2009 (7) TMI 1029 - SC - Indian Laws

Whether there had been a novation of contract or whether the plaintiff was ready and willing to perform his part of contract as is required under Section 16(c) of the Specific Relief Act? Held that - Appeal allowed. Contention of Mr. Venugopal that the defendant having accepted novation of contract but only the quantum of the amount being different the court could have asked the plaintiff - respondent to deposit a further sum of 24, 000/- cannot be accepted for more than one reason. Apart from the fact that such a contention had never been raised before the appellate court keeping in view the finding of fact arrived at that there had in fact been no novation of contract such a course of action was not open. In any view of the matter the same would amount to re- appreciation of evidence which was beyond the review jurisdiction of the High Court. It is open to the plaintiff - respondent to file an appropriate application for recovery of such amount or amounts which he might have expended towards renovation of the building which may be considered on its own merits.

Issues Involved:
1. Jurisdiction of the Court to review its own decision.
2. High Court's exercise of review jurisdiction.
3. Readiness and willingness of the plaintiff to perform the contract.
4. Novation of the contract.
5. Unconditional withdrawal of the deposited amount.
6. Effect of subsequent events on the judgment.

Detailed Analysis:

1. Jurisdiction of the Court to Review its Own Decision:
The primary issue in this appeal is the jurisdiction of a court to review its own decision. The appeal arises from a judgment dated 13.10.2006 by a Single Judge of the High Court of Rajasthan, which recalled an earlier judgment and directed the appeal to be listed for rehearing. Section 114 of the Code of Civil Procedure (CPC) provides the substantive power of review, subject to conditions and limitations prescribed in Order 47 of the CPC. A review is permissible inter alia when the order suffers from an error apparent on the face of the record or when new and important evidence is discovered which was not within the knowledge of the applicant despite due diligence.

2. High Court's Exercise of Review Jurisdiction:
The appellant contended that the High Court exceeded its jurisdiction by acting as an appellate court in its review jurisdiction. It was argued that the High Court could not re-appreciate evidence or exercise discretionary jurisdiction under Section 20 of the Specific Relief Act, 1963. The Supreme Court reiterated that a review court does not sit in appeal over its own order, and a re-hearing is impermissible. The power of review is limited to correcting mistakes or errors apparent on the face of the record and cannot be treated as an appeal in disguise.

3. Readiness and Willingness of the Plaintiff to Perform the Contract:
The readiness and willingness of the plaintiff to perform the contract is a crucial factor under Section 16(c) of the Specific Relief Act, 1963. The plaintiff must demonstrate continuous readiness and willingness from the date of the contract to the time of the hearing. The Supreme Court noted that the plaintiff's readiness and willingness were conditional, as he had stated his willingness to purchase the property only if a certain amount was set off against the cost. This conditional offer did not fulfill the requirements of law for specific performance.

4. Novation of the Contract:
The plaintiff had raised a plea of novation of the contract, claiming that the sale price was reduced from Rs. 1,15,000 to Rs. 80,000. The Trial Judge had decreed the suit based on this modified contract. However, the High Court found that the plaintiff failed to prove the alleged oral agreement regarding the reduction of the sale price. The Supreme Court upheld this finding, noting that the plaintiff's conditional readiness and willingness to perform the contract did not meet the legal requirements.

5. Unconditional Withdrawal of the Deposited Amount:
The defendant had unconditionally withdrawn a part of the deposited amount during the pendency of the appeal. The Division Bench of the High Court had noted that the effect of this unconditional withdrawal was not considered by the Single Judge. The Supreme Court observed that the unconditional withdrawal precluded the defendant from pursuing the appeal, as it indicated acceptance of the Trial Court's judgment.

6. Effect of Subsequent Events on the Judgment:
The Supreme Court emphasized that while subsequent events can be considered for molding relief, they cannot be used to alter the findings of fact or the legal requirements for specific performance. The appellate court must arrive at a conclusion based on the pleadings and evidence that the plaintiff was ready and willing to perform the contract. The High Court's review jurisdiction does not extend to re-appreciating evidence or substituting its view on the merits of the case.

Conclusion:
The Supreme Court set aside the impugned judgment of the High Court, allowing the appeal. It was held that the High Court had wrongly applied the principles of review jurisdiction. The plaintiff was permitted to file an application for recovery of amounts expended towards renovation, and the court was directed to determine the mesne profit payable to the appellant, with the possibility of adjusting amounts payable between the parties.

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