A decree for specific performance of an agreement to sell cannot be reversed on the ground of rise in price #indianlaws

Rise in price is a normal change of circumstances and, therefore, on that ground a decree for specific performance cannot be reversed. However, the court may take notice of the fact of increase in prices and can impose conditions of grant of compensation.

What factors Court should consider while granting relief for specific performance was the issue before Court. It was observed that remedy for specific performance is an equitable remedy and the Court while granting relief for specific performance exercise discretionary jurisdiction.

Section 20 of the Specific Relief Act specifically provides that the court’s jurisdiction to grant decree of specific performance is discretionary but not arbitrary. Discretion must be exercised in accordance with the sound and reasonable judicial principles.

Where the plaintiff brings a suit for specific performance of contract for sale, the law insists a condition precedent to the grant of decree for specific performance that the plaintiff must show his continued readiness and willingness to perform his part of the contract in accordance with its terms from the date of contract to the date of hearing.

Normally, when the trial court exercises its discretion in one way or other after appreciation of entire evidence and materials on record, the appellate court should not interfere unless it is established that the discretion has been exercised perversely, arbitrarily or against judicial principles. The appellate court should also not exercise its discretion against the grant of specific performance on extraneous considerations or sympathetic considerations.

A party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree are established then the Court has to exercise its discretion in favour of granting relief for specific performance.

It was further observed that subsequent rise in price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, therefore, on that ground a decree for specific performance cannot be reversed. However, the court may take notice of the fact that there has been an increase in the price of the property and considering the other facts and circumstances of the case, this Court while granting decree for specific performance can impose such condition which may to some extent compensate the defendant-owner of the property.

[K. Prakash vs. B.R. Sampath Kumar]
(SC, 22.09.2014)