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CASE NO.: Appeal (civil)  401 of 1994

PETITIONER: Surinder Singh

RESPONDENT: Kapoor Singh (Dead) Th. Lrs. & Ors.

DATE OF JUDGMENT: 03/05/2005

BENCH: N. Santosh Hegde, D.M. Dharmadhikari & S.B. Sinha

JUDGMENT: J U D G M E N T

S.B. SINHA, J :  

       A two-Judge Bench of this Court by an order dated 6.9.2001 referred  the matter for decision by a bench of three Judges in view of the purported  conflict recorded in Kartar Singh vs. Harjinder Singh and Others [(1990) 3  SCC 517] and Rachakonda Narayana vs. Ponthala Parvathamma and  Another [(2001) 8 SCC 173].   

       The  basic fact of the matter is not in dispute.            Balwant Singh  father of the Appellant herein was the owner of the  suit land measuring 153 Kanals 19 Marlas.  He allegedly entered into an  agreement to sell the said land on a consideration of Rs.500/- per Bigha.   The total consideration of Rs.16,000/- in terms of the said agreement for sale  dated 22.7.1964 is said to have been paid.  However, for some reason or the  other no sale-deed could be executed and registered pursuant to or in  furtherance thereof.  It is stated that Arjan Singh had paid a further sum of  Rs.14,000/- in addition to the said sum of Rs.16,000/-.  The said Balwant  Singh died on 11.2.1968 whereafter the Appellant herein entered into  another agreement for sale on or about 17.10.1968 in relation to the suit  land.  The said agreement was entered into by him on his own behalf as also  on behalf of his sister, for a consideration of Rs.4,700 per acre.  The amount  of Rs.32,000/- paid to Balwant Singh was treated to be the earnest money  under the said agreement, in terms whereof, a sale-deed was to be executed  and registered on or before 20.6.1969.  As the Appellant herein allegedly  failed and/or neglected to perform his part of contract, a suit for specific  performance of the said agreement dated 17.10.1968 was filed.  In the said  suit, a plea was raised that the Appellant herein was not authorized to enter  into the agreement for sale on behalf of his sister Tajinder Kaur.  The Trial  Court inter alia accepting the said plea dismissed the suit.  It was further held  that as two Khasras bearing Nos.39/4 and 29/3/2 were not included while  describing the land in the plaint, a decree for specific performance could not   be granted.

       A Letters Patent Appeal filed by the Plaintiffs-Respondents herein  against the said judgment and decree came to be allowed by a Division  Bench of the High Court by reason of the impugned judgment holding that  as the property was owned by the Appellant and the said Tajinder Kaur in  equal share, in view of Kartar Singh (supra), a decree for specific  performance could be granted in favour of the Plaintiffs-Respondents herein  in respect  of the share of the Appellant subject to his right to apply for  partition of the property for getting his share demarcated.  As regard  apportionment of the sale consideration, it was directed that the same would  be reduced by 50% as the Appellant would only be entitled thereto.  As  regard the objection of the Appellant  herein that  no relief could be granted  as the plaintiffs-Respondents failed to mention Khasra Nos. 39/4 and 39/3/2

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in the plaint, the Division Bench held that such omission was inadvertent.  It  was pointed out that such an objection was raised only at the time of  argument whereupon the plaintiffs filed an application for amendment of  plaint.  It was held :

"\005We are of the view that the trial court was not  justified in dismissing the application on technical  grounds.  Decree was sought for the entire land i.e. 153 K  19M.  Copies of the agreement as well as Jamabandi for  the relevant year were also attached with the plaint.   Agreement as well as Jamabandi clearly indicate that  relief sought was with regard to the land measuring 153  K 19M which also includes Khasra Nos. 39/4 and 39/3/2.   In this view of the matter, prayer of the plaintiffs for  amendment of the plaintiff is allowed.  Plaint would be  deemed to have included Khasra Nos. 39/4 and 39/3/2  apart from other Khasra numbers mentioned in the  plaint."

       The plaintiff-Respondents has filed an application for amendment  of   plaint wherein a prayer was made to substitute the following prayer in stead  and place of the original prayers made in the suit.:

       "It is, therefore, humbly prayed that this Hon’ble  Court be pleased to :

               Grant decree for possession by part  performance of the Agreement to sell dated 17.10.1968  of the land qua the share of Surinder Singh S/o Balwant  Singh, permanent resident of Village Rajoana Kalan,  Tehsil Jagraon, District Ludhiana i.e. to the extent of half  share out of the total land measuring 153 K \026 19 Marlas  comprised in Khata No. 252/229 and 253/3281 Khasra  Nos. Rect No. 39 Killa Nos. 1, 2, 3/1, 7/2/1, 8, 9, 10,  11/1, 12/2, 13/1, 14/1 Rect No. 28 Killa Nos. 22, 23, 24,  25, 27 Rect No.29 Killa Nos. 21, 22 Rect No. 40 Killa  No. 15/1 Rect. No.69 Killa Nos. 7/34, 4/35, 7/2 Rect  No.59 Killa BO. 21 Rect No.60 Killa Nos. 16, 25 Rect  No. 70 Killa No.1/1 26 mentioned in the Jamabandi for  the year 1967-68 situated in village Rajoana Kalan,   Tehsil Jagraon, District Ludhiana in the year 1967-68 and  situated in Village Rajoana Kalan, Tehsil Jagaraon,  subject to the payment of the entire sale consideration in  the sum of Rs.32,000/- and dismiss the present appeal."

       Mr. R.K. Talwar, the learned counsel appearing on behalf of the  Appellant, would contend that having regard to the fact that the plaintiffs- Respondents did not file an appropriate application conforming to the  requirements of sub-section (3) of Section 12 of the Specific Relief Act,  1963 (the Act), the impugned judgment cannot be sustained.  According to  the learned counsel  the said Respondents had also filed a cross- objection  and in that view of the matter they cannot be said to have relinquished their   claim as regard  performance of the remaining part of the contract and all  rights to compensation, either for the deficiency or for the loss or damage  sustained by them through the default of the defendant, as is mandatorily  required under clause (ii) of sub-section (3) of Section 12 of the Act.  The  learned counsel would further urge that keeping in view the fact that the  application for amendment of  plaint has been filed only after this Court  referred the matter by  an order dated 6.9.2001 to a larger Bench, the same  deserves to be dismissed.  It was submitted that the Division Bench of the  High Court could not have allowed the plaintiffs-Respondents to amend the  plaint in relation to the addition of plots which they failed to mention in the

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schedule of the original plaint.

       The learned counsel appearing on behalf of the Respondents, on the  other hand, made a statement before us that the Respondents do not intend to  press his cross-objection and would relinquish the claim of any damage.   

       Sub-section (3) of  Section 12 of the Act  reads as under :                  "12. Specific performance of part of contract.-(1)                        xxx             xxx             xxx

       (2)     xxx             xxx             xxx

(3) Where a party to a contract is unable to  perform the whole of his part of it, and the part which  must be left unperformed either \026

(a)     forms a considerable part of the whole,  though admitting of compensation in  money; or

(b)     does not admit of compensation in money;

he is not entitled to obtain a decree for specific  performance; but the court may, at the suit of other party,  direct the party in default to perform specifically so much  of his part of the contract as he can perform, if the other  party \026

(i)     in a case falling under clause (a), pays or has  paid the agreed consideration for the whole  of the contract reduced by the consideration  for the part which must be left unperformed  and a case falling under clause (b), pays or  had paid) the consideration for the whole of  the contract without any abatement; and

(ii)    in either case, relinquishes all claims to the  performance of the remaining part of the  contract and all right to compensation, either  for the deficiency or for the loss or damage  sustained by him through the default of the  defendant."       

       The said provision postulates that where a defendant is unable to  perform a part of the contract, and the part left unperformed forms a  considerable portion of the whole but admits of compensation in money, the  party not in default is entitled to specific performance on payment on the  whole consideration, reduced by the consideration for the part left  unperformed.   

       Section 12(3) of the Act is a beneficial provision so far as the  purchasers are concerned.  In the instant case, in view of the findings of fact  arrived at by the High Court, the decree for specific performance of contract  in respect of the entire suit land could not have been granted as the  Appellant herein was not authorized by his sister to enter into the agreement  for sale.  The relinquishment of claim as contemplated under Section  12(3)(ii) of the Act as regard performance of the remaining part of the  contract and all rights to compensation need not specifically be pleaded and  can be made at any stage of the litigation.  Such a plea can also be raised at  the appellate stage.  Delay by itself, it is trite, may not stand in the way of  the plaintiff from claiming the relief unless the defendant establishes  prejudice.

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       In this case, the Division Bench of the High Court passed a decree of  specific performance of contract relying on or on the basis of a decision of  this Court in Kartar Singh (supra).

       In Kartar Singh (supra), as in the present case, the Respondent therein  and the sister had half share in the property, an agreement for sale was also  entered into by the Respondent not only in respect of his own share but also  in respect of share of his sister.  In that case, the High Court was of the  opinion that the Respondent therein could not and in fact did not agree to  sell the whole of the property by himself as neither he had any authority to  do so nor did he represent that he was the owner of the whole of the  property.  It was, in the aforementioned factual backdrop, the High Court  further held that that sub-sections (2) and (3) of Section 12 of the Act would  not be applicable because the portion to be left out was not a small portion of  the whole property.  This Court reversed the said finding of the High Court  holding :   "\005Secondly, the agreement of sale clearly mentions that  respondent was entering into the agreement both on  behalf of himself and his sister, and that he was, under  the agreement, selling the whole of his share and also the  whole of the share of his sister in the property. Further in  the agreement itself he had stated that he was responsible  to get the sale deed executed by his sister and that he  would persuade her to do so. This being the case, the  properties agreed to be sold were clearly distinguishable  by the shares of the respective vendors. In the  circumstances when the absentee vendor, for some  reason or the other, refused to accept the agreement, there  is no reason why the agreement should not be enforced  against the vendor who had signed it and whose property  is identifiable by his specific share. 5. We are, therefore, of the view that this is not a  case which is covered by Section 12 of the Act. It is clear  from Section 12 that it relates to the specific performance  of a part of a contract. The present is not a case of the  performance of a part of the contract but of the whole of  the contract so far as the contracting party, namely, the  respondent is concerned. Under the agreement, he had  contracted to sell whole of his property. The two  contracts, viz. for the sale of his share and of his sister’s  share were separate and were severable from each other  although they were incorporated in one agreement. In  fact, there was no contract between the appellant and the  respondent’s sister and the only valid contract was with  respondent in respect of his share in the property."

       In Rachakonda Narayana (supra), analyzing the provisions of sub- section (3) of Section 12 of the Act, this Court opined :

"\005Thus, the ingredients which would attract specific  performance of the part of the contract, are: (i) if a party  to an agreement is unable to perform a part of the  contract, he is to be treated as defaulting party to that  extent, and (ii) the other party to an agreement must, in a  suit for such specific performance, either pay or has paid  the whole of the agreed amount, for that part of the  contract which is capable of being performed by the  defaulting party and also relinquish his claim in respect  of the other part of the contract which the defaulting  party is not capable to perform and relinquishes the claim  of compensation in respect of loss sustained by him. If  such ingredients are satisfied, the discretionary relief of  specific performance is ordinarily granted unless there is

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delay or laches or any other disability on the part of the  other party."

       It was furthermore held that an application for amendment of the   plaint relinquishing the claim in respect of that part of the contract, which  cannot be performed can be filed even at the appellate stage.          Kartar Singh (supra) was rendered in the fact situation obtaining  therein.  The observations therein to the effect that the provision of Section  12 was not applicable came to be made in view of the finding that the sister  of the Respondent had not entered into any contract at all.  In this case,  however, the Appellant herein had entered into the aforementioned  agreement for sale on the premise that he had the requisite authority to do so  on behalf of his sister as also on his own behalf.  The sister of the Appellant  denied or disputed such authority and in that view of the matter, it is beyond  any pale of doubt that the agreement for sale was entered into in respect of  the entire suit land and having regard to the fact that the sister of the  Appellant did not authorize him to enter into the said agreement, sub-section  (2) of Section 12 of the Act would clearly be attracted.  Kartar Singh (supra)  should not be held to lay down a law to the effect that even in a case where a  part of the contract is held to be invalid, Section 12 will have no application.

       The question which deserves consideration now is as to whether the  application for amendment of plaint filed by the plaintiffs-Respondents  should be allowed. Sub-section (3) of Section 12 does not lay down any  limitation for filing such an application.  Such an application can be filed at  any stage of the proceedings and in that view of the matter an application  even before this Court would be maintainable.

       In Kalyanpur Lime Works Ltd. vs. State of Bihar and Anr. [AIR 1954  SC 165], this Court has held :

"\005The last portion of the application, however, leaves  no doubt whatever that all claims to further performance  were relinquished and compensation prior to 1.4.1948  was also given up.  The plaintiff’s learned counsel has  asked for that relief in the course of his arguments and he  has made it clear that he insists on no further  performance, nor does he claim any compensation for  any period prior to the execution of the leases.   Relinquishment of the claim to further performance can  be made at any stage of the litigation\005"    

       A Division Bench of the Patna High Court in Girdhar Das Anandji  and Another vs. Jivaraj Madhavji Patel and Others [1971 PLJR  66] in an  identical situation, referring to the decision of this Court in Kalyanpur Lime  Works Ltd. (supra), held :

       "I have already stated that learned Advocate  General while opening the case of his client specifically  stated that he was giving up the cross-objection and that  he was relinquishing claim for further performance and  for compensation etc. as required under Section 15 of the  Specific Relief Act, 1877.  The relinquishment as  required by law, having been made in this Court the  plaintiff-respondent could not be non-suited on this  ground."

       In  view of the legal position and also in view of the statement made  across the Bar including the application for amendment of plaint filed on  behalf of the plaintiffs-Respondents in this Court, there cannot be any doubt  that this Court can uphold the decree passed by the Division Bench of the  High court relying on or on the basis of such statement as also upon

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allowing the application for amendment of plaint.  It may be true that in the  application for amendment, there is no specific averment as contained in  clause (ii) of sub-section (2) of Section 12 of the Act but the entire  application, in our opinion, has to be read as a whole.  The plaintiff- Respondents has referred to the prayers made in the plaint and has sought to  substitute the same by a prayer as noticed hereinbefore and, thus, by  necessary implication, the relief for obtaining compensation must be held to  have been given up.  In any event, such a statement was made at the bar and  we accept the same.

       We have noticed hereinbefore that in Rachakonda Narayana (supra),  this Court has clearly held that an application may be filed even at the  appellate stage.  To the same effect is the decision of this Court in Surjit  Kaur vs. Naurata Singh and Another [(2000) 7 SCC 379].

       Mr. Talwar, however, would submit that keeping in view the fact that  the plaintiffs-Respondents are in  possession of the suit premises as  tenants  for a long time and they have not paid any rent therefor, this Court should  not exercise its discretionary jurisdiction in their favour.           Discretionary jurisdiction, as is well-known, must be exercised  reasonably and having regard to the fact situation obtaining in each case.   The Appellant’s father entered into an agreement for sale.  The consideration  amount was paid but keeping in view the lapse of time wherefor plaintiffs- Respondents were not to be blamed, a sale-deed could not be executed and  registered but despite the same admittedly a further sum of Rs.14,000/- was  paid by the Respondents herein.  After the death of Balwant Singh, father of  the Appellant, admittedly another agreement was entered into in terms  whereof the amount of consideration was raised.          The Appellant furthermore misled the plaintiffs-Respondents by  representing that he had the requisite authority to enter into an agreement for  sale on behalf of his sister, which was found to be incorrect.  In this  situation, we are of the view that the equity lies in favour of grant of decree  for specific performance of the contract in respect of the share of the  Appellant rather than refusing the same.  In any event if the Appellant and/or  his sister have claim as regard the arrears of rent, the same can be  adjudicated upon by the appropriate court in an appropriate proceeding.  We  are, therefore, unable to accept the said contention of  Mr. Talwar.

       For the reasons aforementioned, we are of the opinion that there is no  merit in this appeal which is accordingly dismissed.  However, in the facts  and circumstances of the case, there shall be no order as to costs.