay Barathi (supra) has correctly held that relief of setting aside alienation has to be sought for along with the relief for enforcement of sale agreement is sound and right. As the right, title and interests of the parties are decided, the agreement holder should also seek necessary declaratory reliefs by challenging the sale deeds. If the sale agreement is terminated, then the agreement holder should also necessarily seek declaratory relief challenging the termination of agreement.[16] It therefore become imperative to seek said reliefs in a suit for specific performance based on the circumstances 1) to set-aside the alienation 2) relief of possession, if subsequent purchaser has been put into possession of the property 3) relief of partition, if vendor holds right only in part of the property 4) to set-aside the termination of sale agreement and 5) additional relief of compensation, if relief of specific performance cannot be granted or as additional relief (not mandatory)

[1] AIR 2017 SC 3934

[2] AIR 1954 SC 75

[3] AIR 1982 SC 818

[4] 2020 (2) MWN (Civil) 533

[5] 1999 (78) DLT 659

[6] AIR 1951 SC 177 (FB), 2011(6) SCC 529, AIR 1963 SC 309, 2008 (4) SCC 256

[7] AIR 1990 Punjab 117 (F.B), 2011 (12) SCC 615, 1976 (3) SCC 334 (FB)

[8]  2002 (4) SCC 638 (FB)

[9] 1989 (1) SCC 101

[10] 2006 (6) ALT 593 (DB)

 [11] M/s. EXL Careers and another vs. Frankfinn Aviation Services Private Limited dated 05.08.2020 (S.C) (F.B)

 [12] Deccan Paper Mills Co. Ltd. vs. Regency Mahavir Properties and others dated 19.8.2020 (S.C) (F.B)

 [13] Shri Parshwatilak Shwetamber Murtipujak Tapagacch Jain Trust vs. The State of Maharashtra and others in SLP (Civil) D.No- 17041/2020, dated 21.08.2020 (S.C) (F.B)

 [14] AIR 2017 SC 5431

[15] AIR 2017 S.C 1034, 2007 (14) SCC 253, 2011 (4) SCC 567

[16] 2013 (15) SCC 27, 2017 (2) CTC 656 (SC)