Suit for Specific performance can be refused for non- compliance of an essential promise in contract

The Supreme Court held that a party who does not perform one of the essential promises in a contract is not entitled to discretionary relief of specific performance of the very contract.

The said judgment was held in the case of Surinder Kaur (d) thr. LR. Jasinderjit Singh (d) thr. LRs. vs Bahadur Singh (d) thr. LRs.” (Civil Appeal No. 7424-7425 of 2011) decided on 11.09.2019.

Challenge:

Whether a vendee who does not perform one of his promises in a contract can obtain the discretionary relief of specific performance of that very contract?

Facts:

Mohinder Kaur entered into an agreement with Bahadur Singh in year 1964 whereby she agreed to sell the suit land for total consideration of Rs. 5605/-. Out of this, Rs. 1000/- was paid as earnest money at the time of execution of agreement to sell and agreed that balance amount is to be paid at the time of registration of the sale deed. The possession was handed over to the vendee at the time of agreement. Since there was some litigation with regard to property and it was agreed between the party that the sale deed would be executed within one month from the date of decision of court.

It was further agreed between the parties that if the case is not decided within one year, then the second party shall pay to the first party the customary rent for the land.

Bahadur Singh didn’t pay the rent even till the filing of the present suit instead denied his liability to pay the same. Later, suit for specific performance was filed him. In resisting the suit for specific performance, the defendant had raised the plea that since the plaintiff had admittedly failed to pay the rent of the land in terms of Clause 3 of the agreement, he was not entitled to a decree for specific performance.

Held:

The bench observed that the payment of rent was an essential term of the contract.  Plaintiff had failed to perform his part of the contract. Explanation (ii) to Section 16(c) clearly lays down that the plaintiff must prove performance or readiness or willingness to perform the contract according to its true construction. The bench further observed that plaintiff was not entitled to claim the discretionary relief of specific performance of the agreement having not performed his part of the contract even if that part is held to be a distinct part of the agreement to sell. The vendee Bahadur Singh by not paying the rent for 13 long years to the vendor Mohinder Kaur, even when he had been put in possession of the land on payment of less than 18% of the market value, caused undue hardship to her. He, by not paying the rent did not act fairly forfeited his right to get the discretionary relief of specific performance.

Referring to Section 20 of the Specific Relief Act, the bench said that the relief of specific performance is discretionary. Merely because the plaintiff is legally right, the Court is not bound to grant him the relief. It is true, that the Court while exercising its discretionary power is bound to exercise the same on established judicial principles and in a reasonable manner. Obviously, the discretion cannot be exercised in an arbitrary or whimsical manner.