30 Apr 2121

Where the contract for no fault of the plaintiff becomes impossible, Section 21 of the Specific Relief Act, 1963 enables the award of compensation in lieu and substitution of specific performance - Supreme Court of India

Case : Sukhbir v. Ajit Singh Civil Appeal No. 1653 of 2021

Court : Supreme Court of India

Bench : Justice Dr. Dhananjaya Y. Chandrachud and Justice M.R. Shah

Decided on : 30 Apr 2121

Relevant Statutes

Section 6 of Land Acquisition Act, 1984

Section 21 of Specific Relief Act, 1963

Section 73 of Indian Contract Act, 1872

Section 2 of Lord Cairn’s Act, 1858

Brief Facts & Procedural History

1. There was an agreement of sale between the plaintiff(respondent) and the defendant(appellant) concerning land in question for the total sum of Rs. 32 lakhs, out of which the plaintiff paid Rs. 31,50,000/- to the defendant. Since the execution doesn’t take place plaintiff issued a legal notice to the defendant to be present at Sub-Registrar’s office for execution to which the defendant refused.

2. Plaintiff filed a suit in the Court of Civil Judge, Senior Director, Jhajjar, Haryana for the execution of the agreement and alternatively prayed if not execution then the sum paid is to be paid back with interest @24% per annum from the date of agreement to the date of repayment. There it was ordered for the execution. The defendant first appeal and there the appellate court ratified and said the plaintiff should pay the remaining amount and then the defendant should transfer the possession.

3. Before the final order passed by the learned Trial Court, a notification came under Section 6 of the Land Acquisition Act, 1984 for acquiring the land in question, but this was not brought into the notice.

4. Afterward, the defendant appeals in the High Court, and there it was held that since the execution of the agreement is not possible, the defendant should pay the entire compensation as awarded under the Land Acquisition Act, 1984 with interest and solatium, etc.

4. Being not satisfied with this. The defendant appeals in the Honourable Supreme Court of India.

The Issue of the Case

Whether the impugned judgment dated 23 September 2016 passed by the High Court of Punjab and Haryana valid?

The Observations of the Court

1. Referring to the cases Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647 and Urmila Devi v. Deity, Mandir Shree Chamunda Devi, (2018) 2 SCC 284, Section 21 of the Specific Relief Act, 1963 that if the contract becomes impracticable due to no fault of the plaintiff, Section 21 allows for the award of compensation in lieu and replacement of the specific performance. In terms of determining the amount of compensation, Hon’ble Supreme Court noted and held that the compensation awarded under the Land Acquisition Act, 1984 can be safely taken to be the measure of damages, subject, of course, to the deduction of the money value of the services, time, and energy expended by the original landowner in pursuing the compensation claims as well as the costs he paid in the litigation that resulted in the judgment.

2. Honourable Supreme Court of India observes that as to the appellant's argument that, because compensation was not explicitly requested by the plaintiff in the litigation, the plaintiff is not entitled to any compensation, even under Section 21 of the Specific Relief Act, 1963. The preceding is devoid of content. The decree for compensation is issued in place of and as an alternative to the order for specified performance.

3. Honourable Supreme Court of India also observes that the defendant - original landowner, on the other hand, shall be entitled to a deduction for the money value of the services, time, and energy used in pursuing the compensation claims, and the costs paid in the lawsuit that resulted to the award. As a result, there is no evidence in the record that the appellant has incurred any expenditures. However, in light of the facts and circumstances of this case, and light of this Court's decisions in the cases of Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647 and Urmila Devi v. Deity, Mandir Shree Chamunda Devi, (2018) 2 SCC 284, there will be no justice in awarding the whole amount of compensation to the plaintiff.

The Decision Held by the Court

1. Honourable Supreme Court of India step down the judgment of High Court till the extent of the compensation being solely provided to the plaintiff-respondent and held that from the compensation collected by the acquiring body Rs. 3,00,000/- is entitled to appellant-defendant and rest with interest and solatium with the plaintiff-respondent. The rest of the judgment passed by the High Court was upheld by the Hon’ble Supreme Court of India.

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