Major General Darshan Singh (D) by LRs. Vs. Brij Bhushan Chaudhary (D) by LRs.
Background and Facts
The dispute centered on a 1980 agreement for sale executed by Brij Bhushan Chaudhary (defendant) in favor of Major General (retd) Darshan Singh (plaintiff) for a residential property in Chandigarh. The agreed price was ₹3,50,000, with ₹30,000 paid as earnest money. The sale deed was to be executed by April 30, 1980. Clause 3 of the agreement stated that if the defendant failed to honor the deal, he would refund the earnest money plus ₹10,000 in damages, and the plaintiff would have no right to claim other damages or seek specific performance.
The plaintiffs alleged that after subsequent negotiations, the price was reduced, and a draft sale deed was executed. They claimed to have been put in possession and to have fulfilled all obligations, but the defendant, citing rising property prices, refused to complete the sale. The plaintiffs then filed a suit for specific performance or, alternatively, for damages.
Proceedings in Lower Courts
The Trial Court denied specific performance, granting only damages, citing that the property was part of a Hindu Undivided Family (HUF) and not all co-sharers were parties to the suit. The District and High Courts upheld this decision, emphasizing the plaintiffs' failure to implead all co-sharers and the personal nature of the agreement.
Supreme Court’s Analysis
The Supreme Court reaffirmed that the relief of specific performance under Section 20 of the Specific Relief Act, 1963, is discretionary and equitable. The Court observed that the plaintiffs had made false or incorrect statements in the plaint—particularly regarding possession of the property and the status of the property as HUF, despite knowing all co-sharers were not parties to the suit.
The Court stressed that a party seeking equitable relief must approach the court with clean hands. The plaintiffs’ misconduct and failure to disclose material facts disentitled them from the discretionary relief of specific performance. The Court also noted that clause 3 of the agreement expressly limited the plaintiffs’ remedy to refund and damages, precluding specific performance.
Judgment and Outcome
The Supreme Court held that the lower courts were justified in denying specific performance due to the plaintiffs’ misconduct and the explicit contractual terms. However, the Court upheld the award of damages as per the agreement. The appeal was partly allowed to the extent of damages, but the claim for specific performance was denied.
Significance
This judgment underscores that specific performance is not a matter of right but lies within the equitable discretion of the court, which can be denied if the plaintiff is found to have acted inequitably or contrary to the terms of the agreement. The decision also highlights the importance of full disclosure and honesty in pleadings when seeking equitable remedies.
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