| CITATION | 2024 SCC OnLine SC 214 |
| DATE OF JUDGEMENT | 01/03/2024 |
| COURT | Supreme Court of India |
| APPELLANT | Darshan Singh |
| RESPONDENT | Brij Bhushan Chaudhary |
| BENCH | HON’BLE MR. Abhay S. OkaHON’BLE MR. Ujjal Bhuyan |
INTRODUCTION
The defendant (Brij Bhushan Chaudhary) executed an agreement for sale dated 16th January 1980 (for short, ‘the suit agreement’) in favor of plaintiff no. 1 (Major General (retd) Darshan Singh) in respect of plot of land admeasuring approximately 2438 sq. yards with structure thereon being residential House no. 33, R.P. No. 2829, sector 2-A Chandigarh (for short, ‘the suit property’). The agreed consideration was for Rs. 3,50,000/-A sum of Rs. 30,000/- was paid by the plaintiff no. under the Specific Relief Act, 1963.
FACTS OF THE CASE
1. This appeal challenges the judgment of the High Court in the second appeal, initiated by the appellants. Appellant no.1, Major General (retd) Darshan Singh, was the first plaintiff, and appellant no. 1(ii), (iii), and (iv), along with appellant no. 2, were co-plaintiffs. The original first respondent was Brij Bhushan Chaudhary, the defendant in the suit.
2. The defendant, Brij Bhushan Chaudhary, entered into an agreement for sale on 16th January 1980, in favor of plaintiff no.1, Major General (retd) Darshan Singh, concerning a property located in Chandigarh. The agreed consideration was Rs. 3,50,000, with an earnest money payment of Rs. 30,000. The sale deed was to be executed by 30th April 1980. Clause 3 of the agreement stipulated terms in case of the defendant’s failure to honor the agreement.
3. After the initial agreement, further negotiations took place, resulting in a draft sale deed executed on 18th March 1980, with plaintiff no.1 and his daughters as co-signatories. Plaintiff claimed to have obtained necessary sale permission under the Urban Land (Ceiling and Regulation) Act, 1976, and asserted possession of the property. However, the defendant allegedly backed out due to a rise in property prices, prompting the plaintiffs to issue a notice for registration of the sale deed, which the defendant ignored. Consequently, the plaintiffs filed a suit for specific performance or, alternatively, claimed damages of Rs. 40,000.
4. The defendant contended that the property belonged to his Hindu Undivided Family (HUF), and denied handing over possession to the plaintiffs.
5. The Trial Court declined specific performance but awarded damages of Rs. 40,000 to plaintiff no.1. It held the property as HUF property and ruled that plaintiffs nos. 2 to 4 were not entitled to maintain the suit. However, it found the plaintiffs ready and willing to perform their part of the agreement.
6. The District Court upheld the Trial Court’s decision, emphasizing the absence of pleading regarding legal necessity for the sale of HUF property and non-inclusion of co-sharers of the defendant. The High Court affirmed the lower court’s decision, citing legal precedents regarding the nature of the property and the Capital of Punjab (Development and Regulation) Act, 1952.
ISSUES RAISED
- Whether the Trial court erred in not granting specific performance limited to the defendant’s undivided share?
- Whether the trial court’s failure to award post-decree interest on damages of Rs. 40,000 was correct.
- Whether the plaintiff’s non-disclosure of the suit properly being HUF property affects the grant of specific performance?
CONTENTIONS OF APPEALENT
- The appellant may argue that the trial court erred in not granting specific performance limited to the defendant’s undivided share. They could emphasize that the property in question was determined to be HUF property, and therefore, specific performance should have been granted in accordance with Section 16(c) of the Specific Relief Act, 1963. The appellant may contend that the failure to grant specific performance limited to the defendant’s undivided share was a misapplication of the law and deprived them of their rightful claim.
- The appellant may challenge the trial court’s decision not to award post-decree interest on the damages awarded. They could argue that under Section 20 of the Specific Relief Act, 1963, they are entitled to such interest as a means of compensating for the delay in receiving the damages. The appellant may present evidence or legal arguments supporting the award of post-decree interest, emphasizing the financial impact of the delay and the need for full compensation.
- The appellant may raise the issue of plaintiffs’ non-disclosure of the suit property being HUF property. They could contend that this non-disclosure was material information that could have affected the court’s decision-making process. The appellant may argue that such non-disclosure undermines the integrity of the proceedings and may warrant reconsideration of the relief granted. They could present legal arguments or precedents demonstrating the significance of full disclosure in legal proceedings and how the non-disclosure may have prejudiced their case.
CONTENTIONS OF RESPONDENT
- The Trial Court’s decision to decline specific performance altogether was appropriate given the complexities surrounding the property’s ownership as a Hindu Undivided Family (HUF) property. The plaintiffs’ failure to initially seek specific performance limited to the defendant’s undivided share might have affected the feasibility of such relief. Upholding the Trial Court’s ruling is crucial, as it was based on a clear understanding of the property’s status as part of the defendant’s HUF, making it potentially challenging to grant specific performance limited to only a portion of it.
- The modification made by the appellate court to include such interest was unwarranted. The Trial Court’s decision not to award post-decree interest on damages of Rs. 40,000 could have been justified based on the circumstances of the case and the absence of any legal obligation to do so. If the Trial Court’s decision was based on valid legal grounds, then the appellate court’s modification appears to be without sufficient basis.
- This omission undermines their claim for specific performance. Non-disclosure of material facts, such as the HUF nature of the property, could be interpreted as a suppression of vital information that may have influenced the Court’s decision-making process. This non-disclosure potentially affects the equitable considerations involved in granting specific performance, and thus, the relief should not be granted or should be limited accordingly.
JUDGEMENT
The Trial Court erred in not granting specific performance limited to the defendant’s undivided share. Given that the suit property was determined to be HUF property, satisfying the requirements of Section 16(c) of the Specific Relief Act, 1963, the Court finds it appropriate to grant specific performance limited to the defendant’s undivided share in the property.
The Trial Court’s failure to award post-decree interest on damages of Rs. 40,000 was incorrect. In accordance with the principles of equity and fairness, the Court hereby orders the modification of the Trial Court’s decree to include interest at the rate of 6% per annum on the damages of Rs. 40,000. This interest shall accrue from the date of the Trial Court’s decree until payment or realization.
The non-disclosure of the suit property being HUF property by the plaintiffs does not affect the grant of specific performance. The Court affirms that specific performance is a discretionary and equitable remedy, and the plaintiffs’ failure to disclose this fact does not preclude them from seeking relief.
ANALYSIS
The case involved a property dispute where plaintiffs sought specific performance or damages. The Trial Court granted damages but denied specific performance. However, the appellate court found error in not granting specific performance limited to the defendant’s undivided share, given the property’s HUF status. Non-disclosure of HUF ownership didn’t impact the grant. The Court modified the decree to include post-decree interest on damages. This emphasizes the need to consider legal requirements, like those in the Specific Relief Act, in property disputes. It also showcases the Court’s discretionary power to ensure fairness amidst complex circumstances.
CONCLUSION
The court’s decision highlighted the importance of equitable principles in specific performance cases. Despite the trial court’s initial refusal to grant specific performance, the appellate court recognized the plaintiffs’ entitlement to relief, albeit limited to the defendant’s undivided share in the property. Additionally, the court rectified the trial court’s oversight by ordering the inclusion of post-decree interest on the damages awarded. The court’s ruling underscored the discretionary power of the judiciary in matters of specific performance, reaffirming the commitment to fairness and justice in resolving disputes. Ultimately, the judgment served to uphold the principles of equity and ensure adequate redress for the aggrieved party.
REFERENCE
This Article is written by Akriti Mishra student of Lloyd Law College, Greater Noida; Intern at Legal Vidhiya
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