1991 (11) TMI 246 - SC - Indian Laws

Supreme Court modifies decree, awards compensation instead of specific performance.

The Supreme Court awarded compensation to the Respondent in lieu of specific performance, modifying the High Court's decree. The compensation amount was ... Whether a specific claim in the plaint is necessary to grant the compensation? Held that:- In the present case there is no difficulty in assessing the quantum of the compensation. That is ascertainable with reference to the determination of the market value in the land acquisition proceedings. The compensation awarded may safely be taken to be the measure of damages subject, of course, to the deduction therefrom of money value of the services, time and energy expended by the appellant in pursuing the claims of compensation and the expenditure incurred by him in the litigation culminating in the award. Confirm the finding of the High Court that Respondent was willing and ready to perform the contract and that it was the Appellant who was in breach. However, in substitution of the decree for specific performance, we make a decree for compensation, equivalent to the amount of the land acquisition compensation awarded for the suit lands together with solatium and accrued interest, less a sum of ₹ 1,50,000 (one lakh fifty thousand only) which, by a rough and ready estimate, we quantify as the amount to be paid to the appellant in respect of his services, time and money expended in pursuing the legal-claims for compensation. Therefore, there is no need for Respondent to pay the sum of ₹ 15,000 additionally Issues Involved1. Readiness and willingness of the Respondent to perform the contract.2. Jurisdiction of the High Court to reappreciate evidence in a second appeal.3. Impact of the State's acquisition of the suit properties on the specific performance of the contract.4. Entitlement to compensation in lieu of specific performance under Section 21 of the Specific Relief Act, 1963.Detailed Analysis1. Readiness and Willingness of the Respondent to Perform the Contract:The High Court found the Respondent was ready and willing to perform his obligations under the contract. Evidence showed that on 30th January 1974, the Respondent sold another property for Rs. 30,000, indicating he had the necessary funds to fulfill his part of the bargain. The High Court noted the issuance of notices on 23.3.1974 and 6.5.1975 by the Respondent, expressing his readiness and willingness to perform the contract. These notices, though not served due to the Appellant's refusal to accept them, were considered valid under Section 27 of the General Clauses Act. The Supreme Court upheld the High Court's view, affirming that the Respondent was indeed ready and willing to perform the contract.2. Jurisdiction of the High Court to Reappreciate Evidence in a Second Appeal:The High Court reversed the findings of the trial court and the first appellate court, concluding that the Respondent was ready and willing to perform the contract. The Supreme Court supported this reappraisal, stating that the High Court is not precluded from recording proper findings where the lower courts' findings are vitiated by non-consideration of relevant evidence or an erroneous approach.3. Impact of the State's Acquisition of the Suit Properties on the Specific Performance of the Contract:During the pendency of the second appeal, the State acquired the properties in question. The High Court held that the acquisition did not extinguish the Respondent's rights entirely and that the relief could be suitably molded to fit the circumstances. The High Court issued directions that if specific performance became impossible, the decree should be substituted with one for the realization of compensation payable in lieu of the acquired land. The Supreme Court acknowledged the complexity of this issue, emphasizing that the Indian law allows for compensation even when specific performance becomes impossible without the plaintiff's fault.4. Entitlement to Compensation in Lieu of Specific Performance under Section 21 of the Specific Relief Act, 1963:Section 21 of the Specific Relief Act, 1963, allows for compensation in addition to or in substitution of specific performance. The Supreme Court clarified that compensation could be awarded even if the contract becomes incapable of specific performance without the plaintiff's fault. The Court permitted an amendment to the plaint to include a claim for compensation, ensuring complete justice. The measure of compensation was to be determined by the standards of Section 73 of the Indian Contract Act, 1872. The Supreme Court decreed compensation equivalent to the land acquisition compensation, less Rs. 1,50,000 for the Appellant's services, time, and litigation expenses.ConclusionThe Supreme Court modified the High Court's decree, awarding compensation to the Respondent in lieu of specific performance. The compensation was to be the amount determined in the land acquisition proceedings, including solatium and accrued interest, less Rs. 1,50,000 for the Appellant's efforts and expenses. The order provided authority for the apportionment and payment of compensation, ensuring the decree's execution without affecting other potential claimants. The modified decree was issued without costs.