In Specific Performance Suits, Courts Cannot Reassess the Property Value by Ignoring the Contractual Terms: Appellate Division
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| In the matter of Specific Performance of Contract under section 12 of the Specific Relief Act, 1877 |
The Court observed that, in a suit seeking specific relief, neither the trial court nor the appellate court has the jurisdiction to disregard the contractual terms and reassess the value of the property while exercising judicial power.
The Appellate Division made these observations in its judgment delivered on 24 July 2024 in Engineer Md. Shahidullah v. Mrs. Shahana Neyamat and Others, Civil Petition for Leave to Appeal Nos. 494 and 495 of 2018. The judgment was published on the Supreme Court’s website on 18 December 2024.
Background of the Case
In 2004, Shahana Neyamat filed a suit before the Third Joint District Judge’s Court in Dhaka seeking specific performance of an alleged oral agreement for the sale of a flat in Uttara, Dhaka. According to the plaint, the price of the flat had been fixed at Tk 18.20 lakh. The plaintiff claimed that although she had paid Tk 12 lakh as an advance, the owner, Engineer Md. Shahidullah, refused to accept the remaining amount and execute and register the sale deed for the flat.
The defendant, on the other hand, claimed that no agreement for the sale of the flat had been made and that the plaintiff and her husband had been residing there as tenants. After considering the evidence presented by both parties, the trial court dismissed the suit.
The plaintiff subsequently appealed to the High Court Division. The High Court set aside the trial court’s judgment and decreed the suit. It fixed the value of the flat at Tk 36 lakh, directed the plaintiff to pay the remaining Tk 24 lakh, and ordered the defendant to execute the sale deed within 30 days.
Observations of the Appellate Division
The defendant challenged the High Court’s judgment before the Appellate Division by filing Civil Petition for Leave to Appeal Nos. 494 and 495 of 2018. After hearing the matter, the Appellate Division observed that, to obtain specific relief on the basis of an oral agreement, the existence, genuineness, and terms of the agreement must be established through reliable evidence. In enforcing such an agreement, the court must examine the evidence with caution.
The Court observed that the High Court had itself fixed the value of the flat at Tk 36 lakh. This decision demonstrated that the alleged oral agreement’s terms concerning the price had not been established as a concluded agreement between the parties.
According to the Appellate Division, in a suit seeking specific relief, neither the trial court nor the appellate court can disregard the terms of a contract and determine the value of the property afresh. The court cannot reassess the consideration or value of the property, exceed the scope of the contract, or impose or add any new term to it.
The Court further noted that the defendant had claimed that the flat had been mortgaged to Islami Bank Bangladesh Limited. However, the mortgagee bank had not been made a party to the suit. The Appellate Division held that, as the bank was a necessary party, its non-joinder was also a defect in the suit.
Decision of the Appellate Division
The Appellate Division held that the High Court had committed a serious error of law by decreeing the suit even though the alleged oral agreement had not been established in accordance with law through reliable evidence. Accordingly, the Court set aside the judgment and decree of the High Court Division.
However, as the plaintiff had already paid Tk 12 lakh for the flat, the defendant was directed to refund that amount within 30 days of receiving the judgment and order. The Court did not award any additional compensation to the plaintiff, as she had remained in possession of the flat without paying rent since 2002.
Civil Petition for Leave to Appeal No. 494 of 2018 was disposed of, and the connected petition, No. 495 of 2018, was also disposed of in light of the same decision.
Legal Takeaway
In a suit seeking specific relief, the court’s role is to ensure the legal enforcement of an established contract, not to create new contractual terms. Therefore, unless the agreed price and other terms of a contract are reliably proved, the court cannot determine the value of the property on its own and order specific performance. This is particularly important in cases involving oral agreements, where the existence, genuineness, and precise terms of the agreement must be established through reliable evidence.
BD Law Post/Masum
