- 1 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JUNE, 2026 BEFORE THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR REGULAR FIRST APPEAL NO.508 OF 2021 (SP) BETWEEN: SRI. H.B. GOPAL AGED ABOUT 60 YEARS, S/O. LATE H.B.N. SETTY, NO.551, 53RD CROSS, 3RD BLOCK, RAJAJINAGAR, BENGALURU - 560 010. …APPELLANT (BY SRI. MITHUN S.K, ADVOCATE) AND: 1. SMT. SWARNALATHA. P AGED ABOUT 51 YEARS, W/O. V. PRASANNA KUMAR SETTY, 2. SRI. V. PRASANNA KUMAR SETTY AGED ABOUT 64 YEARS, S/O. LATE VENKATAIAH, 3. SRI. N.P. CHETAN KRISHNA AGED ABOUT 38 YEARS, S/O. V. PRASANNA KUMAR SETTY, RESPONDENTS 1 TO 3 ARE RESIDING AT NO. 287/1, NEAR SPR INDUSTRIES, Digitally signed by THEJAS KUMAR N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 OPP. TO FLOWERENCE SCHOOL, SARAKKE GATE, J.P. NAGAR 1ST PHASE, BENGALURU - 560 078. …RESPONDENTS (RESPONDENT - SERVED, UNREPRESENTED) THIS RFA IS FILED UNDER SECTION 96 OF THE CPC, AGAINST JUDGMENT AND DECREE DATED 25.11.2019 PASSED IN OS.NO.6721/2012 ON THE FILE OF THE XXX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CITY, PARTLY DECREEING THE SUIT FOR SPECIFIC PERFORMANCE OF CONTRACT. THIS APPEAL, COMING ON FOR FURTHER ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR ORAL JUDGMENT This Regular First Appeal is filed by the appellant/plaintiff calling in question the judgment and decree dated 25.11.2019 passed in O.S.No.6721/2012 by the XXX Additional City Civil and Sessions Judge, Bengaluru City (CCH-31)1, thereby, the suit filed for specific performance of contract was decreed in part 1 hereinafter referred to as ‘the Trial Court’ for short - 3 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 granting refund of amount of Rs.5,00,000/- along with interest at the rate of 12% p.a. from the date of suit till the date of judgment and denied the main relief of decree for specific performance. 2. For the sake of convenience and easy reference, the parties are referred to as per their rankings before the Trial Court. 3. The defendants are the owners of the suit property and the plaintiff has entered into agreement of sale dated 23.09.2009 for total sale consideration amount of Rs.12,00,000/- and the plaintiff has paid an advance amount Rs.5,00,000/- and it is agreed that the balance amount of Rs.7,00,000/- would be paid at the time of registration of sale deed. 4. It is the allegation that the defendants have not come forward to execute the registered sale deed in respect of the suit schedule property; therefore, the - 4 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 plaintiff has filed suit for specific performance of contract after issuing legal notice dated 17.05.2010. 5. The defendants have filed written statement stating that they are the owners of the property and the agreement of sale is only proposal made to sell the property but the plaintiff has not paid advance amount of Rs.5,00,000/-; therefore, it is submitted that the agreement is not concluded. The defendants have totally denied all the averments made in the plaint and submitted that the defendants have not executed the agreement of sale and had no intention to sell the property to the plaintiff. Therefore, prays to dismiss the appeal. 6. Upon the pleadings, the Trial Court has framed the following issues: "1. Whether the plaintiff proves that defendant agreed to sell 'B' schedule property in favour of him for a consideration of Rs.12,00,000/- and accordingly executed agreement of sale on 23.09.2009 by receiving earnest money of Rs.5,00,000/-? - 5 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 2. Whether the plaintiff proves that he was and is always ready and willing to perform his part of contract? 3. Whether the plaintiff is entitle for the relief of specific performance? 4. Whether plaintiff alternatively entitle for the refund of earnest money with interest? 5. What order or decree?" 7. In order to prove the case, the plaintiff is examined as PW.1 and another attesting witness as PW-2 and got marked the documentary evidence as Exs.P-1 and P-2. On behalf of the defendants, defendant No.2 is examined as DW-1, but not produced any documentary evidence. 8. The Trial Court answered issue Nos.1 and 2 in the affirmative holding that the plaintiff had proved that the defendants have agreed to sell the suit schedule 'B' property under the agreement of sale and the plaintiff was always ready and willing to perform his part of contract, but the Trial Court held that the plaintiff is not entitled for - 6 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 the relief of specific performance of contract and accordingly, granted alternative relief of refund of earnest amount. 9. Being aggrieved by the refusal to grant a decree for specific performance, the plaintiff has preferred this present appeal by raising various grounds and the learned counsel for the appellant/plaintiff inconsonance with the grounds raised in the appeal memorandum has submitted that the Trial Court has held after appreciating the evidence that the defendants have executed the agreement of sale for total sale consideration amount of Rs.12,00,000/- and the plaintiff has paid earnest amount of Rs.5,00,000/-. 10. Further, the Trial Court held that the plaintiff was ever ready and willing to perform his part of the contract; therefore, submitted when these two issues answered in favour of the plaintiff, the Trial Court ought to - 7 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 have grant decree for specific performance, but denied the relief of specific performance of contract, is not correct. 11. The reasoning assigned by the Trial Court that the suit schedule property (flat) was under construction, therefore, the specific performance could not be granted. Therefore, it is submitted that the reasoning given by the Trial Court is not correct and is against Section 20 of the Specific Relief Act, 1963 (for short, ‘the SR Act, 1963’). Therefore, on the reason that the construction of the flat is not completed, the decree for specific performance is not granted. According to the submission made by learned counsel for the appellant/plaintiff, this reasoning is not correct and submitted that at the time of agreement of sale, the entire construction was completed and this reasoning ought not have been assigned for dismissing the suit for the main relief. Hence, prays to allow the appeal and pass decree for main relief of specific performance. - 8 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 12. The respondents are served, but they have not appeared. Hence, they are unrepresented. 13. Upon hearing the arguments of learned counsel appearing on behalf of the appellant/plaintiff and perusal of the materials available at this stage, the following points would arise for consideration: i. Whether, under the facts and circumstances involved in the case, the plaintiff proves that the defendants have executed the agreement of sale dated 29.03.2009 to sell the suit property (flat) for a sum of Rs.12,00,000/- and received earnest amount of Rs.5,00,000/-? ii. Whether, under the facts and circumstances involved in the case, the plaintiff proves that he was ever ready and willing to perform his part of contract? iii. Whether, under the facts and circumstances involved in the case, the defendants prove that they have repaid the advance amount of Rs.5,00,000/- along with interest at the rate of 12% p.a. paid by the appellant/plaintiff as earnest amount at the time of agreement of sale? - 9 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 iv. Whether, under the facts and circumstances plaintiff is not entitled for decree for specific performance, but is entitled for refund of earnest amount involved in the case? v. Whether the judgment and decree passed by the Trial Court requires any interference? 14. The subject matter is residential flat. As per the plaintiff's case, the agreement of sale dated 23.09.2009 is for total sale consideration amount of Rs.12,00,000/-. According to the plaintiff, he has paid an earnest amount of Rs.5,00,000/- and the remaining balance sale consideration amount of Rs.7,00,000/- would be paid at the time of registration of sale deed. Though agreement of sale is proved and also it is proved that the plaintiff was ever ready and willing to perform his part of contract, but still the Court has discretion whether to grant decree or not considering the factors enumerated in Section 20 of the Specific Relief Act, 1963. - 10 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 15. 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 (c) where the defendant entered into the contract under circumstances which though not rendering the contract - 11 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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.” 16. 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 - 12 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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. 17. 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. It is worthwhile to refer some of the judgments of the Hon’ble Supreme Court, which are as follows: 18. The Hon’ble Supreme Court in the case of JAYAKANTHAM AND OTHERS v. ABAYKUMAR2, 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 2 (2017) 5 SCC 178 - 13 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 law. The court is not bound to grant the relief of specific performance 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, - 14 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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 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 Son3, 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…” 3 1987 Supp SCC 340 :AIR 1987 SC 2328 - 15 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 9.2 A similar view was adopted by this Court in Sardar Singh v. Krishna Devi4: (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; 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) Ltd5, 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 4 (1994) 4 SCC 18 5 (1999) 5 SCC 77 - 16 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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 Arogiaswamy6 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.” 9.4. These principles were followed by this Court in A.C. Arulappan v. Ahalya Naik7, 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 6 (1996) 5 SCC 589 7 (2001) 6 SCC 600 - 17 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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 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. - 18 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 Advent Corporation (P) Ltd8., 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, 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 8 8 (2002) 8 SCC 146 - 19 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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.” 19. In the case of Parakunnan Veetill Joseph’s Son Mathew Vs. Nedumbara Kuruvila’s son9, 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 entitled to a decree for specific performance.” 9 (1987) Supp SCC 340 - 20 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 2. In the case of Sardar Singh Vs. Krishna Devi10 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.” 20. In the case of K. Narendra Vs. Riviera Apartments (P) Ltd.,11 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 10 (1994) 4 SCC 18 11 (1999) 5 SCC 77 - 21 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. 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 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.” - 22 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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 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) - 23 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 ‘… 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 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 - 24 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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.” 21. In the case of A.C. Arulappan Vs. Ahalya Naik12 at paragraph No.7, 8, 9, 10 and 15, it is held as follows: 12 (2001) 6 SCC 600 - 25 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 “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 defendant to pay compensation to the plaintiff. - 26 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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 - 27 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 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 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.” 22. In the present case, the suit schedule property is residential flat. The date of agreement of sale is 23.09.2009. The question is, whether to grant decree of specific performance directing the defendants to execute - 28 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 the registered sale deed for total sale consideration amount of Rs.12,00,000/- amounts to unfair advantage over the defendants by the plaintiff and also is it amounting to arbitrariness. 23. The decree for granting relief of specific performance in respect of the residential flat for Rs.12,00,000/- is nothing but arbitrary and also the defendants would be put into hardship and also it is amounting to unfair advantage over the respondents/defendants by the appellant/plaintiff since the present market rate of the residential flat in Bengaluru is more. When this being the fact, compelling the defendants to sell away the suit property for total sale consideration amount of Rs.12,00,000/- is definitely amounting to arbitrary and causing hardship and amounting to unfair advantage over the defendants by the appellant/plaintiff. Therefore, under these circumstances, discretion is to be exercised to protect the interest of the parties. - 29 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 24. If the relief of specific performance is declined, the appellant/plaintiff would not be left without any remedy, as he would be entitled to recover the sum of Rs.5,00,000/- paid under the agreement of sale, together with interest at the rate of 12% per annum from the date of execution of the agreement of sale. On the other hand, while balancing the comparative hardship between the plaintiff and the defendants, it is evident that, if the suit property is directed to be conveyed, the defendants would suffer greater hardship, as they would not be in a position to purchase a similar flat in Bengaluru for the agreed sale consideration of Rs.12,00,000/-. 25. Hence, the defendants will be going to lose residence and at the same time, would not get other flat for a sum of Rs.12,00,000/-. Therefore, if decree for specific performance is granted, then the defendants would be put into more hardship compared to the plaintiff. Hence, the reasoning given by the Trial Court may be on different reasons, but considering the parameters - 30 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 enumerated under Section 20 of SRA Act, 1963, the final verdict of the Trial Court in rejecting the claim of decree for specific performance is correct and the plaintiff’s interest is safeguarded by refunding amount of Rs.5,00,000/- with interest at the rate of 12% p.a. Accordingly, I answer point Nos.(i), (ii) and (iv) in the affirmative, point No.(iii) in the negative and point (v) in partly affirmative. 26. The Trial Court has ordered refund of amount of Rs.5,00,000/- with interest at the rate of 12% p.a. from the date of the filing suit till the date of judgment and simple future rate of interest at the rate of 9% p.a. from the date of judgment till realization from the defendants. Therefore, it is hereby ordered and modified that the commencement of interest at the rate of 12% p.a. shall be payable from the date of agreement, but not from the date of filing of the suit. Subject to this modification only, the appeal is liable to be allowed in part. Therefore, it is hereby clarified that the rate of interest at the rate of 12% - 31 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 p.a. from the date of execution of agreement of sale till its realization and the other directions for rate of interest is kept intact. Hence, to this extent only, the appeal is liable to be allowed in part. 27. Before parting with the judgment, this Court places on record its deep appreciation for the well researched and valuable assistance rendered by Research Assistant, namely Smt.Pushpa.R., and her valuable research helped the Court to take a correct conclusion. Accordingly, the Court places its appreciation on Research Assistant, namely Smt.Pushpa R., on record. 28. In the result, I proceed to pass the following: ORDER i. The Regular First Appeal is allowed-in-part. ii. The judgment and decree dated 25.11.2019 passed in O.S.No.6721/2012 by the Court of XXX Additional City Civil and Sessions Judge, Bengaluru City (CCH-31) so far as declining - 32 - HC-KAR NC: 2026:KHC:29391 RFA No. 508 of 2021 the relief of granting specific performance is hereby confirmed. iii. The judgment and decree passed by the Trial Court of refund of amount of Rs.5,00,000/- shall be from the date of agreement of sale at the rate of 12% p.a. and the other directions of interest are confirmed. iv. No order as to costs. v. Draw decree accordingly. In view of disposal of the appeal, pending I.A’s, if any, shall stand disposed of. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE rv List No.: 1 Sl No.: 33