In the present case, the Supreme Court primarily considered whether the lower courts were justified in modifying the judgement and decree passed by the lower Court in lieu and substitution of Specific performance of a sale deed. 

Date of Judgement: 30 April 2021 

Composition of the Bench: Division Bench of hon’ble Justice M.R. Shah and hon’ble Justice DY Chandrachud 

Facts

The litigants entered into an agreement to sell a piece of land for total sale consideration of Rs. 32 lakhs.  Out of this sum, the plaintiff paid Rs. 31,50,000 to the defendant as advance. 

As per the agreement, the sale deed was to be executed on 08.07.2010

The defendant failed to execute the deed on the said date. Pursuant to this, the plaintiff served a legal notice to the defendant to be present at the office of the sub registrar on 06.08.2010 to execute the sale deed.  

The defendant explicitly refused to be present at the office of the sub registrar two days prior itself i.e. on 04.08.2010

Thereafter, a civil suit was instituted by the plaintiff in the Civil Court at Jhajjar for specific performance of the agreement.

Suffice to know that the hon’ble Court directed the defendant to execute the sale deed in favor of the plaintiff.   

The learned first appellate Court affirmed the decision of the trial Court. 

Hitherto, it had not been brought to the notice of the hon;ble Court that the land in question had been acquired by the Haryana government. 

In a second appeal filed before the HC by the original owner of land, it was contended that since the land was acquired by the government, the original defendant (owner of the land) had no saleable right and the original sale deed could not be executed. Furthermore it was posited, that the plaintiff was entitled merely to a refund of the amount of sale consideration with interest and not any additional compensation as the HC had awarded, since the same had not been prayed for by the plaintiff. 

It was argued that the HC had vitiated section 21(5) of the Relief Act by granting additional compensation. 

Contrarily, the other side placed reliance on Jagdish Singh v. Natthu Singh where facts of the case were similar. The Supreme Court had held that in the contingency that the performance of a deed was rendered impossible by no fault of the plaintiff, he was to be entitled to the entire amount of compensation and solatium with interest, etc.

In the instant case, on whether the lower courts were justified in modifying the judgement and decree in lieu and substitution of Specific performance of a sale deed, the SC held such modification to be legally tenable. The view adopted by the HC of the plaintiff being in the shoes of the defendant and thus being entitled to the amount of compensation paid by the government for land acquisition had a clear jurisprudential precedence. The judgement of the HC was in pursuance  Jagdish Singh v. Natthu Singh and subsequently, Urmila Devi vs The Deity Mandir Shree Chamunda.

Furthermore, the Court held that the argument of the plaintiff not having prayed for compensation and consequently not being entitled to any compensation had “no substance” since the decree for compensation was passed as an alternate decree. 

On question of the amount of compensation, the SC was in consonance with the HC and held that the amount paid under the Land  Acquisition Act be taken into consideration. 

However, the SC awarded the original holder of land Rs. 3 lakhs as compensation for the expenses incurred during the award of compensation by the government and the payment of arrears according to the terms of the original sale deed. 

Thus the appeal was partly allowed to the above extent only.