K. APPA RAO Vs. P. BALASUBRAMANIA GRAMANI

JUDGEMENT

(1.) THESE are appeals by the legal representatives of the plaintiff under the Letters Patent. The plaintiff or his legal representatives as the case may be, had failed in all the Courts below to get specific performance of the three agreements, all executed on 28 -10 -1957, to sell certain shares, which the executants of the agreements had in certain joint family properties. The three agreements put together had undertaken an obligation to convey to the plaintiff a total of 3/5 share in those properties. At the time the agreements were entered into, O.S. No. 150 of 1952, which was a suit for partition by two of the coparceners, was pending, and in fact, a preliminary decree had been passed in 1954. Defendants 3 to 7 forming one unit, defendants 8 and 9 forming another unit and defendant 10 in that suit for partition, who held each 1/5 share, were the executants. On 18 -4 -1958, the plaintiff sought to get himself impleaded as a party defendant in the partition suit but without success. The suit for partition eventually ended in a compromise decree dated 1 -5 -1958, the effect of which was that whatever share the executants of the agreements had agreed to convey had in fact been allotted to the plaintiff and defendants 1 and 2 in that suit. The trial Court found that the agreements were not genuine and dismissed the suit. In passing, it had also observed that if the agreements were genuine, there would be no difficulty in holding that the compromise decree in the partition suit would be a collusive one against the interest of the plaintiff and that, as such, it would not bind him. The first lower appellate Court did not share that view, but held that the agreements were genuine. But it being of opinion, that the consideration for the agreements was grossly inadequate, it declined to grant a decree for specific performance. In second appeal, Srinivasan, J. concurred with the first appellate Court and dismissed it.

(2.) TWO questions which arise for our decision are: -1. Whether the agreements aforesaid were for grossly inadequate consideration, so that specific performance of the agreements should not be ordered in view of Section 28 of the Specific Relief Act, 1877: and 2. If that question were answered in favour of the appellants, whether they could still succeed in the light of the compromise decree and Section 27 (b) of that Act.

(3.) SPECIFIC performance of an agreement to sell immovable property is not invariably ordered as a matter of right. The relief is discretionary, but the discretion being a judicial one, it has to be exercised neither arbitrarily nor unreasonably, but according to law and reason. The Specific Relief Act has provided certain guidelines as to when specific performance could be ordered and when not. Section 28 is one of them, which provides what parties cannot be compelled to perform. Specific performance of an agreement cannot be enforced against a party thereto if the consideration to be received by him "is so grossly inadequate, with reference to the state of things existing at the date of the contract, as to be either by itself or coupled with other circumstances evidence of fraud or of undue advantage taken by the plaintiff." Two matters will have to be considered; one, while consideration was obviously inadequate, was it grossly inadequate; and the other, whether the fact by itself or in association with other circumstances would amount to undue advantage taken by the party asking for enforcement of the agreement. The first one involves a question of degree. If the inadequacy of consideration is so mush as to shock the conscience of the Court in respect of the fairness of the agreement, it is a case of gross inadequacy of consideration. It is not any inadequacy of consideration that will help a defence in a suit for specific performance but when the inadequacy is unconscionable or is so patently unjust that it savours by itself of fraud or that it amounts to that when it is taken in conjunction with other circumstances, that exist on the date of the contract. In the instant case, the plaintiff himself had valued one of the two items covered by these agreements at more than Rs. 8,000. That being the case, we are of opinion that the sum of Rs. 800 for 1/5 share was grossly inadequate. That was the view of Srinivasan, J. with which we agree. The learned Judge has also pointed out the miserable and unenviable position in which the executants were placed vis -a -vis the powerful plaintiff who took undue advantage of their position and had the agreements executed in his favour. That will suffice to conclude the appeals against the appellants.