Summary
The Supreme Court restored a decree for specific performance of a registered agreement of sale that the High Court had reversed on the ground of hardship to the vendor's widow and minor son, holding that hardship under Section 20(2)(b) of the Specific Relief Act, 1963 (pre-2018) is judged by circumstances at the time of the contract, that no issue on hardship had been framed, and that the evidence did not show the property was their only shelter; the balance consideration was enhanced to Rs. 20 lakh.
Issues
- Whether the High Court was justified in refusing specific performance on the ground of hardship to the vendor's heirs under Section 20(2)(b) of the Specific Relief Act, 1963 as it stood before the 2018 amendment.
- Whether a first appellate court may reverse a decree for specific performance on the ground of hardship without an issue on hardship having been framed, while concurring on all other issues.
- Whether the trial court had failed to frame an issue on the plaintiff's readiness and willingness.
Provisions considered
- Section 20 (as it stood before the 2018 amendment), Specific Relief Act, 1963The Court explained that the discretion to decree specific performance must be sound, reasonable and guided by judicial principles; the cases in sub-section (2) are illustrative, and the factors excluded by Explanations 1 and 2 and sub-section (4), each preceded by 'mere', cannot alone justify refusal but may weigh cumulatively with others. (¶¶ 5, 6, 7, 27, 28)
- Section 20(2)(b) read with Explanation 2 (pre-2018), Specific Relief Act, 1963Hardship under clause (b) refers to hardship the defendant did not foresee when entering into the contract and, save where caused by a later act of the plaintiff, is judged by circumstances existing at the time of the contract. There was no pleading or evidence that the deceased vendor could not foresee hardship, or that any act of the plaintiff caused it. (¶¶ 29, 34, 35, 36)
Held
- The jurisdiction to decree specific performance under Section 20 (pre-2018) is discretionary but not arbitrary; the situations in Section 20(2) are illustrative, and factors excluded by the Explanations and Section 20(4), described as 'mere', cannot by themselves justify refusal though they may be considered together with other factors. (¶¶ 6, 7, 27)
- Mere rise in price after the contract or inadequacy of price is not hardship warranting refusal of specific performance; the hardship must be unforeseen and collateral to the contract, and the decision turns on the sum total of the relevant factors. (¶¶ 28, 29)
- Hardship under Section 20(2)(b) read with Explanation 2 is assessed with reference to circumstances at the time of the contract, unless it results from a subsequent act of the plaintiff; it comes into play only if cogent evidence shows that the executant could not foresee it when contracting. (¶¶ 34, 35, 36)
- Following Prakash Chandra v. Narayan, hardship being a question of fact, a first appellate court that concurs with the trial court on all other issues ought not to reverse a decree for specific performance on the ground of hardship when no issue on hardship was framed. (¶¶ 31, 32, 33)
- Even on the wider view, noted in K. Narendra, that post-contract personal circumstances of the defendant may be relevant, the defendants had not shown that the suit property was their only shelter; the evidence was that they lived separately at the widow's parental home and sought the property only after the vendor's death. (¶¶ 37, 38, 39, 40)
- The trial court had in fact framed and decided the issue of readiness and willingness in the plaintiff's favour, and the High Court had not disturbed that finding. (¶ 41)
- Having regard to the defendants being a widow and her minor son, the Court, while restoring the decree, enhanced the balance consideration payable by the plaintiff. (¶¶ 44, 45, 46, 47)
Result
Appeal allowed and disposed of; the High Court's judgment set aside and the trial court's decree for specific performance restored with modification: the plaintiff to pay Rs. 20,00,000 to the defendants as balance consideration instead of Rs. 13,50,000, whereupon the defendants shall execute the sale deed.