SUPREME COURT REITERATES THE LEGAL PROPOSITION THAT CONTINUOUS READINESS AND WILLINGNESS IS A CONDITION PRECEDENT TO GRANT THE RELIEF OF SPECIFIC PERFORMANCE

A two-Judge Bench of the Supreme Court, comprising of Justice Pamidighantam Sri Narsimha and Justice Aravind Kumar, passed a Judgement dated 10.07.2024 in PYDI RAMANA @RAMULU vs. DAVARASETY MANMADHA RAO Civil Appeal No. 434 of 2013, wherein the Supreme Court upheld the Trial Court Judgement of rejecting the claim for specific performance as the Plaintiff was not showing readiness and granting the refund of the amount of Rs. 37,436.80 with 24% interest per annum instead.

Facts

The original Plaintiff (now Respondent) and Appellant-Defendant entered into an Agreement, respectively, as Buyer and Seller of the Property. The Agreement was executed on 07.06.1993.

That the Defendant agreed to execute the Sale Deed in favour of Plaintiff within one year after getting the Property surveyed. The Respondent-Plaintiff, further, paid the sum of Rs. 17,000/- to Defendant on 23.06.1993 as advance money.

That the Defendant did not get the Property surveyed within a year and Plaintiff never inquired about it for nearly 3 years. On 30.05.1996, Plaintiff issued a Legal Notice to Defendant for which the reply was received after 5 months.

That on 07.06.1996, the Plaintiff filed a Suit for Specific Performance of Agreement or in the alternate for the refund of the advanced money. The Trial Court rejected the claim for specific performance and granted the alternate relief in the form of a refund of Rs. 37,436.80 with 24% interest per annum instead.

The Plaintiff, aggrieved, filed an Appeal against the Trial Court Judgement and secured the Order in his favour. The unsuccessful Defendant filed the Second Appeal (S.A No.1282 of 2018) without getting any relief.

That the learned Senior Counsel appearing for the Appellant-Defendant submitted that the Trial Court rightly rejected the prayer for specific performance. It is further submitted that the Agreement had stood cancelled for non-payment of balance sale consideration within the stipulated time specified in the Agreement and time was the essence of the Contract. Hence, the learned Senior Counsel for the Appellant sought for the Appeal to be allowed and Suit to be dismissed.

The learned Counsel appearing for the Respondent submitted that they paid the advance amount on 23.06.1993 which showed their readiness and willingness. He contended that it was the Appellant who did not perform his part of the contractual obligation. It was further submitted that a reply to the legal notice was furnished after 5 months of issuing of the legal notice by the Plaintiff and the Defendant had never cancelled the Agreement and as such Counsel for the Respondent-Plaintiff sought for dismissal of this Appeal.

Issue

1) Whether the impugned order of the High Court required to be affirmed or reversed?

Analysis by the Supreme Court

The Bench, making it clear at the outset that the amendment brought to the Specific Relief Act, 1963 (hereinafter referred to as SRA) by Act 18 of 2018 won’t be applicable in the instant case, relied upon Section 16 of SRA (Personal bars to relief) which bars specific performance of a contract in certain conditions. One, among many, such conditions is failure to prove readiness and willingness.

The Apex Court observed that Plaintiff had been successful in proving the lack of execution of sale agreement on the part of Defendant. However, on the other hand, the long unexplained delay in not taking any reasonable steps as is expected from a reasonable person is itself sufficient to disentitle the Plaintiff to an equitable relief. It was further contended that Plaintiff sat quietly without taking any steps to perform his part of the Contract under the Agreement as expected of a reasonable person.

Supreme Court relying on U.N. Krishnamurthy Thr. LRS. vs. A.M. Krishnamurthy CIVIL APPEAL NO. 4703 OF 2022 and Rajesh Kumar vs. Anand Kumar and Ors, 2024 SCC Online SC 981, held that “the Trial Court had rightly evaluated the facts and had not erred in deciding the matter”. Further, the Supreme Court made observations from Vijay Kumar and Ors V. Om Parkash, Civil Appeal No.10191 of 2018 in which it was held that the continuous readiness and willingness is a condition precedent to grant the relief of specific performance.

Conclusion

The Bench set aside the impugned Judgement of the High Court and the First Appellate Court. Consequently, the Judgement of the Trial Court dated 19.01.2002 was restored. The Appeal stood allowed.

 

 

Editor’s Comments

Section 16[1] of the Specific Relief Act, 1963 provides for certain circumstances where a contract can be deemed to be enforceable. Of these conditions “readiness and willingness” are essential prerequisites for enforcement of a contract. In the present case, as the Plaintiff failed to question the Defendants’ lackadaisical attitude in registration and he himself had failed to prove that he was always ready and willing to complete the sale. The Court therefore, refunded the amount that he had claimed with interest.

 

SURAJ

4^TH  YEAR

INSTITUTE OF LAW, KURUKSHETRA UNIVERSITY, HARYANA

INTERN

THE INDIAN LAWYER & ALLIED SERVICES

 

 

Edited by:

Sushila Ram (Advocate)

The Indian Lawyer & Allied Services

[1] Section 16 of Specific Relief Act, 1963. Personal bars to relief. —

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.