Court cannot refuse specific performance without assigning good and cogent reasons therefor

In a recent ruling the Allahabad High Court while hearing a second appeal reversed the decision of the lower appellate court that refused to decree a suit for specific performance despite having rendered the finding that the Plaintiff had proved breach of the part of the defendant and the readiness and willingness on the part of the Plaintiff to perform his part of the obligations under the contract.

The suit was originally filed for the specific performance of an agreement to sell in respect of an immovable property executed in the year 1994 for a total consideration of Rs.30,000/-. It was the case of the Plaintiff that he had paid part consideration of Rs.15,000/- and the agreement provided that a registered agreement for the sale of the property would have to be executed as and when the purchaser called upon the vendor to do so along with payment of the balance sale consideration. It was the case of the Plaintiff that the Plaintiff called upon the Defendant to execute a registered agreement for sale while offering to pay the balance consideration. However, the Defendant in breach of the contract to sell refused to perform his part of the obligation. In the meantime, the vendor passed away. Accordingly, a suit for specific performance was filed against the heirs of the vendor. The suit was resisted on the basis that the suit contract was a forged and fabricated document. The trial court dismissed the suit holding that the Plaintiff could not prove the signature of the vendor and therefore could not prove the suit contract.

The Original Plaintiff preferred a First Appeal against the order of the Trial Court. The First Appellate Court reversed the findings of the Trial Court and held the suit contract to be proved. Furthermore, the First Appellate Court also held that the Defendant had committed a breach of the contract and Plaintiff had proved his readiness and willingness to perform. Despite the said findings, the First Appellate Court did not grant specific performance and instead, directed refund of the earnest money with interest for the sole reason that the said relief was prayed for in the alternative to specific performance.

The Plaintiff thereafter preferred a Second Appeal before the Allahabad High Court. The Allahabad High Court set aside the order of the First Appellate Court to the extent that the First Appellate Court refused to grant specific performance and remanded the matter back to the First Appellate court for a fresh consideration on the aspect of specific performance. While doing so, the Allahabad High Court held that the First Appellate Court had shown an utter breach in the observance of the statutory obligation cast upon the court by virtue of Section 20 of the Specific Relief Act whereby, the court, while exercising its discretion in refusing to grant specific performance is required to consider relevant factors and assign cogent reasons for doing so. The discretion to not grant specific performance cannot be exercised arbitrarily.1

  1. Before the Allahabad High Court, Second Appeal No.1280 of 2018 dated 06.08.2021

By - Chaitanyaa Bhandarkar