- 1 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR REGULAR FIRST APPEAL NO.98 OF 2018 (SP) BETWEEN: 1. V. RAJU AGED ABOUT 53 YEARS, S/O LATE VENKATAPPA, R/AT DODDABELE COLONY, VIDHYA PEETA POST, KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 2. RAJAMMA 46 YEARS W/O V.RAJU R/AT DODDABELE COLONY, VIDHYA PEETA POST, KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 3. R. NARASIMHA MURTHY AGED ABOUT 25 YEARS, S/O. V.RAJU R/AT DODDABELE COLONY, VIDHYA PEETA POST, KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 4. MOHAN RAJU AGED ABOUT 19 YEARS, S/O. V.RAJU R/AT DODDABELE COLONY, VIDHYA PEETA POST, KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 Digitally signed by RAMYA D Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 5. ANITHA AGED ABOUT 35 YEARS, W/O V.RAJU R/AT DODDABELE COLONY, VIDHYA PEETA POST, KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 6. MASTER NISHANK AGED ABOUT 14 YEARS, S/O. V.RAJU MINOR REP.BY HIS MOTHER AND NATURAL GUARDIAN SMT. ANITHA R/AT DODDABELE COLONY, VIDHYA PEETA POST, KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 7. MASTER YOGESH AGED ABOUT 11 YEARS, S/O V.RAJU MINOR REP.BY HIS MOTHER AND NATURAL GUARDIAN SMT. ANITHA R/AT DODDABELE COLONY, VIDHYA PEETA POST, KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 8. MUNIRAMAIAH AGED ABOUT 53 YEARS, S/O. MARAPPA R/AT VARAHASANDRA VILLAGE KENGERI HOBLI, BENGALURU SOUTH TALUK – 560 060 9. MUNILAKSHMAMMA AGED ABOUT 43 YEARS, D/O MARAPPA - 3 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 NO.5, 1ST CROSS, SERVICE ROAD, DOMMALUR LAYOUT BENGALURU SOUTH TALUK – 560 071 …APPELLANTS (BY SRI SIDDAMALLAPPA P.M., ADVOCATE) AND: R.PRAKASH AGED ABOUT 56 YEARS, S/O. LATE M.RAMAIAH, R/AT NO. 33, 12TH MAIN ROAD, 5TH PHASE, J.P. NAGAR, BENGALURU - 560 078. …RESPONDENT (BY SRI VIJAY KRISHNA BHAT, ADVOCATE) THIS RFA FILED UNDER SECTION 96 ORDER XLI RULE 1 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 08.06.2017 PASSED IN O.S.NO.354/2010 ON THE FILE OF THE ADDITIONAL SENIOR CIVIL JUDGE, RAMANAGARA, DECREEING THE SUIT FOR SPECIFIC PERFORMANCE. THIS APPEAL, COMING ON FOR FURTHER ARGUMENT, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR ORAL JUDGMENT The appeal is filed by the appellants/defendant Nos.1 to 9 challenging the judgment and decree dated 08.06.2017 passed in O.S.No.354/2010 by the Addl. Senior Civil Judge, Ramanagara, thereby, the suit filed for - 4 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 specific performance is decreed directing defendant Nos.1 to 7 to execute the registered sale deed in favour of the plaintiff as per the agreement of sale dated 22.12.2009. 2. The rank of the parties is referred to as per their rankings before the trial Court. 3. It is the case of the plaintiff that defendant Nos.1 to 7 are the owners of the suit schedule land and offered the said suit land for sale to the plaintiff and accordingly, the registered agreement of sale was executed on 22.12.2009 for total sale consideration of Rs.12,00,000/- and the plaintiff has paid an advance amount of Rs.4,00,000/-, among them an amount of Rs.2,00,000/- was paid in cash and Rs.2,00,000/- in cheque and the period stipulated for execution of registered sale deed is six months from the date of agreement of sale, but defendant Nos.1 to 7 have not executed the sale deed in favour of the plaintiff, but defendant Nos.1 to 7 have executed the sale deed in - 5 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 favour of defendant Nos.8 and 9 on 18.08.2010. Therefore, the plaintiff has filed the suit for specific performance of contract. 4. Defendant Nos.1, 4, 6 and 7 and defendant Nos.8 and 9 have appeared through Advocate and filed the written statement. It is contended by defendant Nos.1, 4, 6 and 7 that, though, admitted the execution of agreement of sale, but an advance sale consideration amount of Rs.2,00,000/- was paid and got cancelled the agreement of sale and offered the disputed land for sale to defendant Nos.8 and 9. Therefore, defendant Nos.8 and 9 both are bonafide purchasers. 5. Defendant No.8 has filed the written statement and the same has been adopted by defendant No.9 and stated that the plaintiff has suppressed the true material facts before the Court and that defendant Nos.8 and 9 have purchased the suit schedule land for valuable sale consideration and hence, defendant Nos.8 and 9 are the - 6 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 bonafide purchasers. Hence, the suit filed by the plaintiff is barred by limitation. Therefore, on all these pleadings, prays to dismiss the suit. 6. Upon the pleadings, the trial Court has framed the following issues: 1) Does the plaintiff proves that defendants No.1 to 7 have executed an agreement of sale in favour of plaintiff agreeing to sell the suit schedule property as stated in para 1 to 3 of the plaint ? 2) Does the plaintiff proves that defendants No.1 to 7 have agreed to sell the suit property in favour of the plaintiff for a sum of Rs.12,00,000/-and received Rs.4,00,000/- advance as stated in para 3 of the plaint? 3) Whether the plaintiff proves that he was ready and willing to perform his part of contract? 4) Does the 8th defendant proves that suit is barred by limitation? 5) Does the 8th defendant proves that defendants No.8 & 9 are bonafide purchasers of suit property? - 7 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 6) Whether plaintiff is entitled for specific performance of contract? 7) Whether plaintiff is entitled for the relief's claimed? 8) What order or decree? 7. The plaintiff is examined as P.W.1 and got marked the documents as Exs.P.1 to P.10. Defendant No.1 is examined as D.W.1, defendant No.8 is examined as D.W.2 and examined one witness as D.W.3 and got marked the documents as Exs.D.1 to D.5. 8. The trial Court has decreed the suit by granting the decree of specific performance by directing defendant Nos.1 to 7 to execute the sale deed in favour of the plaintiff by receiving balance sale consideration of Rs.10,00,000/- and the reason assigned by the trial Court is that defendant No.1 admitted the agreement of sale and the plaintiff was ready and willing to perform the contract. Therefore, decreed the suit. - 8 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 9. Being aggrieved by the judgment and decree passed by the trial Court, the appellants/defendant Nos.1 to 9 have preferred the appeal by raising various grounds and the learned counsel for the appellants/defendant Nos.1 to 9 in consonance with the grounds raised has submitted that the plaintiff has not paid an advance sale consideration amount. Further defendant Nos.1 to 7 have got cancelled the agreement of sale by issuing notice to the plaintiff. Further submitted that though, the stipulation period is six months from the date of agreement of sale, but in spite of request made by defendant No.1, the plaintiff has not come forward for making balance sale consideration amount for getting agreement of sale. Therefore, cancelled the agreement of sale and sold the disputed land to defendant Nos.8 and 9. Hence, defendant Nos.8 and 9 are the bonafide purchasers. 10. The learned counsel for the appellants/defendant Nos.1 to 9 places reliance on the judgment of the Hon’ble Supreme Court as follows: - 9 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 (I) PYDI RAMANA @ RAMULU VS. DAVARASETY MANMADHA RAO - CIVIL APPEAL NO.434/2013 (II) KEWAL KRISHAN VS. RAJESH KUMAR AND OTHERS ETC., - CIVIL APPEAL NOS.6989-6992/2021 (ARISING OUT OF SLP(C) NOS.2033-2036/2016) 11. On the other hand, the learned counsel for the respondent/plaintiff submitted that defendant No.1 has admitted the execution of registered agreement of sale and received an advance sale consideration amount of Rs.4,00,000/-. Further submitted that the respondent/plaintiff has issued the legal notice before the expiry of stipulated period of six months. Therefore, the plaintiff was ever ready and willing to perform the contract by making balance sale consideration amount for execution of registered sale deed. Therefore, when all these factors are proved, the trial Court has correctly decreed the suit. Therefore, prays to dismiss the appeal. 12. Learned counsel for the respondent/plaintiff places reliance on the following judgments: - 10 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 (I) SRI ANNASAHEB BALESHA WAGHE AND OTHERS VS. SRI APPASAHEB DADA POMMAI AND OTHERS - ILR 2007 KAR 2395 (II) ANIGLASE YOHANNAN VS. RAMLATHA AND OTHERS - AIR 2005 SC 3503 (III) PUTTARAMAIAH VS. TIMMAIAH - LAWS(KAR)- 2007-7-23 (RFA.NO.866/2001 DD.18.07.2007) 13. Upon hearing the learned counsel for both the parties and perusing the materials on record, the following points arises for consideration: (i) Whether, under the facts and circumstances involved in the case, the plaintiff proves that he was ever ready and willing to perform the contract as per pleadings in the plaint? (ii) Whether, under the facts and circumstances involved in the case, the discretion exercised by the trial Court in granting decree of specific performance is in accordance with Section 20 of the Specific Reliefs Act? (iii) The order passed by the trial Court requires interference or not? 14. It is the case of the plaintiff that Ex.P.1 is the registered agreement of sale dated 22.12.2009 and it is not disputed that defendant Nos.1 to 7 are the owners of - 11 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 the suit schedule land. The total sale consideration amount as per the agreement of sale is Rs.12,00,000/-. It is the contention of the plaintiff that he has paid an advance sale consideration amount of Rs.4,00,000/- to defendant Nos.1 to 7 and among them an amount of Rs.2,00,000/- was paid in cash and Rs.2,00,000/- was paid in the form of cheque and that defendant Nos.1 to 7 have received the same. But it is contended by defendant No.1 that though, the plaintiff has issued a cheque for a sum of Rs.2,00,000/-, but the same was taken back and therefore, an amount of Rs.2,00,000/- was not paid by the plaintiff. 15. Therefore, it is contended by the plaintiff that defendant No.1 was in distress of financial constraints. Therefore, offered the suit schedule land for sale and the period fixed is six months, but the plaintiff has not come forward. Therefore, defendant No.1 has issued the legal notice as per Ex.D.1 to the plaintiff withdrawing the offer made by defendant No.1. Though, Ex.P.1 is the registered - 12 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 agreement of sale, but the plaintiff has failed to prove that he has paid an amount of Rs.2,00,000/- through cheque to defendant No.1. The plaintiff has not produced evidence that he has paid Rs.2,00,000/- through cheque. Therefore, an amount of Rs.2,00,000/- made by the plaintiff to defendant No.1 through cheque is not proved. 16. The plaintiff has taken the averment in the plaint that he was ever ready and willing to perform the contract and had issued the legal notice as per Ex.P.2. Mere pleadings in the plaint are not sufficient to show that the plaintiff was ever ready and willing to perform the contract. Above that, it is the burden on the plaintiff to prove as to how he was ready and willing to perform the contract by showing some material before the Court, but the plaintiff has not produced any material to show that he was ever ready and willing to perform the contract. Therefore, it is not proved that the plaintiff was ready and willing to perform the contract as per Section 16(c) of the Specific Reliefs Act. - 13 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 17. Though, it is proved that execution of agreement of sale and decree to be passed is lawful to do so, but still the Court has discretion to grant decree of specific performance under the Specific Reliefs Act. 18. Section 20 of the Specific Relief Act (Before Amendment 2018), is a discretionary relief, which reads as follows: “20. Discretion as to decreeing specific performance.— (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance:— (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or - 14 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. Explanation 1.— Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2.— The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party.” 19. The Hon’ble Supreme Court in various judgments by interpreting Section 20 of the Specific Relief Act (hereinafter referred to as ‘the SR Act’ for short), has - 15 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 laid down principle of law that granting relief of decree for specific performance is discretionary relief, subject to the principles laid down in Section 20 of the SR Act. Just because an agreement of sale is proved, that cannot be made a reason to grant decree for specific performance, though it is lawful to do so. 20. The grant of decree for specific performance is guided by the principle of law laid down and what are the criteria that the Court shall consider upon the facts and circumstances involved in the case. In this regard, it is worthwhile to refer to some of the judgments of the Hon’ble Supreme Court. 21. The Hon’ble Supreme Court in the case of JAYAKANTHAM AND OTHERS v. ABAYKUMAR1, at paragraph Nos.7, 8 and 9 has held as follows: “7. While evaluating whether specific performance ought to have been decreed in the present case, it would be necessary to bear in mind the fundamental principles of law. The court is not bound to grant the relief of specific performance 1 (2017) 5 SCC 178 - 16 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 merely because it is lawful to do so. Section 20(1) of the Specific Relief Act, 1963 indicates that the jurisdiction to decree specific performance is discretionary. Yet, the discretion of the court is not arbitrary but is “sound and reasonable”, to be “guided by judicial principles”. The exercise of discretion is capable of being corrected by a court of appeal in the hierarchy of appellate courts. Sub- section (2) of Section 20 contains a stipulation of those cases where the court may exercise its discretion not to grant specific performance. Sub- Section (2) of Section 20 is in the following terms: “20. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance- (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non- performance would involve no such hardship on the plaintiff; (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.” 8. However, Explanation 1 stipulates that the mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or - 17 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 improvident in its nature, will not constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Moreover, Explanation 2 requires that the issue as to whether the performance of a contract involves hardship on the defendant has to be determined with reference to the circumstances existing at the time of the contract, except where the hardship has been caused from an act of the plaintiff subsequent to the contract. 9. The precedent on the subject is elucidated below: 9.1. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son2, this Court held that: (scc p. 345, para 14) “…14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff…” 9.2 A similar view was adopted by this Court in Sardar Singh v. Krishna Devi3: (SCC p.26, para 14) “14……. Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief, merely because it is lawful to do so; 2 1987 Supp SCC 340 :AIR 1987 SC 2328 3 (1994) 4 SCC 18 - 18 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.” 9.3. Reiterating the position in K. Narendra v. Riviera Apartments (P) Ltd4, this Court held thus: (SCC p.91, para 29) “29…… Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy5 by stating that the decree for specific performance is in the discretion of the Court but the 4 (1999) 5 SCC 77 5 (1996) 5 SCC 589 - 19 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court.” 9.4. These principles were followed by this Court in A.C. Arulappan v. Ahalya Naik6, with the following observations: (SCC pp.604 & 606, paras 7 & 15) “7…… The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff.” …….. “15…… Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific 6 (2001) 6 SCC 600 - 20 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court…..” 9.5. A Bench of three Judges of this Court considered the position in Nirmala Anand Vs. Advent Corporation (P) Ltd7., and held thus : (SCC p.150, para 6) “6…... It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, 7 8 (2002) 8 SCC 146 - 21 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.” 22. In the case of Parakunnan Veetill Joseph’s Son Mathew Vs. Nedumbara Kuruvila’s son8, at paragraph No.14, it is held as follows: ”14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff. The High Court has failed to consider the motive with which Varghese instituted the suit. It was instituted because Kuruvila could not get the estate and Mathew was not prepared to part with it. The sheet anchor of the suit by Varghese is the agreement for sale Exhibit A-1. Since Chettiar had waived his rights thereunder, Varghese as an assignee could not get a better right to enforce that agreement. He is, therefore, not 8 (1987) Supp SCC 340 - 22 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 entitled to a decree for specific performance.” 23. In the case of SARDAR SINGH VS. KRISHNA DEVI9 at paragraph No.14, it is held as follows: “14. The next question is whether the courts below were justified in decreeing the suit for specific performance. Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief, merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.” 24. In the case of K. Narendra Vs. Riviera Apartments (P) Ltd.,10 at paragraph Nos.29, 30, 31, 32, 33 and 34, it is held as follows: “29. Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. Performance of the contract involving some 9 (1994) 4 SCC 18 10 (1999) 5 SCC 77 - 23 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SCC 589 : AIR 1996 SC 2814] by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court. 30. Chitty on Contracts (27th Edn., 1994, Vol. 1., at p. 1296) states: “Severe hardship may be a ground for refusing specific performance even though it results from circumstances which arise after the conclusion of the contract, which affect the person of the defendant rather than the subject-matter of the contract, and for which the plaintiff is in no way responsible.” 31. Very recently in K.S.Vidyanadam v. Vairavan [(1997) 3 SCC 1] this Court has held: (SCC p. 7, para 10) “10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any - 24 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the court by both Sections 10 and 20. As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani [(1993) 1 SCC 519 : AIR 1993 SC 1742] : (SCC p. 528, para 25) ‘… it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the court may infer that it is to be performed in a reasonable time if the conditions are (evident?): (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract.’ In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, it is well-known that their prices have - 25 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 been going up sharply over the last few decades — particularly after 1973.” 32. Referring to the principle that mere rise in prices is no ground for denying the specific performance the Court has emphasized the need for being alive to the realities of life and inflationary tendencies judicially noticeable and observed: (SCC p. 9, para 11) “Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties — evolved in times when prices and values were stable and inflation was unknown — requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so.” 33. The Court has further proceeded to hold: (SCC pp. 9-10, para 11) “All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties).” 34. Having noticed the Constitution Bench decision in Chand Rani [(1993) 1 SCC 519 : AIR 1993 SC 1742] the Court has further held: (SCC p. 11, para 14) “Even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property.” - 26 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 25. In the case of A.C. Arulappan Vs. Ahalya Naik11 at paragraph No.7, 8, 9, 10 and 15, it is held as follows: “7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff. 8. In Damacherla Anjaneyulu v. Damcherla Venkata Seshaiah [1987 Supp SCC 75 : AIR 1987 SC 1641] the High Court declined to grant a decree for specific performance in favour of the plaintiff, even though the defendant was guilty of breach of agreement. That was a case where the defendant had constructed costly structures and if a decree for specific performance was granted, the defendant would have been put to special hardship. This Court directed the 11 (2001) 6 SCC 600 - 27 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 defendant to pay compensation to the plaintiff. 9. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son [1987 Supp SCC 340 : AIR 1987 SC 2328] this Court cautioned and observed as under: (SCC p. 345, para 14) “14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff.” 10. In Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SCC 589 : AIR 1996 SC 2814] the plaintiff, who sought for specific performance of an agreement to purchase immoveable property, filed a suit with incorrect and false facts. In the plaint, it was alleged that the plaintiff was already given possession of Door No.2/53 as a lessee and he was given possession of Door No.1/53 on the date of the agreement itself. But he did not give any evidence that he had got possession of Door No.1/53 on the date of the agreement. It was found that his case as regards Door No.1/53 was false. He also alleged that he had paid Rs.400 in addition to the sum of Rs.4000 paid as advance, but this was proved to be an incorrect statement. He alleged that the third defendant had inspected the house during the course of negotiations, but this also was found to be false. This Court held that it is settled law that the party who seeks to avail of the jurisdiction of a court and specific performance being equitable - 28 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 relief, must come to the court with clean hands. In other words, the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief. 15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court. The trial court, which had the added advantage of recording the evidence and seeing the demeanour of the witnesses, considered the relevant facts and reached a conclusion. The appellate court should not have reversed that decision disregarding these facts and, in our view, the appellate court seriously flawed in its decision. Therefore, we hold that the respondent is not entitled to a decree of specific performance of the contract.” 26. Therefore, the Court has also followed the principles of law laid down in the decisions relied on by the learned counsel for the respondent/plaintiff. 27. Defendant No.1 has issued the legal notice as per Ex.D1 by stating that the period stipulated in the agreement of sale was completed on 22.06.2010, but the plaintiff has not come forward and has not complied with - 29 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 the conditions of the agreement of sale and the amount stated to have paid by the plaintiff through cheque to defendant No.1 was not encashed. Therefore, there is no proof that the plaintiff has paid an amount of Rs.2,00,000/- through cheque. It is also stated by defendant No.1 that defendant No.1 was in distress of financial constraints, therefore, offered the disputed land for sale. 28. Therefore, considering the circumstances as to whether there is any proof of violation of conditions on the part of the plaintiff, but as above discussed, it is not proved that the plaintiff was ever ready and willing to perform the contract except the pleadings in the plaint. This conduct of the plaintiff is to be proved at some higher degree, but here the plaintiff lacks evidence in this regard. The grant of specific performance is the discretionary relief. Just because, execution of agreement of sale is proved and grant of decree is lawful to do so, but still it is based on the discretion of the Court whether to grant or - 30 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 not to grant decree of specific performance under the Specific Reliefs Act. 29. Here as per Ex.D.1 defendant No.1 has issued the legal notice to the respondent/plaintiff showing his financial constraints. Under these circumstances, he offered the suit land for sale. But the plaintiff except issuing Ex.P.1 has not come forward to execute the registered agreement of sale. Therefore, defendant Nos.1 to 7 were constrained to sell the disputed land to defendant Nos.8 and 9. Hence, defendant Nos.8 and 9 are proved to be the bonafide purchasers. 30. As per the principles of law laid down by the Hon’ble Supreme Court, even if the agreement of sale is proved, that alone cannot be a factor to grant decree in favour of the plaintiff. If there is any unfair advantage over the defendants by the plaintiff and if there is any arbitrariness in the decree in the suit, then the suit shall not be decreed. - 31 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 31. Therefore, just because, the agreement of sale is proved, that alone is not a ground to grant decree in toto. The trial Court ought to have considered the circumstances based on the evidence on all its preponderance of probabilities and ought to have exercised discretion, but here the reasonings lack on the trial Court as to in what way the trial Court exercised discretion in its prudent way. Therefore, the judgment and decree passed by the trial Court is liable to be set aside. Accordingly, I answer point Nos.1 and 2 in negative and point No.3 partly in affirmative. 32. In Ex.D.1-notice, defendant No.1 has admitted that he has received Rs.2,00,000/- in cash from the plaintiff by executing agreement of sale and also it is the finding given by the trial Court that defendant No.1 received an amount of Rs.2,00,000/-. Therefore, the plaintiff is entitled for decree with an alternative relief of making refund of Rs.2,00,000/- from defendant Nos.1 to - 32 - HC-KAR NC: 2025:KHC:49725 RFA No. 98 of 2018 7. Therefore, the suit filed by the plaintiff is liable to be decreed with alternative relief of refund of Rs.2,00,000/-. 33. Accordingly, I proceed to pass the following ORDER (i) The appeal is allowed in part. (ii) The judgment and decree dated 08.06.2017 passed in O.S.No.354/2010 by the Addl. Senior Civil Judge, Ramanagara, is hereby set aside. (iii) The plaintiff is entitled to refund of amount of Rs.2,00,000/- from defendant Nos.1 to 7 with interest at the rate of 6% p.a., from the date of agreement of sale. (iv) Draw decree accordingly. (v) No order as to costs. (vi) Registry is directed to transmit the Trial Court Records to the Court concerned forthwith. SD/- (HANCHATE SANJEEVKUMAR) JUDGE PB LIST NO.1, SL.NO.14