(Delivered by Jagadisan, J.)
The plaintiff in the suit O. S. 173 of 1956, Subordinate Judge's Court, Coimbatore, sued for specific performance of an agreement to sell the plaint items of immoveable properties in his favour by the first defendant, the admitted owner. The suit was dismissed and hence this appeal by the plaintiff.
The subject-matter of the suit is described in the plaint A and B Schedules. They are agricultural lands in the village of Madhappur, Palladam Taluk. The A Schedule (known as Pallamthottam) consists of 7 acres 48 cents. The B Schedule (called Teppakinarthottam) is of an extent of 10 acrss 68 cents. Under an agreement dated 17th June 1956, the first defendant agreed to sell to the plaintiff the plaint A Schedule for Rs. 7500 and the B Schedule for Rs. 9500. It is this agreement which is sought to be specifically enforced in the present suit.
The second defendant, who is the wife of one Ramaswami Gounder, the Village Munsif of Madhapur, claimed to have secured from the first defendant an agreement dated 2nd May 1956, to sell the B Schedule properties for a sum of Rs. 6000. Her case was that the plaintiff was not entitled to enforce the agreement in his favour as regards the plaint B Schedule properties as she held an agreement to purchase the self-same properties from the first defendant which was prior to the agreement in favour of the plaintiff. This plea of the second defendant has been accepted by the Court below.
The third defendant in the suit put forward an agreement dated 25th May 1956, by the first defendant in his favour to sell the plaint A Schedule properties. His case also was that in view of the prior agreement in his favour the plaintiff could not get any relief even in respect of the plaint A Schedule. The third defendant however did not press his contention during the trial of the suit. The first defendant himself denied that there was any such agreement executed by him in favour of the third defendant. The third defendant, therefore, practically went out of the action and the contest in respect of the plaint A Schedule was between the plaintiff and the first defendant.
The first defendant pleaded that though there was an agreement in favour of the plaintiff, as put forward by him, he was not entitled to specific performance as he had committed a breach of the terms of the agreement. The first defendant also pleaded that even if there was no breach the plaintiff was not entitled to the equitable relief of specific performance as the agreement was “vague, indefinite and uncertain.”
The learned Subordinate Judge held that the plaintiff was in default in performing his part of the contract under ths agreement, to sell and upheld the defence of the first defendant. The result was, as stated already, the suit was dismissed.
There is no dispute that the plaintiff and the first defendant entered into an agreement regarding the sale of the plaint A and B Schedule properties on 17th June 1956, and the terms of the agreement were embodied in Ex. A. 1 which was executed by the first defendant in favour of the plaintiff and Ex. B. 1 which was executed by the plaintiff in favour of the first defendent. It is also clear in view of what happened at the trial that as regards the plaint A Schedule the third defendant has no rights and that the first defendant is bound to convey the properties to the plaintiff if he is entitled in law and in equity to enforce his contract. Two questions therefore really arise for consideration and they are :
(1) Is the plaintiff disentitled to obtain speciffc performance of the agreement to sell the plaint A Schedule properties by the defendant, and (2) Does the second defendant hold an agreement in her favour as alleged by her for the sale of the plaint B Schedule properties prior in point of time to that of the agreement in favour of the plaintiff? The second defendant states that the agreement in her favour is Ex. B. 4 dated 2nd May, 1956.
We shall first refer to tha terms of tha agreement in favour of the plaintiff. The agreement consists of two parts, that relating to the A Schedule and that relating to the B Schedule. The A Schedule properties were to be conveyed by the first defendant for a consideration of Rs. 7500. This amount of Rs. 7500 was stipulated to be paid by the plaintiff in the following manner :
(a) Rs. 2250 to be paid on the data of the agreement;
(b) Rs. 1750 to be paid within ten days after tha agreement;
(c) Rs. The first defendant should receive a sum of Rs. 1500 towards expanses of sale,
(d) The balance of Rs. 2000 to be paid before the Sub Registrar at the time of the registration of the sale deed.
The first defendant undertook to execute and register the sale deed in favour of the plaintiff within one month from the date of the agreement and also to discharge an encumbrance over the property in favour of one Ratnaswami Gounder. The agreement stipulates that in the event of the first defendant's failure to secure the sale deed he should not merely return to the plaintiff the amounts received under the agreement but should also be liable to pay an equal amount as damages. As regards the B Schedule properties the consideration of Rs. 9500 was to be paid in the following manner:
(a) Rs. 1250 to be paid by tha plaintiff to the first defendant on the date of tha agreement;
(b) sum of Rs. 3000 should be peid later;
(c) The balance of Rs. 5250 should be puid at the time of the registration of the sale deed.
The first defendant covenanted that he would execute tha sale deed in favour of the plaintiff as regards the B Schedule without delay on the termination of a litigation which formed the subject-matter of the suit, O.S No. 135 of 1956 on the file of the District Munsil Court, Tirupur. If the suit should remain undecided within the period stipulated in the agreement, the first defendant was bound to renew the agreement and execute the sale deed. Failure on the part of the first defendant to fulfil the terms of the contract would make him liable to pay Rs. 2000 by way of damages to the plaintiff.
On the same day, 17th June, 1956, the first defendant executed Ex. A. 1 in favour of the plaintiff and the plaintiff executed Ex. B. 1 in favour of the first defendant. Tha terms of Exs. A. 1 and B. 1 are substantially tha same It cannot be said that there is any variance between the two so as to suggest that there was no definite or certain agreement between the parties.
The plaintiff admittedly paid the sum of Rs. 2250 on 7th June, 1956, the receipt of which is evidenced by Ex. A. 2 in the case. The first defendant also admits that on 21st June, 1956, the plaintiff paid him a further amount of Rs. 1750 as evidenced by Ex. A. 4 These two payments relate to the agreement regarding the plaint A Schedule properties. The first defendant also admits that he passed a receipt Ex. A. 3 dated 17th June, 1956 in favour of the plaintiff acknowledging the receipt of a sum of Rs. 1250. But his evidence now is that he did not receive that amount though he passed the receipt. The plaintiff's evidence is that the amount was paid and the receipt was duly obtained.
It will be convenient at this stage to refer to the agreement put forward by the second defendant as regards the sale of the plaint B Schedule. That is Ex. B-4 in the case which is dated 2nd May, 1956. This agreement recites that a sum of Rs. 2,000 had been paid by way of advance to the plaintiff, that a sum of Rs. 3,000 should be retained by the second defendant to discharge the encumbrance over the property in favour of Ratnaswami Gounder and that the balance of Rs. 1,000 should be paid before the Sub-Registrar at the time of the registration. The crucial question in this case is whether this agreement came into existence on 2nd May, 1956, or whether it was brought into existence later than Ex. A-1 and antedated. The stamp paper is no doubt in the name of the first defendant and it bears the date 2nd May, 1956. The contention vehemently urged on behalf of the second defendant is that there is absolutely no proof that this agreement, Ex. B-4, is really antedated. The scribe of Ex. B-4 is stated to be one S.S Natarajan: There are several attestators to this document. The first is one Srinivasamurthi, the second is one Sanjivi Rao, the third is K. Kumaraswami, the fourth (name is not legible) styled as village munsif, Madhapur. It is however very significant that not one of the attestors, nor the scribe, nor the second defendant, nor the second defendant's husband has gone into the witness box to depose that the deed of agreement came into existence on 2nd May, 1956, and that it is really not an antedated document. The only witness who speaks to Ex. B-4 and the circumstances under which it came to be executed is the first defendant himself. We have, therefore, to decide the question of the actual date of the execution of Ex. B-4 on the probabilities of the case.
The case of the defendants is that the plaintiff knew of the existence of Ex. B-4 in favour of the second defendant when he entered into the agreement to purchase the properties for himself. In fact the first defendant's definite case is that he was unwilling to enter into an agreement with the plaintiff as regards the plaint B Schedule, that he informed him of the prior agreement in favour of the second defendant but yet yielded to his importunities and executed the agreement in his favour on the assurance that he would settle everything with the second defendant's husband as regards her claim under the agreement. The first defendant goes further and says that not merely was there an oral assurance on the part of the plaintiff that he would bring round the second defendant and her husband to agree to his purchasing the property but that there was actually a reference to that agreement in Ex. B-1 which is the agreement executed by the plaintiff in favour of the first defendant.
The plaintiff states that there was no agreement at all by the first defendant in favour of the second defendant on 2nd May, 1956 as alleged by the contesting defendants, that there was, therefore, no question of his assuring the first defendant of settling the claim of the second defendant, that there was no reference to the agreement in favour of the second defendant in Ex. B-1 when he executed it, but that the document had been subsequently interpolated by adding certain words referring to the agreement dated 2nd May, 1956. A mere look at the agreement Ex. B-1, particularly to the portion said to have been interpolated, makes it quite clear that the disputed portion of the document could not have been in existence at the time when it was first written. The last two lines in page 3 consists of the words in Tamil Immediately after that we find the signature of the plaintiff Muthukumaraswami. The document as it now stands contains the word below the signature of Muthukumaraswami and these words are visibly written in an ink different from the ink in which the other portion of the document is written. The top of page 4, as it originally stood, must have been a continuation of in page 3 and must have run like this Then there should have been another paragraph beginning with the words, ”
This separate paragraph admittedly refers to the plaint B Schedule. Now we find at the top of page 4 the following two lines in Tamil;
These two lines must have been put over the top of by a subsequent interpolation. Then follows the words These words are squeezed in between the paragraph describing the plaint A Schedule and the paragraph describing the plaint B Schedule. That these words should have been interpolated or interlineated after the plaintiff signed the document cannot be seriously in doubt. Otherwise there is no explanation why the plaintiff Muthukumaraswami would not have signed at the bottom of page 3 down below instead of below We are, therefore, convinced that this document has been interpolated presumably by the joint endeavour of defendants 1 and 2.
(After discussing evidence his Lorship proceeded) :
We are not prepared to accept the evidence of the first defendant. We accept the evidence of the plaintiff. Having regard to the intrinsic evidence contained in the document itself by reason of the position of the disputed works and lines we have not the slightest doubt that the plaintiff and his witnesses are speaking the truth.
His Lordship discussed the evidence about Ex. B. 4) :
There is a prim facie presumption that all documents were executed on the day they bear the dale [See Mina Kumar v. Bijoy(1)]. But this is not a conclusive presumption and can therefore be rebutted.
We are satisfied that in the circumtances of the case Ex. B 4 did not come into existence on the date it bears but must have been created after Ex. A. 1 and Ex. B. 1.
We are, therefore, of opinion that there was a valid agreement to sell by the first defendant to the plaintiff and that the alleged agreement by the first defendant in favour of the second defendant under Ex. B. 4 dated 2nd May, 1956, is not true and that Ex. B. 4 is an ante-dated document which must have come into existence subsequent to Ex. A. 1 and Ex. B. 1.
We shall now deal with the defence put forward by the first defendant as a bar to the plaintiff seeking the remedy of specific performance as regards the plaint A Schedule. The first defendant states that the plaintiff committed default in performing his part of the contract under Ex. A. 1 and B. 1 and that therefore being a party in breach he cannot sue for specific performance. The question is whether the plaintiff is in breach.
(His Lordship after discussing the evidence and contentions proceeded) :
We have no doubt that the plaintiff has not committed any breach of the terms of the agreement in his favour.
The contention that the plaintiff should be non-suited as he did not tender the money to the first defendant or even deposit it in Court at the time of the institution of the suit is not tenable. A plaintiff in a suit for specific performance is under an obligation to have performed or been ready to perform the terms due to be performed before the date of the suit and must also express his readiness and willingness to perform the conditions to be fulfilled in future. It is true that a default on his part in either of these respects would afford the defendent a good ground for resisting the action, but the law does not insist upon actual tender or payment of the money or deposit of the amount in Court. In the present case, the plaintiff's right under the agreement itself was under challenge by third parties, and, no person of ordinary prudence would have under such circumstances parted with money. Deposit of the amount in Court is not called for as a decree for specific performance itself would only be on condition of the plaintiff paying the stipulated price as per the terms of the agreement. We have no hesitation in reversing the finding of the trial Court and holding that the plaintiff is not disentitled to sue by reason of breach of contract on his part.
Learned Counsel for the first defendant contends that having regard to all the circumstances in the case the plaintiff should not be granted the discretionary relief by way of specific performance. It is urged that the first defendant was not a wise person and that both the plaintiff and the second defendant took advantage of his lack of wisdom and drove a hard bargain. S. 22 of the Specific Relief Act provides that the jurisdiction to decree specific performance is discretionary; and it also provides that the Court may properly exercise a discretion not to decree specific performance.
“Where the circumstances under which the contract is made are such as to give the plaintiff an unfair advantage over the defendant, though there may be no fraud or misrepresentation on the plaintiff's part.”
The English Rule of Equity conferring on the Courts a discretion to refuse specific performance, though it may be lawful to do so, resting on principles of justice and fair play, is embodied in this statutory provision. There is no absolute right in a contracting party to claim enforcement of the contract by way of specific performance. It is true that specific performance is a discretionary remedy. But discretion does not mean that the Court has a carte-blanche to grant or withhold relief arbitrarily. The Court acts judicially and takes into account the conduct of the plaintiff or the hardship which a decree for specific performance would inflict on the defendant. If it would be highly unreasonable or if the defendant would be subject to hardship amounting to injustice, a decree for specific performance will be refused. The conscience of the Court must be satisfied that the plaintiff is not guilty of any shocking conduct or moral culpability before it is persuaded to grant him the remedy. Grounds on which the Court can refuse specific performance cannot be rigidly classified or exhaustively enumerated. Human ingenuity can be harnessed to good purposes equally efficiently. The scope for deviation from right conduct is immense. Unless the law is fluid and adaptable occasions may arise when the Court might feel helpless to redress a particular injustice.
In cases of proved positive fraud there is no question of the Court granting specific performance as the contract itself is liable to be rescinded. There may be something short of fraud like want of equity and fairness which would afford a good defence to the action. The unfairness may be visible from the very terms of the contract, or it may be extrinsic to the contract. The rule is stated thus in Fry on Specific Performance at pages 190 and 191 :
“Whenever there are evidence of distress in the party against whom performance is sought, or he is an illiterate person, or whenever there are any circumstances of surprise, or want of advice, or anything which seems to import that there was not a full, entire and intelligent consent to the contract, the Court is extremely cautious in carrying it into effect. Still, it is not the doctrine of the Court that a man cannot contract without his Solicitor at his elbow, or that a man in insolvent circumstances, or in prison, is disabled from selling his estate; and if a contract made under suoh circumstances will bear the careful examination of the Court and the full light of day, it will bo specifically enforce d.”
In Halsbury's Laws of England, 3rd Edn. Volume 36, pages 299 and 300 the position is set out as follows :
“Again, there may be circumstances in the position of mental state of the party against whom specific performance is sought such as to render it inequitable that he should be forced by the Court to perform his contract, such as, for instance, intoxication, intimidation and duress, mental weakness not amounting to incapacity to contract, distress, illiteracy, want of advice, or similar circumstances appearing inconsistent with intelligent consent. In all such cases it need not be shown that the plaintiff was guilty of intentional unfairness.”
An instance of the Court not granting specific performance on the ground that the bargain between the parties was unconscionable is to be found in the decision reported in Ramakrishna Naidu v. Palaniappa Chettiar. In that case the Court held that the transaction was unfair and unequal because an irrigation channel which was being constructed and which would render the land which was till the date of the contract lying fallow considerably more valuable was not brought to the notice of the defendant who had gone away from the village and who had no knowledge of this development. The Court held that the plaintiff in that suit obtained an unfair advantage within the meaning of the said expression under S. 22 of the Specific Relief Act.
The grounds on which the first defendant seeks to bring the plaintiff's agreement within the inhibition of S. 22 of the Specific Relief Act for not granting specific performance are :
(1) inadequacy of price stipulated under tha agreement, (2) stipulation by the first defendant to bear the stamp charges himself, (3) distressed circumstances in which the first defendant found himself due to domestic trouble and litigation, and (4) lack of knowledge of the real value of the land agreed to be sold, being an absentee landlord. The learned Counsel for the first defendant contends that the circumstances should be cumulatively taken into account and that together they would establish a good defence to the enforceability of the contract by the plaintiff.
The evidence on record is not sufficient to establish that the price of Rs. 9500 offered by the plaintiff and accepted by the first defendant was so grossly inadequate as to suggest that the plaintiff took advantage of the ignorance or illiteracy of the first defendant. P W. 3 deposes that he owns 50 acres of garden land, that there lands are which will yield Rs. 1,000 and lands which will yield Rs. 200 and that the price of one acre of good garden land will be four or five thousands. The plaintiff's evidence is that he owns 100 acres of land at Madhapur, that the suit relates to about 15 acres of garden land of which four acres could be irrigated and the rest is only kadu. According to him good garden land will sell at about Rs. 1,000 per acre. The evidence of the first defendant is that the price of Rs. 6,000 offered by the second defendant was low, that he agreed to sell to the plaintiff because of the advice given by Chandrasekhara Aiyar and Nataraja Aiyar, that on subsequent enquiries he learnt that each acre will be worth Rs. 2,500 or Rs. 3000 and that therefore the prices fixed under Ex. A-1 and under Ex. B-4 are very low. No independent evidence has been let in as regards the value of the lands on the date of the agreements. Even assuming that the price of Rs. 17000, the total consideration fixed under Ex. A-1 for both plaint A and B Schedule properties, would be a little less than the market value, it cannot be said that the agreement is not enforceable by reason of this fact. Inadequacy of price is not a ground for refusing specific performance unless the purchaser stands in a fiduciary position to the vendor or fraud enters into the contract. [Coles v. Trecothick, Sullivan v. Jacob(2)]. Unless the inadequacy of the price shocks the conscience and amonnts in itself to evidence of fraud in the transaction it is not a sufficient ground for refusing specific performance. At page 213 Fry in his book on Specific Performance states as follows :
“To make a contract for an insufficient considerative incapable of enforcement by the purchaser, would be practically to prevent a man from selling hi property at less than its value—however impossible it might be to sell it at its value however desirous he might be to sell it for the price actually obtained, however desirable it might be for his interest that he should do so, and however unwilling or unable the purchaser might be to purchase at its full value … The freedom of contract, including in it the freedom to enter into enforceable contracts, should never be infringed without sufficient cause. But furthermore, if inadequacy of consideration short of fraud were a bar to specific performance, the question would arise as to the amount of inadequacy which should so operate — a question not easy to answer.”
We are not satisfied on the facts of the present case that there has been such a gross inadequacy of consideration as to infer therefrom malpractice or fraudulent conduct on the part of the plaintiff to disentitle him to obtain discretionary relief of specific performance.
The undertaking on the part of the first defendant to pay the stamp charges would not also vitiate the contract and would not afford evidence of the plaintiff taking unfair advantage over the first defendant. It is true that normally the purchaser bears the stamp and registration expenses but that is always Subject to a contract to the contrary between the parties
The first defendant has not been free from domestic troubles. He became an heir to a large extennt of property as the adopted son of one Ananda Thirthachar. His adoptive mother eloped with a Mohammadan in 1953. He deposes in his evidence that there were civil and criminal litigation in respect of the properties and that the adoptive mother and her paramour were threatening him. Tha stepmother Krishnaveni Ammal added to the quota of trouble of the fiirst defendant and launched a suit in the Disrict Munsif Court, Tiruppur. The first defendant himself was aged 22 or 23 years when he entered into the agreement. It is no doubt unfortunate that the first defendant should have found himself in such a predicament. Family misfortunes may cause agony of mind and may destroy the equanimity of temper in any individual. But the question is can they by themselves import unfairness into the transactions entered into by such a person? We are unable to say that mere mental distress, however acute it may be, would be sufficient in law to enable the distressed individual to get out of clumsy bargains which he might have made. The evidence of the first defendant himself is that he was anxious to sell the property. He deposes as follows :
“I told Chandrasekhara Aiyar about my intention to sell first item 15 days before the suit agreement. I did not mention the price. I wanted to realise Rs. 10000 for first item. I had no idea of the price of the land.] did not make enquiries… I agreed to their advice (Chandrasekhara Ayar and Nataraja Aiyar) and executed the agreement. 1 have no suspicion that both Chandrasekhara Aiyar and Nataraja Aiyar would play fraud on me.”
We are therefore not impressed with the argument of the learned Counsel for the first defendant that the imbalance of the mind of the first defendant was so great at the time when he entered into the agreement that it would amount to a vitiating circumstance to bar the remedy of specific performance. The next contention that is urged on behalf of the first defendant is, that he was an absentee landlord, that he was not aware of the real value of the land and that therefore he offered to sell away the property for a sacrificial pries. The fact that the first defendant took to urban life at Coimbatore and neglected his patrimony in the village either wilfully or by force of circumstances is entirely irrelevant in judging whether the agreement sought to be enforced is unequal or unfair. Mere absence from the village would not indicate that the first defendant was not aware of the proper value of his land. Certainly he had the means of knowing the true value even if the was not actually aware. If he would not care to know the market value and if he would agree to sell for whatever price that is offered in a spirit of riddance and renunciation he will have to stand by it. Even equity with its everwidening jurisdiction to temper law with justice cannot offer relief to such a person. The evidence does not disclose that the plaintiff took advantage of the condition of the first defendant to drive a hard bargain. The plaintiff and the second defendant's husband are both residents of the village of Madhapur. It also appears that the plaintiff is running a coffee hotel at Palladam. They were certainly rivals in the matter of purchasing the property from the first defendant. The situation was tempting. The properties could be purchased on favourable terms. Both of them set their hearts on purchasing the lands and the result is this litigation. Granting so much, the conduct of the plaintiff has not been such as to disentitle him from enforcing the contract. Self-aggrandisement is a human ‘virtue’ and Courts cannot put an embargo on it.
To sum up the legal position: specific performance will be refused if the contract is unfair, one-sided, unjust, unconscionable or if its enforcement would be oppressive or hard on the defendant or if the plaintiff has obtained it by sharp practice, by over reaching, by trick, by taking undue advantage of his position, by non disclosure of material facts, or by any other deceptive methods. An onerous bargain is not one which can be resisted to be performed unless if is established that it is also unconscionable or that the plaintiff has taken an improper advantage of his position [See Davis v. Mau Shwe Co.]. Improvidence on the part of the defendant as such would not be a proper ground for refusing specific performance. Where no other element is present except that the bargain is bad, it is not the rule in equity to deny specific performance. The mere fact that the defendant entered into a losing bargain or one where plaintiff will reap great gains is clearly not enough ground to deprive the plaintiff of the benefit of his contract. However wide the jurisdiction of the Court may be to grant succour to persons who have been victimised there is no power to grant relief to a person whose only complaint is that the bargain is foolish and improvident. If the Court were to strike down a bargain on the ground that it was not wise on the part of one of the contracting parties to have entered into it, it would be assuming an overriding power to interfere with the freedom of contract.
In the light of the foregoing principles we are clearly of opinion that the plantiff is entitled to obtain specific performance of the agreement in his favour. It is unnecessary to consider the question as to how far the plaintiff would be entitled to obtain relief by way of damages, or reimbursement of the money paid, as we have held that he can claim specific performance.
In the result, the appeal is allowed, and, the judgment and decree of the Court below are hereby set aside. There will be a decree in favour of the plaintiff as prayed for in the suit. The plaintiff will be entitled to get his costs from the second defendant as regards the plaint B Schedule property in proportion to the value of that property, both here and in the Court below. There will be no order as to costs in favour of the plaintiff as against the first defendant as regards the plaint A Schedule property. The first defendant will bear his costs both here and in the Court below.
V.C.S