B.R. Mulani Vs. Dr. A.B. Aswathanarayana and Others - Court Judgment

Excerpt:
contract - specific performance - suit for specific performance dismissed by trial court - dismissal upheld by high court - facts of case and judgments of courts below analysed - high court rightly refused relief of specific performance - certain equities requires to be taken note of and adjusted in moulding relief - decree for payment of mortgage money along with accrued interest passed. - [p.n. bhagwati, c.j.,; g.l. oza,; e.s. venkataramiah,; s. natarajan, jj.] under article 137 of the constitution of india the supreme court shall have power to review any judgment pro- nounced or order made by it, subject to the provisions of any law made by parliament or any rules made under article 145. the supreme court, in exercise of the powers conferred by article 145 of the constitution and all other powers enabling it and with the approval of the president made the "supreme court'rules 1966". under rule i of order xl thereof, the "court may review its judgment or order but no application for review will he entertained ...... in a criminal proceeding except on the ground of an error apparent on the face of the re- cord." patna urban cooperative banks was registered in may 1970 and it commenced its banking business with nawal kishore sinha as its chairman, k.p. gupta as its honorary secretary, m.a. hydary as manager and a.k. singh as loan clerk. dr. jagannath misra who was then a member of the legislative council was closely associated with nawal kishore sinha and helped the cooperative bank and nawal kishore sinha in diverse ways in connection with the affairs of the bank and assisted in mobilisation of the resources for the bank. there were some irregularities in the affairs of the bank. the then chief minister shri abdul ghafoor ordered the prosecution of the officers and staff of the bank including its honorary secretary shri k.p. gupta, manager, m.a. hai- dary and the loan clerk. however, this was not done. on 11.4.1975 shri abdul ghafoor was replaced by dr. jagannath misra as chief minister. on may 16, 1975 he passed an order that only stern action should he taken for realisation of loans since on the perusal of the file it appeared there was no allegation of defalcation against the chairman and mem- bers of the board. this date is alleged to have been later changed to may 14, 1975 by a fresh order. as per the revised order directions for restoration of normalcy and holding of annual general meeting "of the bank was made. on 15.4.1976 the reserve bank cancelled the banking licence issued to the bank and a liquidator was appointed. consequent to the report of the estimates committee and the debate in the assembly, dr. jagannath misra directed, on 4.8.76 the prose- cution against those involved in the defalcation. thus 23 criminal cases were filed against the office bearers and loanees but nawal kishore sinha was excluded from being arraigned as an accused. in june 1977 there was a change of ministry at the centre. in june 1977 the government headed by dr. jagannath misra was replaced by the government headed by sri karpoori thakur. as a sequel to the memorandums submitted by the patna secretariat non-gazetted employees' association to the now chief minister on 9.7.1977 requesting him to enquire into allegations against dr. jagannath misra, after a detailed procedure and obtaining requisite sanction of the governor, a criminal case was instituted by the vigilance department against dr. jagannath misra and others. the charge sheet filed by the state of bihar against the respondents on 19th february, 1979, was for offences under sections 420/466/ 471/109/120-b of indian penal code and under sections 5(1) (a), s(a) (b) & 5(1) (d) read with section 5(2) of the prevention of corruption act, 1947. the charge against dr. jagannath misra was that he, who at all material times, was either a minister or the chief minister of bihar abusing his position as a public servant, in con- spiracy with the other accused, sought to interfere with the criminal prosecution and surcharge proceedings against nawai kishore sinha and others with a view to obtain to himself and to the other respondents pecuniary advantage to the detriment of patna urban cooperative bank. the chief judi- cial magistrate took cognizance of the case on 29.7.1979. there was a change of ministry in bihar in june 1980 and the second respondent became the chief minister again. a policy decision was taken on 10.6.1980, that criminal cases launched out of political vendetta and cases relating to political agitation be withdrawn. on 24.2.1981 the govern- ment appointed shri l.p. sinha as a special public prosecu- tor. on 25.2.1981, the secretary to the government of bihar wrote a letter to the district magistrate informing him of the policy decision taken by the government,to withdraw from prosecution of two vigilance cases including the case with which the court is concerned. he was requested to take steps for the withdrawal of the case. on i7th june, 1981, shri sinha made an application under s.32i of the cr.p.c. to the special judge seeking permission to withdraw from the prose- cution of respondent nos. 2, 3 and 4 on four grounds; (a) lack of prospect of successful prosecution in the light of the evidence, (b) implication of the persons as a result of political and personal vendetta; (c) inexpediency of the prosecution for the reasons of the state and public policy and (d) adverse effects that the continuance of the prosecu- tion will bring on public interest in the light of the changed situation. the learned special judge gave consent sought, by his order dated 20th june, 1981. the appellant, thereupon, filed a criminal revision application no. 874/81 against the order permitting withdrawal of the prosecution. the said application was dismissed in limine by the high court by an order dated 14.9.1981. the appellant therefore preferred crl. appeal no. 241/82 by special leave to this court. in two well reasoned concurring judgments, baharul islam j and r.b. misra j. dismissed the appeal by their judgments dated december 16, 1982 and by an equally reasoned judgment, tulzapurkar j. dissented from the main judgement and allowed the appeal. (see sheonandan paswan v. state of bihar & 0rs.,[(1983) 2 scr 61] baharul islam j. demited office on 13.1. 1983. an application was filed on 17.1. 1983 to review the judgment under article 137 of the constitution read with order xi of the supreme court rules. on 22.8.1983, the matter was heard in open court by a bench consisting of tulzapurkar j., a.n. sen j. and r.b. misra j, and a.n. sen j. passed an order admitting the review petition without disclosing any reason therefor and directed the rehearing of the petition immediately after the decision in mohd. mumtaz v. smt. nandini satpathy [1983] 4 scc 104, which was referred already to a constitutional bench of five judges. hence the rehearing of the case to review the two concurrent judgments. dismissing the appeal, in accordance with the opinion of the majority, the court, (per venkataramiah j.) (majority view) held: 1.1 merely because a court discharges or acquits an accused arraigned before it, the court cannot be consid- ered to have compromised with the crime. true, corruption, particularly at high places should be put down with a heavy hand. but, the passion to do so should not overtake reason. the court always acts on the material before it and if it finds that the material is not sufficient to connect the accused with the crime, it has to discharge or acquit him, as the case may be, notwithstanding the fact that the crime complained of is a grave one. similarly if the case has been withdrawn by the public prosecutor for good reason with the consent of the court, supreme court should be slow to inter- fere with the order of withdrawal. in either case, where the special judge had rejected the application for withdrawal and the high court had affirmed that order, and where the special judge had permitted the withdrawal but the high court had reversed that order, the supreme court may not have interfered with the orders of the high court under article 136 of the constitution. but this is a case where the special judge had permitted the withdrawal of the prose- cution, and the said order of withdrawal has been affirmed by the high court as well as by the majority judgment pro- nounced by supreme court earlier. interference by the su- preme court on review must only be on strong and compelling reasons. [766d-h] when the earlier decisions of the supreme court are allowed to remain in tact, there is no justification to reverse the majority judgments of baharul islam and r.b. misra jj., reported in [1983] 2 scr 61 by which the appeal had already been dismissed. the reversal of the earlier judgment of supreme court by the process of review strikes at the finality of judgments of supreme court and would amount to the abuse of the power of review vested in supreme court, particularly in a criminal case. this case which was admit- ted solely on the ground that nandini satpathy's case had been subsequently referred to a larger bench to review the earlier decision cannot be converted into an appeal against the earlier decision of supreme court. [774a-c] r.k. jain etc. v. state through special police estab- lishment and ors. etc., [1980] 3 scr 982 and state of bihar v. ram naresh pandey, [1957] scr 279, referred to. 2.1 section 321 of the code of criminal procedure cannot be construed in the light of the principles of administra- tive law. the legal position expounded by the supreme court in r.k. jain's case and in ram naresh pandey's, case is correct. if any change in the law is needed it is for par- liament to make necessary amendments to section 321 of the code of the criminal procedure, 1973, which has remained so despite the judgment of the supreme court in pandey's case rendered in 3957. [773d-e] the judgment of a public prosecutor under section 321 of the code of criminal procedure, 1973 cannot be light- ly interfered with unless the court comes to the conclusion that he has not applied his mind or that his decision is not bona fide. a person may have been accused of several other misdeeds, he may have been an anthema to a section of the public media or he may be an unreliable politician. but these circumstances should not enter into the decision of the court while dealing with a criminal charge against him which must be based only on relevant material. [773b-c ] 2.3 in the circumstances of this case, it cannot be said that the public prosecutor had not applied his mind to the case or had conducted himself in an improper way. if in the light of the material before him the public prosecutor has taken the view that there was no prospect of securing a conviction of the accused it cannot be said that his view is an unreasonable one. the public prosecutor is not a persecu- tor. he is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all, and whose interest, therefore, in a criminal prosecu- tion is not that it shall win a case, but that justice shall be done. as such he is in a peculiar and very definite sense the servant of the land, the two fold aim of which is that guilt shall not escape or innocence suffer. he may prosecute with earnest and vigour indeed, he should do so. but while he may strike hard blows, he is not at liberty to strike foul ones. it is as much his duty to refrain from improper methods calculated to produce a wrong- ful conviction as it is to use every legitimate one to bring about a just one. [772e-h] berger v. united states, 295 us 78, quoted with approval. 2.4 further the questions involved in this case are: whether dr. jagannath misra has been a privy to the misdeeds committed in the patna urban co-operative bank; whether he and his co-accused should be prosecuted for the offences of conspiracy, bribery etc., and whether the public prosecutor had grievously erred in applying for the withdrawal of the case. all the other judges who have dealt with the case on merits from the special judge onwards, except tulzapurkar j. have opined that the permission was properly given for withdrawal. in the circumstances, it is difficult to take a different view. [770g-h; 771a-b] the three circumstances put up against the accused in this case are (i) that jiwanand jha had credited rs. 10,000 and rs. 3000 on 27.12.1973 and on 1.4.1974 respectively in the savings bank account of dr. jagannath misra; (ii) that there was ante-dating of the order passed by dr. jagannath misra on 14.5.1975; and (iii) that there was a second con- fessional statement of hydary which supported the prosecu- tion. as regards the two items of bribe, it has not been shown by any extract of bank account that the said two sams came from the patna urban cooperative bank. if that was so there would have been entries in the bank accounts. mere crediting of the two sums, without any other reliable evi- dence, in a bank account by a political ally or a friend does not by itself show that the sums were either bribe amounts or any official favour had been shown. this fact by itself is not conclusive about the guilt of the accused. the passing of the two orders one on 15.6.1975 on the note sheet and the other on buff paper which is dated 14.5.1975 cannot be faulted on account of the explanation that it was the practice in the bihar secretariat that whenever an order is changed it is done by writing the later order on a buff- sheet and pasting it on the earlier order. it is not also shown by the prosecution that any action had been taken pursuant to the order dated 16.5.1975 by any of the depart- mental authorities. if any action had been taken it would have been a matter of record readily available for produc- tion. no such record is produced before supreme court. hence' it is a mere surmise to say that any such action was sought to be nullified, particularly when there was no acceptable evidence at all on the communication of the order dated 16.5.1975 to any departmental authorities. [769f-g; 770d-g ] per khalid j. (on behalf of himself and on behalf of s. natarajan j.) admitting a review petition is not, the same thing as setting aside the order sought to be reviewed. order 47, rule 1 c.p.c. deals with review in civil matters, article 137 of the constitution is a special power with the supreme court to review any judgment pronounced or order made by it. an order passed in a criminal case can be reviewed and set aside only if there are errors apparent on the record. in this case, one of the judges who was a party to the order to review (r.b. misra j) had earlier dismissed the appeal with convicting reasons. if the judgment was set aside by the order passed in the review petition, the learned judge would definitely have given his own reasons for doing so by a separate order. this has not been done. all that the order says is that the review petition had been admitted. the direction to re-hear the appeal, therefore can only be to ascertain reasons to see whether the judgment need be set aside. [776c-g] there is no error apparent on the face of the record in the judgment reported as sheonandan paswan v. state of bihar & ors., [1983] 2 scr 61. [776g-h] all the three judges who gave the earlier judgment in this case have correctly declined to accept the plea that shri sinha was not a competent public prosecutor since datt's appointment has not been cancelled. [780b-c] 3.1 section 321 needs three requisite to make an order under it valid; (1) the application should be filed by a public prosecutor or assistant public prosecutor who is competent to make an application for withdrawal; (2) he must be in charge of the case; (3) the application should get the consent of the court before which the case is pending. all the three requisites are satisfied here. [780d-e] 3.2 in the absence of any allegation of mala fide against the public prosecutor or of bias against the special judge the public prosecutor should normally be credited with fairness in exercise of his power under s.321. equally, in the absence of a challenge in the revision petition before the high court to the order of the special judge giving consent, it has to be assumed that he has perused the rele- vant records before passing the consent order. [781 c-e] 3.3 section 321 gives the public prosecutor the power for withdrawal of any case at any stage before judgment is pronounced. this pre-supposes the fact that the entire evidence may have been adduced in the case, before the application is made. when an application under s.32i cr. p.c. is made, it is not neces- sary for the court to assess the evidence to discover wheth- er the case would end in conviction or acquittal. to contend that the court when it exercises its limited power of giving consent under s.32i has to assess the evidence and find out whether the case would end in acquittal or conviction, would be to re-write s.321 cr.p.c. and would be to concede to the court a power which the scheme of s.321 does not contem- plate. [781 f-h] the acquittal or discharge order under s.321 are not the same as the normal final orders in criminal cases. the conclusion will not be hacked by a detailed discussion of the evidence in the case of acquittal or absence of prima facie case or groundlessness in the case of discharge. all that the court has to see is whether the application is made in good faith, in the interest of public policy and justice and not to thwart or stifle the process of law. the court, after considering these facets of the case, will have to see whether the application suffers from such improprieties or illegalities as to cause manifest injustice if consent is given. on a reading of the application for withdrawal, the order of consent and the other attendant circumstances, it must be held that the application for withdrawal and the order giving consent were proper and strictly within the confines of section 321 cr.p.c. [781h; 782a-c] 3.5 while construing s.321, it is necessary to bear in mind the wide phraseology used in it, the scheme behind it and its field of operation. true, it does not give any guideline regarding the grounds on which an application for withdrawal can be made. but since it was enacted with a specific purpose, it would be doing violence to its language and contents by importing into the section words which are not there or by restricting its operation by fetters in the form of conditions and provisos. [782c-d] while conferring powers upon the subordinate courts under s.321 of the code, the legislature had only intended that the court should perform a supervisory function and not an adjudicatory function in the legal sense of the term. section 321 clothes the public prosecutor to withdraw from the prosecution of any person, accused of an offence both when no evidence is taken or even if entire evidence has been taken. the outer limit for the exercise of this power is "at any time before the judgment is pronounced". the initiative is that of the public prosecutor and what the court has to do' only to give its consent and not to deter- mine any matter judicially. the judicial function implicit in the exercise of the judicial discretion for granting the consent would normally mean that the court has to satisfy itself that the executive function of the public prosecutor has not been improperly exercised, or that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes. [484a-b; c-d] the courts' function is to give consent. it is not obligatory on the part of the court to record reasons before consent is given. however, consent of the court is not a matter of course. when the public prosecutor makes the application for withdrawal after taking into consideration all the materials before him, the court exercises its judi- cial discretion by considering such materials and on such consideration either gives consent or declines consent. if on a reading of the order giving consent a higher court is satisfied that such consent was given on an overall consid- eration of the materials available, the order giving consent has necessarily to be upheld. [484d-g] the order under section 321 is pot appealable but only revisable under section 397 of the code of criminal procedure. while considering the legality, propriety or the correctness of a finding or a conclusion, normally, the revising court does not dwell at length into the facts and evidence of the case. the court, in revision, considers the materials only to satisfy itself about the correctness, legality and propriety of the findings, sentence or order and refrains from substituting an order passed under s.397 appeal comes to the supreme court by special leave under article 136 of the constitution of india. [789b-c] it has been the declared policy of the supreme court not to embark upon a roving enquiry into the facts and evidence of cases like this or even an order against discharge. the supreme court will not allow itself to be converted into a court of facts and evidence. the supreme court seldom goes into evidence and facts. that is as it should be. any depar- ture from this salutary self imposed restraint is not a healthy practice. as an apex court, any observation on merits or on facts and evidence of a case which has to go back to the courts below will seriously prejudice the party affected and it should be the policy of the court not to tread upon this prohibited ground and invite unsavory but justifiable criticism. supreme court cannot assess the evidence to find out whether there is a case for acquittal or conviction and cannot convert itself into a trial court. nor can this court order a retrial and examination of hun- dred witnesses to find out whether the case would end in acquittal or conviction. [789d-g] section 321 crl. p.c. is virtually a step by way of composition of he offence by the state. the state is the master of the litigation in criminal cases. by the exercise of functions under s.321 the accountability of the concerned person or persons does not disappear. a private complaint can still be filed if a party is aggrieved by the withdrawal of the prosecution but running the possible risk of a suit of malicious prosecution if the complaint is bereft of any basis. [789g-h; 790a] when the magistrate states in his order that he has considered the materials, it is not proper for the court not to accept that statement. the proper thing to do is to hold that magistrate gave consent on objective consideration of the relevant aspects of the case. it would be acting against the mandate s.321 to find fault with the magistrate in such cases, unless the order discloses that the magistrate has failed to consider whether the application is made in good faith, in the interest of public policy and justice and not to thwart or strifle the process of law. the application for withdrawal by the public prosecutor has been made in good faith after careful consideration of the materials placed before him and the order of consent given by the magistrate was also after the consideration of various datails as indicated above. it would be improper for the court, keeping in view the scheme of s.321, to embark upon a detailed inquiry into the facts and evidence of the case or to direct re-trial for that would be destructive of the object and intent of the section. [792c-e; 793b-d] state of bihar v. ram naresh pandey, [1957] scr 279; m.n. sankaranarayanan nair v.p.v. balakrishnan & ors., [1972]2 scr 599; bansi lal v. chandan lal, air 1976 ac 370; state of orissa v. chandrika mohapatra & ors., [1977] 1 scr 335; balwant singh v. state of bihar, [1978] 1 scr 604; subhash chander v. state, [1980] 2 scr 44 and rajendra kumar jain v. state, [1980] 3 scr 982, referred to. 4.1 in this case the supreme court is called upon only to consider the ambit and scope of s.321 crl. p.c. and not the truth or otherwise of the allegations against the re- spondent no. 2. the appellant is admittedly a political rival of respondent no.2. there is no love lost between them. it is at the instance of such a highly interested person that the court is called upon to direct re-trial of the case, setting aside the consent given by the special judge. the second respondent is a leader of a political party. he was a rival to the chief minister who followed him after the 1977 at the time of institution of the case. in 1977, when the second respondent was the chief minister, a warrant of arrest was issued against shri karpoori thakur for his arrest and detention. it has been suggested that shri thakur had grudge against the second respondent. viewed against this background, and on the unsatisfactory factual details of the case, accepting the appeal and ordering retrial would not advance either the interests of justice or public interest. [796b-e] 4.2 there were two confessional statements of haidari in this case one on 4.11.1976 and another on 24.1.1978. in the former he did not implicate respondent no.2 but he did it in the next one. the second statement at best is the confes- sional statement of a co-accused which normally will not inspire confidence, in any court. it is also a statement an accomplice turned approver and hence of a very little evidentiary value. when supreme court exercises its juris- diction while considering an order giving consent on an application under s.321, consistent with the declared policy of the court not to embark upon evidence, request for an order for retrial on this legally weak and infirm evidence should be rejected. [795a-e] as to the accusation of forgery, taking the entire evidence against the appellant it cannot be held that he has committed forgery under s.463 or an offence under s.466. even though there is overwriting or pasting or interpolation or change of digits, there is no evidence at all to show that this paper went out of the chief minister's office or that any one was unduly favoured or that any one secured undue advantage by use of such overwriting. [796a-b] per bhagwati (on behalf of himself and g.l. oza j.) (minority view). (per contra) the review bench did exercise the power of review and set aside the order made by the original bench. when the review bench used the expression "i ....... admit the review" and directed rehearing of the appeal, it must by necessary implication be held to have allowed the review petition and set aside the order of the original bench. the true meaning and effect of the order of the review bench cannot be allowed to be obfuscated by a slight ineptness of the language used by the review bench. the substance of the order must always be looked in to its apparent form. [737f- h] there can be no doubt that the review bench was not legally bound to give reasons for the order made by it. the apex court being the final court against which there is no further appeal, it is not under any legal compulsion to give reasons for an order made by it. but merely because there may be no legal compulsion on the apex court to give reasons. it does not follow that the apex court may dispose of cases without giving any reasons at all. it would be eminently just and desirable on the part of the apex court to give reasons for the orders made by it. but when the apex court disposes of a review petition by allowing it and setting aside the order sought to be re- viewed on the ground of an error apparent on the face of record, it would be desirable for the apex court not to give reasons for allowing the review petition. where the apex court holds that there is an error apparent on the face of the record and the order sought to be reviewed must there- fore be set aside and the case must be reheard, it would considerably prejudice the losing party if the apex court were to give reasons for taking this view. if the review bench of the court were required to give reasons, the review bench would have to discuss the case fully and elaborately and expose what according to it constitutes an error in the reasoning of the original bench and this would inevitably result in pre-judgment of the case and prejudice is rehear- ing. a reasoned order allowing a review petition and setting aside the order sought to be reviewed would, even before the reheating of the case, dictate the direction of the rehear- ing and such direction, whether of binding or of persuasive value, would conceivably in most cases adversely affect the losing party at the rehearing of the case. therefore, the review bench, in the present case, could not be faulted for not giving reasons for allowing the review petition and directing rehearing of the appeal. [738b-g] it is now well settled law that a criminal proceeding is not a proceeding for vindication of a private grievance but it is a proceeding initiated for the purpose of punish- ment to the offender in the interest of the society. it is for maintaining stability and orderliness in the society that certain acts are constituted offences and the right is given to any citizen to set the machinery of the criminal law in motion for the purpose of bringing the offender to book. locus standi of the complainant is a concept foreign to criminal jurisprudence. now if any citizen can lodge a first information report or file a complaint and set the machinery of the criminal law in motion and his locus standi to do so cannot be questioned, a citizen who finds that a prosecution for an offence against the society is being wrongly withdrawn can oppose such withdrawal cannot oppose such withdrawal. if he can be a complainant or initiator of criminal prosecution, he should equally be entitled to oppose prosecution which has already been initiated at his instance. if the offence for which a prosecution is being launched is an offence against the society and not merely an individual wrong, any member of the society must have locus to initiate a prosecution as also to resist withdrawal of such prosecution, if initiated. here in the present case, the offences charged against dr. jagannath misra and others are offences of corruption, criminal breach of trust etc. 'and therefore any person who is interested in cleanliness of public administration and public morality would be entitled to file a complaint; equally he would be entitled to oppose the withdrawal of such prosecution, if it is already instituted. [739c-h; 740a] r.s. nayak v. a.r. antulay, [1984] 2 scr 500, referred to 3.1. it is undoubtedly true that the effect of withdrawal of the prosecution against dr. jagannath misra was that he stood discharged in respect the offences for which he was sought to be prosecuted but it was not an order of discharge which was challanged by sheonandan paswan in the revision application filed by him before the high court but it was an order granting consent for withdrawal of the prosecution that was assailed by him. [740e-g] the analogy of an order of discharge made under section 227 or section 239 of the code of criminal procedure is not apposite because there the sessions judge or the magistrate, as the case may be, considers the entire materi- al before him and then comes to the conclusion that there is not sufficient ground or proceeding against the accused or that the charge against the accused is groundless. but, here, when the magistrate makes an order granting consent to withdrawal of the prosecution under s.321, it is a totally different judicial exercise which he performs and it would not therefore be right to say that if the high court sets aside the order of the magistrate granting consent to with- drawal from the prosecutor, the high court would be really setting aside an order of discharge made by the magistrate. what the high court would be doing would be no more than holding that the withdrawal from the prosecution should proceed against the accused and ultimately if there is not sufficient evidence or the charges are groundless, the accused may still be discharged. even the order of discharge can be discharged by the high court in revision if the high court is satisfied that the order passed by the magistrate is incorrect, illegal or improper or that the proceedings resulting in the order of discharge suffer from any irregu- larity. [740f-h; 741a-c] the revisional power exercised by the high court under s.397 is couched in words of widest amplitude and in exercise of this power can satisfy itself as to the correct- ness, legality propriety of any order passed by the magis- trate or as to the regularity of any proceedings of such magistrate. when the supreme court is hearing an appeal against an order made by the high court in the exercise of its revisional power under s.397 it is the same revisional power which the supreme court would be exercising and the supreme court, therefore, certainly can interfere with the order made by the magistrate and confirmed by the high court if it is satisfied that the order is incorrect, illegal or improper. in fact, in a case like the present where the question is of purity and public administration at a time when moral and ethical values are fast deteriorating and there seems to be a crises of character in public life, the supreme court should regard as its bounded duty-a duty owed by it to the society-to examine carefully whenever it is alleged that a prosecution for an offence of corruption or criminal breach of trust by a person holding high public office has been wrongly withdrawn and it should not matter at all as to how many judges in the high court or the lower court have been party to the granting of such consent for withdrawal. the mathematics of numbers cannot, therefore, be invoked for the purpose of persuading the court not to exercise its discretion under article i36 of the constitu- tion. [741c-h] it is a well-established proposition of law that a criminal prosecution, if otherwise justifiable and based upon adequate evidence does not become vitiated on account of mala fides or political vendetta of the first informant or the complainant. [742d-e] state of punjab v. gurdial singh, [1980] 1 scr 1076, re- ferred to. the fact that the prosecution against dr. jagannath misra was initiated by the successor government of karpoori thakur after the former went out of power, by itself cannot support the inference that the initiation of the prosecution was actuated by political vendetta or mala fides because it is quite possible that there might be material justifying the initiation of prosecution against dr. jagannath misra and the successor government might have legitimately felt that there was a case for initiation of prosecution and that is why the prosecution might have been initiated. therefore, the prosecution cannot be said to be vitiated on that ac- count. [742g-h; 743a] krishna ballabha sahay and ors. v. commission of en- quiry, [1969] 1 scr 387 and p.v. jagannatha rao v. state of orissa, [1968] 3 scr 789, referred to. there is no provision of law which requires that no prosecution should be launched against a former chief minis- ter or a person holding high political office under the earlier regime without first set-ting up a commission of enquiry for enquiring into his conduct. it cannot be said that if a prosecution is initiat- ed without an inquiry being held by a commission of enquiry set up for that purpose, the prosecution would be bad or that on that ground alone the prosecution could be allowed to be withdrawn. [743g-h; 744a] in view of the tardy and slow moving criminal proc- ess in india causing inordinate delay and availability of adequate protection under different existing laws to the accused, it would be perfectly legitimate for the successor government to initiate a prosecution of a former chief minister or a person who has held high political office under the earlier regime without first having an enquiry made by a commission of enquiry, provided of course, the investigation is fair and objective and there is sufficient material to initiate such prosecution. [744a-d] no unfettered or unrestricted power is conferred on the public prosecutor/assistant public prosecutor under section 321 of the code to apply for withdrawal from the prosecution, but the said power must be a controlled or guided power or else it will fail foul of article 14 of the constitution- section 321 is more or less similar to the powers of the police under s. 173 of the code of criminal procedure. [746f-h] the police has no absolute or unfettered discretion whether to prosecute an accused or not to prosecute him. in fact, in the constitutional scheme, conferment of such absolute and uncanalised discretion would be violative of the equality clause of the constitution. the magistrate is therefore given the power to structure and control the discretion of the police. the discretion of the police to prosecute is thus' 'combined and confined" and, subject to appeal or revision, and the magistrate is made the final arbiter on this question. the legislature has in its wisdom taken the view it would be safer not to vest absolute dis- cretion to prosecute in the police which is an executive arm of the government but to subject it to the control of the judicial organ of the state. the same scheme has been fol- lowed by the lesiglature while conferring power on the public prosecutor to withdraw from the prosecution. this power can be exercised only with the consent of the court so that the court can ensure that the power is not abused or misused or exercised in an arbitrary or fanciful manner. once the charge-sheet is filed and the prosecution is initi- ated, it is not left to the sweet-will of the state or the public prosecutor to withdraw from the prosecution. once the prosecution is launched, its relentless course cannot be halted except on sound considerations germane to public justice. the public prosecutor cannot therefore withdraw from the prosecution unless the court before which the prosecution is pending gives its consent for such withdrawal. this is a provision calculated to ensure non-arbitrariness on the part of the public prosecu- tor and compliance with the equality clause of the constitu- tion. [748d-h] h.s. bains v. state, air 1980 sc 1883; subhash chander v. state & ors., [1980] 2 scr 44; m.n. sankaranarayanan nair v. p.n. balakrishnan & ors., [1972] 2 scr 599; and state of orissa. v. c. mohapatra, [1977] 1 scr 385, referred to. 7.1 the position in law in regard to the degree of autonomy enjoyed by the public prosecutor vis-a-vis the government in filling an application for withdrawal of the prosecution is rather confused. now there can be no doubt that prosecution of an offender who is alleged to have committed an offence is primarily the responsibility of the executive. it is the executive which is vested with the power to file a chargesheet and initiate a prosecution. this power is conferred on the executive with a view to protect- ing the society against offenders who disturb the peace and tranquility of the society by committing offences. of course it is left to the court to decide whether to take cognizance of the offences set out in the charge-sheet but the filing of the charge-sheet and initiation of the prosecution is solely within the responsibility of the executive. it is the state through the investigating authorities which files a charge-sheet and initiate the prosecution and the public prosecutor is essentially counsel for the state for conduct- ing the prosecution on behalf of the state. the public prosecutor is an officer of the court, as indeed every advocate practising before the court is, and he owes an obligation to the court to be fair and just: he must not introduce any person interest in the prosecution nor must he be anxious to secure conviction at any cost. he must present the case on behalf of the prosecution fairly and objective- ly. he is bound to assist the court with his fairly consid- ered view and the fair exercise of his intention. but at the same time he conducts the prosecution on behalf of the central government or the state government, as the case may be, and he is an advocate acting on behalf on the central government or the state government which has launched the prosecution. there is nothing wrong if the government takes a decision to withdraw from the prosecution and communicate such direction to the public prosecutor. the public prosecu- tor, would, inter alia, consider the grounds on which the government has taken the decision to withdraw from the prosecution and if he is satisfied that those grounds are legitimate, he may file an application for withdrawal from the prosecution. if on the other hand he takes the view that the grounds which have been given by the government are not legitimate he has two options available to him. he may inform the government that in his opinion, the grounds which have weighed with the government are not valid and that he should be relieved from the case and if this request of his is not granted he may tender his resignation or else, he may make an application for withdrawal from the prosecution as directed by the government and at the hearing of the appli- cation he may offer his considered view to the court that the application is not sustainable on grounds set out by him and leave it to the court to reject the application. there is nothing wrong in the public prosecutor being advised or directed by the government to file an application for with- drawal from the prosecution and the application for with- drawal made by him pursuant to such direction or advice is not necessarily vitiated. the public prosecutor can of course come to his own independent decision that the prose- cution should be withdrawn but ordinarily if he is wise and sensible person he will not apply for withdrawal without consulting the government because it is the government which has launched the prosecution and is prosecuting the accused. theoretically of course, he can make an application for withdrawal from the prosecution without consulting the government and he cannot be accused of any illegality for doing so and the court may give its consent for such with- drawal but in that event the public prosecutor would render the risk of incurring the displeasure of the government which has appointed him. if the public prosecutor seeks the permission of the government for withdrawal from the prose- cution and the government grants such permission to him and on the basis of such permission he applies for withdrawal the application cannot be said to be vitiated. the proviso to s.321 in fact contemplates in so many terms that in certain categories of offences the public prosecutor ap- pointed by the state government cannot move the court for its consent to withdraw from the prosecution without the permission of the central government. there is no danger of abuse or misuse of power by the government inherent in this process because there are two principal safeguards against any such abuse or misuse of power by the government: one is that an application must be based on grounds which advance public justice and the other is that there can be no with- drawal without the consent of the court. [755c-h; 756a-h; 757a-f] state of bihar v. ram naresh pandey, [1957] scr 279; balwant singh v. state of bihar, [1978] 1 scr 604; m.n. sankaranarayanan nair v. p.v. balakrishnan & ors., [1972] 2 scr 599;.state of orissa, v. c. mohapatra, [1977] 1 scr 335 and r.k. jain v. state, [1980] 3 scr 982, referred to. 7.2 the public prosecutor cannot maintain an application for withdrawal from the prosecution on the ground that the government does not want to produce evidence and proceed with the prosecution against the accused or that the govern- ment considers that it is not expedient to proceed with the prosecution. the public prosecutor has to make out some ground which would advance or further the cause of public justice. if the public prosecutor is able to show that he may not be able to produce sufficient evidence to sustain the charge, an application for withdrawal from the prosecu- tion may be legitimately made by. him. [758h; 759a-b] 7.3 however, where a charge has been framed by the court either under s.228 or s.240 of the code of criminal. proce- dure, 1973 it would not be open to the public prosecutor to apply for withdrawal from the prosecution on the ground of insufficiency of evidence in support of the prosecution. the reason is that in both these cases the court applies its mind to the material consisting of the police report and the documents sent with it under s.173 and comes to a conclusion that a prima facie case has been made out against the ac- cused and the charge should therefore be framed. when the court has come to this conclusion after full consideration and framed a charge, the court cannot be persuaded on the same material to hold that there is not sufficient evidence to sustain the prosecution. the public prosecutor cannot be permitted to make a volte face on the basis of the same material. to do so would be mockery of justice and it would shake the confidence of the court in the purity and integri- ty of the administration of justice. it is, therefore, clear that though the prosecution can be withdrawn at any stage, even after the framing of the charge, it would not be compe- tent to the public prosecutor once the charge is framed, to apply for withdrawal of the prosecution on the ground that the same material which was before the court when it framed the charge is not sufficient to sustain the prosecution. of course, if some material has subsequently come to light which throws doubt on the veracity of the prosecution case the public prosecutor can certainly apply for withdrawal on the ground that the prosecution is not well-founded. it may also happen in the meanwhile a key witness may have died or some important evidence may have become unavailable or some such thing may have happened in that event, the public prosecutor may legitimately feel that it will not be possi- ble to sustain the prosecution in the absence of such evi- dence and he may apply for withdrawal from the prosecution. but on the same material without anything more, the public prosecutor cannot apply for withdrawal from the prosecution after the charge is framed. to allow him to do so would impair the faith of the people in the purity and integrity of the judicial process. [759c-h; 760a-e] bansi lal v. chandi lal, air 1976 sc 370, referred to. 7.4 further while exercising its function under s.239 is to consider the police report and the document sent along with it as also any statement made by the accused if the court chooses to examine him. and if the court finds that there is no prima facie case against the accused the court discharges him. but that is precisely what the court is called upon to do when an application for withdrawal from the prosecution is made by the public prosecutor on the ground that there is insufficient or no evidence to support the prosecution- there also the court would have to consider the material placed before it on behalf of the prosecution for the purpose of deciding whether the ground urged by the public prosecutor for withdrawal of the prosecution is justified or not and this material would he the same as the material before the court while discharging its function under s.239. if the court while considering an application for withdrawal on the ground of insufficiency or absence of evidence to support the prosecution has to scrutinise the material for the purpose of deciding whether there is in fact insufficient evidence or no evidence at all in support of the prosecution, the court might as well engage itself in this exercise while considering under s.239 whether the accused shall he discharged or a charge shall he framed against him. it is an identical exercise which the court will he performing whether the court acts under s.239 or under s.321. if that he so, in a warrant case instituted on a police report the public prosecutor should not he entitled to make an application for withdrawal from the prosecution on the ground that there is insufficient or no evidence in support of the prosecution. the court will have consider the same issue under s.239 and it will most certainly further or advance the case of public justice if the court examines the issue under s.239 and gives its reasons for discharging the accused after a judicial consideration of the material before it, rather than allow the prosecution to he withdrawn by the public prosecutor. when the prosecution is allowed to he withdrawn there is always an uneasy feeling in the public mind that the case has not been allowed to be agitated before the court and the court has not given a judicial verdict. but if on the other hand, the court examines the material and discharges the accused under s.239 it will always carry greater conviction with the people because instead of the prosecution being withdrawn and taken out of the ken of judicial scrutiny the judicial verdict based on assessment and evaluation of the material before the court will always inspire greater confidence- since the guiding consideration in all these cases is the imperative of public justice and it is absolutely essential that justice must not only he done but also appear to be done. hence in a warrant case instituted on a police report--which the present case against dr. jagannath misra and others admit- tedly is-it should not be a legitimate ground for the public prosecutor to urge in support of the application for with- drawal that there is insufficient or no evidence in support of the prosecution. the court in such a case should be left to decide under s.239 whether the accused should be dis- charged or a charge should be framed against him. [761a-h; 762a-b] ultimately every offence has a social or economic cause behind it and if the state feels that the elimination or eradication of the social or economic cause of the crime would be better served by not proceeding with the prosecu- tion, the state should clearly be at liberty to withdraw from the prosecution. though in this area no hard and fast rule can be laid down nor can any categories of cases be defined in which an application for withdrawal of the prose- cution could legitimately be made. it must ultimately depend on the facts and circumstances of each case in the light of what is necessary in order to promote the ends of justice. [762c-d; h; 763a-b] the court, while considering whether to grant con- sent or not, must not accept the ipse dixit of the public prosecutor and content itself by merely examining whether the public prosecutor has applied an independent mind but the court must satisfy itself not only that the grounds are germane or relevant to advancement of public justice but also whether the grounds in fact are satisfactorily estab- lished. the ultimate test which must be applied by the court in order to determine the validity of the grounds in a particular case is that the requirement of public justice outweighs the legal justice of that case so that withdrawal from the prosecution could be permitted in the larger inter- est of public justice. the imperative of public justice provides the only relevant consideration for determining whether consent should be granted or not. it is not possible to provide an exclusive definition of what may be regarded as failing within the imperative of public justice in a straitjacket formula. every case must depend on its peculiar facts and circumstances because there may be a myriad situa- tion where this question may have to be considered by the court. [763g-h; 764a-d]. applying these principles to the facts of the present case, it is clear, that the court of the chief judicial magistrate patna as also the high court were clearly in error in granting consent to the withdrawal from the prose- cution against dr. jagannath misra and others. there are two very strong and cogent reasons why consent to the withdrawal of the prosecution must be refused. in the first place, the learned chief judicial magistrate could have considered under s.239 whether the material placed before him was sufficient to make out a prima facie case against dr. jagannath misra and the other accused so that if the learned chief judicial magistrate came to the conclusion on the basis of such material that the charge against dr. jagannath misra and the other accused was groundless, he would be bound to discharge them for reasons to be recorded by him in writing. there is no reason why in these circumstances the public prosecutor should be allowed to withdraw from the prosecution under s.321. the same exercise could be performed by the learned chief judi- cial magistrate by acting under s.239. moreover, in the present case, the decision to withdraw from the prosecution was taken by the cabinet at a meeting held on 24th february 1981 and this meeting was presided over by dr. jagannath misra himself. it may be that shri lallan prasad sinha did not implicitly obey the decision of the cabinet and applied his independent mind to the question whether the prosecution should be withdrawn or not but even so, it would seriously undermine the confidence of the people in the administration of justice if a decision to withdraw the prosecution against him is taken by the accused himself and pursuant to this decision the special public prosecutor who was appointed by the state government of which the accused is chief minister, applies for withdrawal from the prosecution. it is an ele- mentary principle that justice must not only done but must also appear to be done. it would be subversive of all prin- ciples of justice that the accused should take a decision to withdraw the prosecution against himself and then the spe- cial public prosecutor appointed in effect and substance by him makes an application for withdrawal from the prosecu- tion. [764e-h; 765a-e] 8.2 it is no doubt true that if there is not sufficient evidence to sustain the prosecution against dr. jagannath misra and the other accused, it would be subjecting them to harassment and inconvenience to require them to appear and argue before the court for the purpose of securing an order of discharge under s.239, but even so it would be desirable in the interest of public justice that high political per- sonages, accused of offences should face the judicial proc- ess and get discharged, rather than seem to manoeuvre the judicial system and thus endanger the legitimacy of the political as well as the judicial process. it is possible that in a particular case personal harassment or inconven- ience may be caused by non withdrawal of the prosecution, if the accused is really innocent and is ultimately liable to be discharged, but such harassment or inconvenience must be considered as an inevitable cost of public life, which the repositories of public power should have no hesitation to pay, as justice must not only be done but must also appear to be done. [765e-h; 766a] - order 1. the petitioner, the unsuccessful plaintiff in the courts below, seeks special leave to appeal to this court from the judgment and decree dated 1st april, 1992 of the high court of karnataka in regular first appeal no. 1,10,000/- and that respondents having failed to perform their obligations under the said agreement the petitioner is entitled to a decree for specific performance. in the instant case if the equity jurisdiction is exercised in favour of the plaintiff it will result in great hardship to the defendants and it would also be highly inequitable to pass a decree for specific performance in a case like this. sri javali strenuously contended that serious in justice was done to the petitioner who had come to the rescue of the respondents during their bad days and, virtually, enabled them to save the property from the said laxmi narayan on the specific understanding that a part of the property which was in his occupation as a tenant, be sold to him.order1. the petitioner, the unsuccessful plaintiff in the courts below, seeks special leave to appeal to this court from the judgment and decree dated 1st april, 1992 of the high court of karnataka in regular first appeal no. 37 of 1980 on its file, affirming the judgment and decree of dismissal dated 31st october, 1979 entered by the learned ii additional civil judge at bangalore in o.s. no. 436/1973 of the petitioner's suit for specific performance of an agreement to sell dated 7th may, 1970.2. in his suit, the petitioner-plaintiff alleged that respondents 1 and 2 who are husband and wife, on their own behalf and on behalf of respondents 3 to 5, their children, agreed to sell, and the petitioner to purchase, the suit property for a consideration of rs. 1,10,000/- and that respondents having failed to perform their obligations under the said agreement the petitioner is entitled to a decree for specific performance.3. the execution of the suit agreement, exhibit p-3, was not disputed. but having regard to the nature and circumstances under which the said agreement came into existence with its own peculiar terms, a question of construction of the instrument as to the nature and of the rights and obligations it sought to create fell for consideration before the courts below. the relevant recitals in the exhibit p-3 recapitulate certain antecedent transactions under which respondents had agreed to sell the whole of the properties of which the suit property was a part in favour of a certain laxmi narayan, who had also lent moneys to the respondents on a mortgage of the property and that the respondents had approached the petitioner to pay off the immediate and pressing debts and to extend to them financial assistance for the improvement of their business, from the earnings of which they expected to be able to discharge the mortgage debt in favour of laxmi narayan. the document proceeded to stipulate that in the event of respondents' not being able to do so, they should sell the suit property to the petitioner. the recitals in exhibit p-3 in this behalf, are these: and whereas ...(respondents) agreed to help the members of the first party to pay off the arrears of rents or damages 10 sri lakshmi narayana and also to help the members of the first party to improve the poultry farm and dairy farm which they are running at present to bring them to a remunerative stage so that from the income that they have been realising from various sources they will be in a position to discharge the mortgage loan of rupees one lakh and pay off the rents or damages as stated above and retain the property or in the alternative to sell the schedule property to the second party for a consideration of rs. 1,10,000/- (rs. one lakh and ten thousand only) which is an attractive one subject.to the following terms and conditions: 4. the trial court came to dismiss the suit holding, inter alia, that the subject-matter of the agreement was coparcenary property and the debt for discharge of which the sale was intended was not for legal necessity. in the petitioner's appeal before the high court, respondents reiterated their main contention that the document in question recognised the right of the respondents, at their option, to decline to sell the property and that, therefore, the further question as to the entitlement of the petitioner to seek specific enforcement did not at all arise.the two of the five points formulated by the high court for its determination in the appeal reflect this aspect of the controversy. points 1 and 3 formulated in the appeal were:1. what is the true purport of agreement of sale dated 7-5-1970 marked as ex. p-3?3. whether in the facts and circumstances of the case, the plaintiff is entitled to a decree for specific performance?on the first point, the high court held: to our mind the clause is in clear terms and it gives an option to the defendants either to pay the amount and retain the property or to sell the suit property to the plaintiff for a consideration of rs. 1,10,000/-.x x x x x xour reading of the clause is that it gives option to the defendants either to pay the amount or to execute the sale deed. it is supported by the contemporaneous conduct of the parties and the other contemporaneous documentary evidence that has come into existence relating to the terms of the document.x x x x x xtherefore, point no. 1 is answered as follows:under ex. p-3 the plaintiff and the defendants had agreed that the defendants should either pay the amount advanced by the plaintiff under ex. p-3 or to sell the suit schedule property for the amount agreed. it was not an agreement of sale without an option to the defendants to pay off the amount advanced thereunder by the plaintiff.on the third point, the high court, declining relief of specific performance, observed and held:thus, we are of the view that the plaintiff has also taken unfair advantage of the agreement and has kept the rental amount with himself at the rate of rs. 270/- per month from the date of suit till now which itself would come to a several thousands. hence we are of the view that the plaintiff is not entitled to a decree for specific performance. in the instant case if the equity jurisdiction is exercised in favour of the plaintiff it will result in great hardship to the defendants and it would also be highly inequitable to pass a decree for specific performance in a case like this. accordingly, point no. 3 is answered in the negative. 5. we have heard sri javali, learned senior counsel for the petitioner and sri r.n. narasimhamurthy, learned senior counsel for the respondents.sri javali strenuously contended that serious in justice was done to the petitioner who had come to the rescue of the respondents during their bad days and, virtually, enabled them to save the property from the said laxmi narayan on the specific understanding that a part of the property which was in his occupation as a tenant, be sold to him. sri javali further urged that ex. p-3 was really in two parts and though the first part may have intended a relationship of debtor and creditor between the parties in respect of the amounts advanced, however, it was clear and unambiguous that after that relationship came to an end-as indeed there were express provisions contemplating the cessation of that relationship-the relationship of vendor and vendee had commenced. he submitted that the high court went wrong in its construction of ex. p-3. there ought to be, urges counsel, a decree for specific performance.6. secondly, sri javali submitted that on the strength of ex. p-3 the petitioner had, in fact, paid the mortgage debt under deed dated 9-8-1967 in favour of the said laxmi narayan and obtained an assignment of the mortgage. the fact that the high court, while dismissing the suit, had reserved liberty to the petitioner to work out his rights as such assignee is small consolation as, indeed, the amount paid for the assignment really represented and was intended to be a set-off against the sale consideration under ex. p-3. sri javali submitted that, at all events, it was erroneous and unfair to dismiss the petitioner's suit without at least restoring to him the mortgage debt for the assignment which was really intended as a future appropriation and adjustment against the sale price stipulated in ext. p-3. sri javali contended that it would be a travesty of justice that while the respondent was allowed to retain the whole of the property, which had appreciated several times in value over the years owing entirely to petitioner's beneficial intervention, he was left high and dry for the recovery of even the mortgage amount which really was a part of the price.7. thirdly, sri javali says that there should also be some compensation or damages, in lieu of specific performance, to be awarded to the petitioner. sri javali stated that the petitioner put at stake large sums of his own money to bail out respondents from their straightened circumstances and saved them from the consequences of the litigation at the instance of laxmi narayan and it would be unfair to ask petitioner to be content with the return of his money. sri javali says that the petitioner should be held entitled to some compensation in lieu of specific performance if specific performance is refused.8. we have perused the judgment of the courts below. on the first contention, we are unable to agree with sri javali that it is a case in which specific performance should be granted. we are left with the impression that though the course of the transactions between the parties was chequered and meandering, the ultimate conclusion of the high court that specific performance should be refused, is correct and requires to be upheld. but this is not to deny that there are certain equities which require to be taken note of and adjusted in moulding the relief. on the first contention of shri javali we hold that denial of relief of specific performance was right, but there should be some compensation to be given, in view of the particular facts and circumstances of the case, to the petitioner.9. so far as sri javali's second contention that the petitioner should not be driven to a separate suit for the recovery of the amounts under the deed of mortgage dated 9-8-1967, which the petitioner took on assignment on 8-4-1971, is concerned we are relieved of the need to go into this controversy as sri narasimhamurthy, with his usual fairness, submitted that it would be appropriate for the respondents to pay the mortgage money without the need to drive the petitioner to another suit. sri narasimhamurthy further submitted that the respondents would not stand on technicality either as to the liability under the mortgage or of its enforceability in these proceedings and would voluntarily agree to pay the entire mortgage money together with accrued interest at the rates stipulated in the mortgage bond.we, accordingly, direct that while the prayer for specific performance is refused, there will be a decree for payment of the mortgage money which really was intended to be a mode of application and appropriation of the sale price and was, in that sense, a part of the same transaction. it is appropriate that the petitioner should not be driven to a separate suit to enforce the obligations which must, in the circumstances of this case, be held to be a part of the same transaction. we, accordingly, direct that while there be a decree of dismissal of the suit for specific performance, there should, however, be a decree for the repayment of the monies paid on the assignment of the mortgage together with accrued interest thereon. in this case, as the money so laid out is on mortgage the relief must take the form of a preliminary decree for sale on mortgage with two years' time to the respondents to deposit in the trial court the mortgage money and accrued interest till date of deposit. if the mortgage amount is not deposited within two years from today, the petitioner shall be entitled to seek a final decree to be made in the same suit in the trial court, in furtherance of the preliminary decree we have now directed to be drawn up in the suit.10. the payment of the mortgage money under the aforesaid mortgage deed shall be in addition to the sum of rs. 20,000/- directed by the high court to be paid by the respondents to the petitioner in the judgment under appeal.11. the other point that survives is the third contention. here again, we place on record the fair stand of sri narasimhamurthy. he submitted that it would not be unreasonable to offer the petitioner some compensation. he suggested a sum of rs.50,000/- but left the quantification thereof to the court. we think, having regard to the equities of the matter and certain contentions of the petitioner which are not unarguable, we should award to him a compensation of rs. 1 lakh. this amount which shall not carry any interest shall also be paid within two years from today. if it is not paid within two years, it shall be open to the petitioner to sue out execution for its recovery.12. it is also directed that the outstanding arrears of rent shall be paid by the petitioner to the respondent and rent shall be continued to be paid in future till the tenancy subsists.with these directions and modifications of the decree, the special leave petition is disposed of. no costs.

Judgment:
ORDER

1. The petitioner, the unsuccessful plaintiff in the Courts below, seeks special leave to appeal to this Court from the judgment and decree dated 1st April, 1992 of the High Court of Karnataka in Regular First Appeal No. 37 of 1980 on its file, affirming the judgment and decree of dismissal dated 31st October, 1979 entered by the learned II Additional Civil Judge at Bangalore in O.S. No. 436/1973 of the petitioner's suit for specific performance of an agreement to sell dated 7th May, 1970.

2. In his suit, the petitioner-plaintiff alleged that respondents 1 and 2 who are husband and wife, on their own behalf and on behalf of respondents 3 to 5, their children, agreed to sell, and the petitioner to purchase, the suit property for a consideration of Rs. 1,10,000/- and that respondents having failed to perform their obligations under the said agreement the petitioner is entitled to a decree for specific performance.

3. The execution of the suit agreement, Exhibit P-3, was not disputed. But having regard to the nature and circumstances under which the said agreement came into existence with its own peculiar terms, a question of construction of the instrument as to the nature and of the rights and obligations it sought to create fell for consideration before the Courts below. The relevant recitals in the Exhibit P-3 recapitulate certain antecedent transactions under which respondents had agreed to sell the whole of the properties of which the suit property was a part in favour of a certain Laxmi Narayan, who had also lent moneys to the respondents on a mortgage of the property and that the respondents had approached the petitioner to pay off the immediate and pressing debts and to extend to them financial assistance for the improvement of their business, from the earnings of which they expected to be able to discharge the mortgage debt in favour of Laxmi Narayan. The document proceeded to stipulate that in the event of respondents' not being able to do so, they should sell the suit property to the petitioner. The recitals in Exhibit P-3 in this behalf, are these:

And whereas ...(respondents) agreed to help the members of the First Party to pay off the arrears of rents or damages 10 Sri Lakshmi Narayana and also to help the members of the First Party to improve the Poultry Farm and Dairy Farm which they are running at present to bring them to a remunerative stage so that from the income that they have been realising from various sources they will be in a position to discharge the mortgage loan of rupees one lakh and pay off the rents or damages as stated above and retain the property or in the alternative to sell the schedule property to the Second Party for a consideration of Rs. 1,10,000/- (Rs. One lakh and ten thousand only) which is an attractive one subject.to the following terms and conditions:

4. The trial Court came to dismiss the suit holding, inter alia, that the subject-matter of the agreement was coparcenary property and the debt for discharge of which the sale was intended was not for legal necessity. In the petitioner's appeal before the High Court, respondents reiterated their main contention that the document in question recognised the right of the respondents, at their option, to decline to sell the property and that, therefore, the further question as to the entitlement of the petitioner to seek specific enforcement did not at all arise.

The two of the five points formulated by the High Court for its determination in the appeal reflect this aspect of the controversy. Points 1 and 3 formulated in the appeal were:

1. What is the true purport of agreement of sale dated 7-5-1970 marked as Ex. P-3?

3. Whether in the facts and circumstances of the case, the plaintiff is entitled to a decree for specific performance?

On the first point, the High Court held:

To our mind the clause is in clear terms and it gives an option to the defendants either to pay the amount and retain the property or to sell the suit property to the plaintiff for a consideration of Rs. 1,10,000/-.

x x x x x xOur reading of the clause is that it gives option to the defendants either to pay the amount or to execute the sale deed. It is supported by the contemporaneous conduct of the parties and the other contemporaneous documentary evidence that has come into existence relating to the terms of the document.

x x x x x xTherefore, point No. 1 is answered as follows:

Under Ex. P-3 the plaintiff and the defendants had agreed that the defendants should either pay the amount advanced by the plaintiff under Ex. P-3 or to sell the suit schedule property for the amount agreed. It was not an agreement of sale without an option to the defendants to pay off the amount advanced thereunder by the plaintiff.On the third point, the High Court, declining relief of specific performance, observed and held:Thus, we are of the view that the plaintiff has also taken unfair advantage of the agreement and has kept the rental amount with himself at the rate of Rs. 270/- per month from the date of suit till now which itself would come to a several thousands. Hence we are of the view that the plaintiff is not entitled to a decree for specific performance. In the instant case if the equity jurisdiction is exercised in favour of the plaintiff it will result in great hardship to the defendants and it would also be highly inequitable to pass a decree for specific performance in a case like this. Accordingly, point No. 3 is answered in the negative.

5. We have heard Sri Javali, learned senior counsel for the petitioner and Sri R.N. Narasimhamurthy, learned senior counsel for the respondents.

Sri Javali strenuously contended that serious in justice was done to the petitioner who had come to the rescue of the respondents during their bad days and, virtually, enabled them to save the property from the said Laxmi Narayan on the specific understanding that a part of the property which was in his occupation as a tenant, be sold to him. Sri Javali further urged that Ex. P-3 was really in two parts and though the first part may have intended a relationship of debtor and creditor between the parties in respect of the amounts advanced, however, it was clear and unambiguous that after that relationship came to an end-as indeed there were express provisions contemplating the cessation of that relationship-the relationship of vendor and vendee had commenced. He submitted that the High Court went wrong in its construction of Ex. P-3. There ought to be, urges counsel, a decree for specific performance.

6. Secondly, Sri Javali submitted that on the strength of Ex. P-3 the petitioner had, in fact, paid the mortgage debt under deed dated 9-8-1967 in favour of the said Laxmi Narayan and obtained an assignment of the mortgage. The fact that the High Court, while dismissing the suit, had reserved liberty to the petitioner to work out his rights as such assignee is small consolation as, indeed, the amount paid for the assignment really represented and was intended to be a set-off against the sale consideration under Ex. P-3. Sri Javali submitted that, at all events, it was erroneous and unfair to dismiss the petitioner's suit without at least restoring to him the mortgage debt for the assignment which was really intended as a future appropriation and adjustment against the sale price stipulated in Ext. P-3. Sri Javali contended that it would be a travesty of justice that while the respondent was allowed to retain the whole of the property, which had appreciated several times in value over the years owing entirely to petitioner's beneficial intervention, he was left high and dry for the recovery of even the mortgage amount which really was a part of the price.

7. Thirdly, Sri Javali says that there should also be some compensation or damages, in lieu of specific performance, to be awarded to the petitioner. Sri Javali stated that the petitioner put at stake large sums of his own money to bail out respondents from their straightened circumstances and saved them from the consequences of the litigation at the instance of Laxmi Narayan and it would be unfair to ask petitioner to be content with the return of his money. Sri Javali says that the petitioner should be held entitled to some compensation in lieu of specific performance if specific performance is refused.

8. We have perused the judgment of the Courts below. On the first contention, we are unable to agree with Sri Javali that it is a case in which specific performance should be granted. We are left with the impression that though the course of the transactions between the parties was chequered and meandering, the ultimate conclusion of the High Court that specific performance should be refused, is correct and requires to be upheld. But this is not to deny that there are certain equities which require to be taken note of and adjusted in moulding the relief. On the first contention of Shri Javali we hold that denial of relief of specific performance was right, but there should be some compensation to be given, in view of the particular facts and circumstances of the case, to the petitioner.

9. So far as Sri Javali's second contention that the petitioner should not be driven to a separate suit for the recovery of the amounts under the deed of mortgage dated 9-8-1967, which the petitioner took on assignment on 8-4-1971, is concerned we are relieved of the need to go into this controversy as Sri Narasimhamurthy, with his usual fairness, submitted that it would be appropriate for the respondents to pay the mortgage money without the need to drive the petitioner to another suit. Sri Narasimhamurthy further submitted that the respondents would not stand on technicality either as to the liability under the mortgage or of its enforceability in these proceedings and would voluntarily agree to pay the entire mortgage money together with accrued interest at the rates stipulated in the mortgage bond.

We, accordingly, direct that while the prayer for specific performance is refused, there will be a decree for payment of the mortgage money which really was intended to be a mode of application and appropriation of the sale price and was, in that sense, a part of the same transaction. It is appropriate that the petitioner should not be driven to a separate suit to enforce the obligations which must, in the circumstances of this case, be held to be a part of the same transaction. We, accordingly, direct that while there be a decree of dismissal of the suit for specific performance, there should, however, be a decree for the repayment of the monies paid on the assignment of the mortgage together with accrued interest thereon. In this case, as the money so laid out is on mortgage the relief must take the form of a preliminary decree for sale on mortgage with two years' time to the respondents to deposit in the trial Court the mortgage money and accrued interest till date of deposit. If the mortgage amount is not deposited within two years from today, the petitioner shall be entitled to seek a final decree to be made in the same suit in the trial Court, in furtherance of the preliminary decree we have now directed to be drawn up in the suit.

10. The payment of the mortgage money under the aforesaid mortgage deed shall be in addition to the sum of Rs. 20,000/- directed by the High Court to be paid by the respondents to the petitioner in the judgment under appeal.

11. The other point that survives is the third contention. Here again, we place on record the fair stand of Sri Narasimhamurthy. He submitted that it would not be unreasonable to offer the petitioner some Compensation. He suggested a sum of Rs.50,000/- but left the quantification thereof to the Court. We think, having regard to the equities of the matter and certain contentions of the petitioner which are not unarguable, we should award to him a compensation of Rs. 1 lakh. This amount which shall not carry any interest shall also be paid within two years from today. If it is not paid within two years, it shall be open to the petitioner to sue out execution for its recovery.

12. It is also directed that the outstanding arrears of rent shall be paid by the petitioner to the respondent and rent shall be continued to be paid in future till the tenancy subsists.

With these directions and modifications of the decree, the special leave petition is disposed of. No costs.