R.F.A. Nos. 278 & 279 of 2003 (O.S.277/1993 & O.S.278/1993), High Court of Kerala at Ernakulam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE P.BHAVADASAN** **THURSDAY, THE 22ND DECEMBER 2011 / 1ST POUSHA 1933** **RFA.No. 278 of 2003()** **---------------------** ## **OS.277/1993 of SUB COURT, PATHANAMTHITTA** **....................** ## **APPELLANTS/DEFENDANTS** **----------------------------------** ## **1. RAMAKRISHNA PILLAI PRABHAKARAN NAIR, VILANGANTHONDIL HOUSE, KARUMPALA MURI, AND VILLAGE.** ## **2. KALYAIAMMA RAJAMMA, OF DO DO.** **BY ADVS. SRI.T.KRISHNAN UNNI, SENIOR ADVOCATE SRI.SAJU.S.A SRI.K.C.KIRAN** ## **RESPONDENT/PLAINTIFF:** **------------------------------** **SALINA, D/O.JUBILATHUBEEVI, JALILA MNZIL, KOTTARAKARA MURI AND VILLAGE.** ## **R1 BY ADVS. SRI.R.RAJASEKHARAN PILLAI** **SRI.GEORGE T. THACHETT SMT.SABINA JAYAN** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 3.12.2011, ALONG WITH RFA NO. 279 OF 2003 , THE COURT ON 22/12/2011 PASSED THE FOLLOWING:** **vk** ## **P. BHAVADASAN, J.** - - - - - - - - - - - - - - - - - - - - - - - - - - - R.F.A. Nos. 278 & 279 of 2003 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 22nd day of December, 2011. ## **JUDGMENT** Two suits for specific performance, namely O.S.277 of 1993 and O.S.278 of 1993 before the Sub Court, Pathanamthitta, were disposed of by separate judgments. Both the suits were decreed. The defendants in both the suits have come up in appeal. R.F.A.278 of 2003 is directed against the judgment and decree in O.S.277 of 1993 while R.F.A.279 of 2003 is directed against the judgment and decree in O.S. 278 of 1993. 2. Since the issues that arise for consideration are identical and since the facts are almost similar though evidence was adduced separately, these appeals are being disposed of by a common judgment. 3. A couple had to raise the funds for the marriage of their daughter. They, therefore, decided to sell R.F.A.278 & 279/2003. 2 a portion of 1.50 acres of land they had. They divided the property into northern half and southern half after leaving a pathway through the middle of the property. They wanted to sell 90 cents out of the property they had and the entire property abuts the road on the western side. 4. The plaintiff's case in O.S. 277 of 1993 is that by Ext.A1 dated 10.11.1992 the defendants agreed to sell 25 cents of land for Rs.90,000/- and received Rs.10,000/- as advance. The plaintiff in O.S.278 of 1993 alleged that as per Ext.A1 dated 10.11.1992 the defendants agreed to sell 15 cents of property for a sum of Rs.67,500/- and received Rs.5000/- as advance. In both the agreements, the period for completion of transaction was fixed as nine months. In both the cases, the respective plaintiffs averred that they were always ready and willing to perform their part of the contract. The defendants in both the suits had to get the properties measured, put up the boundaries and free the properties from any encumbrance. According to the R.F.A.278 & 279/2003. 3 plaintiffs in both the suits they demanded execution of the sale deeds, but that was put it off under one pretext or another by the defendants. Finally, on 11.8.1993 the plaintiffs issued notice to the defendants calling upon them to perform their part of the agreement. The allegation is that after accepting the notice on 13.8.1993, the defendants caused to issue a notice to the respective plaintiffs by anti-dating the notice as on 12.8.1993 and that too in the name of wrong persons. subsequently, the defendants caused to issue a reply notice dated 20.8.1993 to the notice issued by the respective plaintiffs raising false claims. The defendants are guilty of breach of contract and the plaintiffs are entitled to get specific performance of the agreement executed by them. 5. Both the suits were resisted by the defendants adopting similar contentions. The defendants in both the suits are the same. In both the cases, respective agreements namely, Ext.A1, were admitted. According to 4 R.F.A.278 & 279/2003. them, there were two earlier agreements between the parties and Ext.A1 produced in each of the suits is the third agreement in relation to the sale of the property. First of them was dated 11.5.1992 and the period fixed was three months. Since the plaintiff could not raise funds, they sought for extension of time which resulted in a subsequent agreement dated 11.8.1992. Again time was fixed as three months for execution of sale deed. Even thereafter, the plaintiffs did not have sufficient funds and at the request of the plaintiffs, a third agreement dated 10.11.1992 was executed. The defendants would say that they were not inclined and were very reluctant to extend the time by executing the third agreement, but finally they conceded to the request made by the plaintiffs in the respective cases. It could be seen from Ext.A1 agreement in both the cases that the stipulation of time for performance was initially left blank. It was filled up by the defendants and fixed a period of nine months for completion of the contract. It is pointed R.F.A.278 & 279/2003. 5 out that the parties were agreed that time would be the essence of the contract. Even after executing Ext.A1 agreement, the plaintiffs were unable to raise the necessary funds. The defendants were always ready and willing to perform their part of the contract. They would claim that on 10.8.1993 the plaintiff in O.S.278 of 1993 along with his henchmen came to the house of the defendants and demanded further extension. The defendants were not amenable to such a course. So they issued a notice dated 12.8.1993. It is contended on behalf of the defendants that on 11.51992 when the first agreement in each case was entered into between the parties, there were no litigations pending in respect of the property. Subsequently, false and frivolous suits were instituted by the neighbours of the defendants. The plaintiffs wanted the defendants to settle the cases and assign the property. Since the defendants were in need of money for the marriage of their daughter, they were always ready and willing to perform their part of R.F.A.278 & 279/2003. 6 the contract. As a result of the default committed by the plaintiff, it is claimed that the marriage of the daughter of the defendants had to be postponed. Accusing the plaintiffs in the respective cases, guilty of breach of contract and inability to perform their part of the contract, the defendants prayed for a dismissal of the suit. 6. On the basis of the above pleadings, issues were raised in each case. The evidence in O.S. 277 of 1993 consists of the testimony of P.W. 1 and documents marked as Exts.A1 to A6 from the side of the plaintiffs. The defendants in the said case had D.Ws.1 to 6 examined and Exts.B1 to B16 marked. In O.S.278 of 1993 the evidence consists of the testimony of P.W.1 and documents marked as Exts.A1 to A5 from the side of the plaintiffs. The defendants in the said case had D.Ws.1 to 5 examined and Exts.B1 to B19 series marked. On an appreciation of the evidence in the case, the trial court came to the following conclusions: i) Time was not the essence of the contract. R.F.A.278 & 279/2003. 7 ii) The defendants had committed breach of contract. iii) Plaintiffs were ready and willing to perform their part of the contract. Based on the above findings, the suits were decreed allowing specific performance of the contract as sought for by the plaintiffs. The said judgments and decrees are assailed in these appeals. 7. Learned counsel appearing for the appellants in these appeals raised mainly two points for consideration. They are i) time was the essence of the contract and ii) the discretion available under Section 20 of the Specific Relief Act has not been properly exercised. 8. Ext.A1 in each case, which is the agreement for sale in the respective cases is an admitted document. The contention of the defendants is that Ext.A1 is the third agreement in respect of the property with the respective plaintiffs. The first among was entered into on 11.5.1992 R.F.A.278 & 279/2003. 8 fixing a period of three months for completion of the sale. The defendants would say that the plaintiffs could not raise funds within the stipulated time and therefore they sought an extension of time and then came the second agreement dated 11.8.1992 wherein three months again was fixed for completion of sale. As the plaintiffs were still unable to raise funds, they sought for a further extension and very reluctantly and hesitantly the defendants executed Ext.A1 agreement dated 10.11.1992. The receipt of advance of Rs.10,000/- and Rs.5000/- in each of the case is admitted. 9. One of the contentions is that when the third agreement was executed, i.e.. agreement dated 10.11.1992, space for period of completion of the sale was left blank and it was filled up by the defendants, who specified that execution of the sale deed had to be completed within nine months. This act on the part of the defendants is put forward as a ground to contend for the position that time is the essence of the contract. The defendants would say that R.F.A.278 & 279/2003. 9 it was the plaintiffs who had committed breach of the contract. 10. The plaintiffs would say otherwise. They would point out that as per Ext.A1 agreement, the defendants had an obligation to measure the property, put up boundaries and to ensure that the properties are free from encumbrances. They did none of those things. Even though the plaintiffs demanded execution of the sale deed, it is alleged by them, the execution of the sale deed was put off under one pretext or another by the defendants and therefore they were guilty of breach of contract. 11. Learned counsel appearing for the appellants pointed out that the evidence of D.Ws.2 to 5 would clearly show that there were two prior agreements and that the stipulation of time in Ext.A1 agreement by the defendants would clearly show that the time was the essence of the contract. Learned counsel pointed out that the plaintiffs have no case that they had sought execution of the sale R.F.A.278 & 279/2003. 10 deed before the expiry of the period. The evidence, according to the learned counsel, would clearly show that the defendants were in dire need of money and therefore, under no circumstances they would have postponed the execution of the sale deed. According to learned counsel, an impartial analysis of the evidence in the case would clearly show that it was the plaintiffs in the respective cases who had committed breach of the contract. In support of the claim that time is the essence of the contract, learned counsel relied on the decisions reported in **Joseph George v. Chacko Thomas (** 1992 (1) K.L.T.6) and **Govind Prasad Chaturvedi v. Hari Dutt Shastri** ((1977) 2 SCC 539). 12. Learned counsel appearing for the respondents on the other hand contended that there is absolutely no evidence in this case at all to the effect that Ext.A1 agreement was preceded by two other agreements as contended by the defendants. Learned counsel would contend that it is well settled that in cases of agreement for R.F.A.278 & 279/2003. 11 sale of immovable property, time is usually not treated as the essence of the contract. There are no indications in Ext.A1 to show that the parties had consciously made time as the essence of the contract. If as a matter of fact, it was so, the defendants ought to have issued notice before the expiry of the period calling upon the plaintiffs to pay the balance sale consideration and to get the sale deed executed after showing that they had done what they had to do under the contract. The act of sending a predated notice shows the malafides on the part of the defendants. The evidence would clearly show that the plaintiffs were always ready and willing to perform their part of the contract and it was the defendants who are in breach of the contract. The court below was therefore perfectly justified in coming to the conclusion that time is not the essence of the contract. 13. In each of the cases, the respective plaintiffs were examined as P.W.1. They speak in terms of the plaint. R.F.A.278 & 279/2003. 12 In each of the cases, the first defendant was examined as D.W.1. He would admit that Ext.A1 agreement in both the cases were executed by the defendants. He sticks to his contentions in the written statement. He would assert that on the date of execution of Ext.A1, the defendants were infact not inclined to enter into such an agreement, but under pressure from the plaintiffs, very reluctantly, the defendants signed the document. He would also claim that the period of nine months shown in Ext.A1 was written by him making it very clear that the transaction has to be completed within the expiry of nine months. He speaks about the incident on 10.8.1993 and the issuance of notice to the plaintiffs. He would claim that, that notice contained inadvertent mistakes and were wrongly addressed. He however admitted that at the relevant time cases were pending in respect of the suit property. But he would at once say that that was not a hurdle for execution of the sale deed at all. He would also assert that at the time of R.F.A.278 & 279/2003. 13 execution of Ext.A1 agreement, the plaintiffs were aware of the pendency of the suits. According to him, D.W.3, the scribe, is the real villain. He stated that at no point of time the defendants had declined to execute the sale deed. 14. D.W.2 is the father of one of the assignees from the defendants in each of the cases. He was examined to prove the purchase of the property in pursuance to an agreement dated 11.5.1992. Though he speaks about the sale in the name of his son, he denied having any knowledge of the agreements with the plaintiffs on the same day. The evidence of D.W.3 is open to serious doubt and a reading of his evidence would show that he is not speaking the truth. 15. The court below has found that there is no evidence at all to show that Ext.A1 was preceded by two other agreements as claimed by the defendants. One aspect needs to be noticed. If as a mater of fact, Ext.A1 was preceded by two other agreements, nothing prevented the defendants from insisting about mentioning the two R.F.A.278 & 279/2003. 14 agreements in Ext.A1 agreement. At any rate, the defendants could have insisted that Ext.A1 agreement was being executed on the request made by the plaintiffs for extension of time. That is also not there in Ext.A1. A reading of Ext.A1 would show that the agreement had been entered into for the first time and there is nothing to show that there were two prior agreements. It is more so, because, if, as a matter of fact there were two earlier agreements prior to Ext.A1, then obviously the advance amount would have been received much earlier than the date of execution of Ext.A1. But Ext.A1 would show that advance amount was received on the date of execution of Ext.A1. 16. Further, as per Ext.A1 agreement, the defendants had to perform certain acts. They had to get the properties measured, lay boundaries and also to ensure that the properties are free from encumbrances. Though the defendants would say that the plaintiffs in the respective suits were aware of the pendency of the litigation in respect R.F.A.278 & 279/2003. 15 of the suit property, at the time of execution of Ext.A1 agreement, there is no evidence regarding the same. There is also no evidence to show that the defendants had either measured the property or put up boundaries. Under these circumstances, the plaintiffs were fully justified in insisting that the property be freed from litigation and the same be conveyed to them. 17. The question is whether time can be treated as the essence of the contract. 18. In the decision reported in **Joseph George v. Chacko Thomas** (1992(1) K.L.T. 6) it was held as follows: _“Under S.55 of the Contract Act, time is not the essence of contract to sell immovable property and a stipulation in the contract that the document has to be executed within a period fixed in the contract need not make the stipulation as to time essence of contract. Default clause by itself also need not evidence the intention to make time the essence of the contract, time can be the essence of the contract if it is intended to be so_ 16 R.F.A.278 & 279/2003. _and such intention can be evidenced either by express stipulations or by strong circumstance to displace the presumption that in a contract for sale of land time is not the essence of the contract.”_ 19. In the decision reported in **Govind Prasad Chaturvedi v. Hari Dutt Shastri** ((1977) 2 SCC 539) it was held as follows: _“The fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. When a contract relates to sale of immovable property it will normally be presumed that the time is not the essence of the the contract._ _Also the language used in the agreement is not such as to indicate in unmistakable terms that the time is of the essence of the contract. The intention to treat time as the essence of the contract may be evidenced by the circumstances which are sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract.”_ R.F.A.278 & 279/2003. 17 20. Apart from the two decisions cited by the learned counsel for the appellants, a few other decisions may also be noticed. In the decision reported in **Narinder Kumar Malik v. Surinder Kumar Malik** ((2009) 8 SCC 743), it was held as follows: _“To ascertain if the time was of the essence of the contract, we have to go through Condition (iii) of the MoU which categorically mentions that the second party viz. the respondent herein shall make the payment of the balance amount of Rs.3.25 crores within a maximum period of one hundred fifty days from the date of execution of the MoU i.e. up to or before 9.7.2005. However, this period of one hundred fifty days was extendable by another ten to twenty days, if need be with the consent of both the parties but not more._ _The High Court certainly fell into error in construing the said provision in right perspective and erred in coming to the conclusion that since time was extendable, the time could not have been made the essence of the contract. A bare_ R.F.A.278 & 279/2003. 18 _perusal of the aforesaid provision makes it clear that ultimately the time was only up to 9.7.2005. However, with an intention to give further leverage to the respondent herein, the time was made extendable by ten to twenty days and not more and that too only with the consent of the parties. Even if it is said that 9.7.2005 could not have been the last date, atleast after twenty days the said last date expired.”_ 21. In the decision reported in **Swarnam Ramachandran v. Aravacode Chakungal Jayapalan** ((2004) 8 SCC 689), it was held as follows: _“According to Pollock & Mulla: Indian Contract & Specific Relief Acts, the intention can be ascertained from:_ _“(i) the express words used in the contract;_ _(ii) the nature of the property which forms the subject-matter of the contract;_ _(iii) the nature of the contract itself; and_ _(iv) the surrounding circumstances.”_ _That time is presumed not to be of essence of the contract relating to immovable property, but it is of essence in contracts of reconveyance_ R.F.A.278 & 279/2003. 19 _or renewal of lease. The onus to plead and prove that time was the essence of the contract is on the person alleging it, thus giving an opportunity to the other side to adduce rebuttal evidence that time was not of essence. That when the plaintiff pleads that time was not of essence and the defendant does not deny it by evidence, the court is bound to accept the plea of the plaintiff. In cases where notice is given making time of the essence, it is duty of the court to examine the real intention of the party giving such notice by looking at the facts and circumstances of each case. That a vendor has no right to make time of the essence, unless he is ready and willing to proceed to completion and secondly, when the vendor purports to make time of the essence, the purchaser must be guilty of such gross default as to entitle the vendor to rescind the contract.”_ 22. In the decision reported in **A.K.Lakshmipathy v. Rai Saheb Pannalal H. Lahoti Charitable Trust** ((2010) 1 SCC 287) it was held as follows: _“In our view, the decision of this court in Swarnam Ramachandran case would not be_ R.F.A.278 & 279/2003. 20 _applicable in the facts and circumstances of the present case. It is true that it was conclusively held in the aforesaid decision of this Court on facts that time was not to be of the essence of the contract except in a reconveyance or renewal of lease, the facts and circumstances of that case were totally different from the one at hand. In the said case, there was a specific proviso to one of the clauses in the contract for sale which clearly stipulates that if payment was not made in time, the appellants who were the vendors could extend such date. Hence, in that decision, this court in the facts of that case held that time was not to be of the essence of the contract which was determined by this Court in the said decision on the intention of the parties as well as the written terms of the agreement._ _Clauses 3 and 10 of the contract for sale in this case clearly indicate that time was always meant to be of prime importance in the contract. In fact P.w.1, V.A.Gupta who was examined as a witness for the appellants admitted in his deposition that time was always of the essence of the contract and the appellants were aware of this_ R.F.A.278 & 279/2003. 21 _even before entering into the contract. From the contract for sale also, we can very well see that time was repeatedly mentioned to be of prime importance and it was stated quite clearly that under all circumstances, the appellants would have to definitely deposit the balance amount of Rs.5 lakhs by the date stipulated in the contract for sale. Hence, this submission advanced by Mr.Venugopal, that time was not the essence of the contract cannot at all be accepted and, therefore, we reject the same.”_ 23. In the decision reported in **Citadel Fine Pharmaceuticals v. Ramaniyam Real Estates Private** **Limited** ((2011) 9 SCC 147) it was held as follows: _“In case of a contract relating to sale of immovable property, time is not normally of the essence. However, this is not an absolute proposition and has several exceptions. From the terms of agreement in the instant case time was of the essence and this was clearly stipulated and understood by parties, especially when consequences of non-completion of terms of the purchaser within the stipulated time were clearly_ R.F.A.278 & 279/2003. 22 _spelt out in Clause 9. Furthermore,in a contract relating to commercial enterprise the court is strongly inclined to hold time to be essential, whether the contract is for the purchase of land or for such purposes or more “directly for the prosecution of trade”. here the purchaser was admittedly in the business of building construction and was entering into the agreement for purchasing the plot on commercial basis. The court can also take judicial notice of fact that prices of real estate are constantly escalating and the clear intention of parties, as was evident from stipulations in the agreement was to treat time as the essence of contract. Besides, no clause as could be construed as rendering ineffective the express provision relating to time being of the essence of contract, was incorporated in the agreement.”_ 24. A reading of the above decisions would clearly indicate that normally in respect of immovable property time is not treated as the essence of the contract. Off late, there is a change in the outlook. But that is due to the escalation R.F.A.278 & 279/2003. 23 of the price of the immovable property. However, the law is well settled that normally time is not treated as the essence of the contract. Exception to the said rule can be made only in the case, where contract between the parties stipulates that time is the essence of the contract or by their conduct it would be concluded that time was to be the essence of the contract. 25. The claim of the defendants that the stipulation of nine months inserted by them in Ext.A1 amounts to stipulating time as the essence of the contract cannot be countenanced. As already noticed, the claim of the defendants that there were two prior agreements in relation to the suit property is not proved. One has to therefore go by the terms of Ext.A1 in the respective cases. There is nothing to indicate that in Ext.A1 in the respective suits the parties intended to treat time as the essence of the contract. If as a matter of fact, time was to be the essence of the contract, one would have expected the defendants to R.F.A.278 & 279/2003. 24 issue notice to the plaintiffs after complying with their part of the contract calling upon the plaintiffs to perform their part and get the sale deed executed prior to the expiry of the date specified in Ext.A1 agreement. Therefore, the decisions relied on by the learned counsel for the appellants are of little help to them. There is nothing in the case on hand to come to the conclusion that either by the agreements in question or by the conduct of the parties time was to be treated as the essence of the contract. The lower court was right in holding so. 26. This takes us to the next question whether the discretion under Section 20 has been properly exercised. The discussion regarding this aspect is contained in paragraphs 23 and 24 of the judgment of the court below. After referring to a few decisions, the court below observed that the court is not obliged to grant a decree for specific performance. The court on a consideration of the materials before it came to the conclusion that there is nothing to R.F.A.278 & 279/2003. 25 indicate that the plaintiffs have used the litigation as an instrument of oppression to have unfair advantage to the plaintiffs as contended by the learned counsel for the defendants. Hence, the court below holds that a decree for specific performance is to be granted in favour of the plaintiff. It must be said that the discretion to be exercised under Section 20 of the Specific Relief Act is not properly discussed. This court had occasion to hold that even in cases where the defendants in a suit for specific performance put forth false contentions, that does not disentitle them from claiming that discretion under Section 20 may be exercised in their favour. 27. One has to necessarily refer to Section 20 of the Specific Relief Act.25. Section 20 reads as follows: ## _“_ _**20. Discretion as to decreeing specific**_ _**performance** .- (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of_ 26 R.F.A.278 & 279/2003. _the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal._ _(2) The following are cases in which the court may properly exercise discretion not to decree specific performance:-_ _(a) where the terms of the contract or he conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or_ _(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its nonperformance would involve no such hardship on the plaintiff; or_ _(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance._ _Explanation 1.Mere inadequacy of consideration, or the mere fact that the contract is_ R.F.A.278 & 279/2003. 27 _onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b)._ _Explanation 2.- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract._ _(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance._ _(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party.”_ 28. A reading of the provision shows that there are three circumstances under which the court may decline 28 R.F.A.278 & 279/2003. to grant specific performance of an agreement for sale. However, in the case on hand, none of those three circumstances apply. But it is well settled that the circumstances made mention of in the said Section are not exhaustive. Each case has to be determined on the basis of the facts and evidence of the said case. 29. Even though the court is given a wide discretion, it has to be exercised in a judicial manner. It is evident from the Section itself which says that discretion has to be exercised guided by judicial principles and which is capable of correction by a court of appeal. There can be no doubt that the plaintiff has to show the circumstance which satisfy the court that specific performance should be granted. The discretion conferred is not an arbitrary and unfettered one. It has to be exercised on the basis of well settled rules and principles. 30. As already noticed, it may not be possible to lay down exhaustively the circumstances under which R.F.A.278 & 279/2003. 29 specific performance may be declined. It is also the settled proposition that if it is found that specific performance is to be declined, the court is well within its powers to direct the defendants to pay value of the land to the plaintiff. It is settled by precedents that the court may well be within its jurisdiction to direct return of the money received by the defendant and also to award damages in lieu of specific performance. 31. Merely because, the defendant has denied the agreement for sale or had set up incorrect or false or frivolous contentions, by itself is not a ground to grant decree for specific performance. The court has to evaluate the entire facts and circumstances of the case. 32. The nature of the agreement, the position in which the parties are placed, the nature of the contentions, the nature of evidence, the hardship that is likely to be caused, possibility of compensation to the injured etc are R.F.A.278 & 279/2003. 30 some of the factors which are treated as relevant for consideration. 33. It will be useful at this juncture to refer to a few decisions. In the decision reported in **Adimakutty Hydu Ali v. Ambujam** (2003(2) K.L.T. 328) it was held as follows: _“Performance of the contract involving some hardship on the defendant which he did not foresee while nonperformance in involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. Before decreeing specific performance, it is obligatory for courts to consider whether by going so any unfair advantage would result for the plaintiff over the defendant, the extent of hardship that may be caused to the defendant and if it would render such enforcement inequitable, besides taking into consideration the totality of circumstances of each case. We are of the view considering the totality of the circumstances of the case it would be inequitable_ R.F.A.278 & 279/2003. 31 _to grant a decree as against the widow and other defendants who are deaf and dump persons. The hardship that may be caused to them is much more than what the hardship that would be caused to the plaintiff._ ” ## 34. In the decision reported in **I.F.Association of S.D.A. v. Unneerikutty** (2006(4) K.L.T. 520) it was held as follows: _The basic principle behind S.16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. The provision imposes a personal bar. The Court is to grant relief on the basis of the conduct of the person seeking relief. If the pleadings manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief.”_ 35. In the decision reported in **Azhar Sultana v.** **B. Rajamani** (AIR 2009 SC 2157) it was held that when the plaintiff had failed to establish that the plaintiff was ready R.F.A.278 & 279/2003. 32 and willing to perform her part of the contract, the defendants in the case was entitled to compensatory costs. 36. In the decision reported in **G.Jayashree v. Bhagwandas S. Patel** (AIR 2009 SC 1749) it was held that the right between the parties would have to be worked out with reference to the agreement between them. 37. In the decision reported in **Laxman Tatyaba Kankate v. Taramati Harishchandra Dhatrak** ((2010) 7 SCC 717) it was held as follows: _“20. Similar view was taken by this Court in Mohammadia Coop. Building Society Ltd. v. Lakshmi Srinivasa Coop. Building Society Ltd. where the Court reiterated the principle that jurisdiction of the court to grant specific performance is discretionary and the role of the plaintiff is one of the most important factor to be taken into consideration._ _21. We may also notice that in Parakunnam Veettil Joseph's Son Mathew v. Nedumbara Kuruvila's son, this court further cautioned that while exercising discretionary jurisdiction in terms_ R.F.A.278 & 279/2003. 33 _of Section 20 of the Act, the court should meticulously consider all facts and circumstances of the case. The court is expected to take care to see that the process of the court is not used as an instrument of oppression giving an unfair advantage to the plaintiff as opposed to the defendant in the suit._ _22. The discretion of the court has to be exercised as per the settled judicial principles. All the aforesaid principles are squarely satisfied in the present case and it is the appellants before us who ave taken advantage of the pendency of the proceedings. they have used the sum of Rs.10,000, which was given as earnest money for all this period, as well as, have enjoyed the fruits of the property. The present case does not fall within the ambit of any of the aforesaid cases specified under Section 20(2) of the Act. In the present case, it is not only lawful but even equity and facts of the case demand that a decree for specific performance should be granted in favour of the respondent. Besides all this, the respondent before us has agreed to pay much higher consideration than what was payable in_ 34 R.F.A.278 & 279/2003. _terms of the agreement to sell between the parties.”_ 38. In the decision reported in **Vimaleshwar Nagappa Shet v. Noor Ahmed Sheriff** (AIR 2011 SC 2057) it was held as follows: “ _9. It is settled law that Section 20 of the Specific Relief Act, 1963 confers discretionary powers............ It is also well settled that the value of property escalates in urban areas very fast and it would not be equitable to grant specific performance after a lapse of long period of time.”_ 39. From a reading of the above decisions, it is clear that even assuming that the agreement for sale is found to be a genuine one, the court is not bound to grant decree of specific performance to the plaintiffs. The relief of specific performance can be denied on justifiable grounds. It cannot be said as a rule that whenever there is a valid contract or subsisting agreement, a decree for specific performance ought to follow. The position is also well settled that the courts cannot deny to the plaintiff his right R.F.A.278 & 279/2003. 35 to relief unless it is shown that the discretion has been exercised against him as a result of the circumstances obtained from the evidence on record. Merely because there might be escalation of price and such other factors may not by itself is a ground to decline relief to the plaintiff. 40. In the decision reported in **Alex Thomas v. Rajan** (2010(4) K.L.T. 842) it was held as follows: _“Explanation 1 occurring after sub-s.(2) of S.20 of the Specific Relief Act provides that mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage or hardship wiothin the meaning of clauses (a) and (b) of that sub section. The circumstances specified in S.20 are only illustrative but not exhaustive, as noted by the Apex Court in Sardar Singh v. Krishna Devi. The courts have to take into consideration the circumstances of each case, the conduct of the parties or respective interest in the contract. Sub s.(1) of S.20 stands to advise that the discretionary jurisdiction to decree specific_ R.F.A.278 & 279/2003. 36 _performance does not oblige the court to grant such relief, merely because it is lawful to do so, but that the discretion is to be exercised in a sound and reasonable manner, guided by judicial principles and capable of correction by a court of appeal. The legislative indication in that provision or statute is that the exercise of discretion shall not be arbitrary and reasonableness has to be founded on some judicial principle. While we note that mere inadequacy of consideration may be irrelevant, the passage of time that has gone through with the litigation apparently tilts the scales, since escalation in land value cannot be ignored. In that view of the matter, the pendency of this litigation from the trial court to this court from sometime in November, 1996, till now, advises us to hold that the discretion needs to be exercised against the decreeing specific performance, however, on terms that the defendants will suffer the entire costs of this litigation both here and in the court below.”_ R.F.A.278 & 279/2003. 37 41. Coming to the facts of the case, there is evidence to show that the defendants were in dire need of funds for the conduct of marriage of their daughter. The evidence also shows that the marriage had to be postponed for paucity of funds. Apart from these facts, it seems that the defendants had also to face vexatious and frivolous suits from their neighbours. It is true that there is no evidence to show that the defendants had measured the property and put up boundaries as is required under Ext.A1. But the fact remains that the agreements were entered into in 1993 and almost 19 years have elapsed. The contribution of the courts to this delay is also to be taken note of. The price was soared up considerably. It is also significant to notice that the advance amount paid under Ext.A1 agreement in the respective cases are Rs.10,000/- and Rs.5,000/respectively. Only a negligible portion of the sale consideration had been paid as advance. Under these circumstances, it is felt that grant of a decree for specific R.F.A.278 & 279/2003. 38 performance would be unjust and unfair and would be giving undue advantage to the plaintiffs. At the same time, the loss suffered by the plaintiffs also cannot be ignored. But it is felt that if at all any loss or damage is caused to the plaintiffs, that can be compensated. 42. After taking note of the entire facts and circumstances of the case, it is felt that return of the advance amount with compensation in each case would meet the ends of justice instead of granting decree for specific performance of Ext.A1 agreement in each of the cases. In the result, these appeals are allowed, the judgments and decrees are set aside and a decree is passed in the following terms: The defendants in O.S.277 of 1993 shall pay a sum of Rs.1,50,000/- including the advance amount paid within three months from today to the plaintiff in the said case, failing which the plaintiff will be entitled to recover the same 39 R.F.A.278 & 279/2003. with 8% interest from the date of suit till realisation charged on the plaint schedule property. The defendants in O.S. 278 of 1993 shall pay a sum of Rs.80,000/- including the advance amount paid to the plaintiff in the said case within three months from today, failing which the plaintiff in the suit will be entitled to recover the amount with 8% interest from the date of suit till realization charged on the suit property. Parties will suffer their respective costs in these appeals. **P. BHAVADASAN, JUDGE** sb.