FERRODOUS ESTATES (PVT.) LTD. v. P. GOPIRATHNAM (DEAD) & ORS.

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A 45. The said decision cannot be said to constitute a binding precedent to the effect that in all cases where there had been an escalation of prices, the court should either refuse to pass a decree on specific performance of contract or direct the plaintiff to pay a higher sum. No law in absolute terms to that effect has been laid down by this Court nor is discernible from the aforementioned decision.” In P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi, (2007) 10 SCC 231, this Court held: “19. Submission of Mr Chandrashekhar to the effect that having regard to the rise in price of an immovable property in Bangalore, the Court ought not to have exercised its discretionary jurisdiction under Section 20 of the Specific Relief Act is stated to be rejected. We have noticed hereinbefore that the appellant had entered into an agreement for sale with others also. He had, even after 11-5- 1979, received a sum of Rs 5000 from the respondent. He with a D view to defeat the lawful claim of Respondent 1 had raised a plea of having executed a prior agreement for sale in respect of self- same property in favour of his son-in-law who had never claimed any right thereunder or filed a suit for specific performance of contract. The courts below have categorically arrived at a finding E that the said contention of the appellant was not acceptable. Rise in the price of an immovable property by itself is not a ground for refusal to enforce a lawful agreement of sale. (See P. D’Souza [(2004) 6 SCC 649] and Jai Narain Parasrampuria [(2006) 7 SCC 756].)”

F In Narinderjit Singh v. North Star Estate Promoters Ltd., (2012) 5 SCC 712, this Court held: “25. We are also inclined to agree with the lower appellate court that escalation in the price of the land cannot, by itself, be a ground for denying relief of specific performance. In K. Narendra v. G Riviera Apartments (P) Ltd. [(1999) 5 SCC 77] this Court interpreted Section 20 of the Act and laid down the following propositions: (SCC p. 91, para 29) “29. Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; the discretion of the court is not arbitrary

FERRODOUS ESTATES (PVT.) LTD. v. 717 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognised in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant.” C (emphasis in original)

26. In the present case, the appellant had neither pleaded hardship nor produced any evidence to show that it will be inequitable to order specific performance of the agreement. Rather, the important plea taken by the appellant was that the agreement was fictitious D and fabricated and his father had neither executed the same nor received the earnest money and, as mentioned above, all the courts have found this plea to be wholly untenable.

27. In the result, the appeals are dismissed and the following directions are given: E (i) Within three months from today the respondent shall pay Rs 5 crores to the appellant. This direction is being given keeping in view the statement made by Shri Dushyant Dave, learned Senior Counsel for the respondent on 3-5-2012 that his client would be willing to pay Rs 5 crores in all to the appellant as the F price of the land. xxx xxx xxx” In Satya Jain v. Anis Ahmed Rushdie, (2013) 8 SCC 131, this Court held: G “40. The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof H

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A will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasised that efflux of time and escalation of price of property, by itself, B cannot be a valid ground to deny the relief of specific performance. Such a view has been consistently adopted by this Court. By way of illustration opinions rendered in P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi [(2007) 10 SCC 231] and more recently in Narinderjit Singh v. North Star Estate Promoters C Ltd. [(2012) 5 SCC 712 : (2012) 3 SCC (Civ) 379] may be usefully recapitulated.

41. The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalising the plaintiffs for no fault on their part; to deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour. From another perspective it may also indicate the inadequacies of the law to deal with the long delays that, at times, occur while rendering the final verdict in a given case. The aforesaid two features, at best, may justify award of additional compensation to the vendor by grant of a price higher than what had been stipulated in the agreement which price, in a given case, may even be the market price as on date of the order of the final court.

42. Having given our anxious consideration to all the relevant aspects of the case we are of the view that the ends of justice would require this Court to intervene and set aside the findings and conclusions recorded by the High Court of Delhi in Anis Ahmed Rushdie v. Bhiku Ram Jain [Anis Ahmed Rushdie v. Bhiku Ram Jain, RFA (OS) No. 11 of 1984, decided on 31-10- 2011 (Del)] and to decree the suit of the plaintiffs for specific performance of the agreement dated 22-12-1970. We are of the further view that the sale deed that will now have to be executed by the defendants in favour of the plaintiffs will be for the market price of the suit property as on the date of the present order. As no material, whatsoever is available to enable us to make a correct assessment of the market value of the suit property as on date we request the learned trial Judge of the High Court of Delhi to

FERRODOUS ESTATES (PVT.) LTD. v. 719 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

undertake the said exercise with such expedition as may be possible in the prevailing facts and circumstances.” In K. Prakash v. B.R. Sampath Kumar, (2015) 1 SCC 597, this Court held: “18. Subsequent rise in the price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, therefore, on that ground a decree for specific performance cannot be reversed.

19. However, the court may take notice of the fact that there has been an increase in the price of the property and considering the other facts and circumstances of the case, this Court while granting decree for specific performance can impose such condition which may to some extent compensate the defendant owner of the property. This aspect of the matter is considered by a three-Judge Bench of this Court in Nirmala Anand v. Advent Corpn. (P) Ltd. [(2002) 8 SCC 146], wherein this Court held: (SCC p. 150, D para 6) “6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. G As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to H

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A take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.”

B 20. As discussed above the agreement was entered into between the parties in 2003 for sale of the property for a total consideration of Rs 16,10,000. Ten years have passed by and now the price of the property in that area where it situates has increased by not less than five times. Keeping in mind the factual position we are of the view that the appellant should pay a total consideration of C Rs 25 lakhs, being the price for the said property.” In Zarina Siddiqui v. A. Ramalingam, (2015) 1 SCC 705, this Court held: “33. The equitable discretion to grant or not to grant a relief for specific performance also depends upon the conduct of the parties. The necessary ingredient has to be proved and established by the plaintiff so that discretion would be exercised judiciously in favour of the plaintiff. At the same time, if the defendant does not come with clean hands and suppresses material facts and evidence and misleads the court then such discretion should not be exercised by refusing to grant specific performance.” xxx xxx xxx “36. As held by this Court time and again, efflux of time and escalation of price of the property by itself cannot be a valid ground to deny the relief of specific performance. But the Court in its discretion may impose reasonable conditions including payment of additional amount to the vendor. It is equally well settled that the plaintiff is not to be denied specific performance only on account of phenomenal increase of price during the pendency of litigation.” xxx xxx xxx G “38. … [I]n the facts and circumstances of the case and considering the phenomenal increase in price during the period the matter remained pending in different courts, we are of the considered opinion that the impugned order [A. Ramalingam v. H. Siddiqui, RFA No. 265 of 1999, decided on 1-3-2012 (KAR)] H under appeal be set aside but with a condition imposed upon the

FERRODOUS ESTATES (PVT.) LTD. v. 721 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

appellant-plaintiff to pay a sum of Rs 15,00,000 (Rupees fifteen lakhs) in addition to the amount already paid by the appellant to the respondent.” In Ramathal v. Maruthathal, (2018) 18 SCC 303, this Court held: “22. The buyer has taken prompt steps to file a suit for specific performance as soon as the execution of the sale was stalled by the seller. From this discussion, it is clear that the buyer has always been ready and willing to perform his part of the contract at all stages. Moreover, it is the seller who had always been trying to wriggle out of the contract. Now the seller cannot take advantage of their own wrong and then plead that the grant of decree of specific performance would be inequitable. Escalation of prices cannot be a ground for denying the relief of specific performance. Specific performance is an equitable relief and granting the relief is the discretion of the court. The discretion has to be exercised by the court judicially and within the settled principles of law. Absolutely there is no illegality or infirmity in the judgments of the courts below, which has judicially exercised its discretion and the High Court ought not to have interfered with the same. ……” In Sunkara Lakshminarasamma v. Sagi Subba Raju, (2019) 11 SCC 787, this Court held: E

“9. Shri A. Subba Rao, learned counsel for the appellants was however forceful in his arguments, insofar as the suit for specific performance is concerned. According to him, the appellants herein (defendants in the suit for specific performance) would be put to hardship if the decree for specific performance is confirmed, inasmuch as there has been a huge escalation in the price of the properties since the agreement of sale. Such plea of escalation in price cannot be accepted in view of the fact that the appellants in the first instance do not have the right to question the agreement of sale. As mentioned supra, since Veeraswamy was the absolute owner of the properties including the property involved in the suit for specific performance, he had the right to enter into an agreement of sale also. This property was bequeathed to Veeraswamy under Ext. B-4 will by Padmanabhudu. Hence, Veeraswamy was the sole owner of the property. Consequently, he had entered into an agreement of sale with Sagi Subba Raju, H

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A as far back as on 19-9-1974. The suit was filed in the year 1978, which was later transferred to another court and the same was re-numbered as OS No. 72 of 1983. Since 1978, this litigation is being fought by the prospective vendee. The property of about three-and-a-half acres was agreed to be sold by Veeraswamy in favour of the prospective vendee in the year 1974 for a sum of Rs B 51,000. Such price was agreed to between the vendor as well as the prospective vendee.

10. This Court cannot imagine the value of the property as it stood in the year 1974 in the said area i.e. at Bhimavaram Village in Andhra Pradesh. Be that as it may, we find that hardship was neither pleaded nor proved by the appellants herein before the trial court. No issue was raised relating to hardship before the trial court. A plea which was not urged before the trial court cannot be allowed to be raised for the first time before the appellate courts. Moreover, mere escalation of price is no ground for interference at this stage (see the judgment of this Court in Narinderjit Singh v. North Star Estate Promoters Ltd. [Narinderjit Singh v. North Star Estate Promoters Ltd., (2012) 5 SCC 712 : (2012) 3 SCC (Civ) 379]). Added to it, as mentioned supra, the appellants do not have the locus standi to question the judgment of the Division Bench since they are not the owners of the property. As a matter of fact, Veeraswamy, the vendor of the properties, had entered the witness box before the trial court and supported all his alienations in favour of the defendants. Therefore, in our considered opinion, the Division Bench has rightly concluded in favour of Sagi Subba Raju and against the appellants and granted the decree for specific performance.”

30Copy pinpoint30. It is settled law that mere delay by itself, without more, cannot be the sole factor to deny specific performance – See Mademsetty Satyanarayana v. G. Yelloji Rao, (1965) 2 SCR 221 at pp. 229-230. Thus, in K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1, this Court G made it clear that if property prices have risen dramatically within a period of two and a half years before filing of the suit for specific performance, and it is coupled with violation of the agreement by the plaintiff, specific performance will not be decreed. The Court held: “10. … In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement H

FERRODOUS ESTATES (PVT.) LTD. v. 723 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

and determine whether its discretion to grant specific performance A should be exercised. Now in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades — particularly after 1973 [It is a well-known fact that the steep rise in the price of oil following the 1973 Arab- Israeli war set in inflationary trends all over the world. Particularly B affected were countries like who import bulk of their requirement of oil]. In this case, the suit property is the house property situated in Madurai, which is one of the major cities of Tamil Nadu. The suit agreement was in December 1978 and the six months’ period specified therein for completing the sale expired with 15-6-1979. The suit notice was issued by the plaintiff only on 11-7-1981, i.e., C more than two years after the expiry of six months’ period. The question is what was the plaintiff doing in this interval of more than two years? … The defendants’ consistent refrain has been that the prices of house properties in Madurai have been rising fast, that within the said interval of 2 1/2 years, the prices went up three times and that only because of the said circumstance has the plaintiff (who had earlier abandoned any idea of going forward with the purchase of the suit property) turned round and demanded specific performance. Having regard to the above circumstances and the oral evidence of the parties, we are inclined to accept the case put forward by Defendants 1 to 3. We reject the story put forward by the plaintiff that during the said period of 2 1/2 years, he has been repeatedly asking the defendants to get the tenant vacated and execute the sale deed and that they were asking for time on the ground that tenant was not vacating. The above finding means that from 15-12-1978 till 11-7-1981, i.e., for a period of more than 2 1/2 years, the plaintiff was sitting quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of six months within which he was expected to purchase stamp papers, tender the balance amount and call upon the defendants to execute the sale deed and deliver possession of the property. We are inclined to accept the defendants’ case that the values of the house property in Madurai town were rising fast and this must have induced the plaintiff to wake up after 2 1/2 years and demand specific performance.

11. Shri Sivasubramaniam cited the decision of the Madras High Court in S.V. Sankaralinga Nadar v. P.T.S. Ratnaswami Nadar H

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A [AIR 1952 Mad 389 : (1952) 1 MLJ 44] holding that mere rise in prices is no ground for denying the specific performance. With great respect, we are unable to agree if the said decision is understood as saying that the said factor is not at all to be taken into account while exercising the discretion vested in the court by law. We cannot be oblivious to the reality — and the reality is constant and continuous rise in the values of urban properties — fuelled by large-scale migration of people from rural areas to urban centres and by inflation. Take this very case. The plaintiff had agreed to pay the balance consideration, purchase the stamp papers and ask for the execution of sale deed and delivery of possession within six months. He did nothing of the sort. The agreement expressly provides that if the plaintiff fails in performing his part of the contract, the defendants are entitled to forfeit the earnest money of Rs 5000 and that if the defendants fail to perform their part of the contract, they are liable to pay double the said amount. Except paying the small amount of Rs 5000 (as against the total consideration of Rs 60,000) the plaintiff did nothing until he issued the suit notice 2 1/2 years after the agreement. Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties — evolved in times when prices and values were stable and inflation was unknown — requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so. The learned counsel for the plaintiff says that when the parties entered into the contract, they knew that prices are rising; hence, he says, rise in prices cannot be a ground for denying specific performance. May be, the parties knew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said time-limit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such time-limit would have been prescribed. Can it be stated as a G rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as non-existent? All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other H

FERRODOUS ESTATES (PVT.) LTD. v. 725 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

party, it must have some significance and that the said time-limit(s) A cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties).” xxx xxx xxx “13. In the case before us, it is not mere delay. It is a case of total B inaction on the part of the plaintiff for 2 1/2 years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices — according to the defendants, three times — C between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff.

14. Shri Sivasubramaniam then relied upon the decision in Jiwan Lal (Dr) v. Brij Mohan Mehra [(1972) 2 SCC 757 : (1973) 2 D SCR 230] to show that the delay of two years is not a ground to deny specific performance. But a perusal of the judgment shows that there were good reasons for the plaintiff to wait in that case because of the pendency of an appeal against the order of requisition of the suit property. We may reiterate that the true principle is the one stated by the Constitution Bench in Chand E Rani [(1993) 1 SCC 519]. Even where time is not of the essence of the contract, the plaintiffs must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property.” F Likewise, this Court, in Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18, made it clear that given the steep rise in urban land prices, it may not be correct now to say that time is not of essence in performance of a contract of sale of immovable property. Thus, where time can be said to be of the essence in the facts of a given G case, and the purchaser does not take steps to complete the sale within the stipulated period and the vendor is not responsible for any delay, the steep rise in price within the stipulated time would be a circumstance which would make it inequitable to grant the relief of specific performance. This Court held: H

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A “36. The principle that time is not of the essence of contracts relating to immovable properties took shape in an era when market values of immovable properties were stable and did not undergo any marked change even over a few years (followed mechanically, even when value ceased to be stable). As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed. The assumption was that grant of specific performance would not prejudice the vendor defendant financially as there would not be much difference in the market value of the property even if the contract was performed after a few months. This principle made sense during the first half of the twentieth century, when there was comparatively very little inflation, in India. The third quarter of the twentieth century saw a very slow but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the twentieth century. There has been a D galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are no longer stable or steady. We can take judicial notice of the comparative purchase power of a rupee in the year 1975 and now, as also the steep increase in the value of the immovable E properties between then and now. It is no exaggeration to say that properties in cities, worth a lakh or so in or about 1975 to 1980, may cost a crore or more now.

37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. F The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and “non-readiness”. The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of

FERRODOUS ESTATES (PVT.) LTD. v. 727 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

galloping increases in prices of immovable properties, to hold that A a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to B specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for rupees one lakh and received rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees. C xxx xxx xxx

41. A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this Court in K.S. Vidyanadam v. Vairavan [(1997) 3 SCC 1] (by Jeevan Reddy, J. who incidentally was a D member of the Constitution Bench in Chand Rani [(1993) 1 SCC 519] ). This Court observed: (SCC pp. 7 & 9, paras 10-11) “10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. … in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades—particularly after 1973. …

11. … We cannot be oblivious to the reality—and the reality is constant and continuous rise in the values of urban properties—fuelled by large-scale migration of people from rural areas to urban centres and by inflation. … Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties—evolved in times when prices and values were stable and inflation was unknown— requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so.” (emphasis in original) H

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A 42. Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to a larger Bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani [(1993) 1 SCC 519] and other cases. Be that as it may.

FERRODOUS ESTATES (PVT.) LTD. v. 729 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

a suit for specific performance. It was in this factual background that A the Court held: “10. In a suit for specific performance, the plaintiff has to aver and prove with satisfactory evidence that he was always ready and willing to perform his part of contract at all material time as mandatorily required under Section 16(c) of the Specific Relief B Act, 1963. The first appellate court and the High Court recorded findings that the plaintiff was always ready and willing to perform his part of the contract. By a careful reading of the recitals in the agreement, the concurrent findings so recorded do not seem to reflect the conduct of the parties. As per recitals in Ext. P-1 agreement dated 30-9-1987, an amount of Rs 25,000 was paid by the respondent-plaintiffs to the appellant-defendant. Balance amount of Rs 20,000 was to be paid within 2½ years thereafter and get the sale executed. In the second agreement of sale (Ext. P-2 dated 21-3-1990) it is stated that the plaintiffs were unable to pay the balance amount within the stipulated period and get the sale deed executed and therefore the second sale agreement was executed extending the period for execution of sale deed for a further period of three years. As could be seen from the recitals from Ext. P-2, the respondents were unable to pay the balance sale consideration and get the sale deed executed. It is pertinent to note that the time for performance of contract was extended again and again totalling period of eight years. Even though the first appellate court and the High Court recorded findings that the respondent-plaintiffs were ready and willing to perform their part of contract, the fact that time was extended for eight years is to be kept in view while considering the question whether discretion is to be exercised in favour of the respondent-plaintiffs.” xxx xxx xxx “13. The first sale agreement was executed on 30-9-1987 about twenty-seven years ago. The property is situated in Coimbatore City and over these years, value of property in Coimbatore City G would have considerably increased. In Saradamani Kandappan v. S. Rajalakshmi [(2011) 12 SCC 18 : (2012) 2 SCC (Civ) 104] , this Court has held that the value of the property escalates in the urban areas very fast and it would not be equitable to grant specific performance after a lapse of long period of time. H

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A In the instant case, the first agreement was executed on 30-9- 1987 i.e. twenty-seven years ago. In view of passage of time and escalation of value of the property, grant of specific relief of performance would give an unfair advantage to the respondent- plaintiffs whereas the performance of the contract would involve great hardship to the appellant-defendant and his family members. B

14. Considering the totality and the facts and circumstances, in our view, it is not appropriate to grant discretionary relief of specific performance to the respondent-plaintiffs for more than one reason. Admittedly, the suit property is the only property of the appellant- defendant and the appellant is said to have constructed a house and where he is currently residing with the family. As compared to the respondents, the appellant will suffer significant hardship if a decree for specific performance is granted against the appellant. Considering the circumstances, such as the construction of the residential house over the suit property, sale consideration, passage of time and hardship caused to the appellant, makes it inequitable to exercise the discretionary relief of specific performance and the concurrent finding of the first appellate court and the High Court decreeing the suit for specific performance is to be set aside.”

31Copy pinpoint31. The resultant position in law is that a suit for specific performance filed within limitation cannot be dismissed on the sole ground of delay or laches. However, an exception to this rule is where immovable property is to be sold within a certain period, time being of the essence, and it is found that owing to some default on the part of the plaintiff, the sale could not take place within the stipulated time. Once a suit for specific performance has been filed, any delay as a result of the court process cannot be put against the plaintiff as a matter of law in decreeing specific performance. However, it is within the discretion of the Court, regard being had to the facts of each case, as to whether some additional amount ought or ought not to be paid by the plaintiff once a decree of specific performance is passed in its favour, even at the appellate stage.

32Copy pinpoint32. Shri Giri’s fervent appeal that we should not exercise our discretionary jurisdiction under Article 136, given the fact that Rs.2 crores plus interest is to be paid almost by way of solatium to the appellant, has also to be rejected. As has been found earlier in this judgment, the defendants were held to have taken up dishonest pleas and also held to

FERRODOUS ESTATES (PVT.) LTD. v. 731 P. GOPIRATHNAM (DEAD) [R.F. NARIMAN, J.]

have been in breach of a solemn agreement in which they were to obtain the Urban Land Ceiling permission which, if not obtained, would, under the agreement itself, not stand in the way of the specific performance of the agreement between the parties. He who asks for equity must do equity. Given the conduct of the defendants in this case, as contrasted with the conduct of the appellant who is ready and willing throughout to perform its part of the bargain, we think this is a fit case in which the Division Bench judgment should be set aside. As a result, the decree passed by the Single Judge is restored. Since the appellant itself offered a sum of Rs.1.25 crores to the Division Bench, it must be made to pay this amount to the respondents within a period of eight weeks from the date of this judgment. C

33Copy pinpoint33. The Civil Appeal is allowed in the aforesaid terms with no order as to costs.

Divya Pandey Appeal allowed D