Supreme Court Annual Digest 2024 | Specific Relief Act, 1963

Section 20 - Specific Performance – Discretionary Relief – Hardship – Held, the jurisdiction to decree specific performance is discretionary and must be guided by judicial principles. Mere inadequacy of consideration, rise in price, or the onerous nature of the contract does not constitute hardship under Section 20(2) of the Act unless unforeseen at the time of entering into the contract. The Court reversed the High Court's judgment that denied specific performance on the ground of hardship to the defendants, noting that the hardship claimed was neither unforeseeable nor substantiated by evidence. It reaffirmed the Trial Court's decree for specific performance with a modification. Appeal allowed. Parswanath Saha v. Bandhana Modak, 2024 LiveLaw (SC) 1028

Section 22 - Transfer of Property Act, 1882; Section 55 - Whether the executing court can grant the relief of possession when a decree for specific performance does not explicitly include possession - Interpretation of the scope of Section 22 of the Specific Relief Act concerning relief for possession during execution proceedings. Held, the Supreme Court reiterated that in a suit for specific performance, the relief of possession can be implied under certain circumstances, even if not explicitly decreed, particularly when possession is with the contracting party. The Court upheld the decision of the High Court, which directed the executing court to issue a warrant of possession to the decree-holder, recognizing the implied right to possession under a decree for specific performance. The Court relied on its precedent in Babu Lal v. Hazari Lal Kishori Lal, (1982) 1 SCC 525 and the principle that Section 22 of the Specific Relief Act allows the amendment of pleadings to include possession at any stage, including execution proceedings. This is to ensure complete and effective relief to the decree-holder and avoid multiplicity of proceedings. The petition was dismissed as the High Court's order directing the executing court to grant possession to the decree-holder was found to be in accordance with established legal principles. Birma Devi v. Subhash, 2024 LiveLaw (SC) 976

Section 16(c) (pre-amendment) - Specific Performance – Readiness and Willingness – Burden of Proof - The Supreme Court upheld the decision of the High Court which reversed the trial court's decree for specific performance granted in favor of the plaintiff-petitioner. The High Court found that the plaintiff failed to demonstrate readiness and willingness to perform the contract as mandated under Section 16(c) of the Specific Relief Act, 1963. Readiness pertains to the plaintiff's financial and practical capacity to fulfill the contract, whereas willingness refers to the plaintiff's conduct and intention. Both are essential for granting specific performance. The plaintiff must specifically plead and substantiate readiness and willingness through oral and documentary evidence, including proof of financial capability. The High Court, on reappreciating the evidence, held that the plaintiff failed to establish readiness and willingness. This finding, being factual, was not considered perverse by the Supreme Court. Special Leave Petition dismissed. Findings of the High Court upheld. R. Shama Naik v. G. Srinivasiah, 2024 LiveLaw (SC) 947

Section 10 and Section 16(c) of the Specific Relief Act (Pre-2018 Amendment) - Discretion and Readiness to Perform – Errors in Prior Findings - The Supreme Court analyzed whether the petitioner was entitled to a decree for specific performance under the Specific Relief Act, considering pre-amendment Section 10, which allowed courts discretion in granting such relief. The Court acknowledged its discretionary power under pre-2018 Section 10 to decree specific performance when monetary compensation was inadequate or no standard existed to ascertain damages. The statutory presumption that compensation is inadequate for immovable property transactions was emphasized, with no evidence to rebut this presumption. Under Section 16(c), the petitioner demonstrated readiness and willingness to perform the contract by paying 75% of the sale consideration, despite the remaining balance being unpaid due to circumstances beyond their control. The Court clarified that tendering money is not essential unless mandated by the court. The prior judgment erroneously concluded that time was of the essence and the petitioner was not ready to perform, based on misinterpretation of contract clauses and reliance on incomplete evidence. The evidence of the respondent's failure to produce requisite documents, as confirmed by trial and appellate courts, was overlooked. The Court held that the petitioner was ready and willing to perform and that specific performance was warranted. It noted the absence of any contractual stipulation or evidence negating the statutory presumption under Section 10. The petitioner is entitled to specific performance, and the discretion under Section 10 of the Specific Relief Act (pre-2018 amendment) must be exercised in favor of enforcing the contract. Ramakant Ambalal Choksi v. Harish Ambalal Choksi, 2024 LiveLaw (SC) 939

Section 19(b) - Specific performance of an unregistered oral agreement of sale - Validity of subsequent transfer to bona fide purchasers - Held, the Supreme Court dismissed the appeal filed by the subsequent purchasers (appellants) and upheld the High Court's judgment granting specific performance to the original plaintiff. The High Court rightly concluded that the appellants failed to prove themselves as bona fide purchasers under Section 19(b) - The appellants, subsequent purchasers, failed to demonstrate good faith in their purchase, including due inquiry regarding the possession and title of the suit property. Evidence revealed collusion between the original owner and the appellants. The Court emphasized that bona fide purchasers must act with due care, honesty, and diligence. The appellants' failure to inquire about the possession of the plaintiff's husband, who was a mortgagee in possession, constituted wilful abstention, leading to constructive notice of the plaintiff's equitable rights. The original plaintiff was permitted to execute the decree for specific performance. The appeal was dismissed, reaffirming the High Court's finding that the appellants were not bona fide purchasers under Section 19(b) of the Specific Relief Act. Manjit Singh v. Darshana Devi, 2024 LiveLaw (SC) 919

Readiness and Willingness – Jurisdictional Fact – Maintainability of Suit - Interpretation of Agreement Clauses - In a suit for specific performance of a contract for sale, the written agreement between the parties assumes paramount importance, and its terms must be reasonably ascertainable. Clauses in the agreement must be read harmoniously to ascertain the intention of the parties. Here, the obligation to vacate tenants and the buyer's obligation to pay within a specified timeframe were interlinked. Time was not of the essence since the property's vacant possession delayed the buyer's obligations. The buyer failed to demonstrate readiness and willingness to perform the contract. Evidence indicated financial incapacity, reluctance to pay the balance consideration despite reminders, and unjustified delays in returning the advance payment. The court emphasized the importance of jurisdictional facts in determining the trial court's authority to grant relief. A higher court may assess the existence of such facts even if the trial court omits to frame issues specifically addressing them. Discretionary relief of specific performance was denied due to the buyer's conduct, which lacked bona fides and failed to inspire confidence. The appeal was allowed, restoring the Trial Court's dismissal of the suit. The buyer was entitled to a refund of the advance payment but not specific performance. R. Kandasamy v. T.R.K. Sarawathy, 2024 LiveLaw (SC) 911 : AIR 2025 SC 44

Section 16 (c) - Readiness and Willingness for Specific Performance - A plaintiff seeking specific performance must demonstrate continuous readiness and willingness to fulfill their contractual obligations throughout the legal proceedings. Mere averments of readiness and willingness are insufficient; concrete evidence, including the availability of funds and proactive measures, must be presented. Janardan Das v. Durga Prasad Agarwalla, 2024 LiveLaw (SC) 813

Section 16 (c) - Readiness and Willingness for Specific Performance - Trial Court correctly found that the plaintiffs failed to ensure the participation of Defendant Nos. 6 to 8, as mandated by the agreement, and showed a lack of diligence by relying solely on other parties to secure their involvement. Their failure to communicate with the absent defendants and to arrange timely payment indicated complacency and lack of urgency. Contrarily, the High Court's summary conclusion that the plaintiffs were ready and willing lacked a thorough examination of their conduct and evidence. The Supreme Court agreed with the Trial Court's findings, holding that the plaintiffs' inaction and failure to meet the agreement's essential terms negated their claim for specific performance. The High Court's oversight in addressing this critical aspect led to its erroneous decision, ultimately warranting the denial of equitable relief to the plaintiffs. Janardan Das v. Durga Prasad Agarwalla, 2024 LiveLaw (SC) 813

Section 16 (c) - Readiness and Willingness for Specific Performance - Validity of Sale Agreements and Agent Authority under General Power of Attorney - The Supreme Court examined the enforceability of a sale agreement involving multiple co-owners and the validity of the General Power of Attorney (GPA) executed in 1982 by Defendant Nos. 6 to 8. The Trial Court found the GPA unregistered, outdated, and effectively revoked by a subsequent registered partition deed in 1988, which delineated individual ownership rights and limited Defendant No. 1's authority to rent collection. Furthermore, the agreement dated 06.06.1993 did not reference the GPA or suggest that Defendant No. 1 acted on behalf of the co-owners. The High Court, however, upheld the GPA's validity, concluding that the absence of an explicit reference to it did not invalidate Defendant No. 1's authority. The Supreme Court rejected this view, emphasizing that any agent's authority must be clear and subsisting at the time of the transaction. Given the implied revocation of the GPA by the 1988 partition deed and the lack of evidence that Defendant No. 1 had authority to bind his sisters in 1993, the agreement was deemed unenforceable. The Court concluded that the plaintiffs were aware of the necessity for Defendant Nos. 6 to 8 to personally consent to the sale. Their failure to secure such consent rendered the agreement incomplete and unenforceable. Thus, specific performance was denied, as the plaintiffs could not claim any right over the shares of Defendant Nos. 6 to 8 based on the flawed agreement. Janardan Das v. Durga Prasad Agarwalla, 2024 LiveLaw (SC) 813

Section 16 (c) - Readiness and Willingness for Specific Performance - When the plaintiff seeks specific performance of the agreement to sell a property (being jointly owned by multiple persons), then the onus is on the plaintiff to ensure that all necessary consents and participations are secured to prove his readiness and willingness towards the performance of the contract. Janardan Das v. Durga Prasad Agarwalla, 2024 LiveLaw (SC) 813

Section 20 (applicable to this case as it predates the 2018 amendment) - Discretionary Nature of Specific Performance and Protection of Bona Fide Purchasers - The court reiterated that granting specific performance is discretionary and must be guided by equitable principles. The court is not bound to grant such relief merely because it is legally permissible, particularly when justice and fairness would be compromised. In this case, the plaintiffs sought specific performance of a sale agreement dated 06.06.1993, which was incomplete and lacked the consent of co-owners, particularly Defendant Nos. 6 to 8. Despite this, the property was sold to the appellants on 27.09.1993, who acted as bona fide purchasers for value. The court noted that enforcing the agreement would unjustly prejudice these purchasers and disrupt a sale that had been neither contested nor challenged by the plaintiffs at the time of the suit. Furthermore, the plaintiffs' failure to fulfill essential contractual obligations and secure necessary consents underscored their lack of diligence. Given the availability of adequate monetary compensation and the significant lapse in asserting their rights, the court found it inequitable to grant specific performance. The appeal was allowed, reinstating the Trial Court's decision to dismiss the suit. The appellants were directed to refund ₹10,00,000 to the plaintiffs, covering earnest money and associated costs, affirming that monetary compensation was a sufficient remedy in this case. Janardan Das v. Durga Prasad Agarwalla, 2024 LiveLaw (SC) 813

In the present case, the Court found substantial irregularities in the findings of the courts below concerning an agreement to sell agricultural land. The appellant-defendant challenged the authenticity of the agreement, arguing that his thumb impression had been obtained on blank stamp paper, with the agreement being transcribed later. Additionally, the respondent-plaintiff, a police constable, failed to seek departmental permission for a high-value purchase, raising further doubts about the transaction's legitimacy. After examining evidence, the Court concluded that the respondent-plaintiff's claim of a valid agreement and payment of Rs.16,00,000 as earnest money was unsubstantiated, indicating a fraudulent and concocted case. The lower courts overlooked critical factual discrepancies, warranting the Supreme Court's intervention. The Court allowed the appeal, quashing the judgments of the trial court, first appellate court, and High Court, holding them perverse and unsustainable. Lakha Singh v. Balwinder Singh, 2024 LiveLaw (SC) 755

Section 31 - It is not mandatory for a third party, against whom a sale deed is void, to seek its cancellation. Golam Lalchand v. Nandu Lal Shaw, 2024 LiveLaw (SC) 705 : AIR 2024 SC 4193

Section 28 - An application under Section 28 of the Specific Relief Act, 1963, can be filed before the trial court even if the decree for specific performance was passed by the appellate Court. Ishwar v. Bhim Singh, 2024 LiveLaw (SC) 651 : AIR 2024 SC 4232

Section 28 - Execution Court can entertain application under Section 28 provided it's the Court which passed the decree in terms of Section 37 CPC. Ishwar v. Bhim Singh, 2024 LiveLaw (SC) 651 : AIR 2024 SC 4232

Section 28 - Jurisdiction of the Execution Court - The expression "may apply in the same suit in which the decree is made" in Section 28 of the Specific Relief Act, 1963, must be interpreted expansively. It includes the court of first instance even if the decree was passed by an appellate court, as the decree arises from the same suit. As per Section 37 of the Code of Civil Procedure (CPC), the term "the court which passed a decree" encompasses: (a) The court of first instance, even if the decree was passed in appellate jurisdiction. (b) The court with jurisdiction at the time of application if the original court has ceased to exist or lacks jurisdiction. Applications under Section 28 of the 1963 Act, such as for rescission of the contract or extension of time, can be entertained and decided by the Execution Court if it qualifies as the court that passed the decree under Section 37 of the CPC. The objection to the jurisdiction of the Execution Court to decide the application under Section 28(1) of the 1963 Act is dismissed. Ishwar v. Bhim Singh, 2024 LiveLaw (SC) 651 : AIR 2024 SC 4232

Limitation period for a specific performance suit will run from the date fixed for the performance and not from the expiry of the validity of the agreement. Usha Devi v. Ram Kumar Singh, 2024 LiveLaw (SC) 568 : AIR 2024 SC 4591

Section 16(c) - Mandatory requirement of demonstrating readiness and willingness - Relief of specific performance of contract is a discretionary relief. As such, the Courts, while exercising power to grant specific performance of contract, need to be extra careful and cautious in dealing with the pleadings and the evidence in particular led by the plaintiffs. The plaintiffs have to stand on their own legs to establish that they have made out a case for grant of relief of specific performance of contract. The Act, 1963 provides certain checks and balances which must be fulfilled and established by the plaintiffs before they can become entitled for such a relief. The pleadings in a suit for specific performance have to be very direct, specific and accurate. A suit for specific performance based on bald and vague pleadings must necessarily be rejected. Section 16(C) of the 1963 Act requires readiness and willingness to be pleaded and proved by the plaintiff in a suit for specific performance of contract. The said provision has been widely interpreted and held to be mandatory. (Para 22(i)) P. Ravindranath v. Sasikala, 2024 LiveLaw (SC) 491

Section 19(b) – Specific performance of the suit agreement – Held, the defendants, who are subsequent purchasers, fail to prove that they entered into the sale deed in good faith and without notice of earlier suit agreement. Hence, in view of Section 19(b), a decree for specific performance of the sale agreement can be passed against such defendants. (Para 16) Maharaj Singh v. Karan Singh, 2024 LiveLaw (SC) 473 : AIR 2024 SC 3328 : (2024) 8 SCC 83

Section 12 – Admissibility of deposition of a Power of Attorney Holder – Power of Attorney Holder cannot depose for principal in respect of matters of which only principal can have personal knowledge and in respect of which the principal is liable to be cross-examined – It is necessary for the plaintiff to step into the witness box and depose the said fact and subject himself to cross-examination on that issue. Held, the plaintiff/appellant has failed to enter into the witness box and subject himself to cross-examination, he has not been able to prove the prerequisites of Section 12 of the Specific Relief Act, 1963. (Para 9, 12 & 13) Rajesh Kumar v. Anand Kumar, 2024 LiveLaw (SC) 407

Section 20 – The Supreme Court dismissed the plaintiff's appeal challenging the High Court's modification of the Trial Court's decree in a suit for specific performance. The plaintiff had sought specific performance of a sale agreement dated 26.03.1998, claiming to have paid Rs. 18,00,000/- (Rs. Eighteen Lakhs) as advance sale consideration. The Trial Court denied specific performance but directed the defendant to refund Rs. 18,00,000/- with 12% interest. The High Court, however, modified the decree, allowing the plaintiff to recover only Rs. 3,00,000/- (Rs. Three Lakhs) with 12% interest, holding that the plaintiff failed to prove the payment of the additional Rs. 15,00,000/-. The Supreme Court upheld the High Court's decision, finding no evidence to corroborate the plaintiff's claim of paying Rs. 15,00,000/-. The appeal was dismissed, with parties bearing their own costs. R. Radhakrishna Prasad v. Swaminathan, AIR 2024 SC 3843 : (2024) 7 SCC 240

Land Revenue Code; Section 36A – Specific performance of agreement to sell –The stage of taking previous sanction under Section 36A of the Maharashtra Land Revenue Code, 1959 had not arisen in the present case, for the reason that the defendant did not come forward to execute the sale deed. Courts could not have declined to grant the decree for specific performance on the basis of non-compliance of Section 36A inasmuch as the considerations under the provisions of the Specific Relief Act, 1963 only had to be made for the purpose of adjudicating the suit between the parties. As the plaintiff has performed his part of the agreement as required under the provisions of the Specific Relief Act, 1963, the plaintiff is entitled to the relief specific performance of the agreement to sell. On grant of the decree of specific performance, the appellant-plaintiff shall proceed under Section 36A of Act of 1959 before seeking conveyance of the subject land in his favour in case the defendant is a tribal. Babasaheb Dhondiba Kute v. Radhu Vithoba Barde, 2024 LiveLaw (SC) 225 : (2024) 4 SCC 310

Where there is no reason to decline a decree for specific performance, the Courts ought to grant the same rather than give an alternative relief. Babasaheb Dhondiba Kute v. Radhu Vithoba Barde, 2024 LiveLaw (SC) 225 : (2024) 4 SCC 310

Section 20 – Specific Performance – The grant of decree for specific performance is always discretionary and depends on the conduct of the person. Considering the plaintiffs' conduct of making false and/or incorrect statements in the plaint, which were very material, we hold that the plaintiffs are disentitled to relief of specific performance. The relief of specific performance is an equitable relief, hence a person who seeks equity must do equity. (Para 9 & 14) Major Gen. Darshan Singh v. Brij Bhushan Chaudhary, 2024 LiveLaw (SC) 182 : AIR 2024 SC 1330 : (2024) 3 SCC 489

Section 38 - Presumption for 30 years old documents – If the document is more than 30 years old and is being produced from proper custody, a presumption is available to the effect that signatures and every other part of such document, which purports to be in the handwriting of any particular person, is in that person's handwriting and in case a document is executed or attested, the same was executed and attested by the persons by whom it purports to be executed and attested. This does not lead to a presumption that recitals therein are correct. (Para 17) Urban Improvement Trust v. Ganga Bai Menariya, 2024 LiveLaw (SC) 153

Section 38 - Suit simpliciter for permanent injunction – A suit simpliciter for injunction is not maintainable as the title of the property of the plaintiff/respondent was disputed by the appellants/defendants. In such a situation it is required for the respondent/plaintiff to prove the title of the property while praying for injunction. The plaintiff failed to establish their title on the land. (Para 21) Tehsildar, Urban Improvement Trust v. Ganga Bai Menariya, 2024 LiveLaw (SC) 153

Section 38 - Panchayat (General) Rules, 1961 (Rajasthan); Rule 266 – Only in certain specified situation, the land could be transferred by way of sale on private negotiation, namely, where any person has a plausible claim of title to the land and auction may not fetch reasonable price or it may not be the convenient mode for disposal of land or where such a course is regarded by the Panchayat necessary for advancement of Scheduled Castes and Scheduled Tribes or other Backward Classes. Another situation envisaged is where the person is in possession of land for more than 20 years but less than 42 years. Nothing was produced on record to show that the due process required for leasing out/sale of the land in favour of the respondents/plaintiffs by private negotiation was followed. Gram Panchayat from whom the land was taken was not impleaded as party to admit or deny the allegations made by the respondents/plaintiffs in the plaint. The alleged lease deed/sale deed has been issued in favour of the respondents/plaintiffs is clearly violative of Rule 266. (Para 29) Tehsildar, Urban Improvement Trust v. Ganga Bai Menariya, 2024 LiveLaw (SC) 153

Section 34 - A suit for declaration of title without seeking recovery of possession is not maintainable when the plaintiff is not in possession. In this regard, a plaint could be amended at any suit stage, even at the second appellate stage. (Para 33) Vasantha v. Rajalakshmi @ Rajam, 2024 LiveLaw (SC) 117 : (2024) 5 SCC 282

The person who claims adverse possession must show the following: (a) on what date he came into possession; (b) what was the nature of his possession; (c) whether the factum of possession was known to the other party; (d) how long his possession has continued; and (e) his possession was open and undisturbed. (Para 20) Vasantha v. Rajalakshmi @ Rajam, 2024 LiveLaw (SC) 117 : (2024) 5 SCC 282

Section 16 (c) - When a contract stipulates a specific time frame within which the consideration needs to be paid by the 'buyer' to execute the 'agreement to sale' by the 'seller', then the buyer must strictly adhere to such condition, otherwise, the 'buyer' can not avail a remedy of specific performance of the sale deed. Alagammal v. Ganesan, 2024 LiveLaw (SC) 27 : AIR 2024 SC 683 : (2024) 3 SCC 232