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Narayan Nagorao Vs. Amrit Haribhau - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai High Court
Decided On
Case NumberSecond Appeal No. 721 of 1951
Judge
Reported inAIR1957Bom241; (1957)59BOMLR1004; ILR1958Bom449
ActsSpecific Relief Act, 1877 - Sections 12, 20 and 24; Evidence Act - Sections 92
AppellantNarayan Nagorao
RespondentAmrit Haribhau
Appellant AdvocateR.S. Baxi, Adv.
Respondent AdvocateJ.N. Chandurkar, Adv.
Excerpt:
specific relief act (i of 1877), sections 24(b), 20, 12 - suit for specific performance--plaintiff referring in plaint to notice given before suit in which plaintiff expressing his readiness and willingness to perform his part of contract and stating that notwithstanding notice defendant failing to execute sale-deed--whether plaintiff's failure to expressly aver in plaint his readiness and willingness to perform his part of contract entitles him to specific performance--contract mentioning sum to be paid as damages to plaintiff in case of breach of contract by defendant--applicability of section 20.;in a suit for specific performance of a contract of sale of certain property, the plaintiff, in his plaint, referred to a notice given by him to the defendant before the filing of the suit, in..........that he has been ready and willing at 'all times from the time of the contract down to the date of suit to perform his part of the contract. this principle is set out succinctly in section 24(b) of the specific relief act, but it has been expanded by judicial decision. their lordships of the privy councilhold that though the matter of specific relief is governed in india by the terms of the specific relief act, nevertheless as the act is founded on the english law it is permissible, on matters with which the act does not deal specifically, to refer to the english law. that was decided in ilr 52 bom. 597: air 1928 pc 208 so far as the present points are concerned, their lordships hold at p. 619, (of ilr bom.) : (at. p. 216 air): 'in a suit for specific performance on the other hand, he.....
Judgment:

1. This is a defendant's appeal from a decree for specific performance of a con-tract of sale of a house passed against him.

2. It is not disputed that on 4-4-1949, the defendant executed in favour of the plaintiff a document styled as an Isar Chitti whereunder after reciting that he had received Rs. 125/- as earnest money he undertook to sell a house belonging to him to the plaintiff for Rs. 300/-. the agreement also provided that in case the defendant did not execute a sale deed by 25-5-1949, he will be liable to pay back the earnest money to the Plaintiff and also to pay damages to the extent of Rs. 100/-. According to the plaintiff, the defendant refused to execute a sale deed and that he therefore served a notice on the defendant before the suit to execute a sale deed. But his reply to the notice was that he had not received the whole of the earnest money, that it was not the intention of the parties that the document should operate as a contract of sale and that is why he refused to execute a sale deed. Further according to the plaintiff he had alleged in the notice that he was willing to perform his part of the contract. The defendant denied the contract and said that he is an illiterate person, that he was duped by the plaintiff that he received Rs. 47/- only by way of earnest money and the real agreement between the parties was that the plaintiff was to lend him Rs. 200/- by accepting a mortgage over the ho se in suit. Further according to him the plaintiff would be properly compensated by payment of the money as damages.

3. The trial Court decreed the suit and the lower appellate Court upheld that decree.

4. The first point which was urged before me was that there was no express averment in the plaint to the effect that the plaintiff was ready and willing to perform his part of the contract, that as laid down by their Lordships of the Privy-Council in Ardeshir H. Mama v. Flora Bassoon ILR 52 Bom. 597: AIR 1028 PC 208, it was necessary for the plaintiff not only to allege specifically that he was willing to perform his part of the contract but to establish it and that his failure to do so would bring about the dismissal of the suit for specific performance. This decision was followed, by a Division Bench of the Nagpur High Court in Shamjibhai v. Jagoo Hemchand Shah ILR 1949 Nag. 531: AIR 1952 Nag 220 (B, to which I was a party and it was observed as follows at pages 601, G02 (of ILR Nag): (at p. 228 of AIR):

'One of the essential factors in a case of this kind is that the plaintiff must first allege and then, if the matter is traversed, prove (a) that he has performed all the conditions which under the contract he was bound to perform and (b) that he has been ready and willing at 'all times from the time of the contract down to the date of suit to perform his part of the contract. This principle is set out succinctly in Section 24(b) of the Specific Relief Act, but It has been expanded by Judicial decision. Their Lordships of the Privy Councilhold that though the matter of specific relief is governed in India by the terms of the Specific Relief Act, nevertheless as the Act is founded on the English Law it is permissible, on matters with which the Act does not deal specifically, to refer to the English law. That was decided in ILR 52 Bom. 597: AIR 1928 PC 208 So far as the present points are concerned, their Lordships hold at P. 619, (of ILR Bom.) : (at. p. 216 AIR):

'In a suit for specific performance on the other hand, he treated and was required by the Court to treat the contract as still subsisting. He had in that suit to allege, and if the fact was traversed, he was required to prove a continuous readiness and willingness, from the date of the contract to the time of the hearing, to perform the contract on his part. Failure to make good that averment, brought with it the inevitable dismissal of his suit.'

What is laid down in this decision is that the plaintiff must treat the contract as subsisting. This he can do by making a specific allegation of that kind in the plaint. In the instant case we find that the plaintiff has clearly referred to the notice given by him to the defendant in which he has expressly stated his readiness and willingness to perform his part of the contract and he has also made a grievance of the fact that in spite of this notice the defendant failed to execute a sale deed in his favour. In the relief clause the only substantial relief which is asked for is the relief of specific performance. He has not even claimed any alternative relief. In the circumstances, therefore, it would amount to being extremely technical if I were to hold that the plaintiff has not expressed his readiness and willingness to perform his part of the contract. In this connection I may quote the following observations of Lord Campbell in Court v. The Ambergate, etc.

Railway Company (1831) 17 QB 127: 'in common sense the meaning of such an averment of readiness and willingness must be that the non-completion of the contract was not the fault of the plaintiffs, and that they were disposed and able to complete- it if it had not been renounced by the defendants.'

These observations have been quoted with approval in Arjunsa Raghusa Patwi v. Mohanlal Harakchand Jain and Shamlal v. Yesaram ILR 1954 Nag. 866: AIR 1954 Nag. 334. I therefore hold that the failure of the plaintiff to express specifically in clear terms his readiness and willingness to perform his part of the contract does not disentitle him to specific performance.

5. The second point taken was that the Courts below were in error in preventing the defendant from proving that the agreement as evidenced by the document Exhibit P-1, dated 4-4-1349, was not a contract of sale but was a contract for the execution of a mortgage deed. The Learned counsel for the defendant says that oral evidence to prove the document was admissible under the First Proviso to Section 92 of Evidence Act which runs as follows:

'Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party (want or failure) of consideration, or mistake in fact or law.'

The plea now raised does not fall in any of the categories specified in this proviso. I therefore agree with the Courts below that oral evidencecould not be admitted in this case for proving that the document was intended to operate otherwise than as has been expressly set out therein.

6. The third and last point argued was that the parties having mentioned a sum in the contract to be paid by way of damages to the plaintiff in case there was a breach of the contract on the part of the defendant, the Court would not be right in exercising its discretion in awarding specific performance. The short answer to this argument is to be found in Section 20 of the Specific Relief Act and the illustration thereunder which run as follows:

'A contract, otherwise proper to be specifically enforced may be thus enforced, though a sum be named in it as the amount to be paid in cash of its breach, and the party in default is willing to pay the same.

Illustration.

A contracts to grant B an under lease of property held by A under G, and that he will apply to G for a licence necessary to the validity of the under lease, and that, if the license is not procured, A will pay B Rs. 10,000. A refuses to apply for the license and offers to pay B the Rs. 10,000. B is nevertheless entitled to have the contract specifically enforced if G consents to give the license.'

7. Section 12 of the Specific Relief Act deals with contracts which may be specifically enforced. The Explanation thereto provides:

'Unless and until the contrary is proved the Court shall presume that the breach of a contract to transfer immoveable property cannot be adequately relieved by compensation in money.'

That being so, the general rule of equity that if a thing is agreed to be done the very thing ought to be done must apply even though there is a penalty annexed to secure its performance or a sum is named in the contract to be paid in case of its breach, it is no doubt true that it is open to the parties who are entering into a contract to stipulate that on failure to perform what has been agreed to be done a fixed sum shall be paid by way of compensation. The question which therefore arises in such a case is the interpretation of the contract. Where there is a contract containing a clause for payment of money is the event of non-performance, the Court has to determine whether it is a contract stipulating that one certain act shall be done with a sum annexed to secure the performance of this very act, or it is at contract stipulating that one of two things shall be done at the election of the party who has to perform it, e.g., either performance or payment in money, Where the contract is of the latter type, it is called an alternative contract and the provisions of Section 20 of the Specific Relief Act do not apply to it. They however apply to a contract of the former type. In the instant case, the language used in the document itself would show that the term specified in the contract was added in terrorem and was put in there to secure the performance of the main condition, i.e. requiring the defendant to convey the house to the plaintiff within the time specified in the contract. In the circumstances there-fore I hold that the contract falls within the former category and as such Section 20 of the Specific Relief Act applies thereto. The Courts below were right in decreeing specific performance.

8. In this view I uphold the decree of thelower appellate Court and dismiss the appeal withcosts.


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