REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4451 OF 2008

G. JAYASHREE & ORS.      … APPELLANTS

Versus

BHAGWANDAS S. PATEL & ORS.                    … RESPONDENTS

[WITH CIVIL APPEAL NO. 4452 OF 2008]

J U D G M E N T

S.B. SINHA, J.

1. Plaintiffs  in  a  suit  for  grant  of  decree  for  specific  performance  of

contract are before us aggrieved by and dissatisfied with the judgment and

decree dated 13.11.2007 passed by a Division Bench of the Andhra Pradesh

High  Court  reversing  a  judgment  and  decree  dated  25.10.1995  of  the

Additional  Subordinate  Judge,  Ranga  Reddy  district  at  Saroornagar,

Hyderabad in Original Suit No. 191 of 1987 dismissing the said suit.

2. The basic facts of the matter are not in dispute.   

Respondents No. 1 to 3 are owners of the land measuring 11 Acres

and  39  Gunthas  in  Survey  No.  36  situated  at  village  Satamrai  of

Shamshabad Mandal in the district of Ranga Reddy.  The said land abuts

National  Highway  No.  7  between  Hyderabad  and  Bangalore.   The  said

respondents entered into an agreement for sale with Mohammed Kasim Ali

and  G.  Srinivas  Reddy,  whose  heirs  and  legal  representatives  are  the

appellants, for sale of the said property for a sum of Rs. 18,00,000/-, out of

which a sum of Rs. 1,00,000/- was paid as earnest money.   

Some of the important  clauses contained in the said agreement for

sale read as under:

“1. The total consideration being Rs. 18 lakhs, the  Vendees  have  paid  a  sum  of Rs.1,00,000/- (Rupees One lakh only) to the Vendor as the earnest money.  The balance sum of Rs.17 lakhs shall  be paid within 6 months  of  release  of  tentative  layout HUDA.

2. The sale shall  take effect  within  6 months from  the  release  of  tentative  layout  from B.U.D.A.  (Bhagyanagar  Urban Development Authority).

3. The  actual  physical  possession  of  the property  shall  remain  with  the  Vendors

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only.   However,  the  Vendors  hereby  give permission  to  the  Vendees  to  go  over  the property  and  divide  the  property  into different  plots.   The expenses  for  dividing plots and leaving roads shall also be borne by the Vendees.  The Vendees are entitled at their  own  expenses  to  obtain  the  layout permission from Competent Authority.  The Vendees  are  also  hereby  permitted  to  use the Telephone however they shall be liable to pay Telephone bills.

xxx xxx xxx

5. The  above  stipulated  time for  sale  to  take effect may be extended by the Vendor.  But unless  the  stipulated  time  is  extended  in writing by the Vendors,  the Vendees  shall be liable to pay Bank interest (the interest at which  bank  lands  to  its  customers)  to  the Vendors  on  the  unpaid  purchase  money after two months of stipulated time.

xxx xxx xxx

7. The  Vendors  are  owners  of  11  acres  39 gunthas falling in S. No. 36.  However, the Vendors have fenced the property giving set back from the Road.  The Vendees shall be entitled  to  obtain  compensation  for  the unfenced  land  from  the  concerned Government authorities.

8. As  the  Vendees  are  in  the  business  of selling plots, the Vendees shall be liable to pay  the  sale  consideration  of  each  plot proportionately  on  the  same  day  to  the Vendors  when  the  Vendors  effect  sale  of that particular plot.”

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3. Indisputably,  besides  the  above  agreement  of  sale,  the  said  two

vendees had also entered into an Agreement of sale with one S. Yadagiri,

his sons and some others for sale of land measuring 90 Acres in Survey No.

643 to 658, which is adjacent to the land of the respondents.   

4. Pursuant to or in furtherance of the said agreements of sale, the said

vendees had applied for a joint layout for the entire land of 101.39 acres and

a sum of Rs.1,54,725/- was paid by the said vendees towards layout permit

fee and developmental charges vide undated receipt.  The relevant portion

of the said receipt reads as under:

“It is not part of sale consideration, for any reason, the  amount  is  refunded,  the  same  should  be returned without any delay to the PURCHASERS. The Agreement  period will  be 8 MONTHS after the  release  of  TENTATIVE  LAYOUT  from HUDA  for  SURVEY  No.  36  of  SATMRAI Village  and for  SURVEY NUMBERS 645,  647, 653,  654,  655/1,  657,  658,  666/2  and  PART SURVEY NUMBERS 644,  646,  651,  655  is  15 MONTHS  after  the  release  of  TENTATIVE LAYOUT from HUDA.  After  the  above period for  the  unpaid  balance  of  sale  consideration  the Bank interest will be charged.”

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5. The period of agreement in terms of the said receipt was eight months

from  the  date  of  release  of  the  tentative  layout  by  Hyderabad  Urban

Development Authority (for short, “HUDA”)  

6. Indisputably, the owners filed an application for grant of layout not

only in respect of Survey No. 36 but also for grant of layout permission in

respect of other plots.  By a communication dated 26.4.1985, the said Shri

Yadagiri was informed about the grant of layout not only in respect of the

land of which he was the owner but also in respect of Survey No. 36 subject

to the following conditions:

“i) The  Road  shall  be  formed  as  per  the specifications  (enclosed  a  copy  of  the specifications).

ii) No  plot  shall  be  utilized,  sold,  leased  or  otherwise disposed of for the residential purpose unless the layout is  finally  approved  by Hyderabad  Urban  Development Authority.

iii) As regards to amenities like water, drainage, electricity, etc; your own arrangement shall  be made as the public system is not available in this area.”

It was furthermore directed:

“You are therefore requested to form the roads as stated above within a period of three months from the date of receipt of the draft layout plan and to inform  the  same  to  Hyderabad  Urban

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Development  Authority.    The  final  approval  of the  layout  plan  will  be  considered  only  if  you fulfill the above said conditions.”

Admittedly,  no  road  was  constructed.   Plaintiffs  wanted  to  have a

fresh layout only in respect of Survey No. 36.   

7. It is at that stage the owners of the land -- defendants Nos. 1 to 3 – by

a notice dated 3.7.1985 served upon the vendees  through their  Advocate

requested them to lay the roads as directed by HUDA by 31.7.1985 failing

which the said agreement of sale would be deemed to have been terminated

and the  earnest  money of  Rs.1,00,000/-  paid  by the  said  vendees  would

stand forfeited.  It was contended therein that after the aforementioned draft

layout  plan  was  received,  the  vendees  developed  “inter  se

misunderstandings  and  untrustworthiness  resulting  in  serious  inimical

attitude amongst themselves”.   

It was furthermore contended:  

“9. My clients state that unless you continue to keep up and fulfill your obligations at every stage as  agreed  in  the  Contract  of  sale,  you  will  be consequently  in  trouble  in  fulfilling  the  time scheduled  with  regard  to  the  payments  of  the balance  sale  consideration  in  installments  to  my

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clients  and  ultimately  you  will  be  failing  in completing  the  sale  transaction  within  the  time scheduled if you do not commence and complete the road formation work as per the approved draft layout plan within the time fixed by HUDA.

10. My Clients  state  that  they  are  in  no  way concerned with  your  inter  se  mis-understandings and  disputes.   My clients  are  only  interested  in completing the sale transaction of the land covered by Contract  of  sale  within  the time fixed  in  the contract of sale.”

8. The vendees responded to the said notice stating that the joint layout

had  resulted  in  much  inconvenience  to  develop  the  portion  of  the  land

belonging to  the  owners as  it  was one of  the  conditions  of  the tentative

layout that unless entire land was developed, the final layout would not be

released.  Under these circumstances, it was furthermore contended that the

only alternative left was that the owners had to take a separate layout for

their  lands.   It  was  stated  that  the  vendees  ‘were  ready and  prepared  to

develop the said land immediately as and when the owners obtain a separate

layout for the land held by them’.   

9. Indisputably, Mohammed Kasim Ali did not want to involve himself

in the matter of purchase of the said land in terms of the said agreement of

purchase.  Alleging breach of the terms of the said agreement on the part of

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the defendant nos. 1 to 3, he filed a suit bearing O.S. No. 19 of 1986 in the

Court of V Addl Judge, City Civil Court at Hyderabad praying, inter alia,

for the following reliefs:

“(a) A decree for Rs.90,000/- by way of refund may be passed in favour of the plaintiff and against  the  persons  and  the  properties  of defendants 1 to 3.

(b) A decree  may be  granted  awarding  future bank interest on Rs.90,000/- in favour of the plaintiff  and  against  the  persons  and  the properties of defendants 1 to 3.

(c) A decree may be passed for Rs.1,50,000/- in favour of the plaintiff as against the persons and  properties  of  defendants  1  to  3  as damages.

(d) A decree of further interest on Rs.1,50,000/- may  be  granted  in  favour  of  plaintiff  as against  the  persons  and  properties  of  the defendants 1 to 3.”

10. Indisputably, an interim order was passed therein.  The matter was

taken to the High Court.  The said Mohammed Kasim Ali died on 19.4.1987

and  after  his  death  his  wife,  the  legal  representative,  entered  into  a

compromise with the owners of the land out of the court.

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11. Indisputably, G. Srinivas Reddy filed a suit bearing O.S. No. 171 of

1986 on the file of the Munsif Magistrate, West and South, Ranga Reddy,

for grant of mandatory injunction.   

12. The owners also filed a suit for damages being O.S. No. 679 of 1986.

G. Srinivas Reddy filed a written statement therein, stating:

“9. The defendants further submits that there is no  cause of action  at  all  to  file  the  present  suit. The suit itself as a motivated and is a counter blast to  the claim made by the defendants to  secure a separate layout for the land covered by agreement of  sale  dated  23.4.1984.   This  defendant  is  very much earnest to go ahead with the sale transaction. In that view only he filed O.S. No.171 of 1986 on the file of the Munsif Magistrate, West and South, Ranga  Reddy  seeking  directions  against  the vendors herein for securing separate layout  from HUDA  with  regard  to  the  land  covered  by agreement of sale dated 23.4.1984.  And also filed O.S.  No.  191  of  1987  on  the  file  of  Addl. Subordinate  Court,  Ranga  Reddy  District  for specific  performance  of  the  agreement.   The plaintiffs herein also have made their appearance in the said suit.

10. Under  these  circumstances,  it  is  submitted that this defendant is ready and willing to perform his obligations under the agreement of sale at all times,  and  for  the  reasons  not  known  to  this defendant the plaintiffs are avoiding purposely to secure separate layout in respect  of the land and thereby causing hurdles for proceedings with the sale transaction.”

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The said suit was, however, dismissed for default.  

13. Indisputably, O.S. No. 171 of 1986 filed by G. Srinivas Reddy on the

file of the Munsif Magistrate, West and South, Ranga Reddy, for grant of

mandatory  injunction  was  transferred  to  the  Court  of  Additional

Subordinate  Judge,  Ranga  Reddy  district  at  Saroornagar  and  was

renumbered as O.S. No. 21 of 1993.   

14. G.  Srinivas  Reddy,  thereafter  filed  another  suit  for  specific

performance of the agreement of sale bearing O.S. No. 191 of 1987 in the

Court of Additional Subordinate Judge Ranga Reddy district at Saroornagar

through his constituted attorney.  

Issues were framed in both the suits separately.  Issue No. 2 framed in

O.S. No. 21 of 1993 reads as under:

“Whether the Defendants  1 to 3 are liable  under the  suit  agreement  of  sale  to  obtain  a  separate layout  for  the  suit  land  from  the  Urban Development Authority concerned?

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15. The  learned  trial  judge  was  of  the  opinion  that  there  existed  an

enabling clause being clause (3) in the Agreement of sale.  According to the

learned trial  judge, however, as the defendant Nos. 1 to 3 had signed the

requisite documents and also received the required fee and charges for the

purpose  of  depositing  the  same with  HUDA with  a  view  to  obtain  the

provisional  layout  plan,  they have  accepted  their  responsibility  to  obtain

layout  for  the  suit  land from the  Urban Development  Authority.   It  was

furthermore held:

“No doubt it is for the plaintiff and D4 to pay the necessary expenses and also make efforts to obtain the sanction from HUDA being the vendees.  The responsibility  of  D1 to  D3 or  their  G.P.A.  is  to sign  the  necessary  documents  required  for obtaining layout sanction and also to deposit  the amounts paid by the Plaintiff and D4 required for the fee and charges as they did in the instant case. Since the Defendants 1 to 3 agreed to convey the suit property in favour of plaintiff and D4 or their nominees, D1 to D3 are bound to obtain a separate layout  for  the  suit  land,  at  the  request  of  the Plaintiff and D4.”

Opining that although the agreement was indivisible, it was held:

“Moreover it  cannot  be said that  each bit  of  the suit  land  got  equal  potentiality.   The  suit  land consists of more than 11 acres and it is revealed

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that  the  suit  land  is  adjacent  to  the  road. Therefore,  the  piece  of  land  which  is  quite adjacent to the road will have more value than the land  beyond  the  land  adjacent  to  the  road. Therefore,  the  Plaintiff  can  opt  for  the  specific performance of the entire suit  agreement and the suit filed by the 4th Defendant vide O.S. No. 19 of 1986 on the file of the 5th Additional Judge, City Civil Court will not have any adverse effect on the rights of the Plaintiff. At the most the plaintiff can be  compelled  to  pay  the  balance  of  sale consideration which remained to be paid after the amount paid by the Plaintiff as earnest money.”

16. As regards  the  issue  as  to  whether  the  appellants  were  ready  and

willing to perform their part of the contract, it was opined that as plaintiffs

could purchase the land even without layout and keeping in view the fact

that the sale deed was to be executed within a period of eight months from

the date of grant of approval for tentative layout plan, the learned trial judge

held that there was not much delay in filing the suit for enforcement of the

agreement on the part of the plaintiff and he had all along been ready and

willing to perform his part of the contract.  The learned judge, furthermore,

opined that a suit for specific performance of contract at the instance of the

plaintiff alone was maintainable although Mohammed Kasim Ali was not to

be a party to the deed of sale.  The High Court, on the other hand, reversed

the  said  findings  of  the  learned  trial  judge  holding  that:  (1)  in  terms  of

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clause 3 of  the  agreement,  it  was for the vendees  to obtain  the tentative

layout  plan;  (2)  in  view  of  the  stand  taken  by  Mohammed  Kasim  Ali

resulting in entering into a compromise between him and the owners of the

land, the contract was not kept alive and in view of the fact that the suit was

instituted by the joint purchaser, the plaintiff could not enforce agreement of

sale against  the  wish  of  the joint  purchaser;  and (3) the suit  for specific

performance of the contract  having been filed five days before expiry of

three years from the date of expiry of contract was a clear pointer to show

that the plaintiff was not ready and willing to perform his part of contract.   

17. Mr. R.F. Nariman, learned Senior Counsel appearing on behalf of the

appellants raised the following contentions:

i. A suit  for  specific performance can be instituted even at the

instance of any of the joint promisees as a common layout work

was not contemplated under the agreement and, thus, the High

Court committed a serious error in arriving at a finding that the

appellants were not ready and willing to perform his part of the

contract.

ii. The  suit  having  been  filed  within  the  prescribed  period  of

limitation, the High Court committed a serious error of law in

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opining that time was of essence of the contract and, thus, the

suit  for  specific  performance  was  not  maintainable  and  it

should have been filed much earlier, although in fact the same

had been filed within a period of one and half years from the

date of refusal on the part of the owners - defendants 1 to 3, to

abide by the terms of the contract.  

iii. Order  II  Rule  2  of  the  Code  of  Civil  Procedure  being  not

applicable in a case of this nature, the High Court committed a

serious error in applying the principles thereof.   

18. Mr.  P.P.  Rao,  learned  Senior  Counsel  appearing  on  behalf  of  the

respondents, on the other hand, urged:

i. The  agreement  in  question  being  a  development  agreement

should be construed having regard to the purport and object for

which the same was executed.

ii. All  parties  having  proceeded  on  the  basis  that  development

agreement in respect  of two different plots  of land would be

given effect to jointly and a layout having been obtained for

both  the  plots  together,  the  plaintiff  could  not  have  been

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insisted  at  a  later  stage  for  individual  or  separate  layout  in

respect of the plot in Survey No. 36.

iii. In any event,  in  a case of  this  nature,  this  Court  should not

exercise its discretionary jurisdiction under Article 136 of the

Constitution of India as the High Court has refused to pass a

decree of specific performance of contract.  

19. Indisputably,  Appellants’  predecessor-in-interest  Shri  G.  Srinivas

Reddy and late Mohammed Kasim Ali entered into an agreement jointly.

The  parties  proceeded  on the  basis  that  not  only plot  in  Survey No.  36

which was the subject matter of the agreement but also other plots, notice

whereof  had  been  taken  heretobefore,  were  required  to  be  developed

together  and permission for  common layout should be obtained from the

competent authority therefor.  Applications for grant of layout could have

been filed only by the owners.  In terms of the agreement, however, it was

for the vendees to obtain the same.  Concededly, defendants 1 to 3 signed

all  papers  in  relation  thereto.   They  had  no  doubt  received  a  sum  of

Rs.1,54,725/- from the vendees on that account, but it has not been disputed

that they deposited the amount with the competent authority of HUDA for

obtaining the said layout plan.  In fact, the combined proposal was placed

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before the said authority which was granted as would appear from its letter

dated  26.4.1985  addressed  to  Shri  S.  Yadagiri.   The  said  sanction  was

granted subject to certain conditions, one of them being that a road was to

be formed as per the specifications.   

20. Indisputably, at  least for a period of three months no decision was

taken.  There is also nothing on record to show that any decision was taken

prior to or immediately after the receipt of the said letter dated 26.4.1985;

appellants contended that a proposal for a draft layout should be filed with

the authority only in respect of plot No. 36.

21. Indisputably,  again  not  only  the  vendees  and  developers  of  the

neighbouring plot fell apart, disputes and differences having arisen amongst

the vendees inter se.  

22. The stand which had been taken before us, admittedly, was taken by

the said G. Srinivas Reddy only in reply to the defendant No.1’s legal notice

dated  3.7.1985.  The  said  notice  was  responded  to  by  the  Advocate

appointed by G. Srinivas Reddy alone.  No such demand was, thus, raised

by Mohammed Kasim Ali.

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23. In the matter of performance of the said agreement, the appellants did

not raise the same contentions, as has been raised before us as regards the

performance of contract on the part of the vendors.  At that point of time

they did not say that the vendors committed any breach of the condition of

the agreement for sale.  Even in the said reply dated 25.7.1985, it had not

been pointed out that said G. Srinivas Reddy alone was ready and willing to

develop the plot being Survey No. 36, irrespective of the stand taken by the

Mohammed Kasim Ali.

24. Admittedly,  the  agreement  was  entered  into  on  23.4.1984.   The

contract  was  to  be  performed  within  a  period  of  eight  months.   A joint

tentative layout plan for both the lands was granted on 26.4.1984.  Nothing

has been placed on record to show as to when the disputes and differences

between the vendees inter se began or when the disputes and differences

between the developers of two plots started.  It may be true that in terms of

the agreement, draft layout was to be obtained in respect of Plot No. 36 but

the very fact that the parties proceeded on the basis that all the lands would

be developed together and steps having been taken in this behalf; it was too

late for G. Srinivas Reddy to raise a fresh demand.   

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25. The learned trial judge applied the principle of novation of contract

having regard to the subsequent conduct of the parties.  The said principle,

in our opinion, is  applicable as against the said G. Srinivas Reddy.  The

agreement in question is not an agreement for sale simplicitor.  The parties

thereto were aware that only for the purpose of development of the said plot

the agreement had been entered into.  If that be so, the vendors were right in

enforcing  the  terms  of  the  said  agreement/contract  keeping  in  view  the

aforementioned  purpose  in  mind.   The  joint  promisee  might  not  have

rescinded the contract prior to the filing of the suit for damages against the

defendants  1 to 3 but  then when he filed the suit  claiming refund of the

amount  of  advance  which  he  had  paid  by  way of  his  share  as  also  the

damages,  the  contract  stood  rescinded  so  far  as  he  was  concerned.   His

claim might have been based on the purported breach of the terms of the

contract  on  part  of  defendants  No.  1  to  3,  but  they  had  arrived  at  a

compromise.  True it is that G. Srinivas Reddy filed a written statement in

the suit filed by the Mohammed Kasim Ali.  He expressed his intention to

pay the amount of consideration for the entire land but evidently the suit did

not  go  to  trial.   He  did  not  insist  therefor.   When  an  application  for

settlement  arrived  at  between  Mohammed  Kasim Ali  and  the  defendant

Nos.1 to 3 was filed, he did not object thereto.  As he had appeared even

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before  the  High  Court  through  counsel,  it  was  obligatory on  his  part  to

oppose the said compromise between the vendors and his co-vendee.  

26. Mr. Nariman may be right that a suit for enforcement of a contract on

the part of the joint promisee is maintainable.  Reliance has been placed by

Mr. Nariman on a decision of  Jagdeo Singh & ors.  v.  Bisambhar & ors.

[AIR 1937 Nagpur 186], wherein the learned judge laid down the law thus:

“That  would  certainly  appear  to  cover  a  case where one or more co-contractors want to enforce the  contract  against  the  will  of  the  others.  The wording is not ‘either side thereto’ or even ‘either party thereto’, but  any party thereto’.   The word ‘any’  indicates  one  out  of  a  number  of  persons more  than  two.   If  only  two  parties  are contemplated  the  correct  adjective  would  be ‘either’  or  at  the  most  ‘both’.   The  argument advanced was that the contract cannot be enforced piecemeal and that the Courts cannot make a new contract  for  the  parties.   Of  course  not;  but  the plaintiffs  are  not  doing  that.   They  want  the original  contract  enforced  just  as  it  was  made. They want to buy the property and want the Court to compel their co-contractors Anantram to buy it along with them just as he had promised to do, and ask the Court to compel the defendants to sell it to all  four in  exact  accordance with  the agreement. So  long  as  the  plaintiffs  are  willing  to  pay  the vendors the full price bargained for and ask them to  sell  to  the  very persons  with  whom they had contracted  I  am unable  to  see  how there  is  any variation.   Any quarrel  the  purchasers  may have among themselves is not being introduced into this

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suit.   Each  party  is  getting  exactly  what  he bargained for and it is no concern of the vendors how these purchasers choose to arrange about the payment  of  the  purchase  price  as  between themselves.  That is not a part  of the agreement. All that the purchasers undertook to do was to pay the money to their vendors and that is being done. There is no section in the Act which prohibits this. Therefore I am clear that the plaintiffs have a right to sue for specific performance even though one of their co-contractors now refuses to join them.  Of course,  it  is  essential  in  such  a case that  all  the parties to the contract should be before the Court. If  any  are  omitted  then  I  can  understand difficulties arising.  But when as here they have all been  joined  on  one  side  or  the  other  I  am  of opinion the suit can proceed.”

It  may,  however,  immediately  be  noticed  that  the  court  therein

proceeded on the basis that the original contract was required to be enforced

just as it was made even though one of their co-vendees refused to join them

then and only on that basis the said principle was evolved.    

27. Reliance has also been placed by Mr. Nariman on  Jahar Roy (Dead

through L.Rs.) & Anr.  v.  Premji Bhimji Mansata & Anr.   [(1978) 1 SCR

770] wherein, in terms of the agreement, defendants were to be entitled to

all box-office collections, but they were to contribute a sum of Rs. 5275/-

every month towards the expenses and was also to pay the same within the

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time prescribed.  This Court, having regard to the provisions contained in

Section 45 of the Indian Contract Act, held as under:

“The  section  thus  deals  with  devolution  of  joint rights in the case of joint promises, but it does not deal with a case where, a joint promise, does not want to joint as a co-plaintiff and is arrayed as a proforma-defendant with the specific plea that no relief  is  claimed against  him. The  judgment  and the decree in this case have in fact enured to his benefit also.”

28. This  Court,  furthermore,  while  opining  that  a  person  cannot  be

compelled to be a plaintiff, for as is  obvious,  he cannot be compelled to

bring an action at law if he does not want to do so, held:

“At the same time, it is equally true that a person cannot  be prevented from bringing an action,  by any rule of law or practice, merely because he is a joint  promisee and the other  promisee refuses to join  as  a  co-plaintiff.  The  proper  and  the  only course in such cases is to join him as a proforma- defendant.”

29. The dicta laid  down in Jahar Roy (Dead through L.Rs.)  & Anr.  v.

Premji Bhimji Mansata & Anr.  (supra) was followed by the Madras High

Court in Ponnuswami Gounder v. Boyan & ors. [AIR 1979 MADRAS 130].

The Madras High Court held that the decision of the Calcutta High Court in

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Safiur Rahman v. Maharumunnissa Bibi [(1897) ILR 24 Calcutta 832] was

not good law opining that as both the vendees had different rights, one can

purchase the right of the other, stating:

“In my opinion, the ratio of the judgment is that where the plaintiff is entitled to the relief, merely because some of them have refused to join him as plaintiffs  or  even  where  they  do  not  want  the specific  performance  of  the  agreement,  his  right could  not  be  jeopardised  by such  refusal  by the other parties. In such a case, I am of the view that if  the defendants  do not  want to pay the money, the plaintiffs would have to pay the entirety of the consideration  payable  under  the  agreement  to convey or  reconvey,  as  the  case  may be  and on such  deposit  of  the  entire  money,  he  would  be entitled to get a conveyance of the entirety of the property though it should normally be in favour of the plaintiff  and the defendants  in  whose favour the agreement was executed. After the conveyance is executed as such, the rights of the plaintiff and the  other  defendants  in  whose  favour  the agreement  was executed will  have to  be worked out.  The  specific  performance  as  such  therefore could not be denied to the plaintiff merely on the ground  that  defendants  2  and  3  have  refused  to join  as  plaintiffs  or  that  they  do  not  want  the conveyance. It  may also be pointed out that in a case of this nature, it will not be possible for one co-promisee to give up his rights so as to prejudice the rights of the other co-promisees. Therefore, the first defendant also would not be entitled to claim that he will execute only with reference to half of the  suit  properties  on  the  ground  that  if  the conveyance is executed in favour of the plaintiffs and defendants 2 and 3, defendants 2 and 3 would be entitled to half of the properties conveyed. The

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rights as between the plaintiffs and the defendants would have to be worked out with reference to the agreements between them and it is not open to the first defendant to plead that the second and third defendant's right should be separated from that of the plaintiffs.”

(Emphasis supplied)

30. We would proceed on the basis that the ratio has correctly been laid

down  in  the  aforementioned  decisions.   The  question,  however  is,  is  it

applicable to the fact of the present case?  The answer thereto must, in our

opinion, be rendered in the negative.   

Keeping in view the consent decree passed by a competent court of

law in terms of consent entered into by and between Mohd. Kasim Ali and

defendants 1 and 3, the agreement of sale in the same form could not have

been enforced.  The matter might have been different had the compromise

not  been  recorded.   A part  of  the  contract  stood  rescinded;  it  has  been

worked  out.   We,  however,  must  place  on  record  that  the  terms  of  the

compromise are not placed before us.   

Presumably, that proportionate amount of advance taken must have

been refunded; some damages also must have been paid.  G. Srinivas Reddy

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not being a party thereto may not be bound thereby but at least being a party

to the suit he, keeping in view the interest he had in the matter, should have

opposed recording of the said compromise.  He without any further delay

should have also filed a suit for specific performance of contract.  He even

did not file a suit for specific performance immediately thereafter.  He first

filed  a  suit  for  mandatory  injunction.   We  are  not  concerned  with  the

maintainability  thereof.   We  would  assume  that  the  said  suit  was

maintainable. But the fact that he did not choose to file a suit for specific

performance  of  contract  at  the  first  instance  speaks  volumes  about  his

conduct.  The civil courts, in the matter of enforcement of an agreement to

sell, exercise a discretionary jurisdiction.  Discretionary jurisdiction albeit

must be exercised judiciously and not arbitrarily or capriciously.  A plaintiff

is expected to approach the court with clean hands. His conduct plays an

important  role in the matter of exercise of discretionary jurisdiction by a

court  of  law.  In  Mohammadia Cooperative  Building  Society  Limited  v.

Lakshmi Srinivasa Cooperative Building Society Limited & ors.  [(2008) 7

SCC 310], this Court held:

“71. Grant of a decree for specific performance of contract is a discretionary relief.  There cannot be any doubt whatsoever that the discretion has to be exercised judiciously and not  arbitrarily.  But for the said purpose, the conduct  of the plaintiff

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plays  an  important  role.   The  courts  ordinarily would not grant any relief in favour of the person who  approaches  the  court  with  a  pair  of  dirty hands.”

31. In Sanjana M. Wig (Ms.) v. Hindustan Petroleum Corpn. Ltd. [2005)

8 SCC 242] in regard to exercise of the discretionary jurisdiction, this Court

held that the same depends upon the facts and circumstances of each case

wherefor no hard and fast rule can be laid down.

32. We may notice that B.P. Jeevan Reddy, J. in K.S. Vidyanadam & ors.

v. Vairavan [(1997) 3 SCC 1] held that a new look is required to be given

and the rigour of the rule is required to be relaxed by courts as regards the

principle that time is not of the essence of the contract in case of immovable

properties  as  when the  said  principle  was  evolved  the  prices  and  values

were stable and inflation was unknown, stating:

“The  learned  Counsel  for  the  plaintiff  says  that when  the  parties  entered  into  the  contract,  they knew that prices are rising; hence, he says, rise in prices  cannot  be  a  ground  for  denying  specific performance. May be, the parties knew of the said circumstance  but  they  have  also  specified  six months as the period within which the transaction should be completed. The said time-limit may not amount to making time the essence of the contract but  it  must  yet  have  some  meaning.  Not  for

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nothing  could  such  time-limit  would  have  been prescribed. Can it be stated as a rule of law or rule of  prudence  that  where  time  is  not  made  the essence  of  the  contract,  all  stipulations  of  time provided in  the  contract  have  no  significance or meaning or that they are as good as nonexistent? All  this  only  means  that  while  exercising  its discretion, the court should also bear in mind that when  the  parties  prescribes  certain  time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit (s) cannot be ignored altogether on the ground that time has not been made the essence of the contract [relating to immovable properties].”

This  court  therein  noticed  the  decision  rendered  in  Mademsetty

Satyanarayana v. G. Yellogi Rao [(1965) 2 SCR 221] where Subba Rao, J.

(As His Lordship then was) made a distinction between Indian law and the

English  law on the subject  to hold that  some delay may not  be a bar  in

granting a relief of specific performance as the limitation for filing such suit

is prescribed under the Limitation Act, 1963, stating:

“13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2 1/2 years in clear violation of the terms of agreement which required him to pay the balance, purchase  the  stamp  papers  and  then  ask  for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices -  according  to  the  defendants,  three  times  - between the date of agreement and the date of suit notice.  The  delay  has  brought  about  a  situation

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where it would be inequitable to give the relief of specific performance to the plaintiff.”

33. Mr. Nariman, however, would contend that somewhat different view

has been taken by this Court in  Nirmala Anand v.  Advent Corporation (P)

Ltd. & ors.  [(2002) 8 SCC 146], wherein this Court  in a situation of this

nature had directed payment of a higher price.  Each case is, thus, required

to be considered on its own facts.  No hard and fast rule, therefore, can be

laid down.  While determining the lis in a suit for specific performance of

contract, no legal principle in absolute terms can be laid down.  Relief in a

matter of this nature has to be granted keeping in view a large number of

facts.

Our attention has also been drawn to a decision of this Court in Rame

Gowda (dead) by LRs. v. M. Varadappa Naidu (dead) by LRs. & anr. (2004)

1 SCC 769, which, in our opinion, has no application in this case.  

34. Keeping in view the facts and   circumstances of this case, we think, it

is not a case where we should exercise our discretionary jurisdiction under

Article 136 of the Constitution of India.  We refuse to interfere with the

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discretionary jurisdiction exercised by the High Court particularly when the

learned trial court had not adverted to this aspect of the matter at all.   

35. For the views we have taken, we do not think it necessary to deal with

other  contentions  raised  by  Mr.  Rao  including  the  applicability  of  the

provisions of Order II Rule 2 of the Code of Civil Procedure.  The appeals

are dismissed with costs.  Counsel fee assessed at Rs. 25,000/-.

……………….…..………….J. [S.B. Sinha]

..………………..……………J. [Cyriac Joseph]

New Delhi; December 19, 2008

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