Case Note & Summary
The dispute originated from an agreement to sell executed on 9 March 2010, where the plaintiff paid Rs. 31,50,000 out of a total consideration of Rs. 32 lakhs for land. The defendant failed to execute the sale deed as agreed, leading the plaintiff to file a suit for specific performance on 5 August 2010. During the suit's pendency, the land was acquired under the Land Acquisition Act, 1894, with a notification issued on 6 July 2012. The trial court decreed the suit for specific performance on 19 December 2012, a decision affirmed by the first appellate court. The defendant appealed to the High Court, arguing that acquisition extinguished saleable rights, making specific performance impossible. The High Court modified the decree, holding the plaintiff entitled to compensation under the Land Acquisition Act, including solatium and interest, based on Section 21 of the Specific Relief Act, 1963, and precedent in Jagdish Singh v. Natthu Singh. The defendant appealed to the Supreme Court, contending that compensation was not claimed in the plaint and only refund with interest was due under Section 21. The plaintiff relied on Jagdish Singh and Urmila Devi v. Deity, Mandir Shree Chamunda Devi, arguing entitlement to compensation as an alternative when specific performance becomes impossible. The Supreme Court analyzed the concurrent findings of fact on agreement execution and readiness to perform, affirming the plaintiff's initial entitlement to specific performance. It examined Section 21 of the Specific Relief Act, which permits compensation when a contract becomes impossible without the plaintiff's fault. Following Jagdish Singh, the court held that the High Court correctly modified the decree to award compensation under the Land Acquisition Act, as the acquisition made specific performance impracticable. The appeal was dismissed, upholding the High Court's order.
Headnote
A) Contract Law - Specific Performance - Compensation in Lieu of Specific Performance - Specific Relief Act, 1963, Section 21 - Land Acquisition Act, 1894 - Dispute arose from an agreement to sell where the land was acquired during the suit's pendency, making specific performance impossible - Court considered Section 21 of the Specific Relief Act, which allows compensation when contract becomes impossible without plaintiff's fault - Held that the plaintiff is entitled to compensation under the Land Acquisition Act, including solatium and interest, as an alternative to specific performance, following precedents (Paras 7-8). B) Evidence Law - Concurrent Findings of Fact - Execution of Agreement and Readiness to Perform - Specific Relief Act, 1963 - All three courts below recorded concurrent findings on execution of agreement, payment of part consideration, and plaintiff's readiness and willingness - Supreme Court affirmed these findings, establishing plaintiff's entitlement to decree for specific performance initially (Paras 2-3, 7).
Issue of Consideration
Whether the High Court was justified in modifying the judgment and decree for specific performance to award compensation under the Land Acquisition Act, 1894, in lieu of specific performance, when the land was acquired during the pendency of the suit.
Final Decision
Supreme Court dismissed the appeal, upholding the High Court's impugned judgment and order dated 23.09.2016, which modified the decree for specific performance to award compensation under the Land Acquisition Act, including solatium and interest, to the plaintiff.
Law Points
- Specific performance
- compensation in lieu of specific performance under Section 21 of the Specific Relief Act
- 1963
- effect of land acquisition on saleable rights
- concurrent findings of fact
- readiness and willingness to perform contract
