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TMI Blog2004 (7) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ff by the defendant that all original documents, title deeds and encumbrance certificate would be produced by May, 1981, the same had not been done within the said period. It also stands admitted that pursuant to or in furtherance of the said agreement, the folio wing payments have been made in part payment of the consideration. (a) A sum of Rs. 2,500 on 11.11.1976. (b) A sum of Rs. 10,000 was paid by four cheques of Rs. 2500 each before the agreement was executed. (c) A further sum of Rs. 2,500 was paid subsequently and an amount of Rs. 20,000 was paid on 29.12.1977. The defendant allegedly demanded some amount on 29.11.1980 from the plaintiff and further wanted extension of time for registering the sale deed till 31.12.1981. A letter was also addressed to the plaintiff s father to enhance the rent pursuant whereto and in furtherance whereof the rent was enhanced from Rs. 440 to Rs. 500 per month. The plaintiff by a letter dated 21.5.1981 called upon the defendant to execute the deed of sale wherein she conveyed her readiness and willingness to perform her part of contract and in response thereto the defendant by a letter dated 25.5.1981 purported to have cancelled the agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay back money with the interest at higher rate was also not acceded to. Mr. S.N. Bhat, learned counsel appearing on behalf of the appellant raised three contentions in support of this appeal. It was firstly submitted that the onus to prove that she was al l along ready and willing to perform her part of contract was on the plaintiff and the very fact that she admittedly did not perform her part of the contract by 5.12.1978 is itself a pointer to show that she had not been able to do so. Reliance in this behalf has been placed on Ardeshir H. Mama v. Flora Sassoon, AIR (1928) PC 208. Further contention of Mr. Bhat is that as the agreement provided for a damage clause in terms whereof, the Appellant had a option to pay the liquidated damages and in that view of the matter decree for specific performance of contract could not have been passed. Reliance in this behalf has been placed on Dadarao and Another v. Ramrao and Others, [1999] 8 SCC 416. Mr. Bhat would further submit that in a case of this nature where the decree for specific performance of contract has not taken effect for a long time, this Court having regard to the escalation in price, refuse to exercise its discretionary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be executed and registered by 31st December, 1981 which could not be done for unavoidable reasons. The fact that the plaintiff had paid different amounts to the defendant from time to time which were accepted by him stands admitted. It appears from the records that the defendant herself did not produce the original documents nor redeemed the mortgage. If the mortgage was not redeemed and the original documents were not produced, the sale deed could not have been executed and in that view of the matter, the question of plaintiffs readiness and willingness to perform his part of contract would not arise. In August, 1981 the defendant accepted a sum of Rs. 20,000 from the plaintiff. The contention raised on behalf of the appellant to the effect that the plaintiff has failed to show his readiness and willingness to perform his part of contract by 5.12.1978 is stated to be rejected inasmuch as the defendant himself had revived the contract at a later stage. He as would appear from the findings recorded by the High Court even sought for extension of time for registering the sale deed till 31.12.1981. It is therefore, too late in the day for the defendant now to contend that it was obl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of giving to the party in default an option of paying money in lieu of specific performance. (2) When enforcing specific performance under this section, the court shall not also decree payment of the sum so named in the contract." In M.L. Devender Singh & Ors. v. Syed Khaja, [1974] l SCR 312, the following statement of law appears: "The question always is: What is the contract? is it that one certain act shall be done, with a sum annexed, whether by way of penalty or damages, to secure the performance of this very act? Or, is it that one of the two things shall be done at the election of the party who has to perform the contract, namely, the performance of the act or the payment of the sum of money? If the former, the fact of the penal or other like sum being annexed will not prevent the Court's enforcing performance of the very act, and thus carrying into execution the intention of the parties; if the latter, the contract is satisfied by the payment of a sum of money, and there is no ground for proceeding against the party having the election to compel the performance of the other alternative. From what has been said it will be gathered that contracts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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." A distinction between liquidated damages and penalty may be important in common law put as regards equitable remedy the same does not play any significant role. In Manzoor Ahmed Magrav v. Gulam Hassan Aram and Others, AIR (2000) SC 191, this Court reiterated the ratio laid down in M.L. Devender Singh (supra) (See also A. Abdul Rashid Khan (Dead) and Others v. P.A.K.A. Shahul Hamid and Others, [2000] 10 SCC 636). In Dadarao (supra) whereupon Mr. Bhat placed strong reliance, the binding decision of M.L. Devender Singh (supra) 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 incurium. Furthermore, the relevant term stipulated in Dadarao (supra) was as under: "Tukaram Devsarkar, aged about 65, agriculturist, r/o Devsar, purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecute 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. Apart from the fact that agreement of sale did not contain a similar clause, Dadarao (supra) does not create a binding precedent having not noticed the statutory provisions as also an earlier binding precedent. (See Government of W.B. v. Tarun K. Roy and Others, [2004] l SCC 347 para 26). The second contention of Mr. Bhat therefore, cannot also be accepted. The third contention of the learned counsel to the effect that this Court should not exercise its discretionary jurisdiction in view of hardship which would be faced by the defendant is stated to be rejected. Such a plea was not raised before the High Court. It is not a case where the defendant did not foresee the hardship. It is furthermore not a case that non-performance of the agreement would not cause any hardship to the plaintiff. The defendant was a landlord of the plaintiff. He had accepted part payments from the plaintiff from time to time without any demur whatsoever. He redeemed the mortgage only upon receipt of requisite pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that in case of contract for sale of immovable property the grant of relief of specific performance is a rule and its refusal an exception based on valid and cogent grounds. Further, the defendant cannot take advantage of his own wrong and then plead that decree for specific performance would be an unfair advantage to the plaintiff. 40. Escalation of price during the period may be a relevant consideration under certain circumstances for either refusing to grant the decree of specific performance or for decreeing the specific performance with a direction to the plaintiff to pay an additional amount to the defendant and compensate him. It would depend on the facts and circumstances of each case." The learned Judge further observed that delay in performance of the contract due to pendency of proceedings in court cannot by itself be a ground to refuse relief of specific performance in absence of any compelling circumstances to take a contrary view. However, the learned judge noticed the events which occurred subsequent to the passing of the decree and held: "45. The appellant has always been ready and willing to perform her part of the contract at all stages. She has not taken an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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