Atma Ram v. Charanjit Singh

Author: Shweta Bilonikar

LLM (Financial Regulations)
K.P. Mehta School of Law, Mumbai

CITATION :(2020) 2 MLJ 587 (SC): LNIND 2020 SC 105]

DATE OF JUDGEMENT: 10TH FEBRUARY 2020

BENCH: JUSTICE N.V. RAMANA, JUSTICE AJAY RASTOGI, JUSTICE V. RAMASUBRAMANIAN

AUTHOR: JUSTICE V. RAMASUBRAMANIAN

1. BACKGROUND

This was a landmark judgement that covers one of the many loopholes in Indian law. We often come across such cases where the unfair advantage of these loopholes is taken by the parties which leads to unfair judgement.

In this case, a suit for Mandatory Injunction was treated as a suit for Specific Performance of a contract merely by asking to pay the required court fees for specific performance under sec 149 of CPC, and judgement was given for the same. This technical loophole was highlighted by the Hon’ble Supreme Court and the party was not allowed to enjoy the relief for specific performance as such shortcuts cannot be allowed as it is contrary to the law. In this case, Sec. 149 of CPC, Amendments in lawsuits, Sec. 16 (c) of the Specific Relief Act were taken into consideration by the Supreme Court.

2. FACTS OF THE CASE

  1. In this case, the Petitioner and the Respondent both agreed to the sale of an immovable property on 12. 10. 1994.

In this agreement, the Respondent agreed to sell the land and the factory premises at Plot no. 90, sector 21, Industrial Area, Bhiwani along with the land of about 1250 sq. yards were agreed to be sold to the Petitioner by the Respondent for consideration of Rs. 4, 38, 000/-. The initial amount of Rs. 1, 00, 000/- was paid by the Petitioner.

  1. The date for the final sale deed and the performance of the contract was fixed on 7. 10. 1996.
  2. By the time the date of performance of the contract arrived, the Petitioner was informed by the Respondent that there was pendency of civil litigation with the third party on the concerned land and therefore, there is a hurdle for the performance of the contract.
  3. Therefore, the Petitioner issued a legal notice to the Respondent for furnishing the details of the pending civil suit and if there is no such pendency, the contract of sale must be executed within 15 days of the notice.
  4. As there was no response from the Respondent, the Petitioner filed a civil suit – CS no. 240 of 1999 in the court of Additional Civil Judge, Senior Division, Bhiwani. The suit was filed for the relief of mandatory injunction and the Petitioner valued the suit at Rs.250 and paid the fixed court fee of Rs. 25.
  5. In the Written Statement filed by the Respondent, he denied the execution of the agreement including all the other claims. The Respondent also applied for the dismissal of the suit on the ground that the suit for a mandatory injunction cannot be filed for the specific performance of the contract.
  6. Concerning the application, the Hon’ble Trial Court amended the suit directing the Petitioner to pay the deficit court fees for the suit for specific performance of the contract.
  7. After payment of the required amount by the Petitioner, the court passed the decree on the suit for specific performance of the contract in the order dated 3. 2. 2006, stating that the balance amount must be paid within one month and the property must be transferred by the Respondent to the Petitioner.
  8. The first appeal, CA No. 181 of 2006 was filed at Additional District Court Bhiwani. The District Court allowed the appeal and set aside the judgement of the trial court and the suit was dismissed by the order dated 02. 01. 2013.
  9. Aggrieved by the judgement, the second appeal was filed by the Petitioner at the High Court of Punjab and Haryana at Chandigarh. The High court dismissed the suit by order dated 20. 05. 2016 stating suit as time-barred. Therefore, the Special Leave Petition was filed at the Hon’ble Supreme Court.

 

3. ISSUES

Following are the issues framed by the trial court in the given case:-

  • Is the agreement between the parties valid?
  • Whether the Petitioner was entitled to the relief of mandatory injunction?
  • Was the suit filed by the Petitioner maintainable in its present form?
  • Was the suit barred by limitation?
  • Does the Petitioner have the locus standi to file the suit?
  • Whether the suit is bad for misjoinder and non-joinder of necessary parties?
  • Whether the Petitioner is stopped by his act and conduct of filing the suit.

 

4. ARGUMENTS ADVANCED

Argument by the petitioner

  • The learned senior counsel for the Petitioner argued that judgement of the trial court considering the suit for specific performance by ordering the deficit court fee was valid under Sec. 149 of CPC.
  • The judgement of the High court of dismissing the suit as time-barred was objected by the council by saying that the court did not consider the relief granted by Sec. 16 (C) of the Specific Relief Act, i.e. readiness and willingness on the part of the Petitioner was not considered.

 

Argument by the Respondent

  • The learned senior counsel for the Respondent supported the decision of the High Court stating the fact that the suit was filed after more than 3 years of the date of the notice issued for the specific performance of the contract.
  • There was no argument made on the part of the Respondent regarding the amendment in the suit of mandatory injunction to convert it into the suit for the specific performance of the contract.

 

5. HON’BLE SUPREME COURT’S OBSERVATION AND JUDGEMENT

  • In this Special Leave Petition, on hearing the arguments from both the sides, the Hon’ble Supreme Court said that, though the court had the authority to direct to pay the requisite court fees and it would be considered as the money paid at the date of starting of the suit[1], this cannot be done in the above case.
  • In this case, the Petitioner had filed suit for Mandatory Injunction and paid the requisite court fee and valued the suit according to the rules for the suit for the same. This fact itself shows that the Petitioner was aware of the fact that the suit for Mandatory Injunction was filed and paid the requisite court fees only after a confrontation by the application filed by the R
  • As the suit for a Mandatory Injunction cannot be allowed for the specific performance of the contract, the only alternative for the Petitioner was to seek an amendment in the suit. This was a shortcut taken by the Petitioner to gain the required relief. The court cannot allow taking advantage of such tactics to anyone.
  • Also, after filling the application for the specific performance of the contract on 12. 11. 1996, the Petitioner did not file the suit for three years. There was no issue framed in the trial court regarding the delay in filing the suit under sec 16 (c) of the Specific Relief Act, 1963. The affidavit filed by the Petitioner proving his presence at the office of sub-registrar on the day of the specific performance of the contract is not sufficient to prove the reasons for the delay of 3 years. This does not prove the readiness and willingness[2] on the part of the Petitioner for the specific performance of the contract.
  • In the suit of specific performance, the conduct of the Petitioner filing the suit is important. In this case, the suit for mandatory injunction was filed and required court fees were paid and also there was a delay of three long years. Such an act is not eligible for the specific performance of the contract.
  • Therefore, the Hon’ble Supreme Court considered the decision given by the First Appellate court as right and held the same judgement. Hence, the Special Leave Petition was dismissed.

 

6. APPRAISAL OF POINT OF LAW

  • Sec 149 of CPC: Supreme Court under this section, though the court has the authority to direct the deficit amount (in case any) and it will be considered as paid on the first day of the suit, it cannot change the nature of the suit. It is only applicable in case of a deficit in the court fees required in the suit filed.
  • Sec 16 (C): this section is about the “Readiness and Willingness” as an important aspect for the specific performance of the court.
  • Order VI Rule 17 of CPC.

 

 

References:

1. Westlaw India,

 http://www.westlawindia.com

2. Specific Relief Act.

3. Civil Procedure Code, 1908.

4. Indian Contract Act, 1872.

[1] Sec 149 of CPC, “Power to make up deficiency of Court-fees .-Where the whole or any part of any fee prescribed for any document by the law for the time being in force relating to Court-fees has not been paid, the Court may, in its discretion, at any stage, allow the person, by whom such fee is payable, to pay the whole or part, as the case may be, of such Court-fee; and upon such payment the document, in respect of which such fee is payable, shall have the same force and effect as if such fee had been paid in the first instance”.

[2] Sec 16 (c) of Specific Relief Act, 1963.  “who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation.—For the purposes of clause (c),—

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.”

 

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