B. Santoshamma vs. D. Sarala, 2020
Supreme Court Upholds Partial Specific Performance of Sale Agreement, Dismissing Appeals in Land Dispute Case
Judgement Details
Court
Supreme Court of India
Date of Decision
18 September 2020
Judges
Rohinton Fali Nariman ⦁ Navin Sinha ⦁ Indira Banerjee
Citation
(2020) SCALE 222
Acts / Provisions
Facts of the Case
- B. Santoshamma purchased 300 square yards of land in Survey No. 262, Hayathnagar Village and Taluk in Ranga Reddy District, Andhra Pradesh from one Mr. D. Tanesha, under a registered sale deed dated August 20, 1982.
- After about ten days from the date thereof, the Appellant entered into an oral agreement with one Mr. Pratap Reddy, for sale of 100 square yards out of the Suit Property.
- On March 21, 1984, the Appellant entered into another agreement with one Smt. D. Sarala, for sale of the entire Suit Property to the Respondent for a total consideration of INR 75,000/- out of which a sum of INR 40,000/- was paid by the Respondent to the Appellant in the first instance and a sum of INR 5,000/- was paid subsequently, as advance.
- The Respondent allegedly failing to make payment of INR 30,000/- towards the balance consideration even after expiry of 20 days from the stipulated period under Agreement 2, the Appellant executed a registered deed of conveyance dated May 25, 1984, transferring the said 100 square yards of the Suit Property in favour of Mr. Pratap Reddy (“Sale Deed”).
- The Appellant and her husband and Mr. Pratap Reddy have alleged that the Respondent tried to interfere with Mr. Pratap Reddy’s possession of 100 square yards of the Suit Property.
- Aggrieved by the order of trial court petitioner filed an Appeal.
Trial Court's Decision (1994):
The Trial Court heard all three suits together and delivered a common judgment:
- The Vendee was entitled to specific performance of the sale agreement but only for 200 sq. yards, as 100 sq. yards had already been sold to Pratap Reddy through a registered sale deed.
- The Vendee’s suit for declaring Pratap Reddy’s sale as void was dismissed due to non-joinder of the Vendor (the person who executed the sale deed).
Appeals in the High Court (1994-2006):
Both the Vendor and Vendee appealed against the Trial Court’s decision:
- The Vendor claimed the sale agreement with the Vendee was conditional and argued that the entire contract should be cancelled.
- The Vendee argued she should be granted full specific performance for all 300 sq. yards, and the sale to Pratap Reddy should be nullified.
In 2006, the High Court dismissed all appeals, confirming the Trial Court's decision.
Both parties approached the Supreme Court.
Issues
- Whether the suit agreement of sale was subject to the clearance of any agreement of sale of 100 sq. yards out of the suit plot in favour of one Sri. P. Pratap Reddy?
- Whether the Respondent was entitled to seek specific performance of Agreement?
Judgement
The suit for specific performance being time barred against Pratap Reddy, and the suit against Pratap Reddy also having been dismissed for non-joinder of the Vendor, there could be no question of nullifying the rights that had accrued to Pratap Reddy, pursuant to the Deed of Conveyance dated 25.4.1984 executed by the Vendor transferring 100 sq. yards of the suit land to Pratap Reddy. Moreover, there was apparently an agreement in writing executed between the Vendor and Pratap Reddy on or about 25.01.1984 before execution of the agreement between the Vendor and the Vendee.
Since title in respect of 100 square yards had passed to Pratap Reddy and the suit for specific performance was barred by limitation, the Trial Court was constrained to decree the suit for specific performance in part, and direct that a Deed of Conveyance be executed in respect of the balance 200 square yards of the suit land, under the ownership and control of the Vendor.
The Supreme Court dismissed all appeals, affirming the decisions of the lower courts. The Vendee was entitled to 200 sq. yards of land, while Pratap Reddy retained 100 sq. yards.
Held
It was held by the Supreme Court that Trial Court had fairly reduced the total consideration payable under Agreement 2 by 1/3rd of the agreed amount, in lieu of damages, as 1/3 rd of the area agreed to be sold to the Respondent could not be sold to her.
Supreme Court also noted that Section 12 of the SRA was to be construed and interpreted liberally, in a purposive and meaningful manner, to empower the court to direct specific performance by the defaulting party, of so much of the contract, as can be performed, in a case like this. To hold otherwise would permit a party to a contract for sale of land, to deliberately frustrate the entire contract by transferring a part of the suit property and creating third party interests over the same.
Analysis
The court view that Section 12 of Specific Relief Act, 1963 has to be construced in a liberal, purposive manner that is fair and promotes jusctice. After the amendment of Section 10 of the Specific Relief Act, the words “Specific performance of any contract may, in the discretion of the court, be enforced” have been substituted with the words “Specific performance of Contract shall be enforced subject to…
Hence the court is now obliged to enforce the specific performance of a contract, subject to the provision of Section 11 Sub-Section (2), Section 14 and Section 16 of the Specific Relief Act. Specific Performance of a contract is no longer discretionary, after the amendment.