Relief Of Specific Performance Can Be Refused For Non Performance Of An Essential Promise In Contract

In CIVIL APPEAL NOS. 7424­7425 OF 2011, SURINDER KAUR vs BAHADUR SINGH, an agreement for sale was signed between the appellant and the defendant upon which the possession was handed over to the defendant against payment of a small sum as earnest money. As there was pending litigation between parties, it was agreed that the sale deed would be executed within one month from the date of decision of civil appeal pending before the Punjab and Haryana High Court.

When the said litigation was finally decided 13 years later, Bahadur Singh requested the appellants to execute the sale deed but since she failed to do so, a suit for specific performance of the agreement was filed by Bahadur Singh.  The Appellants raised the plea that since Bahadur Singh 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. The suit has been decreed by all the courts below and finally came up before the Supreme Court.

The Supreme Court decided that the question of law arising in these appeals is 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. The only issue is whether the vendee Bahadur Singh who admittedly did not pay the rent is entitled to a decree of specific performance of the agreement dated 13.05.1964. The courts below have held that the agreement contained several promises which may be reciprocal, contingent or separate. 

Section 51 of the Contract Act,1872 provides that when a contract consists of reciprocal promises to be simultaneously performed, no promisor needs to perform his promise unless the promisee is ready and willing to perform his reciprocal promise.

Against this issue, the Supreme Court found that possession had already been handed over and the sale agreement was waiting upon the decision of the pending litigation. Clause 3 provided 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. One cannot lose sight of the fact that the land had been handed over to Bahadur Singh and he had agreed that he would pay rent at the customary rate. Therefore, the possession of the land was given to him only on this clear­cut. 

Section 16(c) of The Specific Relief Act, 1963 which clearly lays down that the specific performance of a contract cannot be enforced in favour of a person who fails to prove that he has performed or was always ready and willing to perform the essential terms of the contract which were to be performed by him.

Here the Supreme Court held observed that Bahadur Singh did not even pay a penny as rent till the date of filing of the suit and further denied his liability to pay the same. There can be no manner of doubt that the payment of rent was an essential term of the contract. Since the only construction which can be given to the contract in hand is that Bahadur Singh was required to pay customary rent, Bahadur Singh had failed to perform his part of the contract. Tenancy can be monthly or yearly. Even if no date was fixed for payment of rent, at least after expiry of one year, Bahadur Singh should have offered to pay the customary rent to the vendor which could have been monthly or yearly. But he could definitely not claim that he is not liable to pay rent for 13 long years.

Section 20 of The Specific Relief Act lays down that the jurisdiction to decree a suit for specific performance is a discretionary jurisdiction and the court is not bound to grant such relief merely because it is lawful.

The Supreme Court observed that Merely because the plaintiff is legally right, the Court is not bound to grant him the relief. True it is, 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. Sub clause(c) of sub­section (2) of Section 20 provides that even if the contract is otherwise not voidable but the circumstances make it inequitable to enforce specific performance, the Court can refuse to grant such discretionary relief. Explanation (2) to the Section provides that the hardship has to be considered at the time of the contract, unless the hardship is brought in by the action of the plaintiff. Bahadur Singh having got possession of the land in the year 1964 did not pay the rent for 13 long years and even when he filed the replication in the year 1978, he denied any liability to pay the customary rent. The land was agricultural land. Bahadur Singh was cultivating the same. He must have been earning a fairly large amount from this land which measured about 91⁄2 acres. He by not paying the rent did not act fairly and, in our opinion, forfeited his right to get the discretionary relief of specific performance.