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Achhru Ram and ors. Vs. Hari Singh - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtPunjab and Haryana High Court
Decided On
Case NumberSecond Appeal No. 596 of 1957
Judge
Reported inAIR1960P& H216
ActsSpecific Relief Act, 1877 - Sections 20
AppellantAchhru Ram and ors.
RespondentHari Singh
Cases ReferredRamalinga Pillai v. Jagadammal
Excerpt:
.....parties concerned acquire knowledge of passing of the said order. - 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. such contract clearly falls within the ambit of s......i.e. within twelve days of the first sale, the plaintiff hari singh brought the present suit for specific performance of the contract and in the alternative claimed a decree for rs. 700/- (rs. 500/- as the stipulated damages and rs. 200/- as the refund of the earnest money). the defence raised to this suit was that the plaintiff had rescinded the contract on 16-7-1956, and that he was not ready and willing to perform his part of the contract and that he was not entitled to its specific performance. both the courts below have decreed the suit for specific performance on the ground that the defendants were guilty of the breach of contract and that there is no default on the part of the vendee. against this decision the vendors have come up in second appeal to this court.(2) mr. mital for.....
Judgment:

(1) This is a second appeal arising out of a breach of contract for the sale of land. The facts giving rise to this appeal are that on 12-7-1956, defendants Achhru Ram and others agreed to sell 16 bighas of land in village Man Majra for Rs. 3,000/- to Hari Singh. Hari Singh paid Rs. 200/- in advance. The balance was to be paid at the time of registration and the sale deed was to be executed within one week and in default of the execution of the sale deed, the party defaulting was to pay Rs. 500/- as damages. On 17-7-1956, the defendants entered into a sale contract with regard to this very land with one Gurdial Singh and agreed to sell the suit land to him for a sum of Rs. 4,000/-. On 24-7-1956, i.e. within twelve days of the first sale, the plaintiff Hari Singh brought the present suit for specific performance of the contract and in the alternative claimed a decree for Rs. 700/- (Rs. 500/- as the stipulated damages and Rs. 200/- as the refund of the earnest money). The defence raised to this suit was that the plaintiff had rescinded the contract on 16-7-1956, and that he was not ready and willing to perform his part of the contract and that he was not entitled to its specific performance. Both the Courts below have decreed the suit for specific performance on the ground that the defendants were guilty of the breach of contract and that there is no default on the part of the vendee. Against this decision the vendors have come up in second appeal to this Court.

(2) Mr. Mital for the vendors has strenuously contended before me that the contract in dispute (Ex. PA) provides two alternatives--

(i) to specifically enforce the contract; or

(ii) to claim stipulated damages.

On reading the contract I find that there is no such alternative at all. There is merely an additional provision made for damages in case of breach. The vendee has nowhere either given up the claim for specific performance or to have agreed in the alternative to claim damages alone in case of breach. Thus on the interpretation of the contract itself Mr. Mittal's argument falls to the ground.

(3) Mr. Mittal has also referred to Monfar Raja Choundhury v. Rowsan Kamar, 1 1943 Cal 586 Dayaram Chainrai v. Karmumal Kotumal; AIR 1937 Sind 263, and Narayan Nagorao v. Amirt Haribhau, AIR 1957 Bom 241, for the proposition, that where in a contract there are stipulated damages, prayer for specific performance should be refused. I have gone through these decisions and in my opinion they do not lay down what Mr. Mittal wants me to hold and none of these decisions really helps Mr. Mittal. In AIR 1943 Cal 586, the contract itself provided that on the breach of the contract, the contract would come to an end and the only right left to the party who suffered by its breach was a claim to damages. In AIR 1937 Sind 263, both the Courts below had come to a finding of fact that the plaintiff had elected to take damages in the alternative and therefore it was not proper to decree the suit for specific performance. In AIR 1957 Bom 241, it was observed at p. 242:

'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 in the event of nonperformance, 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 a contract stipulating that one of two things shall be done at the election performance or payment in money. Where the contract is of the latter type, it is called an alternative contract and the provisions of S. 20 of the Specific Relief Act do not apply to it. They however apply to a contract of the former type.'

(4) Thus as I have already said this also does not help Mr. Mittal.

(5) It seems to me that the complete answer to Mr. Mittal's argument is furnished by S. 20 of the Specific Relief Act (I of 1877). And in this connection reference may be made to a decision of the Lahore High Court, Kanhaya Lal v. Devi Das, AIR 1931 Lah 227. It is only when the contract provides for either performance or for payment of money as damages for its breach that a contract can be said to be a contract in the alternative. In such a case an election has to be made as to which relief is to be sought for then the party entitled to the relief can only seek one of the two alternative reliefs and not both. But where the term as to payment of money as damages is put in to secure the performance of the main condition i.e. in the instant contract, to secure the transfer of property within the time specified in the contract, it cannot be said that the contract provides for two separate alternatives. Such contract clearly falls within the ambit of S. 20 of the Specific Relief Act. The observations in Ramalinga Pillai v. Jagadammal, AIR 1951 Mad 612 may also be read with advantage in this connection.

(6) For the reasons given above, this appeal fails and is dismissed, but without an order as to costs in this Court.

(7) Appeal dismissed.


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