Section 21 of the Specific Relief Act enables the Court to award compensation in lieu of the specific performance when a contract has become impossible for no fault of the plaintiff

The Hon’ble Supreme Court of India held in the case titled Urmila Devi and ors. vs The Deity, Mandir Shree Chamunda Devi, through Temple Commissioner and ors. (Civil Appeal no. 462 OF 2018 arising out of SLP 25771/2013) decided on 10.01.2018.

Challenge

An agreement to sell was executed by defendant’s in favor of the plaintiff and entire sale consideration was received and possession was delivered in the year 1989. To   defeat   the   rights   of   the plaintiff, a gift deed dated 08.07.1991 was executed by defendants in favour of one the defendant, which was declared null and void by the lower courts.  The   decree   for   specific performance   was   granted   by   the   trial   court in favour of the plaintiff and was confirmed by the first appellate court.  The   suit   land   was   acquired and compensation was determined in favour of one of the defendants whose name was recorded in the Revenue records.

The High Court held that consequent to the acquisition of suit land under the   land   acquisition   proceedings, decree   of   specific performance   granted   in   favour   of   plaintiff   could   not have been maintained. Hence the limited question in the present appeal is as to what relief are the appellants entitled to, in the event the decree of specific performance was required to be modified by an alternate decree.

Held

Due to the name of defendant being recorded in the Revenue records, compensation was determined in his favor.   In   view   of   the   judgment and decree of courts below whereby the gift deed dated 08.07.1991 had been   declared   void, defendant is   left   with   no right in the suit land and is clearly not entitled to receive any amount consequent to the acquisition of the suit land.

The Supreme court relying on Jagdish   Singh   vs. Nathu Singh, 1992 (1) SCC 647 opined that when a contract has become impossible for no fault of the plaintiff, Section 21 of the Specific Relief Act enables the Court to award compensation in lieu of the specific performance. The court further relied upon Kanshi Ram vs. Om Prakash Jawal and others, 1996 (4) SCC 593, in context of suit for specific performance of the contract held that granting decree for specific performance of contract is one of the discretion to be exercised on   sound principles. When   the   court   gets   into   equity jurisdiction,   it   would   be   guided   by   justice,   equity, good conscience and fairness to both the parties.