Skip to content


Ranganayakamma Vs. N. Govinda Narayan - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKarnataka High Court
Decided On
Case NumberFirst Appeal No. 97 of 1974
Judge
Reported inAIR1982Kant264; ILR1982KAR121; 1982(1)KarLJ485
ActsSpecific Relief Act, 1963 - Sections 20(2) and 20(3)
AppellantRanganayakamma
RespondentN. Govinda Narayan
Appellant AdvocateP.K. Padmanabha, Adv.
Respondent AdvocateYoganarasimha, Adv.
Excerpt:
.....to the second question. 12. it is a well established doctrine that the court will not enforce specific performance of a contract, the result of which would be to impose great hardship on either of the parties to it. there may as well be some other circumstances which may arise in a given case justifying the refusal of specific performance. it may better be left undefined except to state what the section says, namely, discretion of the court is not arbitrary, but sound and reasonable guided by judicial principles and capable of correction by a court of appeal'.it is thus clear from the above decision that the illustrations given under sub-sections (2) and (3) of section 20 of the specific relief act, in which a court could refuse specific performance are not exhaustive and there may..........he had executed a will on october 15, 1969 just about a month prior to ext. p-1, bequeathing the suit property to the defendant. his intention in other words was that the property should go to the defendant after his death. they had no other property except the suit, house and they never intended to sell it. the suit property was the sole means of her livelihood, providing both, residence and income by way of rent: and her husband had no intention of depriving her of that source of livelihood. ext. p-1 was brought about under inequitable circumstances and its performance would lead to hardship and the decree for specific performance should not, therefore, be granted,4. in the light of these pleadings, the court below framed the following among other issues :-(1) whether the agreement.....
Judgment:

Jagannatha Shetty, J.

1. This appeal has been preferred against the judgment and decree dated November 24, 1973 made by the Principal Civil Judge, Mysore decreeing the original Suit No. 30 of 1970 for specific performance of a contract.

The facts are shortly as follows:-

2. Mr. Venugopal was the owner of a house bearing Municipal No. 1869, situated at an important locality in Mysore City. He was residing there along with his wife Ranganayakamma alias Rangamani. They were defendants in the suit instituted by Govinda Narayan for specific performance of an agreement Ext. P-1 dated November 17, 1969. The case of the plaintiff was that both the defendants agreed inter alia to sell that house in his favour for Rs. 21,000/within three months there from. They received Rs. 3,000/- as advance and the balance of R,3. 18,000/- was agreed to be payable at the time of registration of the sale deed. The period of three months set out in the agreement for execution of the sale deed expired on February 17, 1970. The defendants, however, did not execute the sale deed. The plaintiff vainly waiting all the time with readiness to perform his part of the agreement, called upon the defendants to perform their part thereof. The defendants instead of executing the sale deed. took up untrue and untenable contentions So, the plaintiff was compelled to institute the suit for specific performance. He has also claimed compensation at Rs. 250/- per month for loss of rent from the date of breach of the agreement till the defendants deliver possession of the house in question.

3. After the institution of the suit and before filing a written statement, A. R. Venugopal defendant No. I died leaving behind his wife defendant No. 2 alone to contest the suit. The suit was instituted on March 4, 1970. He died on April 28, 1970.

On July 3, 1970, defendant No. 2 (hereinafter referred to as 'the defendant') filed a written statement contend inter alia:

That she signed the Ext. p-1 without knowing its contents. She was given to understand that it was a mortgage deed and not an agreement for sale. She did not know to read and write Kannada in which language Ext. P-1 was written. Her husband at the time of the execution of Ext. P-1 was too sick and he too did not know to read and write Kannada. He had executed a will on October 15, 1969 just about a month prior to Ext. P-1, bequeathing the suit property to the defendant. His intention in other words was that the property should go to the defendant after his death. They had no other property except the suit, house and they never intended to sell it. The suit property was the sole means of her livelihood, providing both, residence and income by way of rent: and her husband had no intention of depriving her of that source of livelihood. Ext. P-1 was brought about under inequitable circumstances and its performance would lead to hardship and the decree for specific performance should not, therefore, be granted,

4. In the light of these pleadings, the Court below framed the following among other issues :-

(1) Whether the agreement of sale dated 17-11-1969 was vitiated by fraudulent misrepresentation ?

(2) Whether the plaintiff is entitled to specific performance of the agreement ?

5. Before recording the evidence, the Court below by consent of parties appointed a Commissioner to value the suit property who in his report stated that the market value of the property was not more than that for which it was agreed to be sold under Ext. P-1.

6. The plaintiff has given evidence as P. W. 3. He has also examined two more witnesses. P. N. Venugopal (P. W. 1) and Muniappa (P. W. 2).

The defendant in turn has examined herself as D. W. 7 and six more witnesses. B. K. R. Naidu (D. W. .1) and K. R. Yetiraia. Iyengar (D. W. 4) have testified that the lst defendant was undergoing treatment in the hospital. K. T. Jagannatha Rao (D. W. 2) was a Railway official who once occupied a portion of the suit house as a tenant; and P. Ramanathan (D. W. 3) is the present tenant paying a monthly rent of Rs. 50/- to the defendant. Narayan Das (D. W, 5) and Rukmaddinsalik (D. W. 6) have given evidence as to the importance of the locality in which the suit property is situated with a view to show that the price agreed upon under Ext. P-1 was not adequate.

7. Upon a consideration of the material on record. the Court below held as follows:-

That it was highly improbable that Ext. P-1 was obtained from defendants 1 and 2 by making false or fraudulent representations to the effect that it was a mortgage deed. They were fully aware of its true nature and the contents of Ext. P-1. The husband was not physically or mentally weak and incapable of understanding the bargain.

The husband knew to read and write Kannada - the language in which Ext. P-j was written. The price agreed to be paid there under was quite a fair and reasonable and more or less represented the market value of the property prevailing at that time6 There was no unequal bargaining strength as between the parties to the agreement. The plaintiff was always ready to perform his part of the contract and he in fact had mortgaged his own property to raise funds for purchasing the suit property.

With these findings, the Court below decreed the suit directing the defendant to receive the balance of consideration and to execute and register the necessary sale deed in favour of the defendant.

8. Feeling aggrieved by the judgment and decree, the defendant has preferred (his appeal.

9. Upon the arguments addressed by counsel on both sides, the following two points arise for our consideration :

1. Whether the agreement Ext. P-1 was vitiated by fraudulent misrepresentation ?

2. Whether the performance of Ext. P.-I would involve some hardship on the defendant which she did not foresee at the time of entering into it and its non-performance would involve no such hardships on the plaintiff, or for any other reason, the defendant should not be compelled to part with her property ?

10. We will take up the first point first for consideration. The defendant in her evidence has admitted the execution of the agreement Ext. P-1. but she said that she was given to understand by P. W.2 and Basavaiah that it was a mortgage deed. The summary of her evidence runs as follows:-

She affixed her signature without knowing the true nature of the document. She did not know to read and write Kannada and so too was her husband. Her husband then was ailing without hope of survival and mentally incompetent and incapable of managing the affairs. Basavaiah who was a witness to the document was a dhobi attached to the suit house and he had worked himself to a position of trust and confidence with her husband. Basavaiah was also a close associate of the broker Muniappa who was another witness to the document. Her husband who was too weak to speak then just nodded his approval and the contents of the document were not read over to him or to her.

The question of misrepresentation alleged by the defendant was rested on two aspects: first, on the basis that the husband and wife did not know to read and write Kannada the language in which Ext. P-1 was written.. second on the ground that the husband was too sick and incompetent to manage his own affairs. But unfortunately, both the aspects have not been substantiated by the defendant, On the contrary. she has deposed that her husband could read and write Kannada. The sheet anchor of her case that the language in which Ext. P-1 was written was an impediment for him to know its contents was thus belied.

As to his sickness which was made much of by the defendant, it is true that he had undergone an abdominal operation in 1967, but thereafter, he was going to his Office normally. After the execution of Ext. P-1, no doubt, he fell ill now and then, but there is no evidence about the impairment of his mental capacity at any time. Nor then was any inducement., intimidation or duress on him by the plaintiff or anybody, else. He was not an ignorant, illiterate or gullible person. We cannot, therefore, accept the contention that he was not in a position to understand the contents of Ext. P-1. Nor we could accept the submission that the defendant was misled by others as to the nature of Ext. P-1. She was beside her husband when the agreement was executed. She knew very well that her husband had already executed a Will bequeathing the same property to her. If she was not aware of the contents of the agreement which she had executed, she could have enquired about it from her husband. Her knowledge about the Kannada language may be perfunctory, but the fact remains that she did sign the agreement voluntarily. All that we could mercifully say is that true to the traditions and culture of a faithful wife, without realising the consequences of performance of the agreement she must have blindly signed it. Or shall we say that she must have followed like an obedient servant ?

11. This takes to the second question. The broad aspect of this question primarily relates to the hardship to the defendant on the performance of the agreement. It also covers the question of no hardship to the plaintiff on the non-performance of the agreement.

12. It is a well established doctrine that the Court will not enforce specific performance of a contract, the result of which would be to impose great hardship on either of the parties to it. Section 20 of the Specific Relief Act, 1963 provides that 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. The discretion of the Court however, should be exercised on reasonable principles capable of correction by a Court of appeal. When the Section states that 'the jurisdiction to decree specific performance is discretionary' to it only means that the mere existence of a legal right is not sufficient to attract the remedy. An agreement may be valid in law and there may not be sufficient grounds for its cancellation; yet, upon a fair and just consideration of the attendant circumstances, the Court may abstain from its enforcement. Sub-section (2) of Section 20 sets forth the cases in which the Court may properly -exercise such discretion to refuse specific performance. It broadly divides those cases into three categories, namely:-

(1) where-

(i) the terms of -the contract, or

(ii) the conduct of the parties at the time of entering into the contract or

(iii) other circumstances. under which the contract was entered into, are such that the contract gives the plaintiff an unfair advantage over the defendant, or

(2) Where the performance of the contract would -

(i) involve some hardship on the defendant, which he did not foresee; and

(ii) its non-performance would not involve any such hardship on the plaintiff, or

(3) Where although the contract is not reasonable at the instance of the defendant, yet it is inequitable to enforce specific performance.

13. These cases which the Legislature has provided are by and large illustrative in nature and by no means exhaustive. There may as well be some other circumstances which may arise in a given case justifying the refusal of specific performance. In Satyanarayana v. G. Yelloji Rao, : [1965]2SCR221 the Supreme Court dealing exhaustively the scope of Section 22 of the Specific Relief Act. 1877 which is similar to Section 20 of the Act, 1963., observed:

'The cases providing for a guide to Courts to exercise discretion one way or other are only illustrative, they are not intended to be exhaustive.'

So. there must be some discretionary field unoccupied by the three cases otherwise the substantive section becomes otiose. It is really difficult to define that field. Diverse situation may arise which may induce a Court not to exercise the discretion in favour of the plaintiff. It may better be left undefined except to state what the section says, namely, discretion of the Court is not arbitrary, but sound and reasonable guided by judicial principles and capable of correction by a Court of appeal'.

It is thus clear from the above decision that the illustrations given under sub-sections (2) and (3) of Section 20 of the Specific Relief Act, in which a Court could refuse specific performance are not exhaustive and there may be a broad band of different cases in which also the Court may deny relief to the plaintiff. The relief may vary with the circumstances of individual cases judged by the familiar legal standard of the reasonable man. The Legislature in the first place has given the discretion to Courts: and secondly, it was emphasized that the discretion is required to be exercised on sound and reasonable basis guided by judicial principles. Thirdly, it was provided that the decision should be capable of correction by a Court of appeal. The latter two aspects are always implied and need not be stated when the Power is conferred upon Courts. The purpose of restating these principles, as we understand, was to discourage a tendency to subject a case to 'legal strait-jackets', and to ensure that Judges are not led into the trap of legalism on the validity of the agreement. Judges cannot approach the matter with a mind sentimental to the rights of the parties, but must take into account the relative hardships in granting or refusing the relief prayed for.

14. In the light of these principles and the decision to which we have called attention. we may now proceed to examine the contentions urged for the parties. The contentions urged for the appellant in this context may be summarised as follows:- That the subject-matter of the suit is the only property of the appellant. Her husband died without making any provision for her shelter or means of living. She is not in a position to purchase any house or secure one for rent. She never anticipated at the time of entering into the agreement that her husband would die soon leaving her in the lurch. If she is compelled to part with the suit property she would be in streets. On the contrary, it was urged for the other side that the hardships pleaded by the appellant are not relevant as they could have been easily foreseen when Ext. P-1 was entered into since her husband was then seriously ailing.

15. At the outset, we may make it clear that the hardship contemplated under clause (b) of sub-section (2) of Section 20 may be hardship or oppression arising from the terms of the agreement itself or from circumstances existing at the time of entering into it. This has been so clarified by Explanation (2) there under. The mere loss or inconvenience resulting from the enforcement of a lawful bargain however onerous should not be regarded as hardship in this context. Inadequacy of price is not also a ground to be considered, unless the purchaser stands in a fiduciary position to the vendor or fraud entered into the agreement. Lack of knowledge off the real value of the property to be sold on the part of the vendor is not also a ground for refusal. Perhaps, a combination of these coupled with some other circumstances following from the enforcement of the agreement or collateral to it may persuade the Court towards refusal provided those hardships were not foreseen by the vendor. Fry in his treatise on the Specific Performance of Contracts (sixth edition), Para 425. page 203, has stated.

'It would seem that, in considering the hardship which may flow from the execution of a contract, the Court will consider whether it is a result obviously flowing from the terms of the contract, so that it must have been present at the time of the contract to the minds of the contracting parties, or whether it arises from something collateral and so far concealed and latent, as that it might not have been thus present to their minds. It is obvious that a far higher degree of hardship must be present in the former, than in the latter class of cases, for it to operate on the discretion of the Court.'

In the present case, it is not possible for us to visualize that the appellant was in a position to foresee all the said hardships which obviously flow from the enforcement of the agreement or those collateral to such enforcement. The agreement does not give us any indication why the couple wanted to sell their only property. The evidence on record does not show that the husband knew that he was too ill and beyond redemption. He died on April 28, 1970. whereas the agreement was entered into on November 17, 1969, We may, however. reasonably say that there was no compelling reason for the sale of the property although, Miniyappa (P. W. 2) has stated that the husband wanted to sell the property and go away because his younger brother's son had thrown a chappal at him in that house. Even if that incident was true, it was too flimsy a ground to dispose of the property and run away from the place. Be that as it may, the reason for the appellant's husband to dispose of the property is not so much relevant. The appellant was also a party to the agreement. Her knowledge about the consequences of the agreement is more relevant for our purpose. In our opinion, she as a rustic woman must have signed the agreement admits of no doubt, She, perhaps, though like any other woman, that her husband would purchase some other property or provide her with an alternate accommodation. She might not have dreamt that he would die soon leaving her only the difficulties. The Court below has, however, stated that she was not such a simple woman to be hood-winked by any person. But we must state that that opinion was on a wrong footing. The Court relied upon a letter Ext. D-3 in support of that contention. It was stated that that letter was written by her to the doctor of her husband. But the fact is otherwise. The letter was not written by the appellant but by one Andalamma, enquiring about the health of the appellant's husband. The appellant was not even aware of that letter.

16. In the written statement, this is what the appellant has stated.

'The suit schedule house is the sole means of livelihood for the 2nd defendant, providing both residence and income for livelihood. That 1st defendant had no intention of depriving the 2nd defendant his wife, of the sole means of livelihood after his death.'

In the course of her evidence this is what she has further stated:

Except the suit house, I do not have any other property. Except the income I get for portion of the building, I have no other source of income.

And she continued:

' I am residing in a portion of the suit house, the other portion having been let out to a Railway Official on a rental of Rs. 50/- per month',

From the averments in the written statement coupled with the evidence, it will be fairly clear that she never intended to sell the house and her husband had no intention to Put her into difficulties by selling it.

One cannot ignore the hard fact in these days that the appellant cannot buy a similar or other house in Mysore city out of the balance of consideration payable under the suit agreement. She is a widow with no children. She is getting a rent of Rs. 50/- from the tenant who is occupying a portion of the house. that is her only means of income for sustenance. If we decree the suit, she will be deprived of that income too. for the rest of her life with no shelter to cover her head. There can, therefore, be no justification for us to tell her that she should sell the house and go on pilgrimage never to return.

17. Mr. Yognarasiniha counsel for the respondent was. however, keen to narrate the hardships of his client. He said that the respondent had paid Rs. 3,000/as advance under the agreement and that advance has remained hitherto without interest. He had mortgaged his property and raised loans for purchasing the suit property. These may be true, but we do not think that they could be said to be real hardships to the respondent. He is a businessman and not a helpless widow like the appellant. He has a house of his own besides a shop. He has no doubt raised some loan upon the security of his property under Ext. P-2 dated February 9, 1970; but he is not in difficulty to discharge that loan. He has, of course advanced Rs. 3,000/- under Ext. P-1. as against the agreed amount of Rs. 21,000. For that. we could find a way out to compensate him. But we are unable to find way to make good or compensate the appellant for the hardships which obviously flow by the enforcement of the agreement.

We gave our anxious consideration to all the facts and circumstances of the case and we are firmly of the opinion that it would be manifestly unjust to the appellant if the suit is decreed in favour of the respondent.

18. In the result and for the reasons stated above, the appeal is allowed. in reversing the judgment and decree appealed, the suit is dismissed. In the circumstances of the case, we make no order as to costs.

19. Before parting with the case, we may place on record the memo filed by the counsel for the appellant He filed a memo dated January 7. 1982 stating that the appellant is willing to pay Rs. 9,000/- to the respondent by way of return of the advance of Rs. 3,000/- received under the suit agreement. It is a good gesture and we place that memo on record with a hope that that amount would be paid to the respondent at the earliest without driving him to another litigation.

20. This appeal was preferred in forma paupers. The appellant now succeeds. She has to pay court-fee which would have been paid by her if she had not been permitted to sue as an indigent person. The amount of court-fee shall be recovered by the Deputy Commissioner, Mysore from the appellant.

A copy of this decree shall be transmitted to the Deputy Commissioner, Mysore for necessary action.

21. Mr. Yoganarasimha, counsel for the respondent seeks a certificate for appeal to the Supreme Court. In our opinion, the case dose not involve any substantial question of law of general importance which needs to be decided by the Supreme Court. The certificate prayed for is therefore refused.

22. Appeal allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //