- In P. Ramasubbamma v. V. Vijayalakshmi And Ors. (2022), the Hon'ble SC was dealing with an appeal against the Karnataka High Court's ruling of setting aside the Trial Court's order issuing a decree for the particular performance of a sale agreement. Justices M.R. Shah and B.V. Nagarathna observed that the vendee is not required to further establish anything in a claim for specific performance of the agreement to sell once the vendor agrees to the execution of the agreement to sell and payment of the advance substantial sale consideration.
- In this case, it was contended that respondent no. 1 had failed to execute the sale deed even after the appellant had advanced a sum total of Rs. 26 lakhs and had endorsed the same. Ultimately, the appellant disclosed that two sale deeds were executed in favour of the sisters-in-law of respondents no. 1 and 2 by respondent no. 2. Thus, the appellant filed a lawsuit, as respondent no. 1 failed to execute the agreement even after receiving a legal notice for the execution of the same. After filing the suit, while respondent no. 1 executed his side of the agreement, respondent no. 2 contested the same.
- Since respondent no. 1 had admitted to the agreement's execution, the Trial Court dismissed the suit. However, respondent no. 2 used his power of attorney to execute the sale deeds in their favour. The Karnataka HC overturned the Trial Court's decision and concluded that such a remedy could not have been given because no petition to declare the following sale null and void had been submitted. The appellant argued that the HC had erred in setting aside the directive passed by the Trial Court in terms of Section 20 of the Specific Relief Act, and since nobody testified on behalf of the respondents, the Court heard the appeal ex parte.
- Section 20 of the Specific Relief Act talks about discretion as to Decreeing Specific Performance.
- In a relevant case, Lala Durga Prasad and Anr. v. Lala Deep Chand & Ors., 1954 SCR 360, the petitioner was merely seeking the specific fulfilment of the sale agreement. In a suit for specific performance, the subsequent purchaser was held to be a necessary party.
- In another relevant recent decision, R. C. Chandiok &Another v. Chunni Lal Sabharwal &Others ([1971] 2. SCR 573.), while passing a decree for specific performance of a contract, a direction was issued that the rule should be in the same form as in Lala Durga Prasad's case.
- In another notable case, Rathnavathi and Anr. v. Kavita Ganashamdas (MANU/SC/0966/2014: 2015 (5) SCC 223), the Hon'ble Court held that the case was not drawn against the Plaintiff in such a way that he could be barred from filing a subsequent suit to claim specific performance of agreement against the Defendants concerning the suit property.
- After hearing the appeal ex parte, the Hon'ble Court held that the appellant need not prove anything regarding the specific performance complaint as respondent no. 1 had admitted to the execution of the agreement to sell and the payment of the advance sale consideration. Additionally, it was held that since the Trial Court had framed specific issues pertaining to the said sale deeds, the HC could not have overturned the Trial Court's decree because there was no particular relief of cancellation of the sale deed executed in favour of subsequent purchasers.
- Furthermore, Hon'ble Court concluded that the appellant was aware of the said agreement as the stamp papers of the agreement to sell in favour of the appellant were purchased in the respondent's (no. 2) name. The Court stated that the HC had resorted to Section 20 of the Special Relief Act to exercise discretion in denying relief, but the same would not hold ground as –
- The Trial Court determined that the original owner had allowed the execution of the agreement to sell in favour of the appellant by accepting a significant advance consideration;
- Respondent no. 2 was cognizant of such an agreement;
- Respondent no. 2 executed nominal sale deeds on behalf of purchasers who were their sisters-in-law.
- Therefore, the appeal was allowed by the Hon'ble Apex Court.
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