MADHUKAR NIVRUTTI JAGTAP & ORS. versus SMT. PRAMILABAI CHANDULAL PARANDEKAR & ORS.

[2019] 10 S.C.R. 31

MADHUKAR NIVRUTTI JAGTAP & ORS.

SMT. PRAMILABAI CHANDULAL PARANDEKAR & ORS.

(Civil Appeal No. 5382 of 2007)

AUGUST 13, 2019

[ABHAY MANOHAR SAPRE AND

DINESH MAHESHWARI, JJ.]

Specific Relief Act, 1963: Nature of transaction between theplaintiffs and defendant nos.1 to 3 – Suit for specific performanceof agreements for sale of agricultural land and in the alternativefor recovery of earnest money with interest – Case of plaintiffs wasthat defendant 1 to 3 had executed agreement dated 20.9.1965 forsale of suit land for consideration of Rs.22,951 and that Rs.3,500was paid as earnest money; that plaintiffs further paid Rs.2,000 on24.9.1965 and took possession of 25 acres of land – Plaintiff furtheraverred that defendants executed supplementary agreement forsale and accepted an additional sum of Rs.500 from plaintiffs andhanded over the remaining portion of land to plaintiffs and theremaining sale consideration was settled at Rs.11,951 after deductingRs.5,000 towards encumbrances and on payment of this amountdefendants 1 to 3 were liable to execute the sale deed in their favour– Case of defendants 1 to 3 (vendors) was that the said agreementswere executed only as collateral security for loan advanced byplaintiff no.1 and not for sale of property – Held: There was noteven remote suggestion in the agreements that there was any loanor borrowing transaction between the parties and the saidagreements were being executing towards security – On the contrary,the recitals and stipulations in the agreements were only inaffirmation of the agreement for sale and of the receipt of partpayment from time to time against the sale consideration – As towhether the possession of the land in question was delivered to theplaintiffs or not, could not have been taken as factor decisive asregards nature of transaction – Moreover, execution of thesupplementary agreement after notice and after receiving furtheran amount of Rs. 500/- by defendant Nos. 1 to 3 could only show

Are-affirmation of the intention of the parties towards the saletransaction – In the supplementary agreement, the defendants notonly acknowledged the receipt of part consideration to the tune ofRs. 6,000/- but further agreed for adjustment of Rs. 5,000/- towardsencumbrances and, therefore, agreed to receive remaining Rs.11,921/- at the time of execution of the sale deed – In view of theBdealings of the parties, this circumstance about execution of thesupplementary agreement only strengthened the case of the plaintiffs.Specific Relief Act, 1963: Specific performance – Readinessand willingness of plaintiff to perform his part of the contract –The plaintiffs pleaded in the plaint that they were ready to get theCsale deed executed as per the conditions in the agreement for saleand also stated that they served the notice, then supplementaryagreement was executed; and then, on many occasions, they askedthe defendant to execute the sale deed – Defendant No.1 in hiswritten statement merely stated bald denial that such avermentsDwere false and were ‘not agreeable to the defendants’ – The entireemphasis of the written statement was on the assertion that theagreement in question was not for sale and was obtained by theplaintiffs towards security against the amount borrowed by defendantNo.1 – Held: The plea of the plaintiffs as regards their readiness toperform the contract as per its conditions did not meet withEcategorical denial from the defendants – This apart, even at thetime of entering into the agreement, the plaintiffs paid Rs. 3,500/-against the sale consideration of Rs. 22,951/- – Moreover, and muchbefore the stipulated date of execution of sale deed, they madeanother payment of Rs. 2,000/- against the sale consideration –FWhen the sale deed was not executed within stipulated time, theplaintiffs served notice – Defendants thereafter executed thesupplementary agreement and the plaintiffs made payment of yetanother sum of Rs. 500/- while it was also agreed by the vendorsthat the property carried encumbrance to the tune of Rs. 5,000/-,which was to be adjusted against the sale consideration – Therefore,Gthe plaintiffs were left to make payment of about half of the saleconsideration – The plaintiffs showed their readiness and willingnessto perform their part of the contract and there did not operate anypersonal bar against their claim for specific performance.

Transfer of Property Act, 1882: s.52 – Doctrine of lispendens – Both the sale transactions in favour of the appellants,purporting to transfer the suit property in part, having been effectedafter filing of the suit, were directly hit by the doctrine of lis pendens,as embodied in s.52 of the Act, 1882 – Specific Relief Act, 1963.

Transfer of Property Act, 1882: s.52 – Effect of doctrine oflis pendens – Held: Is not to annul all the transfers effected by theparties to suit but only to render them subservient to the rights ofthe parties under the decree or order which may be made in thatsuit – Its effect is only to make the decree passed in the suit bindingon the transferee, i.e., the subsequent purchaser – Nevertheless,the transfer remains valid subject, of course, to the result of thesuit – Hence, the effect of s.52, for the purpose of the instant casewould only be that the said sale transactions in favour of thesubsequent purchasers shall have no adverse effect on the rightsof the plaintiffs and shall remain subject to the final outcome of thesuit in question – However, the High Court, while holding that thesaid transactions were hit by lis pendens, proceeded to observefurther that the sale deeds so made in favour of the subsequentpurchasers were illegal – These observations by the High Court notapproved.

Specific Relief Act, 1963: Requirement to prove readiness andwillingness of plaintiff to perform his part of the contract is not thatthe plaintiff should continuously approach the defendant withpayment or make incessant requests for performance – For the reliefof specific performance, which is essentially species of equity buthas got statutory recognition in terms of the Specific Relief Act, theplaintiff must be found standing with the contract and the plaintiff’sconduct should not be carrying any such blameworthiness so as tobe considered inequitable.Specific Relief Act, 1963: Limitation – When the plaintiffshad the limitation of three years for filing the suit for specificperformance, it cannot be said that during the said period, theplaintiffs are required to show overt act by them in furtherance ofthe agreement in question – In the instant case, when the plaintiffshad the limitation of three years for filing the suit and have indeedfiled the suit well within limitation, no aspect of delay operatesagainst them –Limitation – Delay/Latches.

ASpecific Relief Act, 1963: ss.21 and 22 – Grant of relief –Agreements in question were executed way back on 20.09.1965 and28.04.1966 – The evidence on record showed that vendors andthereafter, the subsequent purchasers remained in effectivepossession thereof – High Court took note of the fact that as on thedate of its decision, the subsequent purchasers were in possessionBof the land in question for about 40 years – High Court found thatland in question carried much higher valuation at the time of passingof the judgment in second appeal and hence, enhanced the saleconsideration to Rs. 10,000/- per acre – Plaintiffs, even while seekingspecific performance, prayed for the alternative reliefs of recoveryCof amount paid by them with interest and compensation to the tuneof Rs 15,000/- – Plaintiff No. 1 expired during the pendency of suitand plaintiff No. 2 expired during the pendency of this appeal;though legal representative of plaintiff Nos. 1 and 2 was on recordas plaintiff No.4 (respondent No. 2) – Plaintiff No.2, while deposing

as PW2 had stated that in case specific performance was notDgranted, she ‘may be granted alternative relief and compensationwith interest’ – In view of this, instead of specific performance,awarding of monetary compensation to respondent No. 2 wouldmeet the ends of justice – Subsequent purchasers themselves filed

valuation report suggesting that the market value of unirrigatedEland was Rs. 70,000/- per hectare whereas that of the irrigatedland was Rs. 1,40,000/- per hectare – The fact also remained thatthe appellants have been enjoying the land in question for longlength of time – Further, the predecessors of respondent No. 2 madepayment of the sum of Rs. 6,000/- to the vendors in the years 1965-1966; and the plaintiffs had claimed alternative relief of recoveryFof the said amount together with interest as also of compensation –Taking all the relevant factors into account, lump sum of Rs.15,00,000/- is awarded to respondent No. 2 as compensation inlieu of specific performance – Equity.

Partly allowing the appeal, the CourtGHELD: 1. Nature of transaction between the plaintiffs anddefendant Nos. 1 to 3

1.1 There had not been even remote suggestion in thedocuments in question that there was any loan or borrowingHtransaction between the parties and the said documents were

being executing towards security. On the contrary, the recitalsand stipulations in the said agreements had only been in affirmationof the agreement for sale and of the receipt of part payment fromtime to time against the sale consideration. The subordinateCourts proceeded to doubt if the transaction was at all intendedto be of sale while questioning as to why the parties fixed theconsideration in odd figures i.e., Rs. 22,951/-; and while observingthat when as per the documents, the land was being sold @ Rs.450/- per acre, the total consideration for the land in questionwould come to Rs. 22,938.75 and not Rs. 22,951/-. The TrialCourt also raised doubts on the suggestion of the plaintiffs thatpossession of the land in question was handed over to them. TheFirst Appellate Court even observed that as against the saleconsideration, only paltry amount was paid in advance andquestioned as to why the supplementary agreement was executedafter serving of notice. On the other hand, the High Courtminutely examined the evidence on record and observed thatthere was not even whisper about the loan transaction; and thatas per the endorsement made on 24.11.1965, another amount ofRs. 2,000/- was received by defendant Nos. 1 to 3. As regardsthe supplementary agreement dated 28.04.1966, the High Courtagain found that there was no whisper about any loan transactionor any security for such transaction and the document was clearlyexecuted as being the supplementary agreement for sale whileeven referring to the encumbrances of Rs. 5,000/-, which wereto be discharged. The High Court observed that by no stretch ofimagination these two agreements could be termed as and byway of security for loan. Trial Court and First Appellate Courtproceeded on entirely irrelevant and rather baselessconsiderations while failing to consider that such findings on thenature of transaction evidenced by the agreements in questioncould not have been rendered on surmises and conjectures. [Paras12.2, 12.3, 12.4][59-C-D; F-H; 60-A-C, D]

1.2 As to whether the possession of the land in questionwas delivered to the plaintiffs or not, could not have been takenas factor decisive as regards nature of transaction. Moreover,execution of the supplementary agreement after notice dated05.04.1966 and after receiving further an amount of Rs. 500/- by

DEF

Athe defendant Nos. 1 to 3 could only show re-affirmation of theintention of the parties towards the sale transaction. In thesupplementary agreement, the defendants not only acknowledgedthe receipt of part consideration to the tune of Rs. 6,000/- butfurther agreed for adjustment of Rs. 5,000/- towardsencumbrances and, therefore, agreed to receive remaining Rs.B11,921/- at the time of execution of the sale deed. In view of thedealings of the parties, this circumstance about execution of thesupplementary agreement only strengthened the case of theplaintiffs rather than operating against them. [Para 12.4.1][60-E-G]

1.3 The other observations of the subordinate Courts asregards quantum of consideration is also not convincing. Suchhair-splitting exercise by the Trial Court, that on the agreed rate,sale consideration ought to have been Rs. 22,938.75 and as towhy the parties agreed for Rs. 22,951/-, had been entirelyDbaseless, rather unwarranted. The observation of the Trial Courtas to why the sale consideration was in odd figures is itself ofsuch oddity that any finding on that basis could only meet withdisapproval. Rounding up of the amount of consideration andaddition of one rupee in the last is not unknown to suchtransactions. In fact, quite contrary to what was observed by theETrial Court, the figure of sale consideration rather fortifies thededuction that the intention of the parties had only been towardsthe transaction of sale. [Para 12.4.2] [60-G-H; 61-A]

2. Readiness and willingness of the plaintiffs to performtheir part of contractF

2.1 The requirement to prove readiness and willingness ofplaintiff to perform his part of the contract is not that the plaintiffshould continuously approach the defendant with payment ormake incessant requests for performance. For the relief of specificperformance, which is essentially species of equity but has gotGstatutory recognition in terms of the Specific Relief Act, 1963,the plaintiff must be found standing with the contract and theplaintiff’s conduct should not be carrying any such blameworthiness so as to be considered inequitable. [Para 13.2][62-D-F]

2.2 The plaintiffs pleaded in the plaint that they were readyto get the sale deed executed as per the conditions in theagreement for sale and also stated that they served the notice,then supplementary agreement was executed; and then, on manyoccasions, they asked the defendant to execute the sale deed.The defendant No. 1 in his written statement merely stated abald denial that such averments were false and were ‘not agreeableto the defendants’. In fact, the entire emphasis of the writtenstatement had been on the assertion that the agreement inquestion was not for sale and was obtained by the plaintiffs towardssecurity against the amount borrowed by defendant No. 1. Theplea of the plaintiffs as regards their readiness to perform thecontract as per its conditions did not meet with categorical denialfrom the defendants. This apart, even at the time of entering intothe agreement, the plaintiffs made payment of sum of Rs. 3,500/- against the sale consideration of Rs. 22,951/-. Moreover, andmuch before the stipulated date of execution of sale deed, theymade another payment of Rs. 2,000/- against the saleconsideration. When the sale deed was not executed by23.03.1966, the plaintiffs served notice on 05.04.1966. Thevendors thereafter executed the supplementary agreement andthe plaintiffs made payment of yet another sum of Rs. 500/- whileit was also agreed by the vendors that the property carriedencumbrance to the tune of Rs. 5,000/-, which was to be adjustedagainst the sale consideration. Therefore, the plaintiffs were leftto make payment of about half of the sale consideration. Therecitals in the supplementary agreement even suggested aboutthe vendors having delivered possession of the property inquestion. [Para 13.3] [62-G-H; 63-A-E]

2.3 The admission of plaintiff No. 3 that she was notpossessed of sufficient funds cannot be read in isolation and itcannot be concluded that she was not possessed of sufficientmeans to pay the remaining sale consideration. Her statement isrequired to be visualised in the backdrop of the fact that herhusband, plaintiff No. 1, had expired and she had succeeded tohis estate. Her statement, with reference to her understandingof the matter, could only be interpreted to mean that at the givenmoment, she was not off-hand in possession of the money to make

Apayment but such an expression in her statement cannot lead tothe conclusion that making payment of the remaining saleconsideration was beyond her capacity or that she was not willingto perform her part of the contract. The question of readinessand willingness on the part of the plaintiffs was approached bythe First Appellate Court from an altogether wrong angle andBwas decided against the plaintiffs on irrelevant considerations.[Para 13.4] [63-F-H; 64-A]

2.4 So far the period between 1966 to 1968 is concerned,when the plaintiffs had the limitation of three years for filing thesuit for specific performance, it cannot be said that during theCaforesaid period, the plaintiffs were required to show overt actby them in furtherance of the agreement in question. In this casetoo, when the plaintiffs had the limitation of three years for filingthe suit and have indeed filed the suit well within limitation; andlooking to the overall circumstances of the case, no aspect ofDdelay operates against them. The plaintiffs have shown theirreadiness and willingness to perform their part of the contractand there does not operate any personal bar against their claimfor specific performance. [Paras 13.5-13.7] [64-B; 65-D-E]

R Lakshmikantham v. Devaraji (2019) 8 SCC 62E– relied on.

Azhar Sultana v. B. Rajamani and Ors. (2009) 17 SCC27 : [2009] 2 SCR 537 – distinguished.

3. Operation of the doctrine of lis pendens : Section 52T.P. ActF

3.1 The suit in question was filed on 26.08.1968. So far thesale transaction in favour of the defendant Nos. 4 & 5 (appellantNos. 1 & 2), in relation to 25 acres of land out of the suit property,is concerned, the same was effected by way sale deed registeredonly on 10.07.1978 i.e., nearly 10 years after filing of the suit. SoGfar the sale transaction in favour of the defendant No. 6 (appellantNo. 3), in relation to other 25 acres of land out of the suit property,is concerned, though it is suggested that there had been anagreement (dated 08.05.1968) in his favour before filing of the

suit but then, admittedly, the sale transaction was effected byway of sale deed registered only on 18.09.1968, that had alsobeen after filing of the suit. The suggestion about want ofknowledge of the subsequent purchasers about the transactionof the vendors with the plaintiffs and about the pendency of thesuit has been considered and rejected by the High Court andeven by the subordinate Court after due appreciation of evidenceon record; and there is no nfirmity in these findings. Both thesale transactions in favour of the appellants, purporting to transferthe suit property in part, having been effected after filing of thesuit, are directly hit by the doctrine of lis pendens, as embodiedin Section 52 of the Transfer of Property Act, 1882. [Para 14.1][65-G-H; 66-A-CE]

3.2 The effect of doctrine of lis pendens is not to annul allthe transfers effected by the parties to suit but only to renderthem subservient to the rights of the parties under the decree ororder which may be made in that suit. Hence, the effect of Section52 for the purpose of the present case would only be that the saidsale transactions in favour of the appellants shall have no adverseeffect on the rights of the plaintiffs and shall remain subject tothe final outcome of the suit in question. However, the HighCourt, while holding that the said transactions were hit by lispendens, has proceeded to observe further that the sale deedsso made in favour of the appellants were illegal. These furtherobservations by the High Court cannot be approved. [Paras 14.3,14.4] [67-H; 68-A-B]

4. What should be the relief?

4.1 The High Court though proceeded to mould the reliefin the manner that specific performance was granted on enhancedsale consideration and it was also directed that if the plaintiffs failto make payment within two months, the appellants (subsequentpurchasers) would make payment of same amount to the plaintiffsso as to ‘confirm their ownership over the suit land’. However,after it was found that granting the decree for specific performancein the very terms of the agreement/s in question may not beappropriate because of myriad factors, the matter ought to havebeen examined with reference to the stand of the parties and the

Aprovisions of Sections 21 and 22 of the Act of 1963. [Paras 16,16.1, 16.2] [68-G-H; 69-A-B]

4.2 Some of the relevant factors having bearing on thequestion of appropriate relief in this matter. First, the agreementsin question were executed way back in 1965 and 1966. Secondly,Bthe plaintiffs had paid Rs. 6,000/- as on 28.04.1966 against thesale consideration of Rs. 22,951/- when the supplementaryagreement was executed. Thirdly, though the plaintiffs allegeddelivery of possession of the land in question to them, theevidence shows that vendors and thereafter, the subsequentpurchasers remained in effective possession thereof. Fourthly,Cthe High Court took note of the fact that as on the date of itsdecision, the subsequent purchasers were in possession of theland in question for about 40 years. Fifthly, the High Court foundthat the land in question carried much higher valuation at thetime of passing of the judgment in second appeal and hence,Denhanced the sale consideration to Rs. 10,000/- per acre. Sixthly,the plaintiffs, even while seeking specific performance,consciously prayed for the alternative reliefs of recovery of amountpaid by them with interest and compensation to the tune of Rs15,000/-. Seventhly, plaintiff No. 3 had categorically deposedbefore the Court as PW1 that he was not entitled to the land inEquestion for being not an agriculturist and he had relinquishedhis rights in favour of the plaintiff Nos. 1 & 2. Eighthly, the plaintiffNo. 1 had expired during the pendency of suit and the plaintiffNo. 2 had expired during the pendency of this appeal; though theheir and legal representative of the said plaintiff Nos. 1 & 2 is onFrecord as plaintiff No. 4 (respondent No. 2). Ninthly, the plaintiffNo. 2, while deposing as PW2 had stated that in case specificperformance was not granted, she ‘may be granted alternativerelief and compensation with interest’. In view of this, instead ofspecific performance, awarding of monetary compensation torespondent No.2 shall meet the ends of justice. Taking all theGrelevant factors into account, lump sum of Rs. 15,00,000/- isawarded to respondent No. 2 as compensation in lieu of specificperformance. [Paras 16.3, 17] [70-F-H; 71-A-G]

MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAICHANDULAL PARANDEKAR

Umabai and another v. Nilkanth Dhondiba Chavan(Dead) by LRS. and another (2005) 6 SCC 243 : [2005]3 SCR 521 ; Sarvinder Singh v. Dalip Singh and Ors.(1996) 5 SCC 539 : [1996] 4 Suppl. SCR 271 ; VeerayeeAmmal v. Seeni Ammal (2002) 1 SCC 134 : [2012] 6SCR 369 ; Pushparani S. Sundaram and Ors. v. PaulineManomani James (deceased) and Ors. (2002) 9 SCC582 ; A. Nawab John and Ors. v. V. N. Subramaniyam(2012) 7 SCC 738 : [2012] 6 SCR 369 ; V. Muthusami(Dead) by LRs. v. Angammal and Ors. (2002) 3 SCC316 : [2002] 2 SCR 37 ; Guruswamy Nadar v. P. LakshiAmmal (Dead) through LRs and Ors. (2008) 5 SCC796 : [2008] 7 SCR 435 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5382of 2007.

From the final Judgment and Order dated 01.08.2007 of the HighCourt of Judicature at Bombay in Second Appeal No.176 of 1988.

K. Parameshwar, Shivaji M. Jadhav, M. V. Mukunda, Ms. AshthaDeep, Advs. for the Appellants.

Subrat Birla, S.C. Birla, Advs. for the Respondents.

42SUPREME COURT REPORTS

AThe Judgment of the Court was delivered byDINESH MAHESHWARI, J.

1. This appeal by special leave arises out of civil suit (No. 83 of1968) for specific performance of agreement for sale of agriculturalland in Survey No. 64 admeasuring 50 acres and 39 gunthas, situated atBvillage Gulvanchi, Taluka - North Solapur[1]. In its judgment and decreedated 13.04.1984, the Trial Court declined the relief of specificperformance but decreed the suit for the alternative relief of moneyrecovery. On 30.11.1987, the First Appellate Court, while dismissing thecontesting plaintiffs’ appeal (Civil Appeal No. 546 of 1984), affirmed theCdecree of the Trial Court. However, the High Court of Judicature atBombay allowed the second appeal preferred by the contesting plaintiffs(Second Appeal No. 176 of 1988) by its impugned judgment and decreedated 01.08.2007 and decreed the suit for the principal relief of specificperformance, albeit on enhanced sale consideration with reference tothe market value of the land in question.D

2. In order to appreciate the relevant features of this case,essentially pertaining to the reliefs claimed under the Specific ReliefAct, 1963[2], the status and capacity of parties to this litigation may betaken note of at the outset and as follows: -

E2.1. In the suit for specific performance leading to this appeal, therespondent No. 1 and the respondent No. 6 had been the plaintiff Nos. 2and 3 respectively. The suit was filed by them jointly with the plaintiffNo. 1- late Shri Chandulal Balaprasad Parandekar, who was the husbandof plaintiff No. 2 (respondent No. 1 herein) and who expired during thependency of suit. After the demise of plaintiff No. 1, the daughter ofFplaintiff Nos. 1 and 2 was taken on record as plaintiff No. 4. She isrespondent No. 2 in this appeal. Therefore, respondent Nos. 1, 2 and 6of this appeal were standing in the capacity of plaintiffs (vendees).

2.2. On the other hand, the respondent Nos. 3 to 5 of this appealhad been the original defendant Nos. 1 to 3 in the suit in question. TheGdefendant No. 1 (respondent No. 3) having expired, his legalrepresentatives are joined as respondent Nos. 3a to 3d in this appeal.The agreements forming the subject-matter of this litigation were

1 Hereinafter referred to as ‘the suit property’ or ‘the land in question’.

2 Hereinafter also referred to as ‘the Act of 1963’.

executed by the defendant Nos. 1 to 3 (vendors) in favour of the plaintiffNos. 1 to 3 (vendees).

2.3 The appellants of this appeal were subsequently joined asdefendant Nos. 4 to 6 in the suit in question, as being the purchasers ofthe suit property after filing of the suit.[3]

2.4. It may also be noticed that an application (IA No. 3 of 2010)was moved in this appeal pointing out demise of respondent No. 1 (plaintiffNo. 2), respondent No. 4 (defendant No. 2), and respondent No. 6(plaintiff No. 3) with the submissions that the legal representative of therespondent No. 1 was already on record as respondent No. 2; and thelegal representatives of deceased respondent Nos. 4 and 6 may besubstituted on record. However, this application was rejected on24.02.2012. On the other hand, other applications (IA Nos. 5 & 6 of2013) for substitution of legal representatives of deceased respondentNo. 5 (defendant No. 3) and for condonation of delay were granted on05.08.2013. Be that as it may, the estate of the original contesting plaintiffs(plaintiffs Nos. 1 & 2) is duly represented by their daughter (plaintiffNo. 4 - respondent No. 2 herein); and the contest in this litigation isessentially between her and the appellants (subsequent purchasers).3. Briefly put, the relevant background aspects of the matter andrespective stands of the parties had been as follows: -

3.1. The plaintiffs filed the suit aforesaid with the averments thatthe defendant Nos. 1 to 3 had executed an agreement dated 20.09.1965for sale of the suit property for consideration of Rs. 22,951/-; and thata sum of Rs. 3,500/- was paid as earnest money. It was further averredthat crops were standing on the suit property and hence, possession tothe extent of half portion thereof was to be handed over by the end ofthe year of 1965; and that in part performance of agreement, the plaintiffsmade payment of further sum of Rs. 2,000/- to the defendant Nos. 1 to3 on 24.09.1965 and the said defendants handed over possession of 25acres of the land in question to the plaintiffs on 14.11.1965. The plaintiffsfurther averred that they served notice on the defendant Nos. 1 to 3 on05.04.1966 for performance of the agreement in question and, on receiptof this notice, the said defendants executed supplementary agreementfor sale; they accepted an additional amount of Rs. 500/- from the

3 As far as feasible, the parties have been referred in this judgment as per their status inthe suit.

Aplaintiffs; and they handed over possession of the remaining part of theland in question to the plaintiffs. The plaintiffs also averred that in thismanner, sum of Rs. 6,000/- was paid to the defendant Nos. 1 to 3 aspart payment of the total sale consideration and the remaining saleconsideration was settled at Rs. 11,951/-, after deducting Rs. 5,000/-towards encumbrances; and on payment of this amount, the defendantBNos. 1 to 3 were liable to execute the sale deed in their favour within atime span of 15 days. The plaintiffs averred that they were ready toperform their part of the contract but the defendant Nos. 1 to 3 failed toexecute the sale deed for the land in question. With these averments, theplaintiffs sought the relief of specific performance of the agreement forCsale and in the alternative, also prayed for recovery of earnest moneywith interest and for damages. The reliefs claimed in the plaint, beingrelevant for present purposes, may be take note of as follows: -

“10) The Plaintiffs pray that,

A) The Defendants may be ordered to execute the sale-deedDin respect of the land described in plaint paragraph 1, byaccepting Rs.16,951/- from the plaintiffs and to mention inthe sale-deed that, in case, the Defendants can not ward offthe charges on the land, being the sum of Rs. 5,000/-, beforethe execution of the sale-deed then the said amount may beEdeducted from the sale price and the plaintiffs shall obtainassurance for the same and the defendant Nos. 1 to 6 may beordered to join the defendant No.1 to 3, in execution of thesale-deed.

B) If it is proved that, perhaps the possession of the landreceived by the Plaintiffs by way of part performance, is takenby the Defendants and the possession is of the Defendantsonly, then the Defendants may be ordered to hand over theland.

C) In case, if it happens that, for any reason sale-deedpertaining to the suit land can not be executed in favour ofthe plaintiffs, then the defendants may be ordered to pay tothe plaintiffs the sum accepted by the defendants towards theearnest money Rupees 6,000/- and damages thereon at therate of Rs. 2% p.a. And the sum of Rupees 15,000/- towardsthe losses on account of breach of Agreement by the

Defendants and it may also be ordered that the encumbrancesin respect of the said amount has been placed on the suitland.

D) The Defendants may be ordered to pay to the plaintiffs theentire cost, including advocates fee, of the present suit.

E) Other just and proper orders may be passed.”

3.2. In their written statement, the defendant Nos. 1 to 3 (vendors)though admitted the execution of agreement dated 20.09.1965 as alsosupplementary agreement dated 28.04.1966 but then, claimed that thesaid agreements were executed only as collateral security for loanadvanced by the plaintiff No. 1 and not for the sale of property. Thesedefendants asserted that the plaintiff No. 3 had introduced them to theplaintiff Nos. 1 and 2, who in turn, had advanced the loan to them. Theyfurther asserted that though the agreement was originally executed onlyin favour of plaintiff No. 1, the names of other plaintiffs were incorporatedat the behest of plaintiff No.3; and that they had never parted withpossession of the land in question.

3.3. The defendant Nos. 4 and 5 were subsequently impleaded inthe said suit as they had purchased 25 acres of the land in question byway of sale deed dated 10.07.1978, which was executed by thedefendant No. 1. The defendant No. 6 was also impleaded as subsequentpurchaser of the remaining portion of the land in question, by way ofanother sale deed dated 18.09.1968. These defendants contended thatthey were bona fide purchasers having no knowledge of theaforementioned transaction between the plaintiffs and defendant Nos. 1to 3.

4. On completion of pleadings of parties, the Trial Court framedas many as 20 issues for determination of the questions involved in thematter. After taking the evidence and having heard the parties, the TrialCourt proceeded to dismiss the suit for specific performance whilerecording the basic finding to the effect that the documents in question(the alleged agreement for sale as also the supplementary agreement)were, in fact, executed as security for loan and not for sale of the suitproperty to the plaintiffs. The Trial Court, inter alia, observed that thesale consideration of Rs. 22,951/- was peculiar one, because in thenormal course, the parties do not fix the consideration amount in such an

Aodd figure and even the rate of Rs. 450/- per acre did not match with theconsideration amount stated in the agreement. The Trial Court also heldthat the plaintiffs had failed to prove that they were handed over possessionof the suit property in pursuance of the agreements in question. In viewof its finding on the nature of transaction, the Trial Court observed thatthe issue regarding readiness and willingness of the plaintiffs did notBsurvive for consideration. The Trial Court, of course, held that thetransactions effected in favour of defendant Nos. 4 to 6 were hit by thedoctrine of lis pendens as per Section 52 of the Transfer of PropertyAct, 1882[4]; and that the defendant Nos. 4 to 6 were not bona fidepurchasers of suit property. However, in view of its findings on materialCissues, the Trial Court held that the plaintiffs were not entitled for specificperformance and recovery of possession but then, directed that theamount paid by the plaintiffs i.e., the sum of Rs. 6,000/-, be returned tothem, together with interest at the rate of 6% per annum from the dateof decree until payment.D5. Aggrieved by the judgment and decree of the Trial Court, theplaintiff Nos. 1, 2 & 4 preferred the first appeal that was considered anddismissed by III Addl. District Judge, Solapur by way of the judgmentand decree dated 30.11.1987. The First Appellate Court, on re-appreciationof evidence, affirmed the principal findings of the Trial Court on thenature of transaction, while observing that the plaintiffs had failed toEprove that the amount in question was not that of loan advanced, ascontended by the defendant Nos. 1 to 3. In regard to this question relatingto the nature of transaction, the First appellate Court specified thecircumstances being relied upon by it in paragraph 17 of its judgment asfollows:-F“ 17. Following are the circumstances which reveal that thedocuments on which the Plaintiffs have relied upon that theDefendants Nos. 1 to 3 had agreed to sell the suit land, werefor the purpose of collateral security to the loan advancedand the intention of the parties to them was not to sell theGland as mentioned in those documents.(i) As compared to the total price for the land agreed to besold, partly sum was paid towards the advance payment ofthe price.

4 Hereinafter also referred to as ‘the T.P. Act’.H

(ii) The possession of the land was never delivered to thePlaintiffs in pursuance of the agreement of sale.

(iii) The Plaintiff Nos. 1 and 2 must not be interested inpurchasing the land.

(iv) The notice dated 5.4.1966 was issued by the Plaintiffsasking the Defendants Nos. 1 to 3 to execute the sale-deedand, therefore, after this notice the Plaintiffs ought to havegot the sale deed executed if at all the Defendants Nos. 1 to 3had no objection to do so, instead of getting an agreement ofsale executed.”

5.1. The First Appellate Court also held that the plaintiffs hadfailed to prove their continuous willingness and readiness to performtheir part of the contract, particularly for the reason that despite statingthe availability of sufficient consideration with them, the plaintiffs gotexecuted supplementary agreement rather than the sale deed. The FirstAppellate Court decided this question against the plaintiffs while observingas under:-

“(24) As discussed above, according to the terms of theagreement of sale, the sale-deed was to be executed on orabout Chaitra Shubha 1, Shake 1888 means on 23[rd] March,1966 according to the Gregorian Calender. The Plaintiffsissued the notice asking the Defendant Nos. 1 to 3 to executethe sale-deed on 5.4.1966 means after the date on which thesale deed was got to be executed according to the terms laiddown in the agreement of sale. The Notice (Exb. 87) issuedby the plaintiffs being after the period before which the saledeed was to be executed cannot be used for proving that thePlaintiffs were ready and willing to perform their part of thecontract. It was necessary for the Plaintiffs to prove that beforeChaitra Shudha 1, Shake 1888 means 23[rd] March, 1966 theywere ready and willing to get the sale-deed executed in termsof the agreement of sale but there is no evidence to prove thatbefore Chaitra Shudha 1, Shake 1888 the Plaintiffs were readyand willing to perform their part of contract. When thePlaintiffs had sufficient consideration in their hand to makepayment of the entire price of the land and when there wasnot difficulty for the Defendants Nos. 1 to 3 to dispose of the,

Ait is not explained why the supplementary agreement was gotexecuted instead of getting the sale-deed executed. Thepostponement of the sale-deed to which the Plaintiffs gaveconsent clearly suggests that the parties were in fact notintending to execute the sale-deed. The Plaintiffs have, thusfailed to prove that they were ready and willing to performBtheir part of contract of getting the sale-deed executed withinthe time limit proving in the earlier agreement of sale.”

5.2. The First Appellate Court affirmed the finding that thedefendant Nos. 4 to 6 were not bona fide purchasers while observingthat even if they had alleged want of knowledge about the agreement inCquestion, given the size of the village and the population thereof, theywere aware of the pending litigation. However, the First Appellate Courtobserved that even though the transactions with defendant Nos. 4 to 6were hit by the doctrine of lis pendens, but the same would not affectthe validity of sale deeds executed in their favour, as the allegedDagreements were executed only for the purpose of collateral securityfor the loan advanced.

5.3. In view of its findings, the First Appellate Court affirmed thedecree of the Trial Court and dismissed the appeal. Aggrieved by thedecree so passed by the Trial Court and affirmed by the First AppellateECourt, the plaintiff Nos. 1, 2 & 4 preferred second appeal before theHigh Court.

6. The second appeal so filed by the contesting plaintiffs wasadmitted by the High Court while formulating the following substantialquestions of law for consideration:-F

“(a) Whether, in suit for specific performance of agreement,in order to establish the readiness and willingness, the plaintiffhas to give notice to the defendant before the last date,specified in the agreement or after the last date specified inthe agreement but within reasonable time thereafter?

(b) What is the true nature of suit transaction, viz. Whether itis an agreement of sale or whether it is security agreement?”

6.1. During the course of hearing, the High Court found yet anothersubstantial question of law arising for consideration and formulated thesame as follows:-

“(c) If the sale transactions executed in favour of defendantnos.4 to 6 during the pendency of the suit were hit by thedoctrine of lis pendente lite, could the transfer of the suitland to defendant nos.4 to 6 be held to be illegal and void abinitio?”

7. The High Court, in its impugned judgment dated 01.08.2007,examined the contentions of the parties and upturned the findings of thesubordinate Courts on the question of nature of transaction as also thefinding of First Appellate Court on the question of readiness andwillingness on the part of the plaintiffs to perform their part of the contract.

7.1. The High Court observed that both the agreements weresilent about any loan transaction between the plaintiffs and the defendantNos 1 to 3 and came to the conclusion that the agreements in questionwere not executed as security against any loan advanced to thedefendants. The High Court referred to the decision of this Court in thecase of Umabai and another v. Nilkanth Dhondiba Chavan (Dead)by LRS. and another.: (2005) 6 SCC 243 and held as under:-

“The agreement at Exh.85 was signed on 20/9/1965 and inits preamble it is stated that the suit property had become thepersonal property of the vendors i.e. the present defendantnos.1 to 3 by way of the order dated 16/8/1963 passed by theMamlatdar of North Solapur. It proceeded to state that thesaid property was being offered to the plaintiffs by way ofsale at the rate of Rs.450/- per acre. By way of advance, anamount of Rs.3,500/- was received and the remaining amountof Rs.19,451/- would be paid at the time of signing the saledeed. The defendants had agreed that the sale deed will besigned by Chaitra Shudha 1 Shake 1888 or around that time.The agreement for sale would be binding on the successor ofthe vendors. Out of the total land of 50 acres 39 gunthas, 25acres of land was having the crops of groundnuts and toorand those crops would be harvested and possession wouldbe given by the end of November, 1965. The possession ofthe remaining land would be handed over to the plaintiffs onexecution of the sale deed. In this document there is no mentionof any security for any loan transaction. The document didnot even whisper about the loan being given by the plaintiffs

at the request of the defendant nos.1 to 3. At the end of thisdocument there is an endorsement made on 24/11/1965 to theeffect that an additional amount of Rs.2000/- was receivedby the defendant nos.1 to 3 on that day as the amount wasrequired to be paid for the acquisition of house plot andpurchase of buffaloes. It was further stated that the saidamount of Rs.2000/- would be adjusted against the balanceof Rs.19,451/- and the remaining amount of Rs.17,451/- wouldbe given while executing the sale deed and the sale deed wouldbe executed within the time originally specified. Coming tothe supplementary agreement at Exh.86 and signed on 28/4/1966, there is no whisper about any loan transaction or asecurity for such transaction. The document is clearly titledas supplementary agreement for sale. It further states thatthe suit land had an encumbrances of additional Rs.5000/-which was to be discharged by the plaintiffs and balanceamount of Rs.11,951/- was to be paid by the plaintiffs at thetime of execution of the sale deed. By no stretch of imaginationthese two agreements at Exhs.85 and 86 could be termed asand by way of security for loan transaction. This defencewas taken by way of an after thought when the suit was filedand beyond the oral statement made in the depositions ofdefendant no.1, there is not even an iota of evidence to holdthat these agreements were by way of security for loantransaction. As observed by their Lordships in the case ofUmabai (Supra) and as is the well established position in lawthat the agreements have to be read as it is and if so read it isclear that the agreements at Exhs.85 and 86 were theagreements for sale and the concurrent findings recorded byboth the courts below that they were by way of security againstloan transaction are unsustainable. It is perverse findingby both the courts below.”

7.2. On the question of readiness and willingness of the plaintiffs,the High Court analysed the chronology of events, being that, as per theterms mentioned in the first agreement, the sale deed was to be executedby or on 23.03.1966; and on the vendors’ failure to execute the saledeed, legal notice dated 05.04.1966 was issued, which led to the executionof supplementary agreement dated 28.04.1966. With reference to these

facts and events, the High Court was of opinion that the plaintiffs werealways ready and willing to perform their part of the contract. The HighCourt observed and held as under:-

“…..Admittedly, as per the agreement for sale at Exh.85, thesale deed was to be executed by 23/3/1966 and obviously if itwas not so done on account of any reason attributable to anyof the parties, the question of one party calling upon the otherunwilling party by legal notice would arise and there wouldnot be any occasion to issue the legal notice by any of theparties before 23/3/1966 and in the instant case thesupplementary agreement for sale at Exh.86 was signed on28/4/1966. As the agreement was not singed by 23/3/1966the plaintiffs have issued legal notice dated 5/4/1966 to thedefendant nos.1 to 3 calling upon them to execute the saledeed which indicated that the notice was issued at the earliestafter the dead-line for signing the sale deed was over. Inresponse to the said notice the defendant nos.1 to 3 held freshnegotiations with the plaintiffs and the supplementaryagreement for sale at Exh.86 was signed on 28/4/1966 and,therefore, the findings recorded by the Lower Appellate Courtare manifestly erroneous. In the instant case, the plaintiffswere required to give notice after 23/3/2006 and not beforethat and such notice was given on 5/4/1966. The noticewas not required to give before the last date fixed for signingthe sale deed i.e. 23/3/1966. The cause of action to issue thenotice will arise only when either of the parties failed toexecute the sale deed by the date mentioned in the agreementfor sale. The substantial question framed at (a) in para 1above is answered accordingly. It is, therefore, held that theplaintiffs have proved that they were always ready and willingto perform their part of the contract with the defendant nos.1to 3 for signing the sale deed consequent to the agreementsfor sale at Exh.85 and 86.”

7.3. As regards the defendant Nos. 4 to 6 (appellants herein), theHigh Court upheld the findings of the subordinate Courts that they werenot bona fide purchasers; and also observed that the sale transactionsin their favour were made only in order to defeat the claim of the plaintiffsand hence, the said sale deeds were required to be held illegal. The High

ABC

ACourt referred to decision of this Court in the case of Sarvinder Singhv. Dalip Singh and Ors.: (1996) 5 SCC 539 and held, inter alia, asunder:-

“8.…….It is clear that the sale transactions by defendantnos.1 to 3 in favour of defendant nos.4 to 6 were intended toBdefeat the claim of the plaintiffs in the suit and the suit propertycould not have been transferred in favour of defendant nos.4to 6 during the pendency of the suit filed by the plaintiffs.The finding recorded by the Lower Appellate Court that thedefendant nos.4 to 6 were not aware of the agreements betweenthe plaintiffs on one hand and the defendant nos.1 to 3 onCthe other hand, cannot be accepted having regards to theoral evidence of DW 1 and DW 6. The Lower Appellate Courtwas not right in turning down the findings on this issuerecorded by the trial court. Even otherwise, during thependency of the suit the defendant nos.1 to 3 were estoppedDfrom transferring the suit land in view of the embargo ofSection 52 of the Transfer of Property Act, 1882 and, therefore,the sale deeds in favour of defendant nos.4 and 5 anddefendant no.6 executed by defendant nos.1 to 3 are requiredto be held as illegal…..”E7.4. After the findings aforementioned, the High Court examinedthe question of relief to be granted. In this regard, the High Court referredto: (a) the alternative relief of money recovery as claimed in the plaint;(b) the decree as passed by the Trial Court; (c) the fact that the defendantNos. 4 to 6 were cultivating the land in question for about 40 years; (d)the location of the land in question at about 20 kilometres from SolapurFMunicipal Corporation area; and (e) the horticulture growth of the areain question. With reference to these factors, the High Courtconsidered it appropriate to fix the market value of the land in questionat Rs. 10,000/- per acre.

7.5. On the basis of the findings and observations aforesaid, theGHigh Court proceeded to decree the suit for specific performance butwith the stipulations that the plaintiffs would be entitled to receivepossession of the land in question from defendant Nos. 4 to 6 on makingpayment at the rate of Rs. 10,000/- per acre, whereafter, all thedefendants shall jointly and/or severally execute the sale deeds in favour

of the plaintiffs. The High Court further ordered that on failure of theplaintiff to make the requisite payment within period of two months,the defendant Nos. 4 to 6 shall pay Rs. 10,000/- per acre to the plaintiffs‘so as to confirm their title and ownership over the suit land’. TheHigh Court also directed that the said land shall be used for the purposeof self-cultivation or horticulture. The operative part of the judgmentimpugned reads as under:-

“12. In the premises, the second appeal is hereby allowedand the decree of the trial court as confirmed by the LowerAppellate Court is hereby substituted as under:-

(a) The suit is decreed. The plaintiffs are entitled to get thedecree of specific performance of the contract (Sathe Khatdated 20/9/1965 and the Supplementary Sathe Khat dated28/4/1966) executed in their favour.

(b) By way of specific performance of contract the plaintiffsat the first instance shall be entitled to receive the possessionof the suit land from defendant nos. 4 to 6 by paying them acompensation at the rate of Rs.10,000/- per acre and the saiddefendants in turn shall execute the sale deeds jointly and/orseverally in favour of the plaintiffs immediately on receipt ofthe compensation amount. The plaintiffs shall pay thecompensation within two months from today.

(c) In case the plaintiffs jointly and/or severally fail to paythe compensation of Rs.10,000/- per acre to the defendantnos. 4 to 6 within the stipulated period of two months, thesaid defendants shall pay an amount of Rs.10,000/- per acreto the plaintiffs within period of two months therefrom so asto confirm their ownership over the suit land.

(d) The land shall be used for self cultivation or horticulture.

(e) Costs in cause.

Fresh decree be drawn in the above terms by the Registryand forward the same to the trial court for its execution.”8. Assailing the judgment of the High Court, learned counsel forthe appellants-defendant Nos. 4 to 6 has strenuously argued that theHigh Court could not have re-appreciated the evidence on record while

Aexercising jurisdiction under Section 100 of the Code of Civil Procedureand could not have upset the concurrent findings of the subordinate Courts;and as there was no substantial question of law involved, the secondappeal ought to have been dismissed. Learned counsel would submitthat the question as to whether the agreements in question wereagreements for sale or were only executed towards security, had beenBof fact and there was no occasion for the High Court to upturn theconcurrent findings of subordinate Courts that were returned after dueappreciation of evidence. Further, according to the learned counsel,readiness and willingness of the plaintiffs has to be demonstrated duringthe period specified in the agreement for execution; and the High CourtChas erred in assuming the readiness and willingness on part of the plaintiffseven contrary to the evidence on record. Further, with reference to thefact that at the time of executing supplementary agreement, an amountof Rs. 500/- was paid by the plaintiffs whereas sum of Rs. 5,500/- wasearlier paid as earnest money as against the total sale consideration ofRs. 22,951/-, the learned counsel has contended that such payment beingDwholly inadequate as against the alleged sale consideration, the plaintiffscould not have been considered ready and willing to perform their partof contract.

8.1. The learned counsel has elaborated on the submission thateven the notice seeking performance was sent by the plaintiffs only onE05.04.1966 i.e., thirteen days after 23.03.1966, which was the last dateprescribed by the agreement for execution of the sale deed; and even atthe later stage after the notice dated 05.04.1966, the vendees settled fora supplementary agreement and did not seek specific performance, whichclearly shows want for readiness and willingness on their part to performFtheir obligations under the agreement. The learned counsel would submitthat even if time is not of the essence of agreement, the vendees oughtto have claimed performance within reasonable time whereas in thepresent case, there is no evidence as to the steps taken by the vendees,including verbal or written demands for performance, for period oftwo years after the supplementary agreement and until institution of theGsuit on 24.08.1968. This delay, according to learned counsel, ought to beconsidered fatal to the case of the plaintiffs. The learned counsel hasreferred to and relied upon the decisions in Azhar Sultana v. B.Rajamani and Ors.: (2009) 17 SCC 27; Veerayee Ammal v. SeeniAmmal: (2002) 1 SCC 134, and Pushparani S. Sundaram andH

Ors. v. Pauline Manomani James (deceased) and Ors.: (2002) 9SCC 582.

8.2. Learned counsel for the appellants-defendant Nos. 4 to 6 hasfurther submitted that the High Court has erroneously held that the salemade by the vendors to the subsequent purchasers is ‘illegal’ though thelaw remains settled that the sale to the subsequent purchaser is notillegal or void ab initio. The learned counsel has referred to the decisionin A. Nawab John and Ors. v. V.N. Subramaniyam: (2012) 7 SCC738. The learned counsel has contended that the appellants had beenthe bona fide purchasers having no knowledge about any previoustransaction, and on the facts and in the circumstances of this case, decreefor specific performance ought not to have been granted where theplaintiffs failed to prove the execution of the document as also theirpossession over the suit land; and where, after lapse of 40 years sincethe execution of alleged agreement, the relief of specific performancewould provide undue advantage to the plaintiffs. The learned counselwould submit that now, the appellants are in possession of the suitproperty for the past 50 years and have made improvements thereupon;and at this late stage, it would be inequitable to sustain decree forspecific performance, especially when the Trial Court and the FirstAppellate Court refused this relief. The learned counsel has referred tothe decision in V. Muthusami (Dead) by LRs. v. Angammal and Ors.:(2002) 3 SCC 316. The learned counsel has also submitted that themarket value of the suit land was wrongly calculated by the High Courtinasmuch as the value for unirrigated land in the area in question wasRs. 70,000/- per hectare and that of irrigated one was Rs. 1,40,000/- perhectare.

9. Per contra, learned counsel for the contesting respondent hasstrenuously argued that proper construction of the agreement dated20.09.1965 and supplementary agreement dated 28.04.1966, after readingthem in entirety, would only lead to the conclusion that they wereagreements for sale and not for security inasmuch as therein, neitherthere is any provision for payment of interest nor for re-payment; andthere is no expression in the documents to show that there was anysecurity arrangement. The learned counsel has also argued that theplaintiffs had specifically pleaded their readiness and willingness toperform their part of the contract and such pleadings were not specificallydenied by the defendants. Further, according to the learned counsel, the

Acontesting plaintiff’s specific assertion in the deposition about readinessand willingness has remained unshaken in the cross-examination. Learnedcounsel would submit that with the repeated payments made by theplaintiffs show their readiness and willingness to perform their part ofthe contract without any doubt and continuous readiness and willingnesscould well be deduced from the conduct of plaintiffs. Therefore, accordingBto the learned counsel, the perverse finding of the First Appellate Courtin this regard has rightly been set aside by the High Court. The learnedcounsel has also argued that the appellants had not been bona fidepurchasers of the suit property and their sale transaction is clearly hit bythe doctrine of lis pendens as per Section 52 of the T.P. Act; and, forCwant of bona fide, the appellants are not entitled for any equitable relief.The learned counsel has referred to and relied upon the decision inGuruswamy Nadar v. P. Lakshi Ammal (Dead) through LRs andOrs.: 2008 (5) SCC 796. The learned counsel has also argued that theHigh Court has justifiably proceeded to balance the equities by directingthe plaintiff to pay enhanced sale consideration and hence, no interferenceDis called for in this appeal.10. We have bestowed anxious consideration to the rivalsubmissions and have scanned through the material placed before us forperusal.E11. On the submissions made by the learned counsel for the partiesand in the given set of fact and circumstances, the principal point fordetermination in this appeal is as to whether the High Court was justifiedin entertaining the second appeal; and in upsetting the judgment anddecree impugned? Three–fold basic questions need to be addressed tofor determination of this point. The first question is as to whether theFagreement dated 20.09.1965 and supplementary agreement dated28.04.1966 had been for sale and had not been the documents executedtowards security for loan taken by the defendant Nos. 1 to 3? If theanswer to the first question is in favour of the plaintiffs and the agreementsin question are held to be those for sale of property, the second questionGwould be as to whether the plaintiffs were always ready and willing toperform their part of the contract and no personal bar operates againstthem so as to enforce the specific performance of the agreement inquestion. For effective disposal of this matter, the third question wouldbe as to whether the appellants had not been bona fide purchasers andthe sale transactions in their favour relating to the property in questionH

are hit by the doctrine of lis pendens? However, as shall be noticedhereafter later, even if the questions foregoing are answered in favourof the plaintiffs, another point would still arise for determination as towhether, on the facts and in the circumstances of this case, the decreepassed by the High Court, for the relief of specific performance onenhanced market value of the suit property, is justified or if any otherform of relief shall meet the ends of justice?

Nature of transaction between the plaintiffs and defendantNos. 1 to 3

12. As regards the question concerning the nature of transactionunder the agreements in question, as noticed, the Trial Court and theFirst Appellate Court held that such agreements had been towardssecurity and not for sale. The High Court has, however, disagreed andhas held that such findings by the subordinate Courts suffered fromperversity and the documents in question were not towards security forany loan transaction; neither the documents say so nor there was anyevidence on record to hold that these agreements were executed byway of security for loan transaction.

12.1. We have minutely examined the translated copies of thesaid agreements dated 20.09.1965 and 28.04.1966, as placed before usfor perusal. In the initial agreement dated 20.09.1965, after mentioningthe area, survey number and boundaries of the land in question, thevendors had stated as under:-

“ The land accordingly within the boundaries, includingstones, earth , well, trees, shrubs, etc.

This land agreed to be sold at the rate of Rs. 450/- peracres, area 50 Acres, 39 Gs. for total price of Rs. 22951/- Rs.Twenty-two thousand, Nine Hundred and fifty one. Thisagreement is accordingly made. Today and earnest amountof Rs. 3500/- Rs. three Thousand, five hundred. The remainingamount or Rs. 19451 is to be paid at the time of sale deed.The sale transaction would be completed on Chaitra Sud I,Shake 1, 1888 or thereabout.

The expense to be incurred for sale-deed are to borne byyou. The sale deed is to be executed by us and to be taken byyou. This agreement is accordingly executed, for execution

of sale deed. All our heirs shall sign the sale deed. Theencumbrances shall be extinguished or Havala shall be givenand the said amounts shall be deducted at the time of executionof sale deed and thus the land would be free from any charge.Out of the land, there is crop of groundnut and Toor. Aftersame would be reaped, actual possession would be deliveredat the time of sale deed by the end of November of 1965. Theremaining whole land would be actually delivered to you bycompleting the sale transaction. Accordingly, subject tofulfilling the abovementioned conditions, the sale transactionwould be completed within limit prescribed. If anybody wouldcommit breach of conditions he will take action andexpenditure shall be borne by him. The earnest amount of Rs.3500 Rs. Three thousand and five hundred) is received.

This Sathekhat given in writing on 20.09.1965. DasturBhagwa-n Vaman Palaskar resident of Solapur. The sa-le deedof the transactions.

Note: The sale deed of the dealings (property) shall beexecuted in your name or in the names of other personssuggested by you.

The sale deed would be executed –in your name or in thenames others suggested by. The earnest amount of earnest ofRs. 3500 received. No complaint.

This Sathekhat dt. 20.09.1965. Dastur Bhagwan VamanPalaskar, resident of Solapur.”

12.1.1. As noticed, another payment of Rs. 2,000/- was made bythe plaintiffs to the defendant No. 1 and an endorsement for adjustmentof such payment against the sale price was made on this very documenton 24.11.1965 as follows:-

“ I have purchased the house building and also purchasedshe-buffalos. For that, I have received Rs. 2000 in cash fromyou. That amount should be deducted being paid. Theremaining amount of Rs. 17451 would be received from youand as per the conditions of the Sathekhat, the transactionof sale would be completed. Sd/-. Date :24.11.1965”

12.1.2. In the supplementary agreement dated 28.04.1966, thevendors acknowledged that they had received Rs. 6,000/- from theplaintiffs under the agreement dated 20.09.1965; and also stated thatthey had delivered possession of part of the land in question on14.11.1965 and that they had delivered the possession of entire land tothe vendees in part performance. The vendors also stated that therewas charge of approximately Rs. 5,000/- on the land in question and,therefore, after deducting in all sum of Rs. 11,000/-, the vendees shallpay the remaining amount of Rs. 11,961/- and the sale deed would beexecuted in their favour.

12.2. There had not been even remote suggestion in thedocuments in question that there was any loan or borrowing transactionbetween the parties and the said documents were being executingtowards security. On the contrary, the recitals and stipulations in the saidagreements had only been in affirmation of the agreement for sale andof the receipt of part payment from time to time against the saleconsideration. Of course, defendant No. 1, while deposing as DW1attempted to suggest that he had approached the plaintiff No. 3 seekingloan to the tune of Rs. 5000-5500/- through broker; and, at the instanceof the plaintiff No. 3, executed the document in question as securitywhile taking loan at the interest rate of 1 per cent per month. Thisdefendant also admitted having obtained another sum of Rs. 2,000/- fromthe plaintiff No. 1 and having put an endorsement on the document inquestion. He, however, denied having received any other amount orhaving delivered possession of the suit property. The evidence on thepart of the defendants in this case remains rather vague and sketchy;and it is difficult to accept the oral assertions of defendant No. 1 asagainst the recitals in the agreements.12.3. It is also noticed that the subordinate Courts proceeded todoubt if the transaction was at all intended to be of sale while questioningas to why the parties fixed the consideration in odd figures i.e., Rs.22,951/-; and while observing that when as per the documents, the landwas being sold @ Rs. 450/- per acre, the total consideration for the landin question would come to Rs. 22,938.75 and not Rs. 22,951/-. The TrialCourt also raised doubts on the suggestion of the plaintiffs that possessionof the land in question was handed over to them. The First AppellateCourt even observed that as against the sale consideration, only paltryamount was paid in advance and questioned as to why the supplementary

Aagreement was executed after serving of notice. On the other hand, theHigh Court minutely examined the evidence on record and observedthat there was not even whisper about the loan transaction; andthat as per the endorsement made on 24.11.1965, another amount of Rs.2,000/- was received by the defendant Nos. 1 to 3. As regards thesupplementary agreement dated 28.04.1966, the High Court again foundBthat there was no whisper about any loan transaction or any security forsuch transaction and the document was clearly executed as being thesupplementary agreement for sale while even referring to theencumbrances of Rs. 5,000/-, which were to be discharged. The HighCourt observed that by no stretch of imagination these two agreementsCcould be termed as and by way of security for loan.

12.4. Having examined the matter in its totality, we have nohesitation in upholding the findings of the High Court that have beenreturned after due consideration of the material on record and withreference to the law applicable to the case. It is plain and obvious thatDthe Trial Court and the First Appellate Court proceeded on entirelyirrelevant and rather baseless considerations while failing to considerthat such findings on the nature of transaction evidenced by theagreements in question could not have been rendered on surmises andconjectures.E12.4.1. As to whether the possession of the land in question wasdelivered to the plaintiffs or not, could not have been taken as factordecisive as regards nature of transaction. Moreover, execution of thesupplementary agreement after notice dated 05.04.1966 and afterreceiving further an amount of Rs. 500/- by the defendant Nos. 1 to 3could only show re-affirmation of the intention of the parties towardsFthe sale transaction. Significantly, in the supplementary agreement, thedefendants not only acknowledged the receipt of part consideration tothe tune of Rs. 6,000/- but further agreed for adjustment of Rs. 5,000/-towards encumbrances and, therefore, agreed to receive remaining Rs.11,921/- at the time of execution of the sale deed. In our view, looking toGthe dealings of the parties, this circumstance about execution of thesupplementary agreement only strengthens the case of the plaintiffs ratherthan operating against them.

12.4.2. The other observations of the subordinate Courts as regardsquantum of consideration are difficult to be appreciated. Such hair-splittingHexercise by the Trial Court, that on the agreed rate, sale consideration

ought to have been Rs. 22,938.75 and as to why the parties agreed forRs. 22,951/-, had been entirely baseless, rather unwarranted. Theobservation of the Trial Court as to why the sale consideration was inodd figures is itself of such oddity that any finding on that basis couldonly meet with disapproval. Rounding up of the amount of considerationand addition of one rupee in the last is not unknown to such transactions.In fact, quite contrary to what was observed by the Trial Court, thefigure of sale consideration rather fortifies the deduction that the intentionof the parties had only been towards the transaction of sale. In the ultimateanalysis, we are satisfied that the High Court has rightly disapproved thebaseless findings of the subordinate Courts and has rightly held that theagreements in question were executed for the sale of suit property. Thus,the first question is answered in favour of the plaintiffs.

Readiness and willingness of the plaintiffs to perform theirpart of contract

13. When the agreements in question were for the sale of suitproperty, the plaintiffs were entitled to take up the action seeking specificperformance. However, in order to succeed in their claim, the plaintiffswere required to aver and prove that they were always ready and willingto perform their part of the contract. As noticed, the Trial Court chosenot to answer this question in view of its finding on the nature oftransaction. The First Appellate Court though adverted to this questionbut answered the same against the plaintiffs, essentially for the reasonsthat they had failed to prove if before the stipulated date of execution ofsale document, they were ready and willing to get the sale deed executedand there was no explanation as to why supplementary agreement wasgot executed. On this question, again, the High Court examined the recordwith reference to the law applicable and disapproved the finding of theFirst Appellate Court while observing that when as per the firstagreement, the sale deed was to be executed by 23.03.1966, there wasno occasion for any party to call upon the other for performance beforethat date. The High Court also found that the plaintiffs issued notice on05.04.1966, calling upon defendants Nos. 1 to 3 to execute the sale deedand, obviously, fresh negotiations were held thereafter and hence, thesupplementary agreement was executed. The High Court found theapproach of the Appellate Court erroneous and held that the plaintiffshad proved their readiness and willingness to perform their part of thecontract.

A13.1. It has been vehemently argued on behalf of the appellantsthat the plaintiffs paid only Rs. 500/- while executing the supplementaryagreement dated 28.05.1966 which goes to show that the plaintiffs werenot having the capacity to pay the remaining sale consideration and theywere never ready and willing to perform their part of the contract. It hasalso been argued that after supplementary agreement dated 28.05.1966Band until filing of the suit in the year 1968, there was complete silence onthe part of the plaintiffs. It has also been pointed out that the plaintiffNo. 3, while deposing as PW1, stated having relinquished his right topurchase the land in favour of the plaintiff Nos. 1 and 2 but then, theplaintiff No. 2, while deposing as PW2, only made passing statementCthat she was ready and willing to perform her part of the contract butthere was no indication of her source of funds and on the contrary, herstatement had been that she was widow and was having no othersource of income.13.2. The question as to whether the plaintiff seeking specificDperformance has been ready and willing to perform his part of the contractis required to be examined with reference to all the facts and thesurrounding factors of the given case. The requirement is not that theplaintiff should continuously approach the defendant with payment ormake incessant requests for performance. For the relief of specificperformance, which is essentially species of equity but has got statutoryErecognition in terms of the Specific Relief Act, 1963[5], the plaintiff mustbe found standing with the contract and the plaintiff’s conduct shouldnot be carrying any such blameworthiness so as to be consideredinequitable. The requirement of readiness and willingness of the plaintiffis not theoretical in nature but is essentially question of fact, whichFneeds to be determined with reference to the pleadings and evidence ofparties as also to all the material circumstances having bearing on theconduct of parties, the plaintiff in particular. In view of the contentionsurged, we have scanned through the record to examine if the finding ofthe High Court in this regard calls for any interference.

G13.3. It is noticed that plaintiffs pleaded in paragraphs 6 and 7 ofthe plaint that they were ready to get the sale deed executed as per theconditions in the agreement for sale and also stated that they served thenotice, then supplementary agreement was executed; and then, on manyoccasions, they asked the defendant to execute the sale deed. The

H5 Its forerunner being the Specific Relief Act, 1877

defendant No. 1 in his written statement merely stated bald denial thatsuch averments were false and were ‘not agreeable to the defendants’.In fact, the entire emphasis of the written statement had been on theassertion that the agreement in question was not for sale and was obtainedby the plaintiffs towards security against the amount borrowed by thedefendant No. 1.[6] The plea of the plaintiffs as regards their readiness toperform the contract as per its conditions did not meet with categoricaldenial from the defendants. This apart, and as noticed, even at the timeof entering into the agreement, the plaintiffs made payment of sum ofRs. 3,500/- against the sale consideration of Rs. 22,951/-. Moreover,and much before the stipulated date of execution of sale deed, theymade another payment of Rs. 2,000/- against the sale consideration.When the sale deed was not executed by 23.03.1966, the plaintiffs servednotice on 05.04.1966. The vendors thereafter executed the supplementaryagreement and the plaintiffs made payment of yet another sum ofRs. 500/- while it was also agreed by the vendors that the propertycarried encumbrance to the tune of Rs. 5,000/-, which was to be adjustedagainst the sale consideration. Therefore, the plaintiffs were left to makepayment of about half of the sale consideration. The recitals in thesupplementary agreement even suggested about the vendors havingdelivered possession of the property in question. The plaintiffs have allegedthat they lost possession later on. Though the factum of delivery ofpossession is disputed by the defendants but such dispute does notcarry any adverse impact on the rights of the plaintiffs to seek specificperformance.13.4. The admission of plaintiff No. 3 that she was not possessedof sufficient funds cannot be read in isolation and it cannot be concludedthat she was not possessed of sufficient means to pay the remainingsale consideration. Her statement is required to be visualised in thebackdrop of the fact that her husband, plaintiff No. 1, had expired andshe had succeeded to his estate. Her statement, with reference to herunderstanding of the matter, could only be interpreted to mean that atthe given moment, she was not off-hand in possession of the money tomake payment but such an expression in her statement cannot lead tothe conclusion that making payment of the remaining sale considerationwas beyond her capacity or that she was not willing to perform her part

6 This plea of the defendants as regards nature of transaction stands rejected for whathas been discussed in paragraphs 12 and its sub-paragraphs hereinbefore.

ABCDE

Aof the contract. In the ultimate analysis, we are satisfied that the questionof readiness and willingness on the part of the plaintiffs was approachedby the First Appellate Court from an altogether wrong angle and wasdecided against the plaintiffs on irrelevant considerations.

13.5. So far the period between the year 1966 to the year 1968 isBconcerned, when the plaintiffs had the limitation of three years for filingthe suit for specific performance, it cannot be said that during theaforesaid period, the plaintiffs were required to show overt act by themin furtherance of the agreement in question. The principles stated in thedecisions in Azhar Sultana, Veerayee Ammal and Pushparani S.Sundaram (supra), as relied upon by the learned counsel for theCappellants, are not of any doubt or debate but each of the said cases hadproceeded on its own facts. We may also observe that in the case ofAzhar Sultana, the Court found that as against the agreement dated04.12.1978, the suit for specific performance was filed on 07.12.1981,after the property was sold on 31.10.1981; and that the plaintiff failed toDshow that she was not having notice of the subsequent sale. However,in the said case, the Court directed monetary payment to the tune oftwice the amount advanced by the plaintiff. In Veerayee Ammal, thisCourt pointed out that the expression ‘reasonable time’ for performanceon the part of plaintiff would depend on the circumstances of the case,including the terms of contract. In Pushparani S. Sundaram, the basicErequirements of Section 16 of the Act of 1963 were reiterated. In contrastto what is suggested on behalf of the appellants, we may point out thatrecently, in the case of R Lakshmikantham v. Devaraji: Civil AppealNo. 2420 of 2018, decided on 10.07.2019, this Court has againexplained that when the suit for specific performance is filed within theFperiod of limitation, delay cannot be put against the plaintiff. This Courthas said:-------

“….In the aforesaid circumstances, the High Court was alsoincorrect in putting short delay in filing the Suit against theplaintiff to state that he was not ready and willing. In India,Git is well settled that the rule of equity that exists in England,does not apply, and so long as Suit for specific performanceis filed within the period of limitation, delay cannot be putagainst the plaintiff - See Mademsetty Satyanarayana v.G.Yelloji Rao and Others AIR 1965 Supreme Court 1405(paragraph 7) which reads as under:-

“(7) Mr. Lakshamaihan cited long catena of Englishdecisions to define the scope of Court’s discretion. Beforereferring to them, it is necessary to know the fundamentaldifference between the two systems- English and Indian-qua the relief of specific performance. In England therelief of specific performance pertains to the domain ofequity; in India, to that of statutory law. In England thereis no period of limitation for instituting suit for the saidrelief and, therefore, mere delay – the time lag dependingupon circumstances – may itself be sufficient to refuse therelief; but, in India mere delay cannot be ground forrefusing the said relief, for the statute prescribes the periodof limitation. If the suit is in time, delay is sanctioned bylaw; if it is beyond time, the suit will be dismissed as barredby time; in either case, no question of equity arises.””

13.6. In the present case too, when the plaintiffs had the limitationof three years for filing the suit and have indeed filed the suit well withinlimitation; and looking to the overall circumstances of the case, no aspectof delay operates against them.

13.7. Having examined the matter in its totality and in the light ofapplicable principles, we are satisfied that the given set of facts andcircumstances of this case lead only to the conclusion that the plaintiffshave shown their readiness and willingness to perform their part of thecontract and there does not operate any personal bar against their claimfor specific performance. Therefore, the second question is also answeredin favour of the plaintiffs.

Operation of the doctrine of lis pendens: Section 52 T.P. Act

14. The third question as regards the sale transactions in favourof the present appellants (the subsequent purchasers) need not detain uslonger, except to correct an error on the part of High Court where it isobserved that such sale deeds are to be treated as illegal.

14.1. The suit in question was filed on 26.08.1968. So far the saletransaction in favour of the defendant Nos. 4 & 5 (the appellant Nos. 1& 2 herein), in relation to 25 acres of land out of the suit property, isconcerned, the same was effected by way sale deed registered onlyon 10.07.1978 i.e., nearly 10 years after filing of the suit. So far the sale

Atransaction in favour of the defendant No. 6 (the appellant No. 3 herein),in relation to other 25 acres of land out of the suit property, is concerned,though it is suggested that there had been an agreement (dated08.05.1968) in his favour before filing of the suit but then, admittedly, thesale transaction was effected by way of sale deed registered only on18.09.1968, that had also been after filing of the suit. The suggestionBabout want of knowledge of the subsequent purchasers about thetransaction of the vendors with the plaintiffs and about the pendency ofthe suit has been considered and rejected by the High Court and even bythe subordinate Court after due appreciation of evidence on record; andwe are unable to find any infirmity in these findings. Both the saleCtransactions in favour of the present appellants, purporting to transferthe suit property in part, having been effected after filing of the suit, aredirectly hit by the doctrine of lis pendens, as embodied in Section 52 ofthe Transfer of Property Act, 1882 that reads as under: -“52. Transfer of property pending suit relating thereto. ——DDuring the pendency in any Court having authority withinthe limits of India excluding the State of Jammu and Kashmiror established beyond such limits by the Central Governmentof any suit or proceedings which is not collusive and in whichany right to immoveable property is directly and specificallyin question, the property cannot be transferred or otherwiseEdealt with by any party to the suit or proceedings so as toaffect the rights of any other party thereto under any decreeor order which may be made therein, except under theauthority of the Court and on such terms as it may impose.

Explanation.—— For the purposes of this section, theFpendency of suit or proceeding shall be deemed to commencefrom the date of the presentation of the plaint or the institutionof the proceeding in Court of competent jurisdiction, andto continue until the suit or proceedings has been disposedof by final decree or order and complete satisfaction orGdischarge of such decree or order has been obtained, or hasbecome unobtainable by reason of the expiration of anyperiod of limitation prescribed for the execution thereof byany law for the time being in force.”

14.2. In the case of Guruswamy Nada (supra), this Court hasheld as under: -H

“13. Normally, as public policy once suit has been filedpertaining to any subject-matter of the property, in order toput an end to such kind of litigation, the principle of lispendens has been evolved so that the litigation may finallyterminate without intervention of third party. This is becauseof public policy otherwise no litigation will come to an end.Therefore, in order to discourage that same subject-matter ofproperty being subjected to subsequent sale to third person,this kind of transaction is to be checked. Otherwise, litigationwill never come to an end.”

14.3. The aforesaid observations in no way lead to the propositionthat any transaction on being hit by Section 52 ibid., is illegal or void abinitio, as assumed by the High Court. In Sarvinder Singh (supra), asrelied upon by the High Court, the subsequent purchasers sought to comeon record as defendants and in that context, this Court referred to Section52 of the T.P. Act and pointed out that alienation in their favour would behit by the doctrine of lis pendens. The said decision is not an authorityon the point that every alienation during the pendency of the suit is to bedeclared illegal or void. The effect of doctrine of lis pendens is not toannul all the transfers effected by the parties to suit but only to renderthem subservient to the rights of the parties under the decree or orderwhich may be made in that suit. In other words, its effect is only to makethe decree passed in the suit binding on the transferee, i.e., the subsequentpurchaser. Nevertheless, the transfer remains valid subject, of course,to the result of the suit. In the case of A. Nawab John (supra), thisCourt has explained the law in this regard, and we may usefully reiteratethe same with reference to the following:-

“18. It is settled legal position that the effect of Section 52is not to render transfers effected during the pendency of asuit by party to the suit void; but only to render suchtransfers subservient to the rights of the parties to such suit,as may be, eventually, determined in the suit. In other words,the transfer remains valid subject, of course, to the result ofthe suit. The pendent lite purchaser would be entitled to orsuffer the same legal rights and obligations of his vendor asmay be eventually determined by the court.”

14.4. Hence, the effect of Section 52 ibid., for the purpose of thepresent case would only be that the said sale transactions in favour of

Athe appellants shall have no adverse effect on the rights of the plaintiffsand shall remain subject to the final outcome of the suit in question.However, the High Court, while holding that the said transactions werehit by lis pendens, has proceeded to observe further that the sale deedsso made in favour of the present appellants were illegal. These furtherobservations by the High Court cannot be approved for the reasonsBforegoing.

High Court not in error in entertaining second appeal

15. For what has been discussed hereinabove, the basic point fordetermination, i.e., as to whether the High Court was justified inCentertaining the second appeal stands answered in the affirmativebecause, as noticed, the findings of the subordinate Courts on the natureof transaction and as regards readiness and willingness of the plaintiffs,which are of material bearing on the final determination, suffered fromperversity and were based on irrelevant considerations. The secondappeal before the High Court, obviously, involved substantial questionsDof law and the High Court cannot be faulted in entertaining the secondappeal and in deciding the questions in favour of the plaintiffs. However,the observations of the High Court as regards operation of doctrine oflis pendens are partly incorrect and stand modified as above.

What should be the relief?E

16. The determination foregoing is not the end of the matter. Evenwhen the agreements in question are held to be for sale and the plaintiffsare held being ready and willing to perform their part thereof; and thetransactions in favour of the present appellants are hit by lis pendens,the point that still remains for determination is as to whether the plaintiffsFare entitled to the relief of specific performance, or granting of alternativerelief would be just and proper disposal of this litigation?

16.1. It is noticed that the High Court though proceeded to mouldthe relief in the manner that specific performance was granted onenhanced sale consideration and it was also directed that if the plaintiffsGfail to make payment within two months, the present appellants(subsequent purchasers) would make payment of same amount to theplaintiffs so as to ‘confirm their ownership over the suit land’. However,in regard to this crucial aspect of the matter, it appears that the HighCourt overlooked the other relevant provisions of the Act of 1963 and

omitted to examine if the alternative mode of relief would meet the endsof justice.

16.2 In our view, after it was found that granting the decree forspecific performance in the very terms of the agreement/s in questionmay not be appropriate because of myriad factors, the matter ought tohave been examined with reference to the stand of the parties and theprovisions of Sections 21 and 22 of the Act of 1963. For ready reference,we may extract the said provisions as were existing at the time of filingof the suit in question as under:-

“21. Power to award compensation in certain cases.—

(1) In suit for specific performance of contract, the plaintiffmay also claim compensation for its breach, [either in additionto, or in substitution of][7], such performance.

(2) If, in any such suit, the court decides that specificperformance ought not to be granted, but that there is acontract between the parties which has been broken by thedefendant, and that the plaintiff is entitled to compensationfor that breach, it shall award him such compensationaccordingly.

(3) If, in any such suit, the court decides that specificperformance ought to be granted, but that it is not sufficientto satisfy the justice of the case, and that some compensationfor breach of the contract should also be made to the plaintiff,it shall award him such compensation accordingly.

(4) In determining the amount of any compensation awardedunder this section, the court shall be guided by the principlesspecified in section 73 of the Indian Contract Act, 1872 (9 of1872).

(5) No compensation shall be awarded under this sectionunless the plaintiff has claimed such compensation in hisplaint:

Provided that where the plaintiff has not claimed any suchcompensation in the plaint, the court shall, at any stage of

7 The expression “either in addition to, or in substitution of” was substituted by theexpression “in addition to” by Act No.18 of 2018.

the proceeding, allow him to amend the plaint on such termsas may be just, for including claim for such compensation.

Explanation.—The circumstance that the contract has becomeincapable of specific performance does not preclude the courtfrom exercising the jurisdiction conferred by this section.

22. Power to grant relief for possession, partition, refund ofearnest money, etc.—

(1) Notwithstanding anything to the contrary contained inthe Code of Civil Procedure, 1908 (5 of 1908), any personsuing for the specific performance of contract for thetransfer of immovable property may, in an appropriate case,ask for—

(a) possession, or partition and separate possession, of theproperty, in addition to such performance; or

(b) any other relief to which he may be entitled, including theDrefund of any earnest money or deposit paid or made by him,in case his claim for specific performance is refused.

(2) No relief under clause (a) or clause (b) of sub-section (1)shall be granted by the court unless it has been specificallyclaimed: Provided that where the plaintiff has not claimedEany such relief in the plaint, the court shall, at any stage ofthe proceeding, allow him to amend the plaint on such termsas may be just for including claim for such relief.

(3) The power of the court to grant relief under clause (b) ofsub-section (1) shall be without prejudice to its powers toaward compensation under section 21.”

16.3. We may refer to some of the relevant factors having bearingon the question of appropriate relief in this matter. First, the agreementsin question were executed way back on 20.09.1965 and 28.04.1966.Secondly, the plaintiffs had paid an amount of Rs. 6,000/- as on 28.04.1966against the sale consideration of Rs 22,951/- when the supplementaryGagreement was executed. Thirdly, though the plaintiffs alleged deliveryof possession of the land in question to them, the evidence on recordshows that vendors and thereafter, the subsequent purchasers remainedin effective possession thereof. Fourthly, the High Court has taken noteof the fact that as on the date of its decision (01.08.2007), the subsequentHpurchasers were in possession of the land in question for about 40 years.

Fifthly, the High Court has found that the land in question carried muchhigher valuation at the time of passing of the judgment in second appealand hence, enhanced the sale consideration to Rs. 10,000/- per acre.Sixthly, the plaintiffs, even while seeking specific performance,consciously prayed for the alternative reliefs of recovery of amount paidby them with interest and compensation to the tune of Rs 15,000/-.Seventhly, the plaintiff No. 3 had categorically deposed before the Courtas PW1 that he was not entitled to the land in question for being not anagriculturist and he had relinquished his rights in favour of the plaintiffNos. 1 & 2. Eighthly, the plaintiff No. 1 had expired during the pendencyof suit and the plaintiff No. 2 had expired during the pendency of thisappeal; though the heir and legal representative of the said plaintiff Nos.1 & 2 is on record as plaintiff No. 4 (respondent No. 2 herein). Ninthly,the plaintiff No. 2, while deposing as PW2 had stated that in case specificperformance was not granted, she ‘may be granted alternative reliefand compensation with interest’.

17. In view of the above, on the point as to whether the decreepassed by the High Court is justified or any other form of relief shallmeet the ends of justice, we are of the view that instead of specificperformance, awarding of monetary compensation to the respondentNo. 2 shall meet the ends of justice. In this regard, we may observe thatthe appellants themselves have filed so-called valuation report suggestingthat the market value of unirrigated land was Rs. 70,000/- per hectarewhereas that of the irrigated land was Rs. 1,40,000/- per hectare. Thefact also remains that the appellants have been enjoying the land inquestion for long length of time. Further, it gets reiterated that thepredecessors of respondent No. 2 made payment of the sum of Rs.6,000/- to the vendors in the years 1965-1966; and the plaintiffs hadclaimed alternative relief of recovery of the said amount together withinterest as also of compensation. Taking all the relevant factors intoaccount, we are of the view that awarding lump sum of Rs. 15,00,000/- (Rupees fifteen lakh) to the respondent No. 2 as compensation in lieuof specific performance and in lieu of any other claim qua the land inquestion shall meet the ends of justice.

CONCLUSION

18. Accordingly, this appeal is partly allowed to the extent and inthe manner that the impugned judgment and decree dated 01.08.2007stand modified and the relief of specific performance of the agreements

Ain question is set aside. In lieu of specific performance and in lieu of anyother claim qua the land in question, the plaintiff-respondent No. 2 isawarded compensation in the sum of Rs.15,00,000/- (Rupees fifteenlakh), payable within two months from today by the defendants, includingthe present appellants, jointly and severally. Upon the expiry of the periodof two months, the amount shall carry interest @ 6% per annum untilBpayment or realization. The plaintiff-respondent No. 2 shall also be entitledto withdraw the amount of Rs. 5,10,000/- (Rupees five lakh ten thousand)deposited in terms of the decree of High Court, if not already withdrawn.In the circumstances of the case, the parties are left to bear their owncosts throughout.

Devika Gujral

Appeal partly allowed.