Case title:
T. D. Vivek Kumar vs Ranbir Chaudhary
Date of Order:
28 April 2023
Bench:
M.R. Shah, J.B. Pardiwala
Parties:
Appellant- T.D. Vivek Kumar & Anr
Respondent- Ranbir Chaudhary
SUBJECT
- Specific performance is an equitable remedy granted by the courts, which compels a party to enforce their contractual obligations.
- Based on the facts and circumstances of each case and the court's discretion, it can grant a decree for specific performance.
- When a suit for specific performance is instituted, the plaintiff has to show that they are willing to fulfill their part of the contract and other contractual obligations, and it is the defendant who failed to fulfill the contract.
IMPORTANT PROVISIONS
- Article 136 of the Indian Constitution empowers the Supreme Court to grant special leave to appeal from any court/tribunal in India against any judgment, order, or decree.
- Section 100 of the Civil Procedure Code provides that an appeal can lie before the High Court from any subordinate court. This is if the High Court is satisfied that the case involves a substantial question of law.
OVERVIEW OF FACTS
- Appellant No.1 acting as the attorney of appellant No.2 (original defendants) entered into a sale agreement with the respondents (original plaintiffs).
- The tentative date scheduled for the registration and execution of the deed was 18.09.2004, and the consideration for the suit was Rs. 17,61,700/-
- The respondent paid an earnest amount of Rs. 2 lahks.
- The original plaintiff filed a suit for the specific performance of the agreement in the Court of Additional Civil Judge, Faridabad.
- The appellants resisted the execution of the sale on various grounds. However, they claimed that, on the failure of execution of the sale deed, the respondents would receive double the amount they had given in advance.
- Subsequently, the court refused to grant the decree, and the plaintiffs recovered Rs. 4 lahks as per the agreement.
- Aggrieved by this decision, the original plaintiffs approached the first appellate court.
- The appellate court upheld the lower court's decision and refused to grant the specific performance decree.
- The plaintiffs then resorted to the High Court of Punjab and Haryana at Chandigarh, where even the appellants filed cross-objections.
- The High Court overturned the trial and appellate court's decision by granting the decree of specific performance since the plaintiffs were ready to do their part of the agreement. The appellants' cross-objections were dismissed.
- The appellants (original defendants) filed a review petition before the High Court stating that the High Court had not considered relevant clauses of the agreement.
- However, the petition was dismissed as there was no ground for review, and no errors in deciding the case were discovered.
- Dissatisfied with the High Court decision, the appellants filed the present appeal before the Hon’ble Supreme Court of India.
ISSUE RAISED
- Is the High Court justified in overturning the judgment(s) of the learned Trial Court and the First Appellate Court, refusing to pass the decree for the specific performance of the sale agreement based on the facts and circumstances of the case?
ARGUMENTS ADVANCED BY THE APPELLANT
- Senior advocate Shri Guru Krishna Kumar represented the appellants.
- The counsel contended that the High Court made a significant error in rejecting the review petition, and such a rejection was made before consideration.
- It was submitted that the High Court failed to analyze certain clauses in the agreement and made factual errors in its decision.
- Counsel stated that the high court didn’t frame any substantial question of law as required by section 100 of the CPC.
- Paragraph 31 of the case, P. D’Souza Vs. Shondrilo Naidu (2004) [6 SCC 649] was referred to by the learned counsel, after which it was prayed to allow the appeal.
ARGUMENTS ADVANCED BY THE RESPONDENT
- Learned counsel Shri Daya Krishan Sharma represented the respondents.
- Counsel contended that the original plaintiffs had always been willing to fulfill their part of the contract and pay the sale amount. The defendants, however, were never ready to execute the deed, given which, the high court granted the specific performance decree.
- It was submitted that there was no error in the high court decision.
- In addition, the counsel referred to and relied on the judgment of P. D'souza (supra).
JUDGEMENT ANALYSIS
- The Supreme Court quashed and set aside the high court order granting the decree for specific performance. It restored the trial court and appellate court decisions.
- The bench consisting of Justice M.R. Shah and Justice J.B. Pardiwala noted that the High Court failed to form a substantial question of law as required by Section 100 of the CPC.
- The High Court also made a major error by disregarding relevant clauses in the agreement.
- According to clause 2 of the agreement, if the seller fails to execute the deed within the given period, the seller will be liable to pay double the earnest money to the buyer.
- The plaintiff is bound by the agreement and the lower courts were right in refusing the decree of specific performance as per the terms and conditions of the agreement.
CONCLUSION
In this case, the Hon’ble Supreme Court of India reiterated the necessity of courts to consider all the relevant clauses in an agreement while deciding upon it. In addition, it touched upon the need for parties to abide by the agreement. It was held by the court that, if a sum amount is provided in the agreement which is to be paid by the seller to the buyer upon the failure to execute the deed, then the courts have all rights to refuse any decree for the specific performance of such an agreement.
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