MANU/SC/0977/2010

Equivalent/Neutral Citation: 2011(2)ARC 716, 2011 3 AWC 2698SC , (SC Suppl)2011(4)C HN144, 2010(6)C TC 901, 2011(I)C LR(SC )147, 2010 INSC
799, JT2010(12)SC 588, 2011(1)KLJ17, 2010-5-LW673, (2011)2MLJ222(SC ), 2011(1)RC R(C ivil)604, 2010(12)SC ALE400, (2011)1SC C 429,
[2010]15SC R538, 2010(3)UC 2122, 2010(10)UJ5288

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 9821-9822 of 2010 (Arising out of SLP (C) Nos. 14985-14986 of
2010), Civil Appeal Nos. 9824-9825 of 2010 (Arising out of SLP (C) Nos. 15008-15009
of 2010) and Civil Appeal No. 9826 of 2010 (Arising out of SLP (C) No. 17435 of 2010)
Decided On: 22.11.2010
J.P. Builders and Ors. Vs. A. Ramadas Rao and Ors.
Hon'ble Judges/Coram:
P. Sathasivam and Anil R. Dave, JJ.
Case Note:
Contract - Agreement to Sell - Discharge of Liability - Enforceability of
Contract - Section 16(c) of the Specific Relief Act, 1963 - Provision of
personal bars to relief - Implication of the words "ready" and "willing" - Held,
words "ready" and "willing" imply that the person was prepared to carry out
the terms of the contact - Distinction between "readiness" and "willingness"
is that the former refers to financial capacity and the latter to the conduct of
the Plaintiff wanting performance and generally, readiness is backed by
willingness - Section 16(c) puts a condition precedent for obtaining relief of
grant of specific performance - Initiating Party in a suit for specific
performance, must allege and prove a continuous "readiness and willingness"
to perform the contract on his part from the date of the contract - In the
instant case, pursuant to assertion in the form of specific plea in the plaint
and correspondence in the form of letter, followed by assertion in the witness
box at the time of trial, impugned findings rightly concluded that the Plaintiff
has proved and complied with the mandates provided under Section 16(c) of
the Specific Relief Act - Accordingly, based on materials placed on record,
specific assertion in the plaint, oral and documentary evidence as to
execution of agreement, part-payment of sale consideration and financial
capacity to execute the sale deed, bank statements, the Plaintiff proved his
"readiness" and "willingness" to perform his part of obligation under the
contract - Impugned finding correct and to be upheld
Contract - Contingent Contracts - Terms of the Contract contended to be
contingent, impossible to be fulfilled and thus could not be implemented -
Whether grant of relief in such eventuality correct - Effect of Sections 31 and
32 of the Indian Contract Act, 1872 - Held, if the condition prescribed or even
described in the contract is impossible, such contracts become void and not
enforceable in terms of Section 32 - In the instant case only the execution of
the sale deed was postponed to a future date - Merely because the contract
insisted settlement of a loan of the bank and handover the title deeds to the
Plaintiff from the bank are not impossible events in the light of the
performance made by the Plaintiff, the contract in question did not come to
an end on this ground and such contract is not a contingent contract and
undoubtedly, the Court has jurisdiction to grant relief in terms of the contract
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- Obtaining No Objection Certificate (NOC) from the authority concerned,
clearance of NOC from Income Tax Department or any other State/Central
authority, securing title deeds after clearing certain loans are incidental and
implied covenant on the part of the vendors to do the needful to give effect to
the agreement - Contract in question is capable of performance and the
contention that it is a contingent contract and incapable of performance held
to be not acceptable
Civil - Right of Marshalling - Exercise thereof by subsequent purchaser under
Section 56 of the Transfer of Property Act, 1882 - Whether such right
available to a decree holder in a suit for specific performance and relief can be
granted in the absence of any pleading and issue before the Trial Court - Held,
the concept as in Section 56 applies to sales in a manner similar to Section 81
of the Transfer of Property Act which applies to mortgages alone - Section 56
deals with the concept of marshalling in a transaction involved in subsequent
sale - Doctrine of marshalling rests upon the principle that a creditor who has
the means of satisfying his debt out of several funds shall not, by the exercise
of his right, prejudice another creditor whose security comprises only one of
the funds - In the instant case in view of the sale agreement which resulted
into decree for specific performance, the Plaintiff was entitled to insist upon
Defendants to have the mortgage debt satisfied out of the properties not sold
to the Plaintiff and in any case if the sale proceeds are not sufficient then to
proceed against the said suit properties - Plaintiff was under an impression
that the Trial Court would grant the entire relief as claimed and did not
anticipated that he could get a part of relief sought for by him - There was no
occasion for the Plaintiff to raise the plea of marshalling at the time of filing
of the suit - Even otherwise the plea of marshalling being pure question of
law based upon the decree obtained for specific performance, cannot simply
be thrown out merely because the same was not specifically pleaded - When a
party is able to secure substantial relief, namely, decree for specific
performance with clearance of mortgage amount, it is the duty of the Court to
mould the relief so as to render substantial justice between the parties -
Impugned finding held to be correct - However, this doctrine should not be
permitted to become a device for destructing the sanctity of contract and
Court should also not apply the doctrine of impossibility to assist a party
which does not want to fulfill its obligations under the contract
Constitution - Jurisdiction of High Court - Adjudication of claims of similar
nature under two different provisions - Whether Writ Petition under Article
226 of the Constitution of India can be entertained along with Regular First
Appeal filed under Section 96 of the Code of Civil Procedure - Held,
undisputedly the subject-matter of the lis and properties one and the same in
the appeals and the writ petition - There is no bar for the Division Bench
which has jurisdiction to hear appeal, to hear writ petition when the same is
connected with the main issue
Civil - Award of Cost in Suit - Correctness thereof questioned - Held, in the
instant case there was no serious argument advanced about the award of
cost, however in one of the grounds appeal, there was an agitation in regard
to award of cost by the High Court in favour of the Plaintiff - Plaintiff after
valuing the suit paid a substantial Court fee and ultimately secured a decree
though he could not secure a relief in its entirety - Plaintiff rightly held to be

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entitled for the cost awarded Constitution - Issuance of directions by High
Court contrary to orders passed by other forum - Correctness thereof
questioned - Appellant contended that the jurisdiction of Recovery
officer/Tribunal is exclusive and no other Court can go into their order - Held,
in the instant case, the High Court taking note of the fact that it had
considered various connected issues in respect of the same properties in
which both the Civil Court and the DRT passed several orders and the fact
that concerned Defendants were having sufficient other properties at various
locations and also of the fact that the Bank was also party to both these
proceedings and accepted the impugned Order of the High Court and not filed
any appeal before this Court, the direction/clarification issued by the High
Court correct
Constitution - Power of Court under Article 136 of the Constitution of India,
1950 - Exercise thereof to interfere with the impugned findings - Held, even
after issuance of notice in the special leave petition and after grant of leave,
irrespective of the nature of the subject-matter, the Appellants must show
that exceptional and special circumstances exists and if there is no
interference by this Court substantial and grave injustice will result and that
the case has features of sufficient gravity to warrant a decision from this
Court on merits
Civil - Suit for Specific Performance - Challenge against impugned findings
granting decree and disposing application of principle of marshalling - Held,
the conclusion arrived by the High Court in its impugned finding correct -
Division Bench of the High Court had taken pains to discuss once again and
rendered a correct finding on all aspects - Defendant Nos. 1 and 2 incase fail
to comply with the directions in regard to execution of sale deed, the Trial
Court directed to execute the sale deed incorporating all the directions and
observations made in the judgment of the High Court - Appeals dismissed
JUDGMENT
P. Sathasivam, J.
1. Leave granted in all the Special Leave Petitions.
2. These appeals seek to challenge the common judgment and order dated 23.02.2010
passed by the Division Bench of the High Court of Judicature at Madras in A.S. Nos. 708
of 2008 and 946 of 2009 and W.P. No. 23405 of 2009 whereby the High Court partly
allowed A.S. No. 708 of 2008 confirming the decree for specific performance granted by
the Principal District Court, Chengalpet in O.S. No. 336 of 2008 and dismissed A.S. No.
946 of 2009 preferred by the appellants herein. By the same order, the High Court
disposed of W.P. No. 23405 of 2009 with certain directions. By a subsequent order
dated 29.04.2010, the High Court dismissed the Review Application No. 37 of 2010 in
A.S. No. 708 of 2008 and Review Application No. 47 of 2010 in W.P. No. 23405 of 2009
preferred by the appellants herein.
Brief facts:
3 . (a) The subject matter of the suit is a total extent of 30 acres 86 cents of land in
Senthamangalam Village, Sriperumbadur Taluk, Kancheepuram District comprised in 38
items. M/s J.P. Builders-Appellant No. 1 and Shri J.P. Paramanandam-Appellant No. 2

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herein are the owners of the suit property which they acquired under various sale
deeds. The sister concern of M/s J.P. Builders viz., M/s Anand Agency has availed
certain financial assistance from the Indian Bank, (hereinafter referred to as 'the Bank')
and for the said assistance Appellant Nos. 1 and 2 herein offered their various
properties including the suit property as security for the principal as well as interest
amount payable by M/s Anand Agency of which Appellant No. 2 is the sole proprietor.
(b) On 15.08.2005, the appellants entered into a Memorandum of Understanding (MoU)
(Ex. A-2) with Respondent No. 1 herein for sale of the suit property at a sale
consideration of Rs. 14 lakhs per acre and a sum of Rs. 1 lakh was paid as advance by
way of cheque on the same day. Balance sale consideration was to be paid within three
months from the date of obtaining confirmation letter from the Bank.
(c) On 10.10.2005, M/s J.P. Builders, by a letter addressed to the AGM, Indian Bank,
Asset Recovery Management Branch II, offered a sum of Rs. 100 lakhs as full and final
settlement of the dues of its sister concern, M/s Anand Agency, which was declined by
the Bank by letter dated 15.10.2005 advising them to revise the offer with substantial
improvement. By letter dated 23.01.2006, the Bank stated that Appellant No. 2 herein
had not made any improvement in his One Time Settlement (in short 'OTS') proposal of
Rs. 100 lakhs and hence the Bank is proceeding to enforce its rights under the
Securitization and Reconstruction of Financial Assets and Enforcement of Security
Interests Act, 2002 (hereinafter referred to as 'the Act'). By letter dated 01.02.2006,
Appellant No. 2 offered a sum of Rs. 148 lakhs as one time settlement of the loans
availed by M/s Anand Agency.
(d) On 03.02.2006, Respondent No. 1 entered into a Sale Agreement with the appellants
for purchase of the suit property. The sale price of Rs. 14 lakhs per acre was enhanced
to Rs. 18 lakhs per acre and the total sale consideration was fixed at Rs. 5,55,48,000/-.
On the same day, Respondent No. 1 had paid a sum of Rs. 24 lakhs by way of cheque
as further advance to Appellant No. 2 in addition to Rs. 1 lakh already paid. On
18.04.2006, a further payment of Rs. 50 lakhs was made by Respondent No. 1.
(e) On 26.04.2006, the Bank rejected the OTS offer of Rs. 148 lakhs stating that since
the amount offered is very low, the Bank has decided to pursue the recovery application
filed before the Debts Recovery Tribunal, (hereinafter referred to as 'DRT') Chennai for
the recovery of the dues of the Bank. Again, by letter dated 15.05.2006, the Bank stated
that out of court settlement can be done if an offer of Rs. 629.60 lakhs by working out
interest at PLR i.e. 11% compound on the principal outstanding as on 31.03.1993 be
made. However, since the settlement amount was more than the sale consideration for
the suit property, the Appellant No. 2 could not agree to pay the same.
(f) On 26.07.2006, Respondent No. 1 issued a legal notice to the appellants calling
upon them to liquidate the loans out of the amounts received from him and retrieve the
original documents from the Bank in order to execute the sale deed. By letter dated
27.07.2006, the Appellant No. 1 replied to the notice stating that the first respondent
had not paid the balance sale consideration in spite of repeated requests and raised
doubt that the first respondent is no longer interested to buy the suit property,
therefore, a legal notice was sent calling upon Respondent No. 1 to pay a sum of Rs. 1
crore as liquidated damages.
(g) On 07.08.2006, Respondent No. 1 filed O.S. No. 336 of 2006 before the Principal
District Judge, Chengalpet against the appellants and the Bank. By judgment and decree
dated 30.04.2008, the Principal District Judge, Chengalpet decreed the suit partly,

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granting the relief of specific performance directing appellant Nos. 1 & 2 herein to
specifically perform their part of the obligations arising out of the agreement for sale
(Ex. A-3) dated 03.02.2006 by executing the sale deed in favour of Respondent No. 1
on receipt of the balance sale consideration of Rs. 4,80,48,000/- subject to the
mortgage of the Bank. Further the relief in respect of permanent injunction restraining
the appellants from alienating or encumbering or dealing with the subject property was
granted. The prayer for mandatory injunction for directing the appellants to discharge
the loan in respect of DRT proceedings pending on the file of DRT-I, Chennai, thereby
retrieve the documents and deliver the same to Respondent No. 1 at the time of
execution and registration of sale deed was refused. Challenging the rejection of the
prayer of mandatory injunction and failure to award costs, Respondent No. 1 filed A.S.
No. 708 of 2009 before the High Court of Madras along with interim applications being
M.P. Nos. 1 and 2 of 2008. On 01.02.2009, Respondent No. 1 filed another interim
application in M.P. No. 1 of 2009 in A.S. No. 708 of 2008. By order dated 18.04.2009,
the Division Bench of the High Court passed an order of injunction in M.P. No. 1 of
2008 and M.P. No. 1 of 2009 restraining the appellants herein from alienating,
encumbering or dealing with the suit property pending appeal.
(h) On 06.10.2006, the Bank filed OA No. 491 of 1999 withdrawing its OTS offer of Rs.
629.60 lakhs and called upon the appellants to pay the total amount due along with
future interest, costs and charges. By order dated 15.05.2009, the Presiding Officer,
DRT-I, Chennai, disposed of O.A. No. 491 holding that the Bank is entitled to recover a
sum of Rs. 11,08,51,875/- from M/s Anand Agency. Pursuant to the order, the Recovery
Officer issued the recovery certificate being D.R.C. No. 102 of 2009 and also issued the
1st sale notification dated 23.10.2009 bringing to sale the suit property. The upset price
was fixed at Rs. 27 crores and the date of sale was fixed as 25.11.2009.
(i) Challenging the decree for specific performance granted by the Principal Judge,
Chengalpet, the appellants filed A.S. No. 946 of 2009 before the High Court which was
admitted by the Division Bench on 20.10.2009. On 16.11.2009, Respondent No. 1 filed
a writ petition being W.P. No. 23405 of 2009 before the High Court praying for a writ of
mandamus for bringing the suit property in O.S. No. 336 of 2006 on the file of the
Principal District Judge, Chengalpat in his favour and also filed Miscellaneous Petition in
the aforesaid writ petition being M.P. No. 1 of 2009 praying to stay the auction sale of
the property covered by the decree dated 30.04.2008 made in O.S. No. 336 of 2006. On
the same day, the interim applications bearing M.P. Nos. 2 & 3 of 2009 in A.S. 708 of
2008 were also listed and the same were dismissed by the Division Bench.
(j) Questioning the auction sale proposed to be conducted by the DRT, on 19.11.2009,
Respondent No. 1 filed I.A. Nos. 1 to 3 in D.R.C. No. 102 of 2009 in O.A. No. 491 of
1991 before the Recovery Officer, DRT-I, Chennai praying for release of the scheduled
property and stay of auction sale. On 23.11.2009, the Recovery Officer, DRT-I, Chennai
dismissed the said applications. On 24.11.2009, Respondent No. 1 filed SLP (C) No.
31358 of 2009 before this Court challenging the order dated 16.11.2009 passed by the
Division Bench of the High Court in M.P. No. 1 of 2009 in W.P. No. 23405 of 2009.
Respondent No. 1 also filed another SLP (C) Nos. 19154-55 of 2009 challenging the
order dated 18.04.2009 passed by the Division Bench of the High Court in M.P. No. 1 of
2008 and M.P. No. 1 of 2009 in A.S. No. 708 of 2008 and order dated 16.11.2009 in
M.P. Nos. 2 & 3 of 2009 in A.S. No. 708 of 2008. On the very same day, i.e. on
24.11.2009, this Court passed an order to continue auction but not to declare the result.
On 11.12.2009, this Court dismissed the SLPs filed by Respondent No. 1.
(k) On 23.02.2010, the Division Bench, by impugned judgment, partly allowed A.S. No.
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708 of 2008 filed by Respondent No. 1 herein directing him to deposit the balance sale
consideration of Rs. 4,80,48,000/- with 18; interest from the date of filing of the suit
and also directed the appellants herein to execute the sale deed conveying the subject
property to Respondent No. 1 and the Bank was directed to proceed against the various
other properties of the appellants being the subject matter of O.A. No. 491 of 1999 for
recovering the balance amount.
The appellants preferred Review Petition No. 37 of 2010 before the High Court which
was dismissed on 29.04.2010. Being aggrieved by the impugned judgment dated
23.02.2010 and order dated 29.04.2010, the appellants have preferred these appeals by
way of special leave petitions before this Court.
4 . Heard Mr. L. Nageswara Rao and Mrs. Nalini Chidambaram, learned senior counsel
for the appellants and Mr. R.F. Nariman, learned senior counsel for respondent No. 1
and Mr. Himanshu Munshi, learned Counsel for respondent No. 2-Bank.
5. Mr. L.N. Rao and Mrs. Nalini Chidambaram appearing for the appellants after taking
us through the pleadings, judgment of the trial Court as well as the impugned judgment
of the High Court raised the following contentions:
i) The plaintiff has not established "readiness and willingness" in terms of
Section 16(c) of the Specific Relief Act, 1963, hence the Courts below ought not
to have granted discretionary relief of decree for specific performance.
ii) Inasmuch as the agreement being a contingent contract, which is impossible
to fulfil and cannot be implemented, in such circumstance, whether the Courts
below are justified in granting the relief in favour of the plaintiffs.
iii) Whether the right of marshaling by subsequent purchaser as provided in
Section 56 of the Transfer of Property Act, 1882 (hereinafter referred to as 'the
T.P. Act') is available to a decree holder in a suit for specific performance and
whether the High Court is justified in granting such a relief in the absence of
any pleading and issue before the trial Court.
iv) Whether the High Court is justified in hearing a writ petition filed under
Article 226 of the Constitution of India along with the regular first appeal filed
under Section 96 Code of Civil Procedure
v) Whether the High Court is justified in issuing certain directions to the Bank
which are contrary to the orders passed by the competent forum, namely, Debts
Recovery Tribunal.
vi) Whether the High Court is justified in granting cost in favour of the plaintiff
when the same was rightly disallowed by the trial Court.
6. On the other hand, Mr. R.F. Nariman, learned senior counsel for the first respondent,
by drawing our attention to all the relevant materials relied on by the trial Court and the
appellate Court supported the ultimate decision of the High Court. He submitted that -
i) The plaintiff has established his readiness and willingness all along and the
same was rightly accepted by the trial Court and confirmed by the High Court.
ii) The contract in question is not a contingent contract in terms of Sections 31
and 32 of the Indian Contract Act, 1872.

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 iii) In view of the fact that the plaintiff has prayed for larger relief and the trial
Court has confined to lesser relief of decree for specific performance, the plea
of marshaling being a question of law and taking note of equity and justice, the
High Court rightly applied the said principle and there is no error warranting
interference on this ground.
iv) The subject matter of the appeals and the relief prayed for in the writ
petition were interconnected, hence the High Court is justified in disposing of
the writ petition along with the appeals.
v) Inasmuch as the plaintiff has succeeded partial relief at the hands of the trial
Court after paying substantial court fee, the High Court is justified in awarding
cost which was omitted by the trial court.
vi) In any event, in view of the materials placed and the ultimate decision by
both the Courts below, interference by this Court exercising jurisdiction under
Article 136 is not warranted. Even after grant of leave, this Court has ample
power to dismiss the appeal without going into all the issues.
7 . We have considered the rival contentions and perused all the relevant materials in
the form of oral and documentary evidence. Readiness and Willingness
8 . Section 16(c) of the Specific Relief Act, 1963 provides for personal bars to relief.
This provision states that specific performance of a contract cannot be enforced in
favour of a person,
a) who would not be entitled to recover compensation for its breach; or
b) who has become incapable of performing, or violates any essential term of,
the contract that on his part remains to be performed, or acts in fraud of the
contract, or wilfully acts at variance with, or in subversion of, the relation
intended to be established by the contract; or
c) who fails to aver and prove that he has performed or has always been ready
and willing to perform the essential terms of the contract which are to be
performed by him, other than terms the performance of which has been
prevented or waived by the defendant.
Explanation.- For the purposes of Clause (c),-
(i) where a contract involves the payment of money, it is not essential
for the plaintiff to actually tender to the defendant or to deposit in
court any money except when so directed by the court;
(ii) the plaintiff must aver performance of, or readiness and willingness
to perform, the contract according to its true construction.
Among the three Sub-sections, we are more concerned about Sub-section(c).
"Readiness and willingness" is enshrined in Clause (c) which was not present in
the old Act of 1877.
However, it was later inserted with the recommendations of the 9th Law Commission's
report. This clause provides that the person seeking specific performance must prove
that he has performed or has been ready and willing to perform the essential terms of
the contract which are to be performed by him.
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9. The words "ready" and "willing" imply that the person was prepared to carry out the
terms of the contact. The distinction between "readiness" and "willingness" is that the
former refers to financial capacity and the latter to the conduct of the plaintiff wanting
performance. Generally, readiness is backed by willingness.
10. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors. MANU/SC/0025/1996 :
(1995) 5 SCC 115 at para 5, this Court held:
...Section 16(c) of the Act envisages that plaintiff must plead and prove that he
had performed or has always been ready and willing to perform the essential
terms of the contract which are to be performed by him, other than those terms
the performance of which has been prevented or waived by the defendant. The
continuous readiness and willingness on the part of the plaintiff is a condition
precedent to grant the relief of specific performance. This circumstance is
material and relevant and is required to be considered by the court while
granting or refusing to grant the relief. If the plaintiff fails to either aver or
prove the same, he must fail. To adjudge whether the plaintiff is ready and
willing to perform his part of the contract, the court must take into
consideration the conduct of the plaintiff prior and subsequent to the filing of
the suit alongwith other attending circumstances. The amount of consideration
which he has to pay to the defendant must of necessity be proved to be
available. Right from the date of the execution till date of the decree he must
prove that he is ready and has always been willing to perform his part of the
contract. As stated, the factum of his readiness and willingness to perform his
part of the contract is to be adjudged with reference to the conduct of the party
and the attending circumstances. The court may infer from the facts and
circumstances whether the plaintiff was always ready and willing to perform his
part of the contract.
11. In P. D'Souza v. Shondrilo Naidu MANU/SC/0561/2004 : (2004) 6 SCC 649 paras
19 and 21, this Court observed:
It is indisputable that in a suit for specific performance of contract the plaintiff
must establish his readiness and willingness to perform his part of contract.
The question as to whether the onus was discharged by the plaintiff or not will
depend upon the facts and circumstance of each case. No strait-jacket formula
can be laid down in this behalf.... The readiness and willingness on the part of
the plaintiff to perform his part of contract would also depend upon the
question as to whether the defendant did everything which was required of him
to be done in terms of the agreement for sale.
12. Section 16(c) of the Specific Relief Act, 1963 mandates "readiness and willingness"
on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of
specific performance. It is also clear that in a suit for specific performance, the plaintiff
must allege and prove a continuous "readiness and willingness" to perform the contract
on his part from the date of the contract. The onus is on the plaintiff. It has been rightly
considered by this Court in R.C. Chandiok and Anr. v. Chuni Lal Sabharwal and Ors.
MANU/SC/0033/1970 : (1970) 3 SCC 140 that "readiness and willingness" cannot be
treated as a straight jacket formula. This has to be determined from the entirety of the
facts and circumstances relevant to the intention and conduct of the party concerned. It
is settled law that even in the absence of specific plea by the opposite party, it is the
mandate of the statute that plaintiff has to comply with Section 16(c) of the Specific
Relief Act and when there is non-compliance with this statutory mandate, the Court is

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not bound to grant specific performance and is left with no other alternative but to
dismiss the suit. It is also clear that readiness to perform must be established
throughout the relevant points of time. "Readiness and willingness" to perform the part
of the contract has to be determined/ascertained from the conduct of the parties.
1 3 . In the light of the above principles, let us consider whether the plaintiff has
established his case for decree for specific performance.
14. Mr. L.N. Rao and Mrs. Nalini Chidambaram vehemently contended that the plaintiff
has miserably failed to prove that he has fulfilled his obligation both under Ex. A-2
(MoU) and Ex. A-3 - Agreement for Sale and in those circumstances, defendants 1 & 2
are not bound to convey the suit property in favour of the plaintiff. It is not in dispute
that on 15.08.2005, the defendants entered into a MoU with respondent No. 1 for sale
of the suit property at a sale consideration of Rs. 14 lakhs per acre and a sum of Rs. 1
lakh was paid as advance. Balance sale consideration was to be paid within three
months from the date of obtaining confirmation letter from the second respondent-
Bank. It is seen from the materials that on 10.10.2005, M/s J.P. Builders, by a letter
addressed to the AGM, Indian Bank Assets Recovery Management Branch II, offered a
sum of Rs. 100 lakhs as full and final settlement of the dues of its sister concern which
was declined by the Bank advising to revise the offer with substantial improvement. By
a letter dated 23.01.2006, the Bank stated that defendant No. 2 herein had not made
any improvement in his one time settlement proposal of Rs. 100 lakhs and hence the
Bank is proceeding to enforce its rights under the Act. It is further seen that on
01.02.2006, the appellant No. 2 offered a sum of Rs. 148 lakhs as one time settlement.
Within two days of the said offer i.e. 03.02.2006 the plaintiff entered into a Sale
Agreement with the defendants for purchase of the suit property. The sale price of Rs.
14 lakhs per acre was enhanced to Rs. 18 lakhs per acre and the respondent No. 1 had
paid a sum of Rs. 24 lakhs as further advance to defendant No. 2. It is further seen that
on 18.04.2006, a further payment of Rs. 50 lakhs was made by the plaintiff. It is also
seen that on 15.05.2006, the Bank rejected the one time settlement offer of Rs. 148
lakhs stating that out of court settlement can be done if an offer of Rs. 629.60 lakhs by
working out interest at PLR i.e. 11% compound on the principal outstanding as on
31.3.1993 be made. For this, defendant No. 2 could not agree to pay the same.
15. A perusal of the recitals in the Agreement for Sale (Ex.A-3) are to the effect that to
discharge the bank loan and for the business purpose of the vendors, the appellants
have decided to sell the properties and offered the same for sale and the Respondent
No. 1 has agreed to purchase the said property. In Ex. A-3, it is stated that defendant
Nos. 1 & 2/vendors have undertaken to discharge the loans and hand over the original
title deeds of the said property to the plaintiff within three months from the date of the
agreement for scrutiny of title. It is relevant to mention here that Ex. A-3, was executed
on 03.02.2006. The recital also shows that the plaintiff has to pay further advance, if
any, required by the vendors to release the documents from the Bank. It is the definite
case of the plaintiff that defendant Nos. 1 & 2 had agreed to liquidate the property and
hand over the original title deeds for which the plaintiff had paid further advance of Rs.
24 lakhs and on 18.04.2006, he had paid Rs. 50 lakhs.
16. We have already adverted to the initial OTS proposal dated 01.02.2006 expressing
second defendant's willingness to pay for Rs. 148 lakhs since the bank has expressed its
inability to consider, by letter dated 15.05.2006, the bank has conveyed that OTS will
be accepted if the offer is given for Rs. 629.60 lakhs by working out compound interest
at 11%. In the plaint, there is a specific averment that the plaintiff even on 18.4.2006
has paid a further advance of Rs. 50 lakhs.
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17. In his oral evidence before the Court, the plaintiff - PW-1 had reiterated and in fact
asserted that he was always ready with the money and duly pursuing the OTS along
with Defendant Nos. 1 & 2. Insofar as readiness and willingness on the part of the
plaintiff is concerned, apart from the specific plea in the plaint about the payment and
advance of substantial amount, he also placed the relevant materials in the form of
letters to show that he was corresponding with the Bank for early settlement of the
dues. In other words, the assertion in the form of specific plea in the plaint and
correspondence in the form of letter, his assertion in the witness box at the time of
trial, the Courts below are right in arriving at a conclusion that the plaintiff has proved
and complied with the mandates provided under Section 16(c) of the Specific Relief Act.
1 8 . Mrs. Nalini Chidambaram before the High Court as well as before us by basing
reliance on Clause 4 of the MoU (Ex. A-2) contended that the balance sale consideration
has to be paid within one week of the receipt of Confirmation Letter from the Bank and
absolutely there is no material to show that the plaintiff was ready with the money
within the prescribed period of one week. It is also pointed out that in addition to the
same, plaintiff has to pay the amount to clear the bank loan and without paying the
amount within the prescribed period, the plaintiff has committed breach of his
obligations, hence, the plaintiff is not permitted to blame the defendant which would
arise only after the performance of the plaintiff's obligation. In order to prove her stand,
learned senior counsel for the appellants heavily placed reliance on Clauses 4, 6 and 7
of Ex. A-2. In the light of the said claim, we perused various clauses in Ex. A-2 as well
the subsequent agreement for sale dated 03.02.2006, Ex. A-3. As rightly pointed out by
the Division Bench, defendant Nos. 1 & 2 had entered into an agreement to sell the suit
property to discharge loans and handover the original title deeds has been reiterated
both in Ex. A-2 and Ex. A-3. However, it is to be noted that after execution of Ex. A-3,
i.e. agreement for sale dated 03.02.2006, defendant Nos. 1 & 2 have undertaken to
discharge the loans and handover the original title deeds to the plaintiff. No doubt, as
per Ex. A-3, plaintiff has to pay further advance, if required by the vendors to release
the documents from the Bank. The plaintiff has demonstrated by placing oral and
documentary evidence that on the date of execution of Ex. A-3, he has paid further
advance of Rs. 24 lakhs and Rs. 50 lakhs on 18.04.2006. It was pointed out that the
plaintiff has settled Rs. 75 lakhs out of the sale consideration and for the balance sale
price he has deposited a sum of Rs. 2,45,00,000/- in Indian Overseas Bank, Sowcarpet
Branch, Chennai. The deposit receipt of the said amount is produced as Ex. A-13. In
order to prove that he had sufficient means of finance, the plaintiff has produced
documents under Ex. A-12 and Ex. A-13. In his evidence as PW-1, the plaintiff has
asserted that he was having ready cash and also produced Ex. A-11, Fixed Deposit
Receipt (FDR dated 19.04.2006 in his name) in Indian Overseas Bank for Rs.
2,45,00,000 with date of maturity as 18.07.2006. Ex. A-12 is the certificate issued by
the Indian Bank, Alwarpet Branch, Chennai stating that the plaintiff is maintaining
Savings Bank Account No. 726244658 in their bank and the balance as on 20.04.2007 is
Rs. 1,50,00,444/-Ex. A-13 is the Certificate issued by Indian Overseas Bank stating that
credit balance of plaintiff's savings bank account No. 6874 is Rs. 304,12,574.08 as on
21.04.2007. If we analyse Ex. A-11 to Ex.A-13 coupled with assertion made in the oral
evidence of PW-1, it would amply show that plaintiff was having sufficient cash and
financial capacity to complete the transaction. Further the plaintiff is required to pay the
balance amount of consideration only on the event of a demand made for payment of
further amount by the defendants on the basis of the confirmation letter to be obtained
from the bank as per the agreement for sale under Ex. A-3. Absolutely, there is no
evidence as to any demand made by defendant Nos. 1 & 2 from the plaintiff for further
payment of sale price. Inasmuch as under Ex. A-4, he had intimated that he is prepared
to get the sale executed while perusing the aforesaid bank deposit receipts, it is clearly
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revealed that the plaintiff was endowed with the means to pay the sale consideration
and had ever been prepared to do the same. On the other hand, it is not the case of
Defendant Nos. 1 & 2 that they have asked for further advance and that the plaintiff did
not respond for their request. As rightly pointed out by the trial Court and commended
by the High Court, it is not clear that why Defendant Nos. 1 & 2 fail to led oral evidence
in support of their claim. It is also not clear why they have avoided the witness box,
though it is stated that the plaintiff had admitted the stand of Defendant Nos. 1 & 2
which is factually incorrect and unacceptable. The only objection pointed out was that
for effective OTS, even though, the plaintiff has deposited Rs. 10,01,000/- in the "No
lien account" of second defendant, the plaintiff has surreptitiously withdrawn the said
amount which had upset the settlement talks between defendant Nos. 1 & 2 and the 3rd
defendant-Bank on the other side. It is true that as per Clause 4 of Ex. A-2 MoU, the
plaintiff has agreed to pay further advance to defendant Nos. 1 & 2 to enable them to
pay and clear the bank loan obtained by their sister concern namely, M/s Anand Agency,
wherein defendant No. 1 - J.P. Builders have stood as guarantors to the said loan. It is
equally true that in the letter (Ex. B-1), addressed to the Assistant General Manager of
the Bank, the plaintiff has stated that he has deposited Rs. 10,01,000/- in a "No-lien
account" towards M/s. Anand Agency and that he has proposed to purchase the property
from them which was mortgaged to the Bank and after acceptance of the compromise
settlement, the amount can be appropriated towards the compromise arrived. In the
same letter, the plaintiff has also informed that if the compromise settlement is not
materialized, the said deposit may be released to him. However, as pointed out earlier,
one time settlement offer of Rs. 148 lakhs was not acceptable by the Bank and because
of the same, the plaintiff withdrew the said deposit and the bank by a letter (Ex. B-2),
informed the second defendant about the same. As rightly pointed out by the High
Court, mere withdrawal of Rs. 10,01,000/- deposited in "No-lien account" by the
plaintiff has no significance since subsequent to the same both parties have entered into
Ex. A-3, Agreement for sale on 03.02.2006 and on which date the plaintiff has also paid
a further advance of Rs. 25 lakhs. These facts have been clearly explained by PW-1 in
his evidence and he also asserted that the same fact was orally informed to Defendant
Nos. 1 & 2. We have already pointed out that there is no reason to disbelieve the
assertion of PW-1. As rightly pointed out by Mr. R.F. Nariman, learned senior counsel
for the first respondent-plaintiff that after receipt of Ex. B-2 Defendant Nos. 1 & 2 have
not raised any protest but on the other hand they proceeded to further advance of Rs.
50 lakhs from the plaintiff on 18.04.2006 and made endorsement in Ex. A-3 agreement
for sale. In those circumstances, as rightly pointed out and correctly appreciated by the
High Court, withdrawal of Rs. 10,01,000 from "No-lien account" of M/s Anand Agency
by the plaintiff would not lead to the conclusion that the plaintiff had committed breach
and was not ready to perform his part of the contract.
19. With the materials placed, specific assertion in the plaint, oral and documentary
evidence as to execution of agreement, part-payment of sale consideration, having
sufficient cash and financial capacity to execute the sale deed, bank statements as to
the moneys in fixed deposits and saving accounts, we are of the view that the plaintiff
has proved his "readiness" and "willingness" to perform his part of obligation under the
contract. The concurrent findings of the trial court as well the High Court as to
readiness and willingness to perform plaintiff's part of the obligations under the
contract, in the absence of any acceptable contra evidence is to be confirmed. We agree
with the conclusion arrived at by the trial Court as well as by the High Court on the
readiness and willingness on the part of the plaintiff and reject the argument of the
learned senior counsel for the appellants.
Contingent Contracts
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20. By pointing out various clauses in the MoU (Ex. A-2), Ms. Nalini Chidambaram,
learned senior counsel for the appellants heavily contended that inasmuch as the
contract was depending upon uncertain events of the Indian Bank, agreeing for OTS, the
contract entered is contingent depending on the move of the Indian Bank. According to
her, inasmuch as various clauses insists certain impossible conditions at the hands of
the Indian Bank, the contract entered into between the plaintiff and defendants become
impossible and void. Though such an argument was advanced before us, there was no
such specific plea in their written statement and the Trial Court has not framed separate
issue and considered the same. Irrespective of the above position, in view of the
assertion made by learned senior counsel, we intend to discuss and give our answer.
2 1 . Chapter III of the Indian Contract Act, 1872 deals with Contingent Contracts.
Contingent contract has been defined in Section 31 and method of enforcement is stated
in Section 32 which reads as under:
31. "Contingent contract" defined.-- A "contingent contract" is a contract to do
or not to do something, if some event, collateral to such contract, does or does
not happen.
32. Enforcement of contracts contingent on an event happening.-- Contingent
contracts to do or not to do anything if an uncertain future event happens,
cannot be enforced by law unless and until that event has happened. If the
event becomes impossible, such contracts become void.
It is clear that if the condition prescribed or even described in the contract is
impossible, undoubtedly, such contracts become void and not enforceable in terms of
Section 32. The events enumerated in the contract, according to Ms. Nalini
Chidambaram are (a) a letter specifying the balance due to the bank (b) an undertaking
later from the Bank that it will receive the said balance amount (c) they will handover
the original documents directly to the plaintiff. While elaborating the said points,
learned senior counsel highlighted that for executing the sale deed, getting confirmation
or clearance letter from the Indian Bank on payment of the dues to the Bank and getting
original documents have been emphasized in various clauses in the MoU (Ex. A-2).
Among various clauses, she highlighted Clauses 4, 6, 7 in the MoU (Ex. A-2). No doubt,
those conditions have been enumerated in the above referred clauses. She also brought
to our notice that the Indian Bank not only declined the OTS offer of Rs 148 lakhs but
got a decree for Rs. 8,51,825.29 from the DRT. The very same contentions were raised
before the High Court. Mr. R.F. Nariman, by drawing our attention to Ex. A-3 contended
that Agreement for Sale dated 03.02.2006 is a fresh agreement hence Clause 4, 6 and 7
of the MoU (Ex. A-2) would not govern the parties. We have once again perused various
clauses in Ex. A-2 as well as subsequent agreement for sale Ex. A-3. It is relevant to
note that in the plaint, in paragraph 7, this aspect has been specifically pleaded wherein
it was highlighted that the plaintiff sought for performance of contract strictly in
accordance with the original Memorandum of Understanding (MoU) dated 15.08.2005 as
emerged with the agreement for sale dated 03.02.2006 entered into between the
plaintiff and the defendant Nos. 1 and 2 in Chennai for sale and purchase of the suit
property. In fact, this was specifically mentioned by the plaintiff in his rejoinder notice
dated 31.07.2006 addressed to defendant Nos. 1 and 2 and even after receipt of the
same, they have not chosen to send any reply disputing the same. In those
circumstances, we agree with the conclusion arrived at by the High Court, namely, after
the parties entered into Ex. A-3 agreement for sale, Clauses 4, 6 and 7 of the MoU (Ex
A-2) would not govern the parties. On the other hand, as per Clause 3, 4 and 6 in Ex.
A-3, the vendor and defendant Nos. 1 and 2 have undertaken to discharge their loans
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and hand over title deeds. The relevant clauses, namely, 3, 4 and 6 of Ex. A-3 are as
follows.
...3. The balance of sale consideration shall be paid by the PURCHASER TO THE
VENDORS on or before the Registration of the Deed of Sale.
4 . The Vendor undertake to discharge the Loans and hand over the ORIGINAL
TITLE DEEDS relating to Schedule mentioned properties to the PURCHASER,
within three months from this date for scrutiny of title. HOWEVER, the
purchaser has to pay further advance if any required by the VENDORS, to
release the documents from Bank.
6. The sale shall be completed within six months from the date of production of
ORIGINAL DOCUMENTS by the VENDORS to the Purchaser....
2 2 . If we accept the above stand and conduct of the parties and fresh terms as
mentioned above in Ex. A-3, the conditions incorporated in Ex. A-2 need not be
complied with and it cannot be contended that the contract was a contingent contract
and unless and until a letter of confirmation issued by the Indian Bank, the same is not
enforceable. As rightly pointed out by Mr. R. F Nariman, the vendors have agreed to sell
the property but agreed to execute the sale deed after discharge of the mortgage in
favour of the defendants. In other words, it was only the execution of the sale deed
which was postponed to a future date. The clauses referred above in Ex A-3 do not
insist the sale deed is to be executed only after the acceptance of OTS proposal by the
Bank. It is true that the first OTS offered by defendant Nos. 1 and 2 was not acceptable
by the Bank. When the Bank offered OTS for Rs. 629.60 lakhs, it was not acceptable by
the defendant Nos. 1 and 2. Clause 4 of Ex. A-3, makes it clear that to discharge the
loans of the Bank, the vendors are free to make a request to the purchaser, namely, the
plaintiff, to make further advance and after getting the amount from the plaintiff,
defendant Nos. 1 and 2 have to secure documents from the Bank. The trial Court as well
as the High Court held that there is no material to show that the defendant Nos. 1 and 2
made any attempt to comply with Clause 4 in Ex. A-3 by requiring the plaintiff to make
further advance. In the earlier paragraphs, we have also highlighted the conduct of the
plaintiff in keeping the required money, no doubt, in their SB account for the purpose of
meeting the demand of the defendant Nos. 1 and 2. Even otherwise, the agreement to
discharge the loans of the Bank and handover the original title deeds to the plaintiff
cannot be construed as impossible event and it would affect the terms of contract to
become void, more particularly, when the plaintiff deposited substantial amount
facilitating the defendant Nos. 1 and 2 to meet their requirement for fulfilling the
contract. As rightly observed by the High Court, in the light of various clauses in the
agreement agreed to by both the parties, the same cannot be termed as a contingent
contract.
23. As stated earlier, merely because the contract insist settlement of a loan of the bank
and handover the title deeds to the plaintiff from the bank are not impossible events in
the light of the performance made by the plaintiff, the contract in question did not come
to an end on this ground and such contract is not a contingent contract and
undoubtedly, the Court has jurisdiction to grant relief in terms of the contract.
Obtaining No Objection Certificate (NOC) from the authority concerned, clearance of
NOC from Income Tax Department or any other State/Central authority, securing title
deeds after clearing certain loans are incidental and implied covenant on the part of the
vendors to do the needful to give effect to the agreement.

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24. It is also relevant to point out that though defendant Nos. 1 and 2, at the first
instance offered OTS for Rs. 148 lakhs, the Bank, after taking note of various aspects
claimed Rs. 629.60 lakhs as their proposal. As rightly pointed out by Mr. R.F. Nariman,
it was not an impossible performance considering the amount borrowed by the sister
agency of the 1st defendant and various properties possessed by defendant Nos. 1 and
2 in prime localities of Chennai and in and around the sub-urban areas of Chennai.
25. We are satisfied that the contract in question is capable of performance and the
contention of the learned senior counsel for the appellants that it is a contingent
contract and is incapable of performance cannot be accepted. We have already pointed
out that this was not an issue before the trial Court and such plea was not raised in the
written statement. We have also pointed out that defendant Nos. 1 and 2 did not bother
to explain all salient features by entering the witness box in support of their claim. We
have already highlighted that the plaintiff has established that he has partially
performed his part of obligations by paying the advance amount of Rs. 25 lakhs and
another Rs. 50 lakhs in addition to the initial deposit of Rs. 1 Lakh. We also hold that
plaintiff has proved his readiness and willingness and financial ability to complete the
sale transaction. Accordingly, we reject the second contention also.
Marshalling
26. It is the claim of the plaintiff before the High Court that having secured a decree for
specific performance as per Section 56 of the T.P. Act, 1882, by applying the principles
of Marshalling, directions may be issued to the Bank to exhaust its remedy from other
items of property which are located in the prime places in Chennai before bringing the
properties covered in the agreement of sale.
2 7 . In order to understand the claim of the plaintiff and the stand taken by the
defendant Nos. 1 and 2, it is useful to refer Section 56 of the T. P. Act.
56. Marshalling by subsequent purchaser.--If the owner of two or more
properties mortgages them to one person and then sells one or more of the
properties to another person, the buyer is, in the absence of a contract to the
contrary, entitled to have the mortgaged-debt satisfied out of the property or
properties not sold to him, so far as the same will extend, but not so as to
prejudice the rights of the mortgagee or persons claiming under him or of any
other person who has for consideration acquired an interest in any of the
properties.
Similar to this is Section 81 of the T.P. Act which speaks about marshalling securities.
The High Court after noting that the plaintiff had paid substantial amount as advance
and secured decree for specific performance, came to the conclusion that the right of
marshalling is available to the plaintiff. Section 56 deals with the right of subsequent
purchaser to claim marshalling. It should be contrasted with Section 81 which refers to
marshalling by a subsequent mortgage. The concept as in Section 56 applies to sales in
a manner similar to Section 81 which applies to mortgages alone.
2 8 . The concept of marshalling by subsequent purchaser can be explained by the
following illustration. Suppose A owns properties X and Y. Both these properties are
mortgaged to C. Later, A sells property X to B. Now, B will be entitled to insist that his
vendor A, shall satisfy his mortgage debt out of property Y (unsold) in the first instance
as far as possible. If after property Y is exhausted there still remains balance of debt,
only then property X will be drawn upon. As stated earlier, Section 56 deals with the
concept of marshalling in a transaction involved in subsequent sale, on the other hand,
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Section 81 is applicable only to mortgages. The doctrine of marshalling rests upon the
principle that a creditor who has the means of satisfying his debt out of several funds
shall not, by the exercise of his right, prejudice another creditor whose security
comprises only one of the funds.
29. As rightly pointed out, in view of the sale agreement which results into decree for
specific performance, the plaintiff is entitled to insist upon defendant Nos. 1 to 3 to
have the mortgage debt satisfied out of the properties not sold to the plaintiff and in
any case if the sale proceeds are not sufficient then to proceed against the said suit
properties. Learned senior counsel for the appellants strongly objected the application
of the principle of marshalling by subsequent purchaser by the High Court when the
plea of marshalling was not taken by the plaintiff in the trial Court. In other words,
according to them, without taking such plea before the trial court, the same cannot be
taken for the first time before the Appellate Court. It is not in dispute that the plea of
marshalling and applicability of Section 56 of the T.P. Act was not raised before the trial
Court. However, if we consider the entire plaint, which is available in the appeal paper-
book, the plaintiff has claimed a larger relief. In para 12 of the plaint, the plaintiff has
prayed for the following reliefs.
(i) "directing the Defendant Nos. 1 and 2 to specifically perform the Agreement
for Sale Deed dated 03.02.2006 in respect of the suit schedule mentioned
property which is more fully described in the schedule hereunder, by executing
a Deed of Sale or Deeds of Sale and register a valid conveyance in favour of the
Plaintiff or his nominee or nominees on a date to be fixed by this Court and/or
in default, direct the officer of this Court to convey the suit schedule mentioned
property on behalf of the 1st and 2nd Defendants herein in favour of the
plaintiff or his nominee or nominees on a date to be fixed by this Court on
receipt of the balance sale consideration of Rs. 4,80,48,000/- payable by the
Plaintiff to them.
(ii) For a mandatory injunction directing the 1st and 2nd Defendants to
discharge the loan payable to the 3rd Defendant Bank in respect of DRT
proceedings pending on the file of DRT, Chennai as per the terms of the
contract dated 03.02.2006 thereby retrieve the documents and deliver the same
to the plaintiff at time of execution and registration of Sale Deed or Sale Deeds
in favour of the plaintiff or his nominee or nominees either in one lot or in
pieces as the case may be.
(iii) Not pressed, deleted.
(iv) For a permanent injunction restraining the Defendants 1 and 2, their men,
servants, agents, or any one claiming through them or authorized by them in
any manner alienating, encumbering or dealing with the suit schedule
mentioned property either by way of sale, mortgage, lease, joint-development,
or otherwise, or putting up any construction thereon except in accordance with
law.
(v) To grant such further or other reliefs; and (vi) To award the costs of this
suit.
30. As observed by the High Court, the plaintiff was under an impression that the trial
Court would grant the entire relief as claimed and he did not anticipate that he could get
a part of relief sought for by him. In this circumstance, learned senior counsel
appearing for the plaintiff was right in highlighting that there was no occasion for the
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plaintiff to raise the plea of marshalling at the time of filing of the suit. Even otherwise,
as rightly observed by the High Court, the plea of marshalling being pure question of
law based upon the decree obtained for specific performance, cannot simply be thrown
out merely because the same was not specifically pleaded.
31. Mrs. Nalini Chidambaram strongly contended that in the absence of any plea the
claim of marshalling cannot be applied to the plaintiff. In support of her stand she
relied on Anathula Sudhakar v. P. Buchi Reddy (Dead) By LRs. and Ors.
MANU/SC/7376/2008 : (2008) 4 SCC 594 wherein this Court held "no amount of
evidence or arguments can be looked into or considered in the absence of pleadings and
issues, is a proposition that is too well settled." Absolutely, there is no dispute about
the said proposition. In the said decision, the High Court in a Second Appeal arising
from a suit for bare injunction while reversing the decision of the first Appellate Court,
examined various aspects relating to title and recorded findings and proceeded to
discuss and grant relief in the absence of pleadings and issues regarding title. Similar
view has been expressed in Bachhaj Nahar v. Nilima Mandal and Anr.
MANU/SC/8199/2008 : (2008) 17 SCC 491. It is relevant to extract the principles
enunciated in para 23 of the judgment which are as follows.
23. It is fundamental that in a civil suit, relief to be granted can be only with
reference to the prayers made in the pleadings. That apart, in civil suits, grant
of relief is circumscribed by various factors like court fee, limitation, parties to
the suits, as also grounds barring relief, like res judicata, estoppel,
acquiescence, non-joinder of causes of action or parties, etc., which require
pleading and proof. Therefore, it would be hazardous to hold that in a civil suit
whatever be the relief that is prayed, the court can on examination of facts
grant any relief as it thinks fit. In a suit for recovery of rupees one lakh, the
court cannot grant a decree for rupees ten lakhs. In a suit for recovery
possession of property 'A', court cannot grant possession of property 'B'. In a
suit praying for permanent injunction, court cannot grant a relief of declaration
or possession. The jurisdiction to grant relief in a civil suit necessarily depends
on the pleadings, prayer, court fee paid, evidence let in, etc.
In those circumstances, while reiterating the principles laid down above, we hold that
the same are not applicable to the case on hand.
32. We have already demonstrated the relief prayed in the plaint by paying substantial
court fee of Rs. 41,66,326.50. In such circumstance, when a party is able to secure
substantial relief, namely, decree for specific performance with clearance of mortgage
amount, it is the duty of the Court to mould the relief so as to render substantial justice
between the parties. In this regard, we accept the course adopted by the High Court in
granting relief to the plaintiff.
3 3 . We are also satisfied that merely because for recovery of the loan secured by
banks, a special Act, namely, Recovery of Debts due to Banks and Financial Institutions
Act, 1993 has been enacted which is not a bar for the civil Court to apply to other relief
such as Section 56 of the T.P. Act. We are also satisfied that by issuing such direction
on the application of Section 56 of the T.P. Act, the Division Bench has not modified or
eroded the order passed by the DRT. On the other hand, it is an admitted fact that the
Bank has accepted the impugned verdict of the High Court and did not challenge the
same before this Court by filing an appeal. We are also satisfied that by granting such a
relief, the Bank is not prejudiced in any way by bringing other properties for sale first to
satisfy the mortgage debt payable by defendant Nos. 1 and 2. In fact, the High Court

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was conscious and also observed that if sale proceeds of other items of properties are
not sufficient to satisfy the debt payable to the Bank by defendant Nos. 1 and 2, in that
event, Bank can proceed against the suit properties.
34. We are also conscious of the fact that the said doctrine cannot be permitted to
become a device for destructing the sanctity of contract. The court will also not apply
the doctrine of impossibility to assist a party which does not want to fulfill its
obligations under the contract.
About Writ Petition:
35. It is relevant to note that during the pendency of the appeals before the High Court,
the very same plaintiff filed Writ Petition No. 23405 of 2009, impleading defendant Nos.
1 and 2, M/s Anand Agency which is a sister concern of defendant No. 1 and 3rd
defendant-Bank apart from Union of India, praying for issuance of a writ of Mandamus
forbearing the respondents from bringing the scheduled property forming the subject
matter of the decree in his favour in O.S. No 336 of 2006 on the file of the Principal
District Judge, Chengalpet by way of auction. He also prayed for certain other
directions. Objections were raised by the appellants about the hearing of the writ
petition along with the appeals. We have already adverted to the facts leading to the
filing of two regular First Appeals before the High Court. It is not in dispute that the
parties in those appeals as well as in the writ petition are one and the same except
Union of India against whom the writ petitioner has not sought any relief. It is also not
in dispute that the subject matter of the lis and properties are one and the same in both
the appeals and the writ petition. There is no bar for the Division Bench which has
jurisdiction to hear appeal, to hear writ petition when the same is connected with the
main issue. In fact, no serious objection was raised before the High Court for hearing
the writ petition along with the appeal. On the other hand, on the earlier occasion,
when the parties have filed special leave petitions against certain interim orders, this
Court requested the High Court to dispose of all the matters together. It is relevant to
point out that no clarification or direction was sought in respect of the said order
passed by this Court.
36. Mr. R.F. Nariman, learned senior counsel has pointed out that the writ petitioner
has highlighted the applicability of the principle of marshalling. He pointed out that in
grounds (j) and (k), the factual aspects about applicability of marshalling have been
highlighted. Since the appellants have seriously objected that in the absence of any
material, the High Court ought not to have considered the same, we reproduce the said
grounds hereunder:
(j) When there are other properties belonging to the Judgment Debtors are
available for auction sale for realization of the D.R.C. issued the suit properties
are brought to auction sale, leaving out the other valuable properties of the
Respondent Nos. 1 & 2 at Chennai and the property covered by the decree
situate at Senthamangalam village are brought to sale and the said action of the
respondents would defeat and frustrate the decree for specific performance
granted in favour of the petitioner herein.
(k) When there are more than one property belonging to the borrowers are
available leaving out all the properties including the 3 valuable properties at
Chennai are left from auction sale and the property situate at Senthamangalam
village (forming the decree property) would demonstrate that the respondent
bank with tacit understanding with the borrowers is attempting to destroy the

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 rights of the Decree Holder who is holding a decree for specific performance
which has not been stayed by the High Court, Madras and the respondent bank
is not willing to receive the monies offered by the petitioner on behalf of the
Respondents 4, 5 and 6 ever since the inception of the suit in August 2006 till
date which would demonstrate the motive of the bank in indulging in dilatory
tactics, the Respondents 2 and 3 in collusion and connivance of the respondents
4, 5 and 6 are bringing the property covered by the decree solely with a view to
frustrate the decree secured by the petitioner herein.
Though the plea of 'marshalling' has not been specifically mentioned but all the required
details have been referred to. It is not clear whether any objection/counter has been
filed by the respondent Nos. 4 to 6 therein (respondent Nos. 1 & 2 herein) about those
factual details. Irrespective of the same, we have already concurred with the High Court
in applying the said principle considering the larger relief prayed for in the suit and the
plaintiff was having a decree for specific performance subject to clearance of mortgage
loan with the Bank.
37. In Sain Ditta Mal v. Bulagi Mal and Sons and Ors. MANU/LA/0072/1946 : AIR
1947 Lah 230, the High Court after adverting to Section 56 of the Transfer of Property
Act has held that this equitable doctrine exists for the benefit of the buyer alone.
Following the said decision of the Lahore High Court, Karam Singh Sobti v. Smt Shukla
Bedi MANU/PH/0180/1962 : AIR 1962 P&H 477 reiterated the same principle.
3 8 . The principle laid down in Brahm Parkash v. Manbir Singh and Ors.
MANU/SC/0195/1963 : (1964) 2 SCR 324 at 335 is also relevant to quote:.
The other submission of learned Counsel was that the learned Judges failed to
give effect to the last portion of Section 56 under which marshalling is not to
be permitted so as to prejudice the rights inter alia of the mortgagees or other
persons claiming under him i.e. under the original mortgagor. Learned Counsel
pointed out that the appellant having proved his mortgage and the fact that it
was subsisting, the learned Judges of the High Court ought to have held that
any direction as to marshalling must necessarily prejudice him. We are unable
to agree that this follows as any matter of law. The question of prejudice is
purely one of fact which has to be pleaded and the necessary facts and
circumstances established. It is obvious that the question of prejudice would be
intimately connected with the value of the property against which the
mortgagee is directed to proceed in the first instance. If even after paying off
such a mortgage there is enough left for payment over to the subsequent
encumbrancer referred to in the last portion of Section 56 it would be manifest
that there would be no question of prejudice. If therefore the appellant desired
to invoke the benefit of the last portion of Section 56 he should have made
some plea as to the value of the property and shown how it would prejudice his
rights as a subsequent encumbrancer. He however made no such plea and no
evidence was led as to the value of the property. Even at the stage of the
appeal in the High Court the contention that to allow marshalling in favour of
the subsequent purchaser -- Mukhamal would result in prejudice to him was
admittedly never put forward before the learned Judges. As the point is one not
of pure law but springs from the factual inadequacy of the property mortgaged
to him to discharge his debt it is too late for the appellant to raise such a plea
in this Court.
It is clear that the application of the principle of marshalling may cause prejudice to the

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other party, but their Lordships have held that the said prejudice is a pure question of
fact and depends upon various factors.
39. In the light of the details and materials highlighted in the earlier paragraphs and as
discussed by the High Court, we are satisfied that the High Court is right in applying the
principle of marshalling in favour of the plaintiff that too by safeguarding the interest of
the 3rd defendant-Bank. In fact, the Bank did not challenge the impugned judgment of
the High Court. Accordingly, we reject the contrary arguments made in respect of
applying the principle of marshalling at the appellate stage.
Cost
40. Though no serious argument was advanced about the award of cost, in the grounds
raised in the appeal, the appellants have agitated the award of cost by the High Court in
favour of the plaintiff. Section 35 of the Code of Civil Procedure speaks about Cost.
Inasmuch as the plaintiff after valuing the suit paid a substantial court fee of Rs.
41,66,326.50 and ultimately he secured a decree for specific performance though he
could not secure a relief in its entirety, the plaintiff is entitled for his cost. It is not in
dispute that the court has granted the major relief, namely, decree for specific
performance subject to clearance of the mortgage debt. In those circumstances, the
High Court having noticed the payment of substantial court fee ordered cost payable by
the contesting defendant Nos. 1 and 2 to the plaintiff. We agree with the said direction.
Direction to the Recovery Officer/Tribunal
4 1 . Learned senior counsel for the appellants contended that the jurisdiction of
Recovery officer/Tribunal is exclusive and no other Court can go into their order for
which they relied on Allahabad Bank v. Canara Bank and Anr. MANU/SC/0262/2000 :
(2000) 4 SCC 406, State Bank of India v. Allied Chemical Laboratories and Anr. (2006)
9 SCC 252, India Household and Healthcare Ltd. v. LG Household and Healthcare Ltd.
MANU/SC/1253/2007 : (2007) 5 SCC 510. We are conscious of the principles
enunciated in these decisions. However, in our case, the High Court taking note of the
fact that it had considered various connected issues in respect of the same properties in
which both the Civil Court and the DRT passed several orders and the fact that
defendant Nos. 1 and 2 are having sufficient other properties in prime locations at
Chennai and other places nearby Chennai and also of the fact that the Bank was also
party to both these proceedings and accepted the impugned order of the High Court and
not filed any appeal before this Court, we feel that the direction/clarification issued by
the High Court does not run counter to the orders of DRT/Recovery Officers, on the
other hand, it safeguards the interest of all parties. Only because of the delay on the
part of the defendant Nos. 1 and 2 in not settling the dues of the Bank at the
appropriate time, in the recent times, property value has risen to some extent. On this
ground, we cannot interfere with the direction of the High Court about the sale of the
said properties.
Interference under Article 136 of the Constitution of India
4 2 . Though we have exhaustively dealt with the merits of the appeals, Mr. R.F.
Nariman, learned senior counsel for Respondent No. 1 highlighted that even after grant
of leave, there is no obligation on the part of this Court to go into all aspects and
decide after giving reasons. According to him, in view of the concurrent findings by the
Trial Court and the High Court about the decree for specific performance and other relief
by the High Court based on the question of law and equity, this Court has ample power
to dismiss all the appeals even without assigning any reason.
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4 3 . In Balvantrai Chimanlal Trivedi, Manager Raipur Manfg. Co. Ltd., Ahmedabad v.
M.N. Nagrashna and Ors. MANU/SC/0204/1959 : AIR 1960 SC 407, while considering
the scope of Article 136 of the Constitution of India, a three-Judge Bench of this Court
has concluded:
5. The question then arises whether we should interfere in our jurisdiction
under Article 136 of the Constitution, when we are satisfied that there was no
failure of justice. In similar circumstances this Court refused to interfere and
did not go into the question of jurisdiction on the ground that this Court could
refuse interference unless it was satisfied that the justice of the case required
it: (see A.M. Allison v. B.L. Sen MANU/SC/0073/1956 : (1957) SCR 359 : AIR
1957 SC 227). On a parity of reasoning we are of opinion that as we are not
satisfied that the justice of the case requires interference in the circumstances,
we should refuse to interfere with the order of the High Court dismissing the
writ petition of the appellant. We accordingly dismiss the appeal, but having
regard to the peculiar circumstances of the case which we have referred to
above we order that each party will bear its own costs of this appeal.
44. In Balvantrai Chimanlal Trivedi v. M.N. Nagrashna and Ors. MANU/SC/0021/1960
: AIR 1960 SC 1292, the Constitution Bench of this Court, while considering the
jurisdiction of this Court under Article 136, has held:
... It is necessary to remember that wide as are our powers under Article 136,
their exercise is discretionary; and if it is conceded, as it was in the course of
the arguments, that this Court could have dismissed the appellant's application
for special leave summarily on the ground that the order under appeal had done
substantial justice, it is difficult to appreciate the argument that because leave
has been granted this Court must always and in every case deal with the merits
even though it is satisfied that ends of justice do not justify its interference in a
given case. In the circumstances we are of opinion that this Court was not
bound to decide the question of jurisdiction on the facts and circumstances of
this case when it had come to the conclusion in dealing with an appeal under
Article 136 of the Constitution that there was no failure of justice. The review
application therefore fails and is hereby dismissed with costs.
45. In Taherakhatoon (D) By LRs. v. Salambin Mohammad MANU/SC/0139/1999 :
(1999) 2 SCC 635, the following point arose for consideration.
(2) Whether the discretionary power available to this Court at the time of grant
of special leave continues with the Court even after grant of special leave and
when the appeal is being heard on merits and whether, this Court could declare
the law and yet not interfere or could mould the relief? Or whether, once the
law is declared, this Court is bound to grant possession and the mandatory
injunction?
Their Lordships have held:
15. It is now well settled that though special leave is granted, the discretionary
power which vested in the Court at the stage of the special leave petition
continues to remain with the Court even at the stage when the appeal comes up
for hearing and when both sides are heard on merits in the appeal. This
principle is applicable to all kinds of appeals admitted by special leave under
Article 136, irrespective of the nature of the subject - matter. It was so laid
down by a Constitution Bench of five learned Judges of this Court in Pritam
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 Singh v. State. In that case, it was argued for the appellant that once special
leave was granted and the matter was registered as an appeal, the case should
be disposed of on merits on all points and that the discretionary power
available at the stage of grant of special leave was not available when the
appeal was being heard on merits.
20. In view of the above decisions, even though we are now dealing with the
appeal after grant of special leave, we are not bound to go into merits and even
if we do so and declare the law or point out the error -- still we may not
interfere if the justice of the case on facts does not require interference or if we
feel that the relief could be moulded in a different fashion. We have already
referred to the various circumstances of the case which show that the plaintiff,
on her own admission, had knowledge of the trespass in December 1967 and
did not raise any objection to the construction of the two rooms though she
was the adjacent neighbour. She gave notice only after 7 years in 1974 and she
filed suit in 1975. These two rooms have been there for the last 30 years. In
those circumstances, we declare the law by holding that the High Court while
dealing with a second appeal under Section 100 Code of Civil Procedure erred
in not framing a substantial question of law and that it also erred in interfering
with a pure question of fact relating to the genuineness of the agreement. We
declare that this was not permissible in law. Even while so declaring, we hold
that in the peculiar circumstances referred to above, this is not a fit case for
interference and that in exercise of our discretion under Article 136, -- a
discretion which continues with us even after the grant of special leave, -- the
decree passed by the High Court dismissing the suit for possession need not be
interfered with and the two rooms need not be demolished. The plaintiff could
be adequately compensated by way of damages....
46. In Chandra Singh and Ors. v. State of Rajasthan and Anr. MANU/SC/0479/2003 :
(2003) 6 SCC 545, a three-Judge Bench, after following the principle in Taherakhaton
(supra), held:
42. In any event, even assuming that there is some force in the contention of
the appellants, this Court will be justified in following Taherakhatoon v.
Salambin Mohd. wherein this Court declared that even if the appellants'
contention is right in law having regard to the overall circumstances of the
case, this Court would be justified in declining to grant relief under Article 136
while declaring the law in favour of the appellants.
43. Issuance of a writ of certiorari is a discretionary remedy. (See Champalal
Binani v. CIT) The High Court and consequently this Court while exercising their
extraordinary jurisdiction under Article 226 or 32 of the Constitution of India
may not strike down an illegal order although it would be lawful to do so. In a
given case, the High Court or this Court may refuse to extend the benefit of a
discretionary relief to the applicant. Furthermore, this Court exercised its
discretionary jurisdiction under Article 136 of the Constitution of India which
need not be exercised in a case where the impugned judgment is found to be
erroneous if by reason thereof substantial justice is being done. [See S.D.S.
Shipping (P) Ltd. v. Jay Container Services Co. (P) Ltd.] Such a relief can be
denied, inter alia, when it would be opposed to public policy or in a case where
quashing of an illegal order would revive another illegal one. This Court also in
exercise of its jurisdiction under Article 142 of the Constitution of India is
entitled to pass such order which will do complete justice to the parties.
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 45. This Court said that this principle applies to all kinds of appeals admitted
by special leave under Article 136, irrespective of the nature of the subject-
matter. So even after the appeal is admitted and special leave is granted, the
appellants must show that exceptional and special circumstances exist, and
that, if there is no interference, substantial and grave injustice will result and
that the case has features of sufficient gravity to warrant a review of the
decision appealed against on merits. So this Court may declare the law or point
out the lower court's error, still it may not interfere if special circumstances are
not shown to exist and the justice of the case on facts does not require
interference or if it feels the relief could be moulded in a different fashion.
46. The observations made in paras 15-20 of Taherakhatoon can be usefully
applied to the facts and circumstances of the case on hand.
It is clear from the above decisions, even after issuance of notice in the special leave
petition and after grant of leave, irrespective of the nature of the subject matter, the
appellants must show that exceptional and special circumstances exists and if there is
no interference by this Court substantial and grave injustice will result and that the case
has features of sufficient gravity to warrant a decision from this Court on merits.
Conclusion
47. In the light of the above discussion, more particularly, the factual findings rendered
by the trial Court and the Appellate Court-High Court in respect of grant of decree for
specific performance and application of principle of marshalling under Section 56 of the
Transfer of Property Act, we are in entire agreement with the conclusion arrived by the
High Court. We have also gone through the elaborate order of the High Court in review
petitions filed by the appellants. As a matter of fact, after highlighting the jurisdiction
under review, the Division Bench of the High Court had taken pains to discuss once
again and rendered a finding on all aspects with which we fully agree. Inasmuch as we
are confirming the impugned judgment of the High Court in toto, there is no need to
refer the affidavit of undertaking filed by the first respondent herein and the objection
raised by the appellants as to the contents of the same. Since we confirm the conclusion
and ultimate decision of the High Court, we grant further time of three months from
today for deposit of the balance amount as directed by the High Court in paragraph 85.
In case defendant Nos. 1 and 2 fail to comply with the said directions in executing the
sale deed, the trial Court is directed to execute the sale deed incorporating all the
directions and observations made in the judgment of the High Court. Consequently, all
the appeals are dismissed as devoid of any merit with no order as to costs.
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