Delve into this insightful blog post focusing on the court’s legal analysis regarding compensation in a specific performance case. The case involved intricate details surrounding the execution of an agreement and the subsequent land acquisition, shedding light on the complexities of legal proceedings. Stay tuned to gain a deeper understanding of how compensation was determined and awarded in this intriguing legal scenario.
Facts
- An agreement to sell was executed by the defendant in favor of the plaintiff on 9.3.2010 for the land in question for a total consideration of Rs. 32 lakhs.
- The land in question was subsequently acquired under the Land Acquisition Act with a notification issued on 6.7.2012.
- The defendant failed to remain present at the Sub-Registrar’s office on 4.8.2010 for executing the sale deed.
- A suit was filed by the plaintiff for specific performance of the agreement on 5.8.2010, resulting in a decree by the trial court on 19.12.2012 in favor of the plaintiff.
- The trial court found the execution of the agreement, acceptance of part consideration, and readiness of the plaintiff to pay the balance amount in favor of the plaintiff.
- A legal notice was served to the defendant on 13.7.2020 for executing the sale deed on 6.8.2010, along with a prayer for recovery of the paid amount with interest.
- The plaintiff had paid Rs. 31,50,000 out of the total consideration of Rs. 32 lakhs.
- The sale deed was supposed to be executed on 8.7.2010 as per the agreement.
- Learned trial Court directed defendant to execute sale deed in favor of plaintiff and handover possession of property
- High Court affirmed findings of courts regarding execution of agreement to sell and plaintiff’s readiness and willingness
- Defendant appealed against High Court judgment
- Shri Sushil Singh modified judgment for specific performance, stating plaintiff entitled to entire compensation due to land acquisition
Also Read: Judicial Review of Delayed Writ Petition
Arguments
- The plaintiff never claimed any compensation in the present case.
- Reliance was placed on the decision of the court in Jagdish Singh v. Natthu Singh and Urmila Devi v. Deity, Mandir Shree Chamunda Devi.
- Section 21(1) of the Specific Relief Act allows for compensation if the contract is broken by the defendant.
- Section 21(5) specifies that compensation cannot be awarded unless claimed in the plaint.
- Plaintiff may be entitled to refund of sale consideration with interest as per Section 21 of the Specific Relief Act.
- High Court erred in awarding entire compensation to the plaintiff instead of refunding sale consideration with interest.
- Defendant had no saleable right after land acquisition, making specific performance of the agreement impossible.
- Decision of the court in a similar case allowed plaintiff to benefit from compensation minus litigation costs incurred by the original landowner.
- High Court directed plaintiff to receive approximately Rs. 80 lakhs from the acquiring body of the State of Haryana.
- The plaintiff’s alternate prayer requested a refund of Rs. 31,50,000/- with 24% interest if specific performance cannot be carried out.
- Based on the lower court judgments, the plaintiff is entitled to receive the amount of Rs. 31,50,000/- with interest only.
- Referring to Section 21 of the Specific Relief Act, the court can award compensation in place of specific performance when the contract becomes impossible without the plaintiff’s fault.
- Concurrent findings by all three courts confirmed the execution of the agreement, payment of Rs. 31,50,000/- as sale consideration, and the plaintiff’s readiness to pay the remaining balance.
Also Read: Ownership Dispute: Legal Analysis on Admission and Decree
Analysis
- The compensation determined and awarded under the Land Acquisition Act can be considered in determining the amount of damages.
- If specific performance is made impossible by the plaintiff, they cannot seek damages under Section 21 of the Specific Relief Act.
- The plaintiff is entitled to the decree for specific performance and can claim the entire amount of compensation awarded under the Land Acquisition Act.
- The High Court correctly ruled that the plaintiff is entitled to the compensation amount along with interest and solatium.
- The decree for compensation is passed as an alternate decree in lieu of the decree for specific performance.
- The compensation awarded can be considered as the measure of damages, with deductions for services, time, and energy expended in pursuing the claim and litigation costs.
- The plaintiff can still claim compensation even if it was not specifically prayed for in the suit.
- The High Court’s finding that the respondent was ready to perform the contract and the appellant was in breach is confirmed.
- The defendant – original landowner is also entitled to deductions for services, time, and energy expended in pursuing the claim and litigation costs.
- High Court modified the decree of specific performance to decree for realization of compensation in lieu of acquisition.
- Court referred to Section 21 of the Specific Relief Act which allows award of compensation in case the contract becomes impossible to perform.
- The compensation awarded under the Land Acquisition Act was considered as the measure of damages, deducting expenses incurred by the original land owner.
- High Court held that the plaintiff is entitled to compensation awarded under the Land Acquisition Act along with interest and solatium as there was no fault on the part of the plaintiff.
- The modification of the decree was based on principles laid down in previous cases of Jagdish Singh and Urmila Devi by the Supreme Court.
- The modification of the decree was justified as per the circumstances of the case.
- No expenses incurred by the appellant have been reported or documented on record.
Also Read: Interpretation of Statutory Limitation under Section 263(2)
Decision
- The plaintiff is awarded the entire amount of compensation determined under the Land Acquisition Act, with interest and solatium, less Rs. 2,50,000/-
- The defendant shall be entitled to Rs. 3,00,000/- from the compensation deposited with the acquiring body
- The plaintiff will receive the balance amount of compensation, interest, and solatium, minus Rs. 3,00,000/-
- The appeal is partly allowed to the extent mentioned
- The plaintiff is entitled to recover the full amount of compensation lying with the acquiring body, minus Rs. 3,00,000/- towards specified expenses and balance sale consideration
- The rest of the High Court’s judgment is confirmed
Case Title: SUKHBIR Vs. AJIT SINGH (2021 INSC 279)
Case Number: C.A. No.-001653-001653 / 2021
