SATYA JAIN (D) THR. LRS. & ORS. versus ANIS AHMED RUSHDIE (D) TR.LRS. & ORS.

Citation: [2013] 3 S.C.R. 319 · Decided: 03-12-2012 · Supreme Court of India · Bench: P. SATHASIVAM · Disposal: Appeal(s) allowed

Cited by 7 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2013] 3 S.C.R. 319 
SATYA JAIN (D) THR. LRS. & ORS. 
v. 
ANIS AHMED RUSHDIE (D) TR.LRS. & ORS. 
(Civil Appeal No. 8653 of 2012 ETC.) 
DECEMBER 3, 2012 
[P. SATHASIVAM AND RANJAN GOGOi, JJ.] 
Specific Performance: 
A 
B 
Agreement to sell - Suit by purchaser, for specific c 
, performance of agreement - Decreed by trial court - High 
Court reversed the decree - Held: Purchaser was, at all times, 
ready and willing to perform his part of the contract - It was 
the seller who defaulted in execution of sale deed -Insistence 
of the seller on further payments by the purchaser directly to D 
him and not to the Income Tax Authorities was not justified -
Purchaser was not obliged to make any further payment to 
seller apart from payment of earnest money - Purchaser 
entitled to decree of specific performance - However, due to 
efflux of time and escalation of price of property, seller is E 
entitled to additional compensation ie. a price higher than 
what was stipulated in the agreement - Direction to execute 
the sale deed for the market price of the suit property as on 
date - Trial court directed to ascertain the market price. 
Suit for specific performance - Test of readiness and F 
willingness of plaintiff - Held: No straitjacket formula can be 
laid down on the basis of which the readiness and willingness 
of the plaintiff is to be judged - It would depend on overall 
conduct of the plaintiff in the light of the conduct of the 
defendant. 
G 
Specific Relief Act, 1963 - s. 20 - Parameters for exercise 
of discretion under - Held : Cannot be entrapped within any 
precise expression of language and the contours thereof 
319 
H 
320 
SUPREME COURT REPORTS 
[2013] 3 S.C.R. 
A 
would depend on the facts and circumstances of each case -
The discretion to direct specific performance of an agreement 
and that too after lapse of a long period, has to be exercised 
on sound, reasonable, rational and acceptable principles -
The ultimate guiding test would be the principles of fairness 
B 
and reasonableness - Efflux of time and escalation of price 
of property, by itself, cannot be a valid ground to deny the 
relief of specific performance. 
Principle of 'Business Efficac( - Applicability of - The 
C 
test of business efficacy requires that a term can only be 
implied if it is necessary to give business efficacy to the 
contract to avoid such a failure of consideration that the 
parties cannot as reasonable businessmen have intended -
If the contract makes business sense without the term, courts 
will not imply the same - In the instant case, invocation of the 
D 
principle by the High Court, notwithstanding the clear 
language of the agreement, not correct. 
Limitation Act, 1963 - s. 15(5) - Limitation for filing suit -
The period of the absence of the defendant from India has 
E 
to be excluded while computing the limitation for filing of the 
suit - Thus the suit in the instant case was filed well within time. 
F 
Plaintiff No. 1 was the tenant of the defendant in 
respect of the suit property. They entered into an 
agreement dated 22.12.1970 to sell the suit property to 
plaintiff No.1. for Rs. 3,75,0001-. Plaintiff No.1 paid Rs. 
50,000/- to the defendant as earnest money. Under clause 
7 of the agreement, plaintiff No.1 was required to pay to 
the Income Tax Authorities such amount as would be 
desired by the defendant against the tax dues of the 
G 
defendant so as to facilitate the grant of the required tax 
clearance certificate and such money was to be deducted 
from the balance of the sale price at the time of the 
execution of the sale deed. In response to the query of 
plaintiff No.1 as regards Tax Clearance, the defendant 
H 
' ' 
1 
I 
SATYA JAIN (D) THR. LRS. v. ANIS AHMED RUSHDIEJ321 
(D) TR.LRS. 
sent a legal notice stating that he had written a letter to 
A 
the plaintiff No.1 on 9.9.1971 calling upon him to pay a 
sum of Rs. 1 lakh to the defendant. Plaintiff No.1 denied 
the receipt of letter dated 9.9.1971. He also reiterated his 
readiness to tender any payment as might be due under 
clause 7 of the agreement. Plaintiff No.1 received a notice 
from the defendant terminating the tenancy. The plaintiff 
filed the suit seeking a decree for specific performance 
B 
of the agreement dated 22.12.1970. The defendant in his 
written statement contended, inter alia, that the suit was 
barred by limitation; that the plaintiffs were not entitled c 
to a decree for specific performance as plaintiff No.1 had 
breached 

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