JUDGMENT
R.M.S. Khandeparkar, J.
Page 1550
1. This appeal arises from the judgment and order dated 30-4-2004 passed in Suit No. 364 of 1978. Only ground on which the impugned decree is sought to be challenged is that inspite of answering all the issues in favour of Page 1551 the appellants/plaintiffs on the point of agreement between the parties, willingness and readiness of the plaintiffs to perform the agreement, the specific performance has been denied solely on the ground that the suit was pending for 25 years when that could not be a ground to refuse to exercise discretion in favour of the plaintiffs for grant of specific performance of the agreement.
2. We have heard the learned Counsel for the appellants. None has appeared for the respondents, though served. We have also perused the records. 3. The suit was filed by the appellants for specific performance of the agreement of sale dated 27-3-1976 by which the appellants had agreed to purchase the Flat No. 304 comprising of three rooms and a kitchen and other amenities, situated on the third floor of the building and admeasuring 970 sq.ft. built-up area for a total consideration of Rs. 1,05,100/- and had paid sum of Rs. 21,000/- to the respondents/defendants by way of earnest money. In view of dispute having arisen between the parties in relation to the claim for specific performance of the agreement by the appellants, the suit came to be filed which was contested by the respondents and the learned single Judge framed the following issues on the basis of the pleadings of the parties:
Issues Findings
1. Whether the Plaintiffs prove that Yes they have been ready and willing at all time to perform their part of the
2. Whether the Defendants prove that the Agreement dated 27th March, 1976 No is null and void and unenforceable in law?
3. Whether the Agreement dated 27th No March, 1976 has been cancelled and/or abandoned and/or terminated as alleged in paragraph 2 of the Written Statement of Defendant Nos. 1 to 4?
4. Whether the Plaintiffs failed and No neglected to perform their part of Agreement dated 27th March, 1976, as alleged in paragraph 3 of the Written Statement of Defendant No. 1 to 4?
5. Whether the Defendant Nos. 1 to 4 No have sold the suit flat to the 5th Defendant on 28th February, 1978 and put him in possession thereof as alleged in paragraph 3 of the Written Statement of Defendant Nos. 1 to 4?
6. Whether the 5th Defendant was No a bona fide purchaser for value of suit flat without notice as alleged in paragraph 3 of the Written Statement of Defendant Nos. 1 to 4?
7. Whether the suit as against the No 5th Defendant is misconceived, bad in law, false, frivolous, baseless and vexatious as alleged in paragraph 2 of the Written Statement of Defendant?
Page 1552
8. Whether the suit is bad for Does misjoinder of parties and, not therefore, liable to be dismissed survive as alleged in paragraph 3 of the Written Statement of the Defendant No. 5?
9. Whether the Defendant Nos. 1 to 4 No failed to furnish to the plaintiffs inspect of documents and/or title certificate as alleged in paragraphs 3 and 4 of the Plaint?
10. Whether the Certificate of Title Yes dated 17th January, 1977, issued by M/s. Shah & Sanghavi, certified the title of Defendant Nos. 1 to 4 with reservations and thus, Defendant Nos. 1 to 4 failed to make out a marketable title to the said property as alleged in paragraph 5 of the Plaint?
11. Whether the purported termination Yes and/or cancellation and/or revocation of Agreement was illegal and unjustified?
12. Whether the Defendants Advocate Yes had issued a certificate of clear marketable title on 3rd August, 1977 to Bombay District Central Co-operative Bank Ltd?
13. Whether the 5th Defendant is a Yes nominee of and has been put up by the Defendant Nos. 1 to 4 to defeat the claim of the Plaintiffs & has no right, title or interest in the suit flat and Agreement dated 28th February 1978, between the Defendant Nos. 1 to 4 and the 5th Defendant is colourable, bogus and sham as alleged in paragraph 9(b), 9(c) and 9(d) of the Plaint?
14. Whether the Plaintiffs are No entitled to specific performance of the Agreement dated 27th March, 1976, as modified by oral Agreement contained in paragraphs 2 and 3 of the Plaint?
15. In the event that this Hon’ble As Court does not grant specific per performance to the Plaintiffs, order then in that event only, are the Plaintiffs entitled to damages in the sum of Rs. 81,67,105.05 praise.
16. To what reliefs, if any, are the As per Plaintiffs entitled?” order
4. After going through the evidence which was led by the parties, the learned single Judge answered the issue regarding the readiness and willingness on the part of the appellants to perform their part of the obligation under the agreement in the affirmative as well as the other issues were also answered in favour of the appellants. In fact, the issue Nos. 1, 10, 11, 12 and 13 were answered in the affirmative and the issue Nos. 2 to 7, 9 and 14 Page 1553 were answered in the negative. As far as the issue No. 8, it was held that it did not survive. The most relevant issue i.e. the issue No. 14 was answered against the appellants only on the ground that the period of 25 years had elapsed from the time of commencement of litigation till the date of delivery of the judgment. In fact, the said issue was answered in paragraph No. 36 of the judgment as under:
36. Whether the Plaintiffs are entitled to specific performance of the agreement dated 27/3/1976, is a discretionary relief. The learned Counsel for the Plaintiffs vehemently submitted that this relief shall have to be granted to the Plaintiffs. However, considering the circumstances of this case, and particularly when number of years have passed now since after the execution of the agreement dated 27/3/1976 and after the correspondence that ensued between the parties which continued PTO the year 1978, now more than 25 years have passed. Therefore, I am not inclined to grant specific performance in favour of the Plaintiffs. The issue is answered in the negative.
5. The learned Senior Counsel appearing for the appellants, taking us through the impugned judgment and decree, submitted that the trial Judge having answered all the relevant issues, more particularly regarding the readiness and willingness on the part of the appellants to perform their part of the obligation under the agreement in the affirmative, as well as the alleged termination of the agreement by the defendants to be ineffective, merely because there was lapse of 25 years of period from the time of commencement of the suit till the disposal thereof, that could not have been ground to reject the specific performance of the agreement. He further submitted that though the relief of specific performance of the agreement is a discretionary relief, it is to be exercised judiciously and mere lapse of period of 25 years cannot be said to be a justification to reject the relief. He further submitted that even the increase in the prices of the land cannot be a ground to reject the specific performance of an agreement to sell the property. He has sought to rely upon the decisions of the Apex Court in the matters of Surya Narain Upadhyaya v. Ram Roop Pandey and Ors. reported in 1995 Supp. (4) SCC 542 and S.V.R. Mudaliar (Dead) by LRs and Ors. v. Rajabu F. Buhari (Mrs.) (Dead) by LRs and Ors. .
6. As rightly submitted on behalf of the appellants, the learned trial Judge has answered the most relevant issues in favour of the appellants. It has been clearly held that the appellants had been ready and willing to perform all their obligations under the said agreement and there was no default in that regard on the part of the appellants. The contention of the respondents that the agreement was already terminated or that it was abandoned, has been specifically rejected on account of failure on the part of the respondents to prove the same. Inspite of the same, the specific Page 1554 performance has been rejected solely on the ground that there has been lapse of more than 25 years’ period from the time of commencement of the suit till the disposal thereof.
7. The Apex Court in Surya Narain Upadhyaya’s (supra) had held that though the decree for specific performance is a discretionary power, yet the Court is not bound to grant such a relief merely because it is lawful to do so and the discretion of the Court is not arbitrary, but sound and reasonable, guided by judicial principles of law and capable of correction by a Court of appeal and, therefore, the discretion should be properly exercised keeping in view the settled principles of law as envisaged in Section 20 of the Act. Irrelevant considerations are to be avoided from taking into account either for the grant or refusal of the decree of specific performance.
8. In S.V.R. Mudaliar’s case (supra), the Apex Court had held that as to when the Court may not exercise the discretion to grant the decree for specific performance has been mentioned in Sub-section (2) of Section 20 whereas the Sub-section (3) states as to when the Court may properly exercise its discretion to decree specific performance. It was further ruled that what has been stated in these two sub-sections is not exhaustive, but is illustrative, yet the intention of the Legislature has been well reflected, both as regards the granting of the relief and non-granting of the same.
9. Dealing with the point as to whether delay in disposal of the suit could be a ground to refuse to exercise discretion for the grant of such relief, the Apex Court held that
If merely because the prices have risen during the pendency of litigation, we were to deny the relief of specific performance if otherwise due, this relief could hardly be granted in any case, because by the time the litigation comes to an end a sufficiently long period is likely to elapse in most of the cases. This factor, therefore, should not normally weigh against the suitor in exercise of discretion by a court in a case of the present nature.” The Apex Court was dealing with a matter in relation to a property situated in the metropolitan city like Madras. In the case in hand, we are dealing with a property which is situated in the metropolitan city like Mumbai.
10. Taking into consideration the pronouncement of the Apex Court on the point of exercise of discretion as well as in relation to the period spent in getting the litigation disposed of, while dealing with the matter in relation to specific performance of an agreement, it is to be held that mere delay in disposal of the suit by itself cannot be a ground to refuse specific performance of the agreement once it is found that the plaintiff is not at fault and he had been always ready and willing to perform his obligations under the agreement and if at all there has been any cause for non-performance of the agreement for a long period, it is on account of the defendant or for some unforeseen reasons, certainly the plaintiff cannot be denied the relief on that ground. As regards the price rise of land is concerned, it has been clearly held by the Apex Court that same cannot be, by itself, a ground to reject the specific performance. In case the defendant wants to take the advantage of the price rise of land and to Page 1555 make a ground to justify the refusal of the relief of specific performance, it is necessary for the defendant to establish the prejudice that would be suffered by the defendant as also higher degree thereof in comparison to the one that the plaintiff may suffer on account of denial of the relief. In the absence of any material being placed in that regard on record by the defendant, mere price rise itself would not be a justification to deny the relief of specific performance to the plaintiff.
11. Perusal of the impugned judgment and decree discloses that apart from observing that more than 25 years have elapsed from the time of commencement of the litigation between the parties, no other material is relied upon to justify rejection of the specific performance to the appellants. Hence the finding on issue No. 14, given by the learned trial Judge, cannot be sustained and is liable to be set aside and it is to be held that in the facts and circumstances of the case, the appellants having been always ready and willing to perform their obligations under the said agreement and the respondents having failed to establish the alleged termination or abandonment of the agreement and there being no justifiable reason disclosed to refuse to exercise the discretion in favour of the appellants/plaintiffs, the issue No. 14 is to be answered in the affirmative. Consequently, the question of grant of compensation as such does not arise and hence the issue No. 15 is to be answered as not surviving.
12. In the circumstances, therefore, the appeal is to be allowed; the impugned decree to the extent it refuses the specific performance and grants compensation is to be set aside and the suit is to be decreed for specific performance of the agreement dated 27-3-1976 between the parties, subject to payment of balance of the consideration payable on the agreement along with interest at the rate of 9% per annum. Consequently, the suit stands decreed in terms of the prayer Clause (a) with costs, subject to payment of the balance of the consideration amount, as stated above.