JUDGMENT
B. Sudershan Reddy, J.
1. The defendants in O.S.No. 1749 of 1989 on the file of the learned IV Additional Judge, City Civil Court, Hyderabad are the appellants in this appeal. The learned trial Judge decreed the suit for specific performance of agreement of sale filed by the respondent-plaintiff. Hence this appeal.
2. We shall refer to the parties as plaintiff and defendants throughout this judgment.
3. Before adverting to the question as to whether the impugned judgment under appeal suffers from any errors and legal infirmities, it may be required to notice the relevant facts.
4. It is the case of the plaintiff that she has entered into an oral agreement of sale with the plaintiff (sic. 1st defendant) on 17-9-1989 in respect of house plot admeasuring 354.66 square yards bearing plot No. 17 situate at Road No. 2, Banjara Hills, Hyderabad (for short ‘the said property’) for a sale consideration of Rs. 3,50,000/-. The 1st defendant received a sum of Rupees One Lakh from the defendant (sic. plaintiff) as advance and acknowledged a receipt to that effect on a non-judicial stamp of Rs. 5/- in the presence of P.W. 2 and the mother of the 1st defendant. The document is marked as Ex.A-1 dated 17-9-1989. It is also her case that originally she intended to pay only a sum of Rs. 50,000/- as advance but the 1st defendant insisted that another sum of Rs. 50,000/- may be given to him as he was in need of money. The plaintiff paid a further sum of Rs. 50,000/- on the very same day i.e. to say on 17-9-1989.
5. In the plaint itself, it is stated that the 1st defendant has shown all the original title deeds of the vendor. It is admitted that the 2nd defendant is the true and absolute owner of the property agreed to be sold. The 2nd defendant is alleged to have entered into an agreement of sale dated 5-1-1988 in favour of the 1st defendant.
6. It is also the case of the plaintiff that the 1st defendant having obtained the agreement of sale dated 5-1-1988 got the sanction for construction of building from the Municipal Corporation of Hyderabad in his name and accordingly, started construction of a house in the said property.
7. It is the specific case of the plaintiff that “defendant No. 1 agreed to sell orally the suit property to this plaintiff on 17-9-1989 and the total consideration was fixed after bargaining at Rs. 3,50,000- and out of which the defendant No. 1, received rupees one lakh as advance amount”. The plaintiff got issued telegraphic notice dated 25-9-1989 Ex. A-2 to defendant No. 1 requiring him to execute the sale deed in her favour after receiving the balance of sale consideration. The 1st defendant received the telegraphic notice vide acknowledgment Ex. A-3. The 1st defendant did not reply to the said notice. It is under those circumstances, the plaintiff laid the suit for specific performance of the agreement of sale.
8. The defendants filed common written statement inter alia disputing the correctness of allegations and averments made in the plaint. It is specifically pleaded that the 2nd defendant is the owner of the property and the 1st defendant is only an agreement holder. It is also stated that the 1st defendant never entered into any agreement of sale as alleged by the plaintiff but borrowed a sum of Rupees One Lakh on account of personal necessity from the plaintiff. The amount of Rupees One Lakh received by defendant No. 1 from the plaintiff on 17-9-1989 is nothing but a loan. Ex. A-1 is not an agreement of sale and the same is unenforceable. It is the further case of the defendants that “defendant No. 1 signed on blank stamp paper of Rs. 5- non-judicial at the places shown by the plaintiff”.
9. In view of the rival pleadings, the learned trial Judge framed the following issues for consideration
(1) Whether the oral agreement of sale dated 17-9-89 set up by plaintiff is true, valid and binding on defendants?
(2) Whether 1st defendant did not receive the sum of Rs. One lakh as part of sale consideration from the plaintiff, but only as a hand loan?
(3) Whether the 1st defendant gifted the suit property on 4-4-88 to his wife Siraj Fatima, and ceased to have any interest in it by 17-9-1989?
(4) Whether the suit is bad for nonjoinder of Smt. Siraj Fatima?
(5) Whether the plaintiff was throughout ready to perform her part of contract?
(6) Whether plaintiff is entitled to specific performance?
(7) To what relief?”
10. The plaintiff in order to establish her case examined herself as P.W. 1 and one of the attestors of Ex. A-1 as P.W. 2. Exs. A-1 to A-11 were marked on her behalf. Neither the 1st defendant nor the 2d defendant have entered into witness box. The general power of attorney holder of defendant No. 1 is examined as D.W. 1 and Exs. B-1 to B-3 were marked.
11. The learned trial Judge upon appreciation of both the oral and documentary evidence available on record passed a preliminary decree directing the plaintiff to deposit the balance of sale consideration of Rs. 2,50,000- within two months from the date of judgment. The plaintiff was also further directed to file a petition for appointment of a Commissioner to make spot inspection and estimate the cost of construction with an Engineer and with the help of the 1st defendant or his authorized agent as to the amount spent over the construction of building on the suit property in order to enable the Court to direct the plaintiff to deposit further amounts in the Court arrived at by the Commissioner and to further direct the defendants to register the sale deed in favour of the plaintiff within two months and also to pass a final decree.
12. The judgment and decree granted by the learned trial Judge is somewhat peculiar.
We shall advert to the validity and the correctness of the judgment a little later.
13. In the instant case, we are required to notice certain basic features and facts about which there is no controversy. The 2nd defendant is the true and absolute owner of the said property. He is alleged to have executed an irrevocable power of attorney in favour of the wife of the 1st defendant for whatsoever purposes with which we are not concerned for the present in the instant case. Even according to the plaintiff, the 2nd defendant entered into an agreement of sale dated 5-1-1988 with the 1st defendant under which the 1st defendant is stated to have purchased the property. It is also admitted that there is no privity of contract as such between the 2nd defendant and the plaintiff. It is not as if the wife of the 1st defendant in her capacity as the general power of attorney holder of the 2nd defendant entered into any agreement of sale as such with the plaintiff. The specific case of the plaintiff is that she has entered into an oral agreement of sale with the 1st defendant on 17-9-1989. In acknowledgement of the said oral agreement of sale, the 1st defendant having received a sum of Rupees One Lakh as advance from the plaintiff executed Ex. A-1 dated 17-9-1989 styled as Letter/ Receipt of intent.
14. In the light of these admitted facts, the crucial questions that fall for consideration are as to whether Ex.A-1 dated 17-9-1989 is a genuine agreement of sale and as to whether the same confers any enforceable rights upon the plaintiff for specific performance.
15. Learned counsel for the appellants, Smt. Jayashree Sarathy strenuously contends that Ex. A-l document cannot be considered to be an agreement of sale and it does not confer any enforceable rights upon the plaintiff. Learned counsel also contends that it is not a genuine document since the same is surrounded by many suspicious circumstances.
16. Sri Khaja Moinuddin, learned counsel for the respondent-plaintiff contends that the judgment under appeal does not suffer from any legal or factual infirmities requiring any correction as such by this Court. It is submitted that the defendants having filed their written statement have not chosen to examine themselves as witnesses and for that reason the avernments made in the written statement cannot be taken into consideration. It is submitted that there is no evidence whatsoever let in by the defendants disputing the claim of the plaintiff. Learned counsel also contends that the recitals made in Ex. A-1 are self-explanatory and if the document is read as a whole it would undoubtedly reveal the same to be an agreement of sale.
17. It may be necessary to somewhat critically examine the contents of Ex. A-l document styled as Letter/Receipt of Intent. It is true as submitted by the learned counsel for the respondent, the nomenclature of the document or the title thereof itself may not be of any consequence. The document is required to be read as a whole. Ex. A-l document is a very short one and it would be convenient to notice the same which is as under:
“This is to confirm on this the 17th day of September 1989, that Mrs. Bader-Unnisa D/o Mr. S.K. Ali Bilgrami age 30 years R/O H.No. 8-2-61/B6, Road No. 11, Banjara Hills, Hyderabad, 500034, intent to buy the property of Mr. Toufiq Ali Mirza S/O Late Ishaq All Mirza R/O Plot No. 17, Road No. 2, Banjarahills, Hyderabad. In this consideration Mr. Toufiq AH Mirza has received a sum of Rs. 50,000/- (Rupees Fifty Thousand Only). Balance advance will be made accordingly and final settlement will be made at the time of registration.
The intended property to buy is, Plot No. 17, Road No. 2, Banjarahills, Hyderabad. 500034
Sd/-
Toufiq Ali Mirza
Dt. 17-9-89
(It is in the hand-writing)
Further an advance of Rs. 50,000/-received. A total of Rs. 1,00,000/-(Rupees One Lakh only) received so far.
Sd/-T dated 17-9-1989.
Witnesses
(1) Mrs. Shahzadi Begum Sd/-
(2) Mr. Monu Wasi.”
18. Ex. A-1 is executed on 17-9-1989. It says that the plaintiff intended to buy the property of the 1st defendant. The description of the property sought to be purchased is not mentioned. The total consideration payable by the plaintiff is not stated. It does not reveal that the 1st defendant intended to sell or agreed to sell the said property in favour of the plaintiff. There is no such plea. There is no time stipulated for completing the contract. The mode of payment is not provided for. On the other hand, it says that final settlement would be made at the time of registration. There is no reference to any earlier oral agreement of sale as such stated to have been entered into by and between the parties.
19. P.W. 1 in her evidence states that defendant No. 2 sold the property to defendant No. 1. She deposed that “the 1st defendant entered into an oral agreement of sale of the suit property with me on 17-9-89. The said suit property is incomplete house having pillars and foundation and one room”. It is clear from her evidence as if the 1st defendant and the plaintiff entered into an oral agreement of sale on 17-9-1989 itself. She went and inspected the property on the same day and she has agreed to purchase the same. She was willing to pay Rs. 50,000/- towards part of sale consideration. It is specifically stated in her evidence that the 1st defendant got prepared the document typed on non-judicial stamp papers worth Rs. 5/- for the purpose (Ex. A-1). She accordingly paid a sum of Rs. 50,000/- as advance but the 1st defendant requested for payment of another sum of Rs. 50,000/-. She accordingly paid another sum of Rs. 50,000/- on the same day. The plaintiff herself describes the document as receipt of Rupees One Lakh received by defendant No. 1. It would be very interesting to notice that non-judicial stamp of Rs. 5/- is purchased in the name of the plaintiff on 15-9-1989 i.e. to say two days prior to the execution of the document Ex. A-l dated 17-9-1989. There is nothing on record and particularly in the evidence of P.W. 1 that she knew the 1st defendant even prior to 17-9-1989. The stamp is purchased by the plaintiff herself for self. There is also nothing on record and particularly in the evidence of P.W. 1 that she has entered into an oral agreement with the 1st defendant even prior to 17-9-1989. No doubt, P.W. 2 in his evidence states that he has been negotiating on behalf of both the plaintiff and the 1st defendant for sale of the property in question. It is in his evidence that ‘he knew that 1st defendant as well as the plaintiff much prior to the transaction. There is nothing even in his evidence as to when the parties have entered into oral agreement of sale pursuant to which a sum of Rupees One Lakh has been paid by the plaintiff to the 1st defendant under Ex.A-1. Thus there is no evidence on record to arrive at any conclusion that there has been oral agreement of sale much prior to execution of Ex. A-1 document. It is difficult to construe Ex. A-l itself as an agreement of sale. It is not even the case of the plaintiff that Ex. A-l is the agreement. However, during the course of hearing of the arguments, learned counsel for the respondent contended that Ex. A-l itself is the agreement of sale. The recitals therein, in our considered opinion, do not reflect the same to be an agreement of sale.
20. The fact that the plaintiff purchased herself stamps on 15-9-1989 in her name also creates suspicion in the mind of the Court that some old stamp in possession of the plaintiff has been pressed into service in order to plead that there has been earlier an oral agreement of sale. But there is no evidence on record let in by the plaintiff there being any oral agreement of sale preceding Ex. A-1 dated 17-9-1989.
21. Be that as it may, P.W. 2 claims to be a real estate dealer. It is difficult to discern as to how he could have arranged the sale of the property in question without satisfying himself as to the title of the 1st defendant with regard to the suit property. It is not as if defendant No. 1 misled the plaintiff or P.W. 2 about the ownership of the property. In the cross-examination, P.W. 1 admitted in categorical terms that she knew the 1st defendant as the general power of attorney holder of the real owner. It is further admitted by her that the 1st defendant showed all the documents of title to her at the time of registration. It is admitted by her that the 1st defendant was not having any registered sale deed in his name and he is the general power of attorney holder to act on behalf of the 2nd defendant.
22. The question that falls for consideration is as to whether any prudent person would have entered into an agreement of sale with a person who has admittedly no title to the property?
23. Even according to the plaintiff, the 1st defendant has shown her all the documents namely G.P.A deed executed by defendant No. 2 in favour of the wife of the 1st defendant. In the plaint itself she admitted that the 1st defendant is only an agreement holder. In the circumstances, we find it difficult to accept the case put forth by the plaintiff that she has entered into an agreement of sale with the 1st defendant for sale of the said property. Viewed from any angle, we find it difficult to sustain the findings recorded by the trial Court in this regard. Even at the cost of repetition, we observe that there is no evidence on record to show that there has been earlier oral agreement of sale between the plaintiff and the 1st defendant with regard to the said property. Ex.A-1 document styled as letter/receipt of intent itself cannot be construed as an agreement of sale for the reasons which we have indicated in the preceding paragraphs. Rs. 5/- non-judicial stamp paper is dated 15-9-1979. The evidence on record would clearly suggest that the plaintiff and the 1st defendant came into contact with each other only on 17-9-1989. It is in the evidence of P.W 1 herself that the whole transaction has taken place on 17-9-1989 and she paid a sum of Rs. 50,000/- in the morning and another sum of Rs. 50,000/- in the afternoon and obtained an endorsement/acknowledgement under Ex.A-1 dated 17-9-1989. In the circumstances, we are of the opinion that Ex.A-1 is not an enforceable agreement of sale.
24. The plaintiff paid a sum of Rupees One Lakh under Ex. A-l dated 17-9-1989. She got issued Ex. A-2 telegraphic notice on 25-9-1989 i.e. to say within a period of one week and got filed the suit on 28-9-1989 itself.
25. The next question that falls for consideration is as to whether the plaintiff is entitled for the discretionary relief of specific performance in the instant case?
26. The 1st defendant is not admittedly the owner of the said property sought to be purchased by the plaintiff. Learned Counsel for the respondent, however, placed reliance upon a judgment of the Division Bench of this Court reported in M.A.H. Khan v. A.M. Khadri, . It is contended by the learned counsel for the respondent that the 1st defendant having agreed to sell the property cannot be permitted to raise the defence contending that he has no title to the property so as to convey the same to the plaintiff. The question is not as to whether the 1st defendant can be permitted to raise such a plea. The question is as to whether a decree for specific performance could be granted by the Court in a case where the plaintiff admits the lack of title in the person from whom the properties are sought to be purchased. There is a specific averment in the plaint to the effect that the 1st defendant is not the owner. P.W. 1 herself in her evidence states that the 2nd defendant is the owner and the 1st defendant is the agreement holder. In the circumstances, we are of the considered opinion that the decision of this Court reported in M.A.H. Khan’s case in no manner supports the case of the plaintiff. Here is a case where admittedly the 1st defendant has no title over the properties purchased by the plaintiff. This Court in exercise of its jurisdiction to grant specific relief cannot blindly direct the 1st defendant to execute sale deed in favour of the plaintiff and conveying nothing thereunder. The person who has no title cannot convey any title whatsoever to the purchaser. The Court cannot shut its eyes to this reality in the instant case. For that reason, we are not inclined to exercise our discretion to grant specific relief.
27. The 1st defendant proceeded with the construction of the said property during the pendency of the suit. It is case of the 1st defendant that he has spent about Rupees Six Lakhs and above in construction of the building over the said property. No doubt, the plaintiff seriously disputes the correctness of the statement. But the fact remains that there is a categorical finding in this regard by the trial Court itself that the 1st defendant has spent some amounts in construction of the building on the said property. It is entirely a different matter as to whether the 1st defendant could have made any such construction in the absence of any title, which admittedly vests on the 2nd defendant. It is not necessary for our present purpose to decide as to whether the 1st defendant made such construction for and on behalf of the 2nd defendant. It is not clear from the evidence available on record as to the arrangement, if any, between the 1st defendant and the 2nd defendant. The fact remains that the property sought to be purchased by the plaintiff has undergone a radical transformation and as at present, there is a full-fledged house existing on the said property. At the time when the property was sought to be purchased, it was an open land on which a single room was constructed.
28. In the circumstances question that falls for consideration is as to whether in the facts and circumstances of the case it would be proper to exercise our jurisdiction to grant a decree for specific performance?
29. It is very well settled and needs no restatement in our hands that Section 20 of the Specific Relief Act, 1963 confers discretion upon the Court in the matter of exercising jurisdiction to decree specific performance. The provision in categorical terms declares that the Court is not bound to grant such relief merely because it is lawful to do so. No doubt, the discretion is to be exercised in a sound and reasonable manner and always guided by judicial principles. The discretion so vested in the Court can never be exercised in an arbitrary manner. It is very well settled that if performance of contract involves some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the Court may properly exercise discretion not to decree specific performance and the doctrine of comparative hardship has been statutorily recognized in India. One of the grounds on which the Court may decline to decree specific performance is where it would be inequitable to enforce specific performance (for the proposition see K. Narendra v. Riviera Apts. (P) Ltd. ; Her Highness Maharani Shantidevi P. Gaikwad v. Savjibhai Haribhai Patel, and V. Muthusami v. Angammal, ).
30. The plaintiff altogether paid a sum of Rupees One Lakh under Ex. A-1 dated 17-9-1989. This fact is admitted by the defendants in the written statement. It is no body’s case that Ex. A-1 is a forged document. The purport and substance of the document is in dispute. Since the defendants have failed to examine themselves and lead any evidence, we will go by the recitals made in Ex. A-1 document. We have already indicated that it is difficult to consider Ex. A-1 as an agreement of sale. Even if it is to be held to be an agreement of sale and not a mere receipt evidencing receipt of amounts, we are not inclined to grant specific relief for the reasons stated herein above. All that the plaintiff paid is only a sum of Rupees One Lakh to the 1st defendant. The property is situated in one of the most posh localities in the city of Hyderabad viz., Banjara Hills. In view of the rapid rise in the prices of urban properties, it is a valuable property as on today. That apart, the 1st defendant invested huge amounts in constructing the house in the said property during the pendency of the suit. In the circumstances/ it would be inequitable and unjust to decree the suit for specific performance. In our considered opinion, it is eminently a fit case where the Court is required to exercise its discretion and not to grant relief of specific performance.
31. Learned Counsel for the respondent, however, strenuously contends that the defence averred by the defendants in the written statement can never be looked into since they have failed to examine themselves. Non-examination of the 1st defendant and not making himself available for cross-examination by the plaintiff is fatal i to the case of the defendants, is the ^ submission. We have no difficulty whatsoever to accept the submissions made by the learned counsel for the respondent-plaintiff. In the circumstances, we need not elaborately refer to the decision reported in Iswar Bhai C. Patel v. Hari Har Behere and Anr., 1999 (3) Supreme 121 and M.A. Jabbar v. LIC House Building Employees Society, . It is very well settled that the burden is upon the plaintiff to make out a clear case for grant of specific relief. In the instant case, we have considered the case set up by the plaintiff as revealed in the plaint and her own evidence. Even going by what is stated by her is true, in our considered opinion, she is not entitled for grant of specific performance.
32. Before we part with the case, we are constrained to observe that the trial Court adopted a peculiar method for granting a preliminary decree in the suit for specific performance. Having found that the 1st defendant during the pendency of the suit invested substantial amounts and constructed a building thereon, the trial Court instead of exercising its discretion not to grant specific relief had chosen to grant a preliminary decree directing the appointment of a Commissioner and ascertainment of the amounts invested on the land etc. Such a course in our considered opinion is not permissible in law. On the admitted facts, the trial Court ought to have exercised its discretion not to grant the decree for specific performance.
33. For the aforesaid reasons, the judgment and decree of the trial Court is set aside. However, the plaintiff is entitled for return of a sum of Rupees One Lakh paid by her to the 1st defendant under Ex. A-1. There shall be an order accordingly directing the 1st defendant to return the said sum of Rupees One Lakh to the plaintiff together with interest at 12% per annum.
34. The appeal is accordingly allowed with costs throughout.