Court Denies Specific Performance Due to Terminated Agreement, Upholds Trial Court Decision

The Supreme Court held that the suit for specific performance without seeking declaratory relief was not maintainable as the Agreement of Sale had been terminated. The High Court erred in reversing the trial court's findings and granting specific performance despite contractual clauses and the plaintiff's non-compliance. The Supreme Court restored the trial court's judgment, denying specific performance and ruling in favor of the defendants due to the plaintiff's failure to fulfill contractual obligations.

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Issues Involved:
1. Maintainability of the suit for specific performance without seeking declaratory relief.
2. Legality and validity of the High Court's reversal of the trial court's findings.
3. Grant of decree for specific performance despite Clause 12 of the Agreement of Sale.
4. Conformity of the decree with Section 20 of the Specific Relief Act.
5. Appropriate decree or order to be passed.

Summary:

Issue 1: Maintainability of the Suit
The Supreme Court held that the original suit filed by the plaintiff seeking a decree for specific performance without seeking declaratory relief regarding the termination of the Agreement of Sale is not maintainable. The Agreement of Sale was terminated by the defendants through a notice dated 28.03.1985, and the plaintiff did not seek to declare this termination as invalid. Therefore, the suit for specific performance on the basis of the terminated Agreement of Sale is unsustainable in law.

Issue 2: Legality and Validity of High Court's Reversal
The Supreme Court found that the High Court erred in reversing the trial court's findings on issues 3, 4, and 5. The trial court had correctly concluded that the plaintiff was not ready and willing to perform his part of the contract, as required by Section 16(c) of the Specific Relief Act. The plaintiff failed to pay the balance sale consideration and did not secure the necessary permissions within the stipulated time. The High Court's judgment was based on incorrect appreciation of facts and legal evidence.

Issue 3: Grant of Decree Despite Clause 12
The Supreme Court observed that Clause 12 of the Agreement of Sale provided for compensation in case of non-compliance by either party. The High Court overlooked this clause while granting specific performance. The plaintiff was entitled to compensation rather than specific performance, as the Agreement of Sale had been terminated, and the plaintiff had not fulfilled his obligations.

Issue 4: Conformity with Section 20 of the Specific Relief Act
The Supreme Court held that the High Court did not exercise its discretionary power reasonably under Section 20 of the Specific Relief Act. The plaintiff had breached the terms of the contract, and the Agreement of Sale was terminated. Therefore, granting a decree for specific performance was not justified. The trial court's judgment, which denied specific performance, was in accordance with the law and facts.

Issue 5: Appropriate Decree or Order
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the trial court's judgment, which had denied the decree for specific performance. The trial court's findings and conclusions were deemed correct and legally sustainable.

Conclusion:
The Supreme Court restored the judgment and decree of the trial court, denying the plaintiff's suit for specific performance and granting relief to the defendants. The plaintiff's failure to seek declaratory relief and non-compliance with the contractual terms were pivotal in the decision.

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