Supreme Court Denies Specific Performance To Plaintiff Who Made False Statements, Calls Relief Discretionary & Equitable

While denying a plaintiff's plea for specific performance on account of false/incorrect statements made by him, the Supreme Court recently held that grant of a decree for specific performance under Section 20 of the Specific Relief Act, 1963 is discretionary and equitable.

"The exercise of discretion depends on several factors. One of the factors is the conduct of the plaintiff. The reason is that relief of a decree of specific performance is an equitable relief. A person who seeks equity must do equity", said the Bench of Justices Abhay S Oka and Sanjay Karol.

Briefly put, the case related to sale-purchase of a property that was agreed to be sold by the defendant (respondent No.1) to the plaintiffs (appellants). The parties agreed upon consideration amount of Rs.3,90,000/- and earnest money @ Rs.30,000 was paid by the plaintiffs to defendant. As per the agreement between the parties, if the defendant failed to honor the agreement, he'd refund the sum of Rs. 30,000/- along with damages of Rs.10,000/- without any interest.

According to the plaintiffs, this agreement was novated and consideration amount reduced to Rs.2,90,000/-. A draft sale deed was executed and the plaintiffs put in possession. However, subsequently, the defendant changed his mind and did not appear for registration of the sale deed. As such, the plaintiffs filed a suit for specific performance, praying in the alternative for damages of Rs.40,000/-.

The defendant contested the suit, stating that the suit property was a Hindu Undivided Family (HUF) property. He denied the plaintiffs' claim of possession having been given, saying that the members of the HUF were in joint possession of the property.

The Trial Court, Appellate Court and High Court denied relief of specific performance, but allowed and maintained a decree of damages to the tune of Rs.40,000/- in favor of plaintiff No.1. Against the High Court judgment, the plaintiffs approached the Supreme Court.

After perusing the material on record, the top Court came to the conclusion that the plaintiffs made incorrect/false statements, including on the matter of being put in possession of the property, and refused specific performance.

"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."

It further observed that the plaintiffs continued to prosecute the suit in respect of the entire property, despite knowing and admitting that it was an HUF property, members of which were not party to the suit.

In closing, as no interest was awarded post decree on the damages of Rs.40,000/-, the appeal was partly allowed. The Court directed that the sum of Rs.40,000/- shall carry interest @ 6 percent per annum from the date of passing of the decree by the Trial Court till realization.

Case Title: Major Gen. Darshan Singh (D) By Lrs. & Anr. v. Brij Bhushan Chaudhary (D) by Lrs., CIVIL APPEAL NO. 9360 OF 2013

Citation : 2024 LiveLaw (SC) 182

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