Court Cannot Grant Relief Of Specific Performance Against Person Compelling Him To Enter Into Agreement With Third Party – SC

The Bench of Justice Indira Banerjee and Justice V. Ramasubramanian held that the specific performance of the agreement by the Appellants in the case depended upon i) the Appellants entering into an agreement with a third party; and ii) the Appellants being in a position to compel such third party to perform her obligations under such agreement.

Counsel G. Sivabalamurugan appeared for the Appellants while Counsel S. Nandakumar appeared for the Respondent before the Apex Court.

In this case, the Respondent had filed a suit for specific performance of an agreement to sell before the First Additional District Munsif. The Trial Court passed a judgment and decree holding that the Agreement to sell was true and valid, the suit was not barred by limitation and that the plaintiff was entitled to the relief of specific performance.

However, the First Appellate Court reversed the findings of the Trial Court and held that the agreement was not valid, the plaintiff could not prove that he was willing to perform his part of obligations, the suit was barred by limitation and therefore the Plaintiff was entitled to specific performance.

Second appeal was preferred before the High Court which reversed the findings of the First Appellate Court and restored the judgment of the Trial Court.

The Apex Court noted that the mistakes committed by the High Court were manifold and thus observed –

"First, the High Court framed a question which was actually a question of fact which involved appreciation of evidence and not a substantial question of law. As a consequence, the answer given by the High Court was only a finding of fact. Next, the High Court reversed the finding of the First Appellate Court on the question of limitation, without framing a substantial question of law and without even referring to the statutory provisions."

The Court held that the High Court could not have answered the question of limitation in favour of the respondent herein, (i) without framing any substantial question of law; and (ii) without even a reference to Article 54 of the Schedule to the Limitation Act.

"In any case, the High Court ought to have seen that a Court cannot grant the relief of specific performance against a person compelling him to enter into an agreement with a third party and seek specific relief against such a third party," the Bench further noted.

Also, the Court held, "The High Court ought to have seen that the specific performance of the Agreement in question comprised of two parts namely, (i) the defendant entering into an agreement with his brother's wife for the purchase of a land for providing access to the land agreed to be sold under the suit Agreement of Sale; and (ii) the defendant thereafter executing a sale deed conveying the property covered by the suit Agreement of Sale."

The Court also noted that since the Defendant's brother's wife was not a party to the suit agreement of sale, the Court cannot compel her to enter into an agreement with the Defendant.

Accordingly, the Court held that the High Court committed a grave error in law in granting a decree for specific performance and set aside the impugned judgment of the High Court.

Cause Title - Raman (Dead) By Lrs. v. R. Natarajan

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