Parveen Singh Vs Satpal Garg: The Court Is Entitled To Dismiss The Appeal If There Was No Agreement To Sell Between The Parties

Crux:
The court is entitled to dismiss the appeal if there was no agreement to sell between the parties.

Date of judgement:
11 May, 2018

Bench:
Justice Valmiki J. Mehta

Parties:
Appellant: Parveen Garg
Respondent: Satpal Singh and Anr.

Legal provisions

• Section 16(c) of the Specific Relief Act - [who fails to prove] that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the performance of which has been prevented or waived by the defendant.
• Section 20 of the Specific Relief Act - Discretion as to decreeing specific performance.—

The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.

Overview

• According to the circumstances of the case, the appellant claimed that an agreement to sell dated 1.9.2003 was put into his favour for the sale of the suit property for a total sale amount of Rs.33,25,000/-.
• The appellant and his father are government contractors in the building sector, and they were looking for a property to buy.
• According to the plaint, the appellant gave the respondents an amount of Rs.1,00,000/- in cash as earnest money on the date of the agreement to sell.
• On the following day, 2.9.2003, the appellant paid an additional sum of Rs.3,00,000/- in cash to the respondent number 1.
• According to the appellant, the sale transaction was to be completed by November 1, 2003, subject to the respondents converting the property from leasehold to freehold.
• The appellant claimed that he was never shown the title deeds to the suit property and requested that the respondents provide him with copies of the title deeds as well as a certificate of conversion from leasehold to freehold so that the transaction could be completed, to which the respondents responded that due to unavoidable circumstances in the short time frame, the transaction could not be completed.
• It is further alleged in the plaint that in April 2004, respondent no. 1 called the appellant to his home and informed him that the respondent no. 1is not the only owner of the suit property, but that both respondents are joint owners.
• The appellant claims that a further sum of Rs.8,00,000/- was demanded from him, and because he was interested in completing the transaction, he paid a cash sum of Rs.5,000/- on 9.4.2004 and prepared a bank draft for Rs.7,95,000/- dated 10.4.2004, and asked the respondents to show the suit property's title deeds before handing over the bank draft.
• The appellant also claims that he filed police complaints on 7.10.2004 and 9.11.2004, after which the matter was settled between the parties in the Police Station, according to which the respondent no. 1 agreed to execute and register the sale deed of the suit property in favour of the appellant on or before 16.12.2004, as per the compromise dated 24.11.2004.
• It is also alleged in the plaint that on 7.12.2004, the appellant withdrew a sum of Rs.7,25,000/- in cash from his bank account with the intention of giving it to the respondents/defendants, but that this amount was not given to the respondents because the respondents again refused to show the title deeds.
• The subject suit for specific performance was brought after the appellant sent the respondents a legal notice dated 9.12.2004 directing them to complete the transaction after acquiring all relevant licences.
• The respondents contested the suit and filed their separate written statements.

Issues

• Whether the plaintiff is entitled for specific performance of agreement dated 01.09.2003 and alleged compromise dated 24.11.2004 in respect of property bearing no. 3/153, Sunder Vihar, PaschimVihar, New Delhi?
• Whether the plaintiff has always been ready and willing and is still ready and willing to perform his part of the agreement?
• Whether there was no agreement between the plaintiff and defendant no. 2, as alleged by the defendant no. 2? If so, to what effect?
• Whether the plaintiff is entitled for recovery of vacant possession, in case a decree of specific performance is passed in favour of the plaintiff and against the defendants?

Judgement Analysis

• Because there is no agreement to sell the suit property between the owner/respondent no.2 and the appellant, the trial court is properly justified in dismissing the suit for specific performance.
• Even if we assume that the original agreement to sell was made with respondent no.2's consent, the subsequent agreement in the police station on November 24, 2004, was only between the appellant and respondent no.1, and admittedly, the appellant knew then there was no reason why the appellant did not engage into any agreement with respondent no.2 i.e. the agreement dated 24.11.2004 was not signed by respondent no.2, but only by respondent no.1.
• The argument advanced by counsel for the appellant/plaintiff that the appellant was duped by the respondents is one that works against the appellant because if it is determined that the respondents defrauded the appellant by misrepresenting respondent no. 1 as the owner of the suit property when he was not, the result would be that there is no agreement between the respondent no.2 and the appellant to sell the suit property, and since there is no agreement, there can be no specific performance of a non-existent agreement between the respondent no.2 and the appellant.
• Any doubt in this regard is dispelled by the appellant’s police complaint dated 7.10.2004, which alleges that the appellant was duped into entering into a sale agreement despite the fact that the respondent no.1 was not the owner of the suit property.
• A property for which there is no sale agreement, and the consequence would be at best alleged of duping of the appellant but certainly not the issuance of specific performance relief.
• Because the respondent no. 2 has admittedly not entered into any agreement to sell with the appellant i.e. there is no privity of contract of the respondent no. 2 with the appellant, and because the appellant's case is that he has been duped and cheated, the relief of specific performance has been rightfully declined by the trial court.
• Even if we assume for the purpose of argument that there was an agreement to sell of the suit property of the appellant and the respondent no. 2, the appellant cannot be given the discretionary relief of specific performance.
• The relief of specific performance is a discretionary relief under Section 20 of the Specific Relief Act, 1963, and the trial court correctly made the observations in this regard to refuse the appellant/plaintiff the discretionary relief of specific performance.

Conclusion

The Specific Relief Act, 1963 is an Act of the Parliament of India which provides remedies for persons whose civil or contractual rights have been violated. It replaced an earlier Act of 1877.Section 20 of the Act regulates the exercise of discretion by the court by prescribing do’s and don'ts. Section 20 of the Act confers discretion on the Court to decree or not to decree specific performance depending upon the facts and circumstances of the case. In exercise of discretion, the Courts shall take into consideration the conduct of the parties in order to give effect to the principle that he who seeks the equitable remedy of specific performance must approach the court with clean hands. Setting up a false plea such as payment of substantial portion of sale price or making false averments in the plaint with a view to mislead the court are considered to be relevant factors to disentitle the plaintiff to the relief of specific performance.Section 20 of the Specific Relief Act empowers the Court with discretion as to decreeing specific performance. It cannot be said that in every case wherever there is a valid contract or subsisting agreement a decree for specific performance ought to be passed. Further, Section 16(c) states that there must be a willingness on the part of the parties which was successfully matched in case of the plaintiff and therefore there was no reason to file a decree against him.

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