Manmohan, J.@mdashRelying on the Supreme Court''s judgment in Dadarao and Another Vs. Ramrao and Others, and this Court''s judgment in
Ashok Aggarwal Vs. Bhagwan Das Arora, referred to by the defendant''s counsel, this Court on 03rd April, 2013 had framed the following
issues:-
1. Whether present suit for specific performance of the Agreement to Sell dated 21st February, 2011 is maintainable in view of the specific term in
the Agreement to Sell that in the event the Seller does not transfer the property in time, then the Purchaser shall have right to claim double the
amount of bayana as compensation? OPP
2. Relief.
It is pertinent to mention that neither on 03rd April, 2013 nor on 30th May, 2013, learned counsel for plaintiff had submitted that the aforesaid
Supreme Court and High Court judgments were not good law.
2. However, case law research shows that the judgment of the Supreme Court in Dadarao & Anr. (supra) did not notice the earlier judgment of
the Supreme Court in M.L. Devender Singh and Others Vs. Syed Khaja, in which after referring to Section 10 of the Specific Relief Act and
explanation appended thereto as well as Sections 14, 20 and 23, it was held that the jurisdiction of a Court to grant specific performance cannot
be curtailed or taken away by merely fixing a sum as liquidated damages. The relevant portion of the Supreme Court''s judgment in M.L. Devender
Singh and Others (supra) is reproduced hereinbelow:-
19. A reference to Section 22 of the old Act, (the corresponding provision is Section 20 of the Act of 1963), would show that the jurisdiction of
the Court to decree specific relief is discretionary and must be exercised on sound and reasonable grounds ""guided by judicial principles and
capable of correction by a Court of appeal"". This jurisdiction cannot be curtailed or taken away by merely fixing a sum even as liquidated
damages. We think that this is made perfectly clear by the provisions of Section 20 of the old Act (corresponding to Section 23 of the Act of
1963) so that the Courts has to determine, on the facts and circumstances of each case before it whether specific performance of a contract to
convey a property ought to be granted.
20. The fact that the parties themselves have provided a sum to be paid by the party breaking the contract does not, by itself, remove the strong
presumption contemplated by the use of the words ""unless and until the contrary is proved."" The sufficiency or insufficiency of any evidence to
remove such a presumption is a matter of evidence. The fact that the parties themselves specified a sum of money to be paid in the event of its
breach is, no doubt, a piece of evidence to be considered in deciding whether the presumption has been repelled or not. But, in our opinion, it is
nothing more than a piece of evidence. It is not conclusive or decisive.
21. The second assumption underlying the contentions on behalf the Defendants-Appellants is that, once the presumption contained in explanation
to Section 12 of the Act, is removed, the bar contained in Section 21 of the old Act, against the specific enforcement of a contract for which
compensation in money is an adequate relief, automatically operates, overlooks that the condition for the imposition of the bar is actual proof that
compensation in money is adequate on the facts and circumstances of a particular case before the Court. The effect of the presumption is that the
party coming to Court for the specific performance of a contract for sale of immovable property need not prove anything until the other side has
removed the presumption. After evidence is led to remove the presumption, the plaintiff may still be in a position to prove, by other evidence in the
case, that payment of money does not compensate him adequately.
3. In P. D''Souza Vs. Shondrilo Naidu, , a Division Bench of the Supreme Court after referring to the decisions in M.L. Devender Singh and
Others (supra) and Dadarao & Anr. (supra) held that the decision in Dadarao & Anr. (supra) was per incuriam. The relevant portion of the
Supreme Court''s judgment in P. D''Souza (supra) is reproduced hereinbelow:-
34. In Dadarao whereupon Mr. Bhat placed strong reliance, the binding decision of M.L. Devender Singh was not noticed. This Court furthermore
failed to notice and consider the provisions of Section 23 of the Specific Relief Act, 1963. The said decision, thus, was rendered per incuriam.
35. Furthermore, the relevant term stipulated in Dadarao was as under:(SCC p.417, para 2)
Tukaram Devsarkar, aged about 65, agriculturist, r/o Devsar, purchaser (GHENAR)-Balwantrao Ganpatrao Pande, aged 76 years, r/o Dijadi,
Post Devsar, vendor (DENAR), who hereby give in writing that a paddy field situated at Dighadi Mouja, Survey No. 7/2 admeasuring 3 acres
belonging to me hereby agree to sell to you for Rs. 2000 and agree to receive Rs. 1000 from you in presence of V.D.N. Sane. A sale deed shall
be made by me at my cost by 15-4-1972. In case the sale deed is not made to you or if you refuse to accept, in addition of earnest money an
amount of Rs. 500 shall be given or taken and no sale deed will be executed. The possession of the property has been agreed to be delivered at
the time of purchase. This agreement is binding on the legal heirs and successors and assigns.
(emphasis supplied)
Interpreting the said term, it was held: (SCC p.418, paras 6-7)
6. The relationship between the parties has to be regulated by the terms of the agreement between them. Whereas the defendants in the suit had
taken up the stand that the agreement dated 24-4-1969 was really in the nature of a loan transaction, it is the plaintiff who contended that it was an
agreement to sell. As we read the agreement, it contemplates that on or before 15-4-1972 the sale deed would be executed. But what is important
is that the agreement itself provides as to what is to happen if either the seller refuses to sell or the purchaser refuses to buy. In that event the
agreement provides that in addition to the earnest money of Rs. 1000 a sum of Rs. 500 was to be given back to Tukaram Devsarkar and that ''no
sale deed will be executed''. The agreement is very categorical in envisaging that a sale deed is to be executed only if both the parties agree to do
so and in the event of any one of them resiling from the same there was to be no question of the other party being compelled to go ahead with the
execution of the sale deed. In the event of the sale deed not being executed, Rs. 500 in addition to the return of Rs. 1000, was the only sum
payable. This sum of Rs. 500 perhaps represented the amount of quantified damages or, as the defendants would have it, interest payable on Rs.
1000.
7. If the agreement had not stipulated as to what is to happen in the event of the sale not going through, then perhaps the plaintiff could have asked
the Court for a decree of specific performance but here the parties to the agreement had agreed that even if the seller did not want to execute the
sale deed he would only be required to refund the amount of Rs. 1000 plus pay Rs. 500 in addition thereto. There was thus no obligation on
Balwantrao to complete the sale transaction.
36. Apart from the fact that agreement of sale did not contain a similar clause, Dadarao does not create a binding precedent having not noticed the
statutory provisions as also an earlier binding precedent. [See Govt. of W.B. v. Tarun K. Roy (SCC para 26).]
4. In P.S. Ranakrishna Reddy Vs. M.K. Bhagyalakshmi and Another, , the Supreme Court following its earlier decision in P. D''Souza (supra)
rejected the contention that specific performance could be refused if there was a default clause which stipulated that in the event of commission of a
breach, the plaintiff was only entitled to forfeit the amount paid by way of advance.
5. Having considered the above case law, the preliminary issue with regard to maintainability of the present suit is decided against the defendant
and in favour of the plaintiff. However, the order dated 03rd April, 2013 is not being vacated as it is based also on grounds other than the
judgment of the Supreme Court in Dadarao & Anr. (supra) and this Court''s judgment in Ashok Aggarwal (supra). List the matter for framing of
issues on 28th August, 2013 before regular Roster Bench.
