civil dispute, professional liability, contract law, Supreme Court
0  15 May, 1998
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Ganesh Shet Vs. Dr. C.S.G.K. Setty and Ors.

  Supreme Court Of India Civil Appeal /1347/1988
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Case Background

As per case facts, the plaintiff sought specific performance for a property sale, alleging an agreement made in Delhi. The trial court sided with the plaintiff, but the High Court ...

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PETITIONER:

GANESH SHET

Vs.

RESPONDENT:

DR. C.S.G.K. SETTY & ORS.

DATE OF JUDGMENT: 15/05/1998

BENCH:

S.B. MAJMUDAR, M. JAGANNADHA RAO

ACT:

HEADNOTE:

JUDGMENT:

THE 15TH DAY OF MAY, 1998

Present:

Hon'ble Mr. Justice S.B. Majmudar

Hon'ble Mr. Justice M. Jagannadha Rao

R.F. Nariman, Sr.Adv., Girish Ananthamurthy, G.V.

Chandrasekhar, B.Y. Kulkarni, Advs. With him for the

appellant

M.Rama Jois, Sr. Adv., P. Mahale, Adv. with him for the

Respondent in No.1

G.L. Sanghi, Sr.Adv., T.V. Ratnam., Adv. with him for the

Respondent Nos. 2-3

J U D G M E N T

The following Judgment of the Court was delivered:

M. JAGANNADHA RAO. J.

The appellant is the plaintiff. He filed the suit O.S

No. 50 of 1985 for specific performance of an agreement of

sales of house property located at Shimoga, Karnataka State

executed in his favour. He succeeded in the trial court but

on appeal by the Vendors-defendants, the Judgment of the

trial court was set aside by the High Court and the suit was

dismissed. Against the said Judgment of the High Court, this

appeal was preferred.

The case of the appellant in the suit filed on the file

of the Civil Judge, Shimoga was as follows : The defendants

1 to 3 are three brothers and are joint owners of the house

at Shimoga. The Ist defendant who was a Professor was

working at Delhi ( now retired); the 2nd defendant was at

Madras and the third defendant was at Bangalore. The

defendants 2 and 3 gave powers-of-attorney to the Ist

defendant. There were consultations between plaintiff and

the Ist defendant which started in 1983 by way telephone

calls and letters and 'after the negotiations reached a

final stage' the Ist defendant wanted the plaintiff to come

to Delhi "for finalising" the proposals. The plaintiff took

along with him, one Mr. R.K. Kalyankar (PW 2) to help him in

the negotiations. They took two bank drafts for Rs. 50,000/-

and Rs . 10,000/- respectively and reached Delhi in January

1984. On 25.1.1984, at the residence of the Ist defendant, a

draft agreement of sale was 'approved' by the Ist defendant

with small changes made in his own handwriting and the Ist

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defendant told the plaintiff 'that he was approved the draft

and "the contract was concluded". (The photocopy of the

agreement was filed and its original was marked as Ex. p3).

The agreed consideration was Rs. 5 lakhs and the purchaser

agreed to bear the stamps and registration charges. It was

also agreed that the sale deed was to be executed on or

before 30.6.1984 or within a reasonable time and that

thereafter the plaintiff would be put in possession. The Ist

defendant did not accept the Bank drafts but said he would

accept the entire consideration in one lump sum at the time

of registration. The plaintiff returned to Shimoga and the

further correspondence 'only confirmed that the defendants

would execute the sale deed'. The plaintiff received a

telegram (Ex. p7 dated 4.4.84) addressed to PW 2 that the

terms of the agreement were acceptable. Further, the 3rd

defendant also "confirmed" the terms of the agreement by

letter dated 11.4.84 (Ex .P6). The plaintiff received

another letter dated 18.4.1984 (Ex.P4) which stated that 1st

defendant would be coming over to Bangalore on 28.4.1984.

They met at Bangalore and it was agreed that plaintiff was

to be ready with the entire sale consideration by about 3rd

week of June 1984. The plaintiff raised finances by selling

some of his properties. The plaintiff was ready and willing

to perform the contract. The Ist defendant came to Shimoga

on or about 17.6.1984 but surprisingly he did not meet the

plaintiff. On the other hand defendants gave a paper

advertisement on 26.6.84 for sale of the house. Plaintiff

then got a regd. notice dated 2.7.84 (Ex.P12) issued and

defendants 2 and 3 give a reply dated 31.7.84 (Ex . P16).

The suit was laid for specific performance of the agreement

of sale said to be dated 25.1.84 entered into at Delhi and

for posession and also for permanent injunction restraining

alienation by defendants.

A written statement was filed by the Ist defendant

contending mainly that there was correspondence between

parties, the negotiations did not reach any 'final' stage

and that there was 'no concluded contract'. There were only

proposals and counter proposals. Sale consideration was not

Rs .5 lakhs. The Ist defendant had an obligation to consult

his brothers. They were not willing for a consideration of

Rs.5 lakhs. The Ist defendant did not state, as contended,

in any telegram dated 4.4.84 nor any letter dated 11.4.84.

PW 2 sent another draft agreement(Ex. D11) alongwith his

letter dated 29.31984 (Ex .P8) and the Ist defendant made

corrections therein, especially regarding consideration,

correcting the figure Rs .5 lakhs as Rs.6.50 lakhs - apart

from other corrections. The Ist defendant did not ask the

plaintiff to be ready by June 1984 for registration as

alleged by plaintiff. The agreement produced alongwith

plaint was only a proposal. Plaintiff was, in the meantime,

negotiating for another property at Davangere. Plaintiff was

not ready and willing. The plaintiff did not product the

letter of PW 2 dated 11.4.84 addressed to Ist defendant. The

suit was liable to be dismissed. These were the allegations

in the said written statement of the 1st Defendant.

Defendants 2 and 3 adopted the written statement of Ist

defendant.

The trial court after considering the oral and

documentary evidence held on issue 1,3 & 4 that a contract

was concluded at Delhi between Plaintiff and defendants on

25.1.1984 for Rs .5 lakhs as per Ex .P3 draft, that the said

agreement dated 25.1.84 was not materially altered later and

the sale deed was agreed to be executed by 30.6.84. On issue

2, it held that plaintiff was ready and willing and that

plaintiff was entitled to specific performance of the

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agreement dated 25.1.1984 and for permanent injuction

against defendants not to alienate the property to others.

The defendants 1 to 3 appealed to the High Court. The

High Court reversed the decree and dismissed the suit. It

held that there was no concluded contract on 25.1.1984 at

Delhi and this was clear from the subsequent correspondence.

So far as the subsequent correspondence was concerned, it

was clear from Ex.P5 dated 10.4.84 written by Ist defendant

that the Ist defendant was ready to execute the agreement as

per the "talks" that took place at Delhi on 25.1.1984 and he

had written to the plaintiff to go over to Delhi or he would

come to Bangalore. He requested the plaintiff to inform him

about the plaintiff's decision in regard to the matter.

Ex.P23 letter addressed to plaintiff also said the same

thing. As per Ex .P6 letter dated 11.4.84 of defendants the

ball was left in the court of the plaintiff 'awaiting his

confirmation', but the plaintiff did not send any reply. Ex

.P4 letter dated 18.4.84 of Ist defendant showed that he had

sent the agreement sent by the Plaintiff with certain

alterations and that he would be reaching on 28th. But after

Ist defendant arrived at Bangalore on 27.4.84 , plaintiff

did not meet him. It was not possible to say that parties

had agreed for Rs. 5 lakhs at any stage. The draft sent to

the ist defendant alongwith Ex.P4 letter was of course, Ex

P3 as contended by plaintiff and not the other draft Ex.

D11, as contended by the 1st defendant. But it was not

possible to accept that plaintiff agreed to pay Rs.5 lakhs.

Inasmuch as the relief was for specific performance of an

agreement of sale dated 25.1.1984 and no such agreement was

proved, it must be held that plaintiff did not come to Court

with clean hands and discretion could not be exercised in

his favour. It was also stated that plaintiff, when he was

asked if he wanted to rely on any agreement of April 1984

and if he would amend the plaint, the plaintiff's counsel

was not willing to amend the plaint. Hence the suit was

liable to be dismissed. The appeal was allowed accordingly.

In this appeal elaborate arguments were advanced by

learned senior counsel Sri R.F. Nariman for the plaintiff-

appellant, learned senior counsel by Sri Rama Jois for the

Ist defendant and senior counsel Sri G.L. Sanghi for

defendants 2 and 3.

Four points arise for consideration :

(1) Whether there was a concluded contract between the

parties on 25.1.1984 at Delhi when plaintiff and PW 2 (Mr.

Kalyankar) met the Ist defendant at his Delhi residence?

(2) Having not agreed in the High Court to amend the plaint

and plead that there was a concluded contract at Bangalore

on 28.4.84 and having thus refused to seek for a relief for

specific performance of an agreement dated 28.4.84, whether

the plaintiff could contend that there was an agreement of

sale dated 28.4.84 at Bangalore?

(3) What are the legal principles applicable to suits for

specific performance under section 20 of the Specific Relief

Act, 1963 where there is variation between pleadings and

evidence in regard to the date or other terms of the

contract? To what extent can relief be given under the

heading 'general relief' in suits for specific performance

under Order 7 Rule 7 CPC?

(4) Alternatively, whether, on the plaint as it stands, and

the prayer made therein without seeking amendment, the

plaintiff can get a decree for specific performance of an

agreement dated 28.4.84 said to have been concluded at

Bangalore?

Point 1:

On this point, as to whether there is a concluded

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agreement at Delhi on 25.1.1984. there is abundant evidence

to say that there is no such concluded agreement. This is

clear from the suit-notice Ex.P12 dated 2.7.84 wherein

plaintiff has stated clearly that at the Delhi meeting the

ist defendant said that he is yet to consult his two

brothers. The correspondance between the parties and PW2

subsequent to 25.1.84 has been read to us by the learned

senior counsel for the appellant-plaintiff and on reading

the same, we are clear that the finding of the High Court

that there is no concluded agreement on 25.1.1984 at Delhi

is unassailable and is absolutely correct. The tenor of

several letters from PW2 to 1st defendant after 25.1.1984

shows that consideration for sale was not finalised at

Delhi. Learned senior counsel for the appellant, after

elaborate submissions has more or less accepted this

position and has concentrated on the question which we have

set out under the third and fourth points. Hence there can

be no decree for specific performance of any agreement dated

25.1.84 as none has been concluded on that day. We hold on

Point 1 accordingly.

Point 2;

The learned senior counsel for the appellant has argued

before us that plaintiff must be given relief in respect of

the agreement which, according to him, has been concluded at

Bangalore on 28.4.1984 and specific performance can be

granted in respect of such an agreement.

We have already stated that, in the High Court, when

and opportunity for amendment of plaint was given by the

High Court to the plaintiff the same was spurned and not

accepted by the plaintiff's counsel. That being the attitude

of the appellant in the High Court, we are of the view that

the plaintiff can not be given any relief for specific

performance of any such agreement allegedly concluded at

Bangalore on 28.4.1994. Point 2 is also held against the

appellant.

Point 3 and 4:

These are the points upon which the appellants counsel

made elaborate submissions citing several rulings of this

Court and the High Courts under Order 6 and Order 7 CPC. It

has been argued that, without amendment of plaint, plaintiff

can ask the Court to construe the pleadings liberally.

Inasmuch as both sides have adduced evidence on the question

whether there has been an agreement at Bangalore on

28.4.1984 or not, the plaintiff can still be given relief of

specific performance on the basis of the original plaint as

it stands, even assuming there is no specific reference to a

contract being concluded at Bangalore on 28.4.84. Several

rulings have been cited before us to the effect that if

parties have led evidence on a point which has not been

pleaded, no prejudice will be caused if relief is granted on

the basis of what emerges from the evidence. We do not

propose to refer to these rulings as the said propositions

are not in dispute.

(A) Point 3:

(a) We shall first refer to certain special principles

of law applicable to suits for specific performance in

regard to the discretion which is to be exercised under

section 20 of the Specific Relief Act, 1963, when there is a

conflict between the pleading and the evidence.

Section 20 of the Act reads as

follows:

"S .20: Discretion as to decreeing

specific performance:(1) The

jurisdiction to decree specific

performance is discretionary, and

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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)--------------------------------

(3)--------------------------------

(4)------------------------------"

It is well settled that the circumstances referred to in

dub-clauses (2) to (4) in regard to exercise of discretion

for granting a decree for specific performance are not

exhaustive. The relief for specific performance is

discretionary and is not given merely because it is legal

but it is governed by sound judicial principles. (See

Madamsetty Satyanarayana vs. G. Yellogi Rao & Two Others

[1965 (2) SCR 221] and Sardar Singh vs. Smt. Krishna Devi &

Another [1994 (4) SCC 18]).

It is again well settled that, in a suit for specific

performance, the evidence and proof of the agreement must be

absolutely clear and certain.

In Pomeroy on 'Specific Performance of Contracts' (3rd

Edn) (para 159) it is stated clearly, that a "greater amount

or degree of certainly is required in the terms of an

agreement, which is to be specifically executed in equity,

than is necessary in a contract which is to be the basis of

an action at law for damages. An action at law is founded

upon the mere non-performance by the defendant, and this

negative conclusion can often be established without

determining all the terms of the agreement with exactness.

The suit in equity is wholly an affirmative proceeding. The

mere fact of non performance is not enough; its object is to

procure a performance by the defendant, and this demands a

clear, definite, and precise understanding of all the terms;

they must be exactly ascertained before their performance

can be enforced. This quality of certainty can best be

illustrated by examples selected from the decided

cases........"

The question is whether, when parties have led evidence

in regard to a contract not pleaded in the evidence, relief

can be granted on the basis of the evidence and whether the

plaintiff can be allowed to give a go-bye to the specific

plea in the plaint. Is there any difference between suits

for specific performance and other suits?

It appears to us that while normally it is permissible

to grant relief on the basis of what emerges from the

evidence - even if not pleaded, provided there is no

prejudice to the opposite party, such a principle is not

applied in suits relating to specific performance. In Gonesh

Ram vs. Ganpat Rai [AIR 1924 Cal 461], the Calcutta High

Court has considered the same question. There the agreement

pleaded was not proved but plaintiff wanted to prove an

antecedent agreement based on correspondence. It was held

that the plaintiff, in a suit for specific performance,

could not be permitted to abandon the case made out in the

plaint and to invite the Court to examine whether a

completed agreement may or may not be spelt out of the

antecedent correspondence. In that connection Sir Asutosh

Mookerjee observed:

"The Court would not in a case of

this description permit the

plaintiffs to depart from the case

made in the plaint as the Court

discourages, as a rule, variance

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between pleading and proof. The

test to be applied in such cases is

whether if the variance were

permitted in favour of the

plaintiffs, defendants would be

taken by surprise and be prejudiced

thereby .........This rule is

applied with special strictness in

cases of specific performance of

contracts. In Hawkins vs.

Maltby(1868) 3 Ch.A. 188, one

contract was alleged and another

was proved, with the result that

the bill was dismissed. No doubt

where there has been part

performance, the Court may struggle

with apparently conflicting

evidence rather than dismiss the

suit. This appears to have been the

view adopted by Lord Cottenham in

Mundy vs. Jolliffe 5 Myl 8 C167:

(1939) 9 LJ ch. 95. In the case

before us there is no question of

part performance".

A.N. Ray (as he then was) in Md. Ziaul Haque vs.

Calcutta Vyapar Pratisthan ([AIR 1966 Cal 605] referred to

the special rule applicable to suits for specific

performance and also relied upon Hawkins vs. Maltby [1867] 3

Ch.A.188. The learned judge observed;

"In Nil Kanta's case 19 C.W.N. 933

= AIR 1916 Cal 774, it was said

that when a plaintiff alleged a

contract of which he sought

specific performance and failed to

establish in the court would not

make a decree for specific

performance of a different four

specific performance of a different

contract. Reliance was placed on

Hawkins vs. Maltby reported in

[1867] 3 Ch.A. 188.

.......Emphasis was rightly placed

on the aspect of the plaintiff's

case pleaded that there was an

agreement in the month of August

and that the plaintiff failed to

prove that case and the plaintiff

having completely abandoned that

case of agreement in the month of

August, any attempt on behalf of

the plaintiff to make recourse to

May agreement would be to have a

decree for specific performance of

an agreement which was not the

agreement of the parties according

to the plaintiff".

The above special principles applicable to cases of specific

performance can be also gathered from standard works under

the England Law, where the above English cases and other

cases have been cited.

Halsbury's Law of England (Vol 44, 4th Edn.1984)

(Specific Performance, para 443) (f .n.1) states, after

referring to Pillage vs. Armitage [(1805) 12 Ves 78], that

the plaintiff having failed to prove an agreement which he

had set up, was refused specific performance of a different

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agreement admitted by the defendant cf . Legal vs. Miller

[(1750) 2 Ves. Sen. 299].

Fry on 'Specific Performance' (6th Ed) (PP. 298-302)

deals with the exact point in issue before us. The another

refers to four types of cases: (1) Where the defendant

admits the contract alleged; (2) Where the defendant denies

the contract as alleged and the plaintiff supports his case

by one witness only; (3) Where the defendant denies the

contract as alleged and the evidence proves a contract, but

different from that alleged by the plaintiff; and (4) where

the defendant denies the contract as alleged and admits

another contract.

On the assumption that plaintiff has proved an

agreement at Bangalore on 28.4.84 (which question we shall

deal with under Point 4), it is obvious that we are here

concerned with category, Fry says (p. 299) (paras 634 to

638) as follows:

"(3): In considering the case in

which a Variation has arisen

between the contract alleged and

that proved, it must be borne in

mind that the burthen of providing

his case rests, of course on the

plaintiff, and therefore, if there

by any such conflict of evidence as

leaves any uncertainty in the mind

of the court as to what the terms

of the parole contract were its

interference will be refused

(Lindsay vs. Lynch 2, Sch. & Lef.

1; cf Price vs. Salusbury 2 Beav,

446)"

Fry also refers to a case where one contract has been

alleged in the bill, another has been proved by the

plaintiffs' one witness and a third contract has been

admitted by the two defendants and where initially. Specific

performance has been granted a per the contract set up by

the answers. Fry says: "but Lord Rosslyn considered that in

strictness the bill ought to have been dismissed. (Mortimer

vs. Orchard, (2 Ves,. Jun, 243; London and Birmingham Rly .

Co. vs. Winter: (Cr. & Ph. 57). In a more recent case, where

one contract was alleged and another proved, the bill was

dismissed without prejudice to the filing of another bill

(Hawkins vs. Maltby L.R. 3 Ch.A. 188; the fresh bill was

filed (L.R. 6 Eq.505 and 4 Ch.200). The inclination of Lord

Cottenham's mind seems to have been to struggle with

apparently conflicting evidence rather than to dismiss the

bill, where there had been part performance' (Mundy vs.

Jollife 5 Myl. Cr.p.167). In one case Turner L.J observed

that there are cases in which the court will go to a great

extent in order to do justice between the parties when

possession has been taken, and there is an uncertainty about

the terms of the contract (East India Co. vs. Nuthumbadoo

Veerasawmy Moodelly [7 Moo PCC p.482 at 497]). In the case

of part performance, it is said, similar views were

expressed in the Privy Council by Sir William Erle (Oxford

vs. Provand L.R. 2 P.C.135) as follows:

"With respect to the supposed

vagueness of the memorandum of

agreement, their Lordships propose

to consider what is the true

construction of that memorandum,

having regard to the terms of the

instrument and, and to the

surrounding circumstances, and also

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in reference to this suit for

specific performance, and, to the

conduct of the parties in the

interval between the making of the

agreements and the commencement of

the suit".

Fry also refers to Hart vs. Hart (18 ch.D.670 at 685) in

that context. The author then refers to cases where the

variation between the contract alleged and proved is an

immaterial variation and says that in such cases, the bill

is granted. He says (p. 301) that this is the position under

the old practice of the Court of Chancery but the High Court

can permit amendment to put that contract in issue; but

"that if there was not (i.e.amendment), it will generally

give judgment for the defendant, without reserving any right

to the plaintiff to institute fresh proceedings. But the

circumstances will govern the discretion of the Court in

each case which may arise".

The above principles are, it is clear, special

principles applicable to suits for specific performance. The

case before us does not fall within the exceptions namely, -

part performance or immaterial variations. Nor is it a case

where the plaintiff has agreed to amend his plaint. On the

other hand, as already stated, the plaintiff spurned the

opportunity given to him by the High Court for amendment of

plaint. The case is in no way dissimilar to the cases in

Gonesh Ram vs. Ganpat Rai and to Mohd. Ziaul Jaque, referred

to above.

(b) Yet another aspect of the matter is whether in a

suit for specific performance the plaintiff can be given

relief under the general prayer "such other relief as this

Hon'ble Court may deem fit to grant in the circumstances of

the case", in the light of Order 7 Rule 7 CPC. order 7 Rule

7 CPC reads as follows:

"Relief to be specifically stated:

Every plaint shall state

specifically the relief which the

plaintiff claims either simply or

in the alternative, and it shall

not be necessary to ask for general

or other relief which may always be

given as the Court may think just

to the same extent as if it had

been asked for. And the same rule

shall apply to any relief claimed

by the defendant in his written

statement."

Mulla(CPC) Vol.2 (15th Ed.p.1224) says that such relief may

always be given to the same extent as if it had been asked

for, provided it is not inconsistent with that specifically

claimed, and with the case raised in the pleading. (See

Cargil vs. Bower [1878 Ch. D.502, 508]; Kidar Lall Seal &

Another vs. Hari Lall Seal [1952 SCR 179]).

It is stated in Corpus Juris Secundum (Vol. 81A,

Specific Performance) (Para 189) as follows:

"In accordance with general rules,

the relief awarded in a suit for

specific performance would be based

on the issues raised by the

pleadings and supported by the

proof. More specifically, relief

awarded for the plaintiff must be

authorised by or be in conformity

with his pleading in respect of the

contract to be enforced and the

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parties thereto".

As to the 'general relief' in suits for specific

performance it is stated:

"In accordance with the general

rules and its qualifications and

limitations where the bill or

complaint in a suit for specific

performance contains a prayer for

general relief, the court may

grant relief consistent with the

facts pleaded and proved and the

court may in some cases grant or

award partial relief."

In other words, other relief to be granted must be

consistent with both pleading and proof, in suits for

specific performance. The principles stated above under (a)

and (b) appear to us to be the broad principles which are to

be borne in mind while dealing with exercise of discretion

in cases of specific performance. We decide Point 3

accordingly.

(B) Point 4:

Strictly, this point does not arise in view of the

principles stated under Point 3. But even so, as the counsel

have made elaborate submissions we shall decide the same.

(a) We shall initially analyse the plaint averments and

then examine the evidence limited to the agreement dated

28.4.1984.

In para 3 of the plaint it is stated, referring to

25.1.84 meeting of the parties at Delhi, that 'the contract

was also concluded', and that it was decided that the

registration should take place in June 1984.

The plaint states :

'further correspondance which only

confirmed that the defendants would

execute the registered sale deed.

The plaintiff also received

telegram addressed to Sri R.K.

Kalyankar that the terms of the

agreement are acceptable and this

was received on 4.4.1984. Further,

the 3rd defendant also confirmed

the terms of the agreement and

wrote a letter to the plaintiff on

11.4.1984.

Adverting to the Bangalore meeting the plaint merely stated

as follows:

"The defendants informed the

plaintiff that the first defendant

is purchasing a flat in University

Compound, Delhi and that he

requires the amount and that he

would receive the entire amount at

the time of executing the sale

deed. The defendant also said that

the plaintiff is to be ready with

the entire amount at the time of

executing the sale deed. .....The

defendant also told the plaintiff

to be ready with the entire sale

consideration by about the 3rd week

of June 1984".

If, as stated under Point 1, there was no concluded

contract at Delhi on 25.1.1984, then the above, averments in

the plaint do not show that there was an independent

concluded agreement at Bangalore. The plaint proceeds on the

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basis that the concluded agreement, if any, was the one

dated 25.1.1984 at Delhi. The paragraph dealing with cause

of action (paragraph 9) also, states thus:

"When the defendants concluded the

contract on 25.1.1984 and also on

subsequent dates when the

defendants further confirmed the

agreement of sale....."

Therefore, there is no specific allegation of any fresh

agreement of sale dated 28.4.1984 in the plaint. Further,

the relief asked for in para 11 is only with regard to the

'concluded' agreement of 25.1.1984 and reads as follows :

"(a) Specific performance of the

agreement of sale concluded between

the parties on 25.1.1984 and

direct........."

(b) Permanent injunction..........

(c) Cost of this suit and such

other reliefs as this Hon'ble Court

may deem fit to grant in the

circumstances of the case".

The main difficulty for the plaintiff in this case is that

he was thrown away the opportunity granted by the High Court

to amend the plaint for proof of an agreement of sale dated

28.4.1984 and for specific performance of such an agreement

of sale dated 28.4.1984.

(b) We shall next deal with the evidence on this aspect.

Learned senior counsel on both sides have referred us to the

evidence adduced by the parties in relation to the agreement

dated 28.4.1984. PW 2 the person who was corresponding and

negotiating on behalf of plaintiff stated in his evidence-

"We did not get agreement on

28.4.1984 from the first

defendant."

He stated in regard to the concluded agreement of 25.1.1984

as follows:

"It is not correct to say on

25.1.1984 no transaction (was

settled) and sale price was not

settled".

As already stated, this runs counter to the suit notice sent

wherein it is admitted that on 25.1.1984, Ist defendant said

at Delhi that he has still to consult his brothers.

Subsequent correspondance after 25.1.1984 on this aspect, as

already stated, is very clear that there is no concluded

contract as on 25.1.1984.

So far as the plaintiff is concerned, as PW1 he says

that the agreement is concluded at Delhi on 25.1.1984 for

Rs.5 lakhs and Ist defendant "confirmed negotiation. I gave

first defendant a rupee coin". This version of giving a

rupee coin at Delhi also shows that, even at the stage of

the evidence, PW 1 stuck to a case, of a concluded contract

on 25.1.1984 at Delhi which is totally contrary to the suit

notice and the correspondance after 25.1.1984.

In respect of the 28.4.1984 meeting at Bangalore, PW1

stated that the Ist defendant was alone at Bangalore and

they meet him and he said he had to correct some question-

papers from Andhra Pradesh and that he had to go to Delhi

urgently and that he asked the plaintiff "to come again in

the second week June 1984 and also he told that he would

come to Shimoga to execute registered deed. He told us to

keep entire amount ready and there shall not (be) give

trouble". From the above evidence, it could not be said that

parties negotiated afresh at bangalore and concluded any

fresh agreement on 28.4.1984.

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Learned senior counsel for appellant relied upon a

telegram dated 4.4.84 (Ex .P7) which reads as follows:

"Agreement acceptable. You come to

Delhi for agreement, if unable,

inform"

Ex. P5 letter dated 10.4.84 of Ist defendant to plaintiff

stated that he has received the letter of PW2 on 6.4.84 and

it further states:

"I agree to make agreement in

accordance with talks at Delhi by

us. It may be done at Delhi if you

come to Delhi......Mainly, if mind

satisfied regarding money, it may

be done, if it is less or more. As

it is said by Kalyankar, we must

have due it seems".

On the next day 11.4.84, the 3rd defendant writes to

PW1 Ex P6 dated 11.4.84 (produced by plaintiff PW1) as

follows:

"I understood from my brother,

Dr.C.S.G.K. Setty at Delhi, that he

has conveyed to you both by

telephone and by letter, that you

should meet him at Bangalore during

the end of April 1984, when he will

be visiting Bangalore for

finalising the agreement as he had

discussed with you earlier. he

writes me that he is awaiting your

confirmation"

Ex. D9 dated 6.4.84 by PW 2 to Ist defendant shows that

plaintiff was in a dilemne whether to purchase this property

or some other property and that plaintiff and ist defendant

should talk over the matter. This letter would be

inconsistent with there being any concluded contract by

4.4.84 when telegram Ex.P7 was issued by Ist defendant.

Further, Ex.P6 would throw a doubt as to whether there was

any concluded contract by 10.4.84 when Ex. P5 was written by

Ist defendant. In fact, the argument before us, on the

contrary, was that there was a concluded agreement on

28.4.1984 when Ist defendant came to Bangalore.This proceeds

on the basis that there was no concluded agreement before

28.4.1984.

No doubt the High Court has stated that plaintiff and

Ist defendant have not met at Bangalore on 28.4.1984. This

finding is wrong as it does not take into account the other

telegram of Ist defendant Ex. p8 dated 28.4.1984 about his

arrival at Bangalore and the oral evidence. But from what

all PW1, PW2 stated as to what happened on 28.4.84, it

appears to us that there is no fresh agreement on 28.4.84 at

Bangalore and that Ist defendant asked the plaintiff to come

to Delhi.

Considerable argument has been advanced before us

regarding Ex.P6 dated 11.4.84 which is an inland letter by

the 3rd defendant to plaintiff that it is not genuine. It

being an Inland letter bearing postal seals, we cannot

accept the contention that the letter is not genuine. There

is no such evidence on plaintiff's side nor any cross-

examination of the 1st defendant.

Another argument was that in his evidence, 1st

defendant admitted that he signed the draft agreement.

Appellant's counsel has contended that this is with

reference to Ex.P3 while Respondent's counsel has submitted

that this evidence of the 1st defendant has reference to

Ex.D11, the draft set up by Ist defendant for Rs.6.50 lakhs.

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It has also been contended for respondents that there is no

signature of 1st defendant on Ex. P3.

Applying the legal principles referred under Point 3 to

the above facts it will be noticed - even assuming that a

contract dated 28.4.1984 at Bangalore is proved, which in

our view, is not proved - that this case does not fit into

the exceptions stated by Fry on Specific Performance

inasmuch as this is not a case where there has been part

performance by delivery of possession. Nor can it be said

that the variation between pleading and proof is immaterial

or insignificant. Plaintiff has also refused to amend the

plaint to seek relief on the basis of an agreement dated

28.4.84, keeping the plaint as it is.

Nor can this case be brought with the principles

applicable to 'general relief' because the plaint

specifically says that there is a concluded contract on

25.1.1984 at Delhi which is belied by the oral and

documentary evidence. However liberally the plaint is

construed, all that it says is that the 1st defendant came

to Bangalore and asked the plaintiff to be ready. It does

not speak of any fresh agreement entered into at Bangalore

on 28.4.1984. Nor are we able spell out any such agreement

concluded on 28.4.1984. The grant of any general relief on

the basis of an agreement of sale dated 28.4.84 - even if

proved - will be doing violence to the language in the

plaint to the effect that the parties concluded an agreement

on 25.1.1984.

The High Court on the basis of its findings has held in

para 13 as follows: "if only the plaintiff was able to prove

the agreement as pleaded by him there was no difficulty in

granting a decree for specific performance, as the evidence

on record does not disclose that the case falls within any

of the exceptions mentioned either in Section 16 or Section

20 of the Specific Relief Act. No doubt specific relief is

an equitable remedy and (it is the ) discretion is required

to be exercised judicially on the basis of establishment

principles of equity, justice and fairplay". The High Court

then stated:

"The party has to approach the

Court with clean hands. The

contract sought to be enforced must

be established. As the agreement

pleaded by the plaintiff has not

been established, on Point No. 3,

it is held that the plaintiff is

not entitled for a decree for

specific performance."

Having regard to the principles laid down in Gonesh

Ram's case [AIR 1924 Cal 461], Ziaul Haque's case [AIR 1966

Cal 605) Halsbury's Laws of England. Fry on Specific

Performance and Corpus Juris Secundum as set out under Point

3, we are unable to say that the discretion exercised by the

High Court in refusing specific performance is contrary to

established principles. Nor can we say that discretion has

been exercised in a perverse manner. Finally, we do not also

think that this is a fit case for exercising our

jurisdiction under Article 136 of the Constitution of India.

The appeal fails and is dismissed without costs.

Reference cases

Description

Supreme Court on Pleading and Proof in Specific Performance Suits

In the landmark judgment of Ganesh Shet vs. Dr. C.S.G.K. Setty & Ors., available on CaseOn, the Supreme Court of India delivered a crucial ruling on the principles of Specific Performance of Contract and the critical consequences of a variance between pleadings and proof. This case serves as a vital guide for legal professionals on the necessity of precise pleading, particularly in suits where the relief sought is discretionary. The court meticulously examined whether a plaintiff, having based his entire case on a specific agreement, could later seek relief based on a different, unpleaded agreement that emerged during the trial.

Background of the Dispute

The case revolved around an agreement for the sale of a house in Shimoga, Karnataka, jointly owned by three brothers (the defendants). The appellant, Ganesh Shet (the plaintiff), initiated negotiations with the first defendant, who held power of attorney for his brothers. The plaintiff's case was that a final, concluded contract for the sale of the property for Rs. 5 lakhs was reached at the first defendant's residence in Delhi on January 25, 1984.

The timeline of the case proceeded as follows:

  • Trial Court: The plaintiff succeeded, and the court granted a decree for specific performance based on the Delhi agreement.
  • High Court: The defendants appealed. The High Court reversed the trial court's decision, finding that no concluded contract existed on January 25, 1984, as evidenced by subsequent correspondence. Crucially, when the plaintiff’s counsel was offered an opportunity to amend the plaint to plead a subsequent agreement allegedly made in Bangalore on April 28, 1984, the offer was refused. The suit was dismissed.
  • Supreme Court: The plaintiff then brought this appeal before the Supreme Court, challenging the High Court's dismissal.

Legal Analysis: The IRAC Method

Issue: The Core Questions Before the Court

The Supreme Court identified four primary points for consideration:

  1. Was there a concluded contract between the parties in Delhi on January 25, 1984?
  2. Could the plaintiff contend that an agreement was formed in Bangalore on April 28, 1984, especially after refusing to amend his plaint in the High Court to include this claim?
  3. What is the legal position on granting relief when there is a significant variance between the case pleaded and the evidence produced, particularly in suits for specific performance?
  4. Could the court grant a decree for the unpleaded Bangalore agreement under the prayer for 'general relief'?

Rule: The Governing Legal Principles

The Court's decision was anchored in established legal principles governing specific performance:

  • Discretionary Relief (Section 20, Specific Relief Act, 1963): The jurisdiction to decree specific performance is discretionary. The court is not bound to grant such relief merely because it is lawful to do so. This discretion must be sound, reasonable, and guided by judicial principles.
  • Requirement of Certainty: For a court to enforce a contract, its terms must be clear, definite, and precise. A higher degree of certainty is required for specific performance than for a damages claim.
  • Strictness in Pleadings: The Court reiterated a special rule applicable to specific performance suits: a plaintiff cannot be permitted to abandon the case made in the plaint and seek relief based on a different agreement proved in evidence. Variance between pleading and proof is strongly discouraged.
  • General Relief (Order 7, Rule 7, CPC): A court can grant general or other relief, but this relief must be consistent with the case raised in the pleading and not contradictory to the specific relief claimed.

Understanding the nuances of discretionary relief and pleading requirements can be complex. Legal professionals can stay ahead by using tools like the CaseOn.in 2-minute audio briefs, which provide concise summaries and analyses of such critical rulings, making it easier to grasp the core principles on the go.

Analysis: The Supreme Court's Reasoning

The Supreme Court meticulously analyzed each issue based on the facts and the established rules.

1. The Delhi Agreement Was Not Concluded

The Court swiftly dismissed the claim of a concluded contract in Delhi on January 25, 1984. It found abundant evidence, including the plaintiff's own suit notice and subsequent letters, showing that negotiations were still ongoing and the first defendant had yet to consult his brothers. Therefore, the very foundation of the plaint was found to be incorrect.

2. The Fatal Refusal to Amend

The Court held the plaintiff's refusal to amend the plaint in the High Court against him. By spurning the opportunity to formally plead the Bangalore agreement, the plaintiff locked himself into his original, and now disproven, claim. The Court deemed this attitude a crucial factor in denying any alternative relief.

3. The Peril of Variance Between Pleading and Proof

This formed the crux of the judgment. The Court emphasized that in specific performance suits, a plaintiff who pleads a specific contract must prove that very contract. The plaintiff pleaded a Delhi agreement but tried to argue for a Bangalore agreement during the proceedings. The Court, citing classic English cases like Hawkins vs. Maltby, held that such a variance is not permissible. To allow it would be to grant a decree for a case the defendant was never asked to formally meet, causing significant prejudice.

4. 'General Relief' Cannot Rescue a Defective Plaint

The Court clarified that the prayer for "such other relief" cannot be used to grant a decree for an agreement that is fundamentally inconsistent with the case pleaded. The plaint was built entirely on the Delhi agreement. Granting specific performance for a different (Bangalore) agreement would not be 'other relief' but an entirely new one, contradicting the plaintiff's own stated case. The evidence for the Bangalore agreement was itself found to be weak and did not establish a fresh, concluded contract.

Conclusion: Appeal Dismissed

The Supreme Court concluded that the High Court was correct in dismissing the suit. There was no concluded contract in Delhi as pleaded. The plaintiff, by refusing to amend his plaint, forfeited any right to seek relief based on any subsequent agreement. The Court found no reason to interfere with the discretionary power exercised by the High Court and dismissed the appeal, affirming that a plaintiff in a specific performance suit must stand or fall by the case they plead.


Why is this Judgment an Important Read?

For lawyers, law students, and litigants, Ganesh Shet vs. Dr. C.S.G.K. Setty & Ors. is a masterclass in civil procedure and contract law. Its importance lies in:

  • The Sanctity of Pleadings: It underscores that pleadings are not mere formalities but the foundational bedrock of a civil suit. Casual or inaccurate pleadings can be fatal to a case.
  • Guidance on Specific Performance: It provides a clear warning about the high standards of proof and consistency required to obtain the equitable remedy of specific performance.
  • Strategic Litigation: The case highlights the critical importance of procedural decisions, such as whether to amend a plaint. The plaintiff's refusal to amend was a pivotal strategic error that sealed his fate.
  • Limits of General Relief: It clarifies that the 'general relief' clause is not a magic wand that can cure fundamental defects or inconsistencies in a plaintiff's case.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute legal advice. For any legal issues, it is essential to consult with a qualified legal professional.

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