Supreme Court

Surinder Kaur (D) thr. L.Rs. Vs. Bahadur Singh (D) thr. L.Rs.

MANU/SC/1233/2019

11.09.2019

Contract

Court can refuse to grant discretionary relief of specific performance, even if, contract is not voidable but circumstances make it inequitable to enforce the same

In facts of present case, Mohinder Kaur, predecessor in interest of the Appellants entered into an agreement with Bahadur Singh, predecessor in interest of the Respondents whereby she agreed to sell the suit land to Bahadur Singh for a total sale consideration of Rs. 5605. Out of this, Rs. 1000 was paid as earnest money at the time of execution of agreement to sell, and it was agreed that the balance amount would be paid at the time of registration of the sale deed. The possession of the land was handed over to the vendee on the date of agreement to sell itself. Since, there was some litigation with regard to the property, it was agreed between the parties that the sale deed would be executed within one month from the date of decision of civil appeal pending before the Punjab and Haryana High Court.

The question of law arising in these appeals is whether a vendee who does not perform one of his promises in a contract can obtain the discretionary relief of specific performance of that very contract.

There can be no hard and fast Rule and the issue whether promises are reciprocal or not has to be determined in the peculiar facts of each case. The payment of rent was an essential term of the contract. Explanation (ii) to Section 16(c) of Specific Relief Act, 1963 clearly lays down that, the Plaintiff must prove performance or readiness or willingness to perform the contract according to its true construction. The only construction which can be given to the contract in hand is that, Bahadur Singh was required to pay customary rent.

A party cannot claim that, though he may not perform his part of the contract, he is entitled to specific performance of the same. Explanation (ii) to Section 16(c) of The Specific Relief Act lays down that it is incumbent on the party, who wants to enforce the specific performance of a contract, to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract.

A perusal of Section 20 of Act clearly indicates that the relief of specific performance is discretionary. Merely because the Plaintiff is legally right, the Court is not bound to grant him the relief. The Court while exercising its discretionary power is bound to exercise the same on established judicial principles and in a reasonable manner. The discretion cannot be exercised in an arbitrary or whimsical manner.

Sub clause(c) of Sub-section (2) of Section 20 provides that even if the contract is otherwise not voidable but the circumstances make it inequitable to enforce specific performance, the Court can refuse to grant such discretionary relief. Explanation (2) to the Section provides that the hardship has to be considered at the time of the contract, unless the hardship is brought in by the action of the Plaintiff.

In this case, Bahadur Singh having got possession of the land in the year 1964 did not pay the rent for 13 long years and even when he filed the replication in the year 1978, he denied any liability to pay the customary rent. Therefore, he did not act in a proper manner. Equity is totally against him. He was not entitled to claim the discretionary relief of specific performance of the agreement having not performed his part of the contract even if that part is held to be a distinct part of the agreement to sell.

The vendee Bahadur Singh by not paying the rent for 13 long years to the vendor Mohinder Kaur, even when he had been put in possession of the land on payment of less than 18% of the market value, caused undue hardship to her. The land was agricultural land. Bahadur Singh was cultivating the same. He by not paying the rent did not act fairly and, forfeited his right to get the discretionary relief of specific performance. The judgment and decree of all the Courts below is set aside. Appeal allowed.

Tags : Discretionary relief Specific performance Validity

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Supreme Court

Raja Ram Vs. Jai Prakash Singh and Ors.

MANU/SC/1231/2019

11.09.2019

Contract

‘Undue influence’ in execution of a contract cannot be inferred merely because a family member was looking after his family elder

In present matter, the Plaintiff and Defendant No. 2 are brothers. Defendant No. 1 was the wife of Defendant No. 2. Respondents Nos. 1 to 3 are sons of deceased Defendant No. 1. The Plaintiffs alleged that, the original Defendants obtained the sale deed dated 2nd March, 1970 from their father in favour of Defendant No. 1, fraudulently, by deceit and undue influence because of old age and infirmity of the deceased and who was living with the Defendants. The suit was dismissed. The appellate court allowed the appeal holding that, the Defendants had failed to discharge their burden of being in a position to dominate the will of the deceased by undue influence. The High Court reversed the order of the first appellate Court and restored the dismissal of the suit.

The deceased on account of his advanced age may have been old and infirm with a deteriorating eye sight, and unable to move freely. There is no credible evidence that, he was bed ridden. Hardness of hearing by old age cannot be equated with deafness. The Plaintiff, despite being the son of the deceased, except for bald statement in the plaint, has not led any evidence in support of his averments. It is an undisputed fact that, the deceased appeared before the sub-registrar for registration. It demolishes the entire case of the Plaintiff that the deceased was bed ridden.

The sale deed being a registered instrument, there shall be a presumption in favour of the Defendants. The onus for rebuttal lay on the Plaintiff which he failed to discharge. Notwithstanding the finding of enmity between PW-2 and PW-3 with original Defendant No. 2, the First Appellate Court erred in relying upon these two witnesses by holding that, they were independent witnesses. DW-1, though related was a witness to the sale deed. His evidence in support of the events before the sub-registrar therefore has to be accepted. The Plaintiff could have led evidence in rebuttal of the sub-registrar but he did not do so.

The pleadings in the plaint are completely bereft of any details or circumstances with regard to the nature, manner or kind of undue influence exercised by the original Defendants over the deceased. A mere bald statement has been made attributed to the infirmity of the deceased. The deceased was not completely physically and mentally incapacitated. There can be no doubt that, the original Defendants were in a fiduciary relationship with the deceased. Their conduct in looking after the deceased and his wife in old age may have influenced the thinking of the deceased. But that per se cannot lead to the only irresistible conclusion that, the original Defendants were therefore in a position to dominate the will of the deceased or that the sale deed executed was unconscionable. The onus would shift upon the original Defendants under Section 16 of the Contract Act, 1872 read with Section 111 of the Evidence Act, 1872 as held in Anil Rishi v. Gurbaksh Singh, only after the Plaintiff would have established a prima facie case.

In Subhas Chandra Das Mushib v. Ganga Prosad Das Mushib and Ors. , it was further observed that there was no presumption of imposition merely because a donor was old and weak. Mere close relation also was insufficient to presume undue influence.

The first appellate Court completely erred in appreciation of the facts and evidence in the case. The primary ingredients of the law need to be first established by proper pleading supported by relevant evidence. Cases cannot be decided on assumptions or presumptions. On a consideration of the entirety of the matter, there is no reason to interfere with the concurrent findings arrived at by two Courts. The appeal is dismissed.

Relevant

Anil Rishi v. Gurbaksh Singh MANU/SC/8133/2006
; Subhas Chandra Das Mushib v. Ganga Prosad Das Mushib and Ors. MANU/SC/0069/1966

Tags : Sale deed Execution Undue Influence

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Central Administrative Tribunal

Shyama K. Nair Vs. Bharat Sanchar Nigam Limited and Ors.

MANU/CA/0561/2019

06.09.2019

Service

Terms on which applications for compassionate appointment would be considered should be strictly adhered to and are subject to policy framed

The brief facts of the case are that, the Applicant is the daughter of Late Unnikrishnan K, who died in harness while working as Telecom Mechanic. The Applicant applied for employment under the scheme for employment of dependents of Government servants dying while in service. The application of the Applicant was considered by the Circle High Power Committee and the same was rejected by order.

The applicant submits that, the committee considered the application applying the system of weightage point system and found that, the Applicant is entitled to obtain only 27 points as against the minimum of 55 or above points which is considered for grant of appointment. The Respondents while rejecting the application of the applicant had not applied the provisions of the revised scheme which was in force. Therefore, the action of the Respondents is arbitrary and illegal. Aggrieved, the Applicant has approached this Tribunal with the present OA.

In the present case, the claim of the Applicant is that, the revised scheme should be followed in her case while considering her application for compassionate appointment. The Respondents have denied this fact in the reply statement contending that, even though the family gets family pension of Rs. 7,775 plus DA, the basic pension in the pre-revised scale without the DA factor i.e. Rs. 3,490 will be taken into account.

As per the letter dated 21st April, 2016 the pension calculated with uniform fitment benefit @ 30% of basic pay plus effective DA @ 78.2% as on 1.1.2007 is to be taken in to account. Since these guidelines have not come into force, the said pension amount has not been calculated. Therefore, the applicant will not get 20 points as claimed by her even if guidelines are implemented and may not even get the weightage points under the pension factor in the new scheme.

Compassionate appointment is an exception to the general rule and appointment to any public post in the service of the State has to be made on the basis of principles which accord with Articles 14 and 16 of the Constitution. The dependents of a deceased employee are made eligible by virtue of the policy on compassionate appointment. The basis of the policy is that, it recognizes that a family of a deceased employee may be placed in a position of financial hardship upon the untimely death of the employee while in service. It is the immediacy of the need which furnishes the basis for the Respondents to allow the benefit of compassionate appointment. The terms on which such applications would be considered are subject to the policy which is framed by the Respondents.

In the instant case, the policy for compassionate appointment mandated that receipt of benefits received by family on account of welfare measures including family pension and death gratuity was required to be considered while assessing requirement of immediate means of sustenance. Therefore, as per the judgment of the apex court in State of Himachal Pradesh & Anr. v. Shashi Kumar, the policy for compassionate appointment should be strictly adhered to by the Respondents while considering the claim for compassionate appointment. Application dismissed.

Relevant

State of Himachal Pradesh & Anr. v. Shashi Kumar -MANU/SC/0081/2019

Tags : Appointment Compassionate ground Entitlement

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Basab Biraja Paul and Ors. Vs. Edelweiss Asset Reconstruction Company Limited and Ors.

MANU/NL/0426/2019

06.09.2019

Limitation

When Financial Creditor was pursuing its remedies in proper forum, there was continuous cause of action existed and debt cannot be considered as time barred

In facts of present case, Edelweiss Asset Reconstruction Company Limited, assignee of debt from original lender - UCO Bank (Assignor), filed Company Petition under the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate corporate insolvency resolution process against Octaga Green Power and Sugar Company Limited - Corporate Debtor claiming outstanding debt which was Rs. 69,70,15,694 as per recall Notice dated 15th March, 2018. The matter came up before Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) and the Section 7 of Code Application was admitted. The present Appeal has been filed by the shareholders of the Corporate Debtor.

Financial Creditor - Edelweiss issued Notice under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) calling upon the Corporate Debtor to pay Rs. 50,44,37,258 and on 15th March, 2018 sent recall Notice demanding repayment of Rs. 69,70,15,694 from the Corporate Debtor. The Corporate Debtor had offered one-time settlement of Rs. 10 Crores and later, revised the same to Rs. 11 Crores within 90 days or Rs. 18 Crores over 9 years. However, the Financial Creditor filed Section 7 proceedings. The Appellants claim that the proceeding has been filed after a delay of 5 years from the date of the account of the Corporate Debtor being classified as NPA.

The Appellants claim that, the debt is clearly barred by law of limitation and proceedings before DRT would not save the limitation. The Company Petition has been filed in 2018 for loan facility availed in 2012 which was classified as NPA on 31st March, 2013. Thus, according to the Appellants, the admission of the Application of Financial Creditor (Respondent No. 1) is bad in law and the Application should have been dismissed.

There is no dispute with regard to the fact that, the Corporate Debtor had taken credit facilities from UCO Bank. There is no dispute regarding the fact that Corporate Debtor had secured the credit facilities taken by equitable mortgage of immovable property and by executing other securities. The filing of proceedings before DRT in 2014 and invoking of Section 13(2) of SARFAESI in 2016 are also not disputed. Amount more than Rs. 1 Lakh is in default, is apparent from record. The proceeding in DRT is still pending.

It is clear that, the question of limitation has to be looked into from the angle whether the debt is payable in law or in fact. The yardstick is to see whether there is continuous cause of action for the debt claimed. The limitation for enforcing payment of money secured by a mortgage or otherwise charged by the immovable property is twelve years at the time when money sued for becomes due. Thus, for 12 years after becoming due, the debt would be payable in law. In the present matter, the sanction letters are between 19th January, 2005 to 18th May, 2012 and there were Master Restructuring Agreements executed in 2012. Apart from proceeding filed in DRT in May, 2014, which is pending, the loan was secured by equitable mortgage and as such, it cannot be said that the debt was barred by limitation, when Section 7 Application was filed on 7th August, 2018.

The Financial Creditor had moved DRT in 2014 which was a relief available at that time. When the Financial Creditor was pursuing its remedies in proper forum, there was continuous cause of action existing and it cannot be said that the debt became time barred. The IBC was enforced in 2016 and the additional remedy became available. Financial Creditor resorted additionally to it and the Application was filed under Section 7. It could not be said to be time barred. There is no substance in the Appeal. The Appeal is dismissed.

Tags : Payment Enforcement Maintainability

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High Court of Gauhati

Kukil Das Vs. The State of Assam and Ors.

MANU/GH/0667/2019

05.09.2019

Commercial

Authorities have to obtain prior approval from Government in case the order of settlement is not issued to highest tenderer

The order of settlement of the Sulung Daily Market under the Pachim Kaliabor Anchalik Panchayat in the district of Nagaon, issued in favour of the respondent No. 8 is under challenge in the present writ petition. The grievance expressed in this writ petition pertains to the manner in which the bids were evaluated by the respondents leading to issuance of the order of settlement dated 31st July, 2019 in favour of the Respondent No. 8 who was the lowest bidder.

The Petitioner, submits that the tender of the Respondent No. 8, besides being technically defective, was also the lowest bid and therefore, in view of the specific provision of Rule 47(10) of the Assam Panchayat (Financial) Rules, 2002, the Respondents did not have the authority or jurisdiction to issue the order of settlement in favour of the Respondent No. 8 without obtaining prior approval of the Government.

There is no dispute about the fact that, amongst the 18 tenderers who had submitted their bids in response to the NIT dated 01.06.2019 for settlement of Sulung Daily Market, the Respondent No. 8 was the lowest bidder. The highest bidder had quoted Rs. 35,80,082.00 per annum, whereas the writ Petitioner had quoted Rs. 13,84,845.00 per annum. There is also no dispute in this case about the fact that the only ground on which the order of settlement was awarded in favour of the Respondent No. 8 at the lowest price was on account of the fact that the higher rates quoted by the other tenderers were found to be exorbitant. However, it is significant to note herein that, there is no clause in the NIT which even remotely indicates that such a criterion would be employed while evaluating the bids.

In the present case, no such criteria regarding exorbitant price was laid down in the NIT. Therefore, it is clear that after opening the bids the Respondents have devised an additional/undisclosed criterion to reject higher bids. Rule 47(10) of the Assam Panchayat (Financial) Rules, 2002, provides that, the tender of highest bidder shall be accepted. Acceptance of tender other than the highest bid shall require the "Government" prior and formal approval."

From a plain reading of Rule 47(10) of the Rules, 2002, it is clear that the authorities would have to obtain prior approval from the Government in case the order of settlement is not issued to the highest tenderer. In the instant case, the Respondent No. 8 is not the highest bidder and there are other tenderers who have quoted higher price than the Petitioner. The bids of such tenderers were also found to be technically responsive. As such, there was no scope for the Respondent No. 4 to issue the order of settlement in favour of the respondent No. 8 without obtaining the prior approval of the Government.

The impugned order has not only been issued in violation of the principles of fairness as enshrined in Article 14 of the Constitution of India but the same also contravenes the provision of Rule 47(10) of the Rules, 2002. As such, the impugned order of settlement dated 31.07.2019 stands set aside. As the process of evaluation of the bids have been held to be erroneous by this Court, the Respondent authorities are directed to re-evaluate the bids based on the criteria laid down in the NIT and issue a fresh order of settlement to the successful bidder. Writ petition disposed off.

Tags : Evaluation Bids Legality

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High Court of Himachal Pradesh

Neeraj Katoch and Ors. Vs. State of H.P. and Ors.

MANU/HP/1280/2019

05.09.2019

Criminal

High Court has inherent power to quash criminal proceedings even in non-compoundable cases, where parties have settled matter between themselves

By way of instant petition filed under Section 482 of the Code of Criminal Procedure, 1973 (CrPC), a prayer has been made on behalf of the Petitioners-accused, for quashing of FIR under Sections 387, 504 and 506 read with Section 34 of Indian Penal Code, 1860 (IPC) registered with Police Station as well as consequent proceedings pending before the Court below on the basis of amicable settlement arrived inter-se parties.

Since the petition has been filed under Section 482 of CrPC, this Court deems it fit to consider the present petition in the light of the judgment passed by Hon'ble Apex Court in Narinder Singh and others v. State of Punjab and another whereby Hon'ble Apex Court has formulated guidelines for accepting the settlement and quashing the proceedings or refusing to accept the settlement with direction to continue with the criminal proceedings. Power conferred under Section 482 of the CrPC is to be distinguished from the power which lies in the Court to compound the offences under section 320 of the CrPC. No doubt, under Section 482 of the CrPC, the High Court has inherent power to quash the criminal proceedings even in those cases which are not compoundable, where the parties have settled the matter between themselves. However, this power is to be exercised sparingly and with great caution.

High Court has inherent power to quash criminal proceedings even in those cases which are not compoundable, but such power is to be exercised sparingly and with great caution. Court while exercising inherent power under Section 482 of CrPC, must have due regard to the nature and gravity of offence sought to be compounded.

Consequently, in view of the averments contained in the petition as well as the submissions having been made by the learned counsel for the parties that the matter has been compromised, and in view of well settled proposition of law as well as the compromise being genuine, FIR under Sections 387, 504 and 506 read with Section 34 of IPC, registered with Police Station as well as consequent proceedings pending before the Court below are quashed and set-aside. The present petition is allowed.

Relevant

Narinder Singh and Ors. vs. State of Punjab and Anr. MANU/SC/0235/2014

Tags : Settlement Proceedings Quashing of

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