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Gobind Ram Vs Gian Chand: Decree Of Special Performance Of Contract In Relation To Specific Relief Act, 1963

Sanjeevani Sundas ,
  08 November 2021       Share Bookmark

Court :
Supreme Court
Brief :
This appeal by special leave is granted against the decision of the Delhi High Court in 1995. The decree of special performance wasgranted to the respondent and compensation was given to the petitioner. Also, viewing other judgements, Section 20 of the Specific Relief Act, 1963 was referred to while deciding the above case by the Learned Senior Counsel.
Citation :
Civil Appeal No. 443 of 1994

Case Name:
Gobind Ram v. Gian Chand

Coram:
V.N Khare, S.N Phukkan, JJ

Date of Judgement:
September 27, 2000

Parties:
-Petitioner: Gobind Ram
-Respondent: Gian Chand

Overview

  • The petitioner gave his consent to sell a disputed property in Lajpat Nagar IV, New Delhi for a considerable amount of Rs.16,000 to the respondent, and an agreement of sale was made between the two on 24-1-1973. The respondent paid Rs.1000 as earnest amount.
  • However, on failure to execute the sale deed on time by the petitioner, the respondent filed a suit for specific performance of the contract. The suit was pronounced on 6-10-1976 and the respondent deposited Rs.15,000 in the trial court as a consideration amount.
  • The petitioner had also filed an appeal in the High Court which was dismissed by a disputed judgement given by the court on 20-12-1991. Moreover, the High Court also ordered the respondent to pay a sum of Rs.1,00,000 to the Registry of the High Court as a fixed deposit which was in the nature of interest-bearing. The petitioner filed an appeal again.
  • When the notice of special leave petition was served, the Counsel for the petitioner offered to pay Rs.1,16,000 to the respondent to get out of the decree. To this, the respondent made an offer that the petitioner would pay a further sum of Rs.50,000 and a consideration sum of Rs.1,50,000, and then the leave was granted.
  • When the matter came up to the court, another attempt was made by the court to settle but it failed.

Issues

  • Whether a decree of specific performance is valid or not in this case or not?
  • Whether a decree of specific performance can cause hardship to the defendant or not?
  • Whether the court can grant a special performance decree just because it’s lawful or not?
  • Whether the judgement given by the Delhi High Court was based on the principle of fair, just, and equitable justice or not?

Legal Provisions

Section 10 of the Specific Relief Act, 1963 which lays down the scenarios in which specific performance of a contract are enforceable.

Section 20 of the Specific Relief Act, 1963: The jurisdiction of the court to grant specific performance of a contract.

Judgement Analysis

The Court made the following observations:

  • The Counsel forthe petitioner relied on two judgements given by the Court.In Damacherla Anjaneyulu v. Damcherla Venkata Sehaiah, the Court granted compensation instead of a decree of special performance as it would cause hardships to the defendant. Another case was the case of P.V Joseph’s Son Mathew,where the court held that it is not bound to grant the decree just because it is lawful to do so. The motive of the litigation should also be considered while passing the verdict.
  • While viewing the facts of the case and the judgments of the other cases, the Court observed that the petitioner tried to wag out of the contract due to the escalation of prices in the real estate. On the other hand, the respondent did not try to take unfair advantage of the petitioner. He kept following the orders and direction of the Court and hence he is entitled to the decree.
  • The two previous courts had already decided in favor of the respondent. The fact that the respondent kept depositing the consideration amount in the trial court as well as the High Court should also be taken into consideration. The conduct of the petitioner was also taken into account and the court needs to indulge. Hence, the court observed that it would be unfair and unjust if the respondent was denied the decree.
  • However, to mitigate the hardships to the petitioner, the Court directed the respondent to further deposit a sum of Rs. 3,00,000 within 4 months to the Registry of the Court. The amount was kept in a nationalized bank for a short term. The Court took note of the offer made on behalf of the respondent, and that amount was to be paid to the petitioner when he gives the possession of the suit property.
  • The petitioner was also ordered to withdraw the amount which was deposited in the trial court and also the sum of Rs.1,00,000 kept in the Registry of High Court as fixed deposit bearing interest.
  • Certain changes were made in the judgements given by Delhi High Court and both the respondents were granted with the decree of special performance and the petitioner was entitled to compensation. Hence, the appeal was dismissed.

Conclusion

The main objective of the Specific Relief Act, 1963 is to provide amendments to parties whose contractual or civil rights have been violated. The Supreme Court in this case gave a verdict that was not only based on the principle of free, fair, and equitable justice but also covered the main purpose of the Specific Relief Act. The respondent’s appeal to an entitlement of decree falls under Section 10 of the Act and hence is enforceable. Section 20 of the Act deals with the jurisdiction and discretion of the court to grant the decree of specific performance. If the discretion is not arbitrary and is guided by the judicial principle, then the court can grant such decree. Another important point to be noticed is that when the lower courts make errors while giving the judgement, the apex court can always mend those errors and give unarbitrary decisions and this was evident in the case of Gobind v. Gian Chand, where both the respondent and the petitioner was provided with fair justice.

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