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Shenbagam v. KK Rathinavel

Specific Relief Act, 1963 – Merely averring that the plaintiff was waiting with the balance consideration and believed that the defendant would clear the encumbrance is insufficient to prove that the plaintiff was willing to perform his obligations under the contract.

It is an established principle of law that the plaintiff must prove that he is ready and willing to perform the contract. The burden lies on the plaintiff. True enough, generally speaking, time is not of the essence in an agreement for the sale of immoveable property. In deciding whether to grant the remedy of specific performance, specifically in suits relating to sale of immovable property, the courts must be cognizant of the conduct of the parties, the escalation of the price of the suit property, and whether one party will unfairly benefit from the decree. The remedy provided must not cause injustice to a party, specifically when they are not at fault.

Specific Relief Act, 1963 – Section 20 – Whether it is appropriate to direct specific performance of a contract relating to the transfer of immovable property, especially given the efflux of time and the escalation of prices of property ?

The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case.

Sale deed must be executed for the current market price of the suit property.

In case of a phenomenal increase in the price of the land, the Court may impose a reasonable condition in the decree such as payment of an additional amount by the purchaser. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.

Specific Relief Act, 1963 – Section 16 – Personal bars to relief.

Section 16 of the Specific Relief Act provides certain bars to the relief of specific performance. These include, inter alia, a person 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 and waived by the defendant.

Specific Relief Act, 1963 – Section 16 (c) – “Readiness and Willingness”.

Section 16(c) mandates “readiness and willingness” of the plaintiff and is a condition precedent to obtain the relief of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous “readiness and willingness” to perform the contract on his part from the date of the contract. The onus is on the plaintiff. It is the mandate of the statute that the plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is non-compliance with this statutory mandate, the court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. “Readiness” refers to the financial capacity and “Willingness” refers to the conduct of the plaintiff wanting the performance. The factum of readiness and willingness to perform the plaintiff’s part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. The plaintiff must establish that he was “ready and willing” to perform the contract. In this regard, the conduct of the plaintiff must be consistent.

The conduct of a plaintiff is very crucial in a suit for specific performance.

The delay in filing a suit, specifically one for mandatory injunction, indicates the inconsistent behaviour of the plaintiff. The failure of the trial court to frame an issue relating to the readiness and willingness of the plaintiff to perform the contract is also critical in declining the remedy of specific performance. As regards suit for specific performance, the law is very clear that the plaintiff must plead and prove his readiness and willingness to perform his part of the contract all through i.e. right from the date of the contract till the date of hearing of the suit.

The foundation of a suit for specific performance lies in ascertaining whether the plaintiff has come to the court with clean hands and has, through his conduct, demonstrated that he has always been willing to perform the contract.

All the three courts, including the High Court, grossly erred in the manner in which they have adjudicated upon this dispute in a suit for specific performance. In the first instance, the trial court failed to frame an issue on whether the respondent-plaintiff was ready and willing to perform his obligations under the contract and instead assessed whether he is entitled to the relief of specific performance. In doing so, the trial court viewed the legal issue from an incorrect lens. There is a conspicuous absence in judgment of the trial court of any reference to evidence led by the respondent to indicate his willingness to perform the contract. The trial court merely adverted to “document produced on behalf of the plaintiff” and concluded that he had sufficient means to purchase the suit property. Apart from this observation, the judgment fails to analyse the terms of the agreement, the obligations of the parties and the conduct of the respondent or the appellant. [Para 25]

In evaluating whether the respondent was ready and willing to perform his obligations under the contract, it is not only necessary to view whether he had the financial capacity to pay the balance consideration, but also assess his conduct throughout the transaction.

In the present case, three decades have passed since the agreement to sell was entered into between the parties. The price of the suit property would undoubtedly have escalated. Given the blemished conduct of the respondent-plaintiff in indicating his willingness to perform the contract, we decline in any event to grant the remedy of specific performance of the contract. However, we order a refund of the consideration together with interest at 6% per annum.

Case Law Reference

  1. Atma Ram v. Charanjit Singh, (2020) 3 SCC 311
  2. P. Meenakshisundaram v. P. Vijayakumar, (2018) 15 SCC 80
  3. Zarina Siddiqui v. A. Ramalingam, (2015) 1 SCC 705
  4. Satya Jain v. Anis Ahmed Rushdie, (2013) 8 SCC 131
  5. JP Builders v. A Ramadas Rao, (2011) 1 SCC 429
  6. Nirmala Anand v. Advent Corporation (P.) Ltd., (2002) 8 SCC 146
  7. KS Vidyanadam v. Vairavan, (1997) 3 SCC 1
  8. His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526

Citations : JT 2022 (1) SC 344

Case Number : Civil Appeal No 150 of 2022; January 20, 2022

Hon’ble Dr. Justice D.Y. Chandrachud pronounced the reportable judgment of the Bench comprising of His Lordship and Hon’ble Mr. Justice A.S. Bopana.

For Appellant(s) Mr B.Ragunath Adv Mrs. N. C.Kavitha, Adv Mr. Vijay Kumar, AOR For Respondent(s) M/S. KSN & Co., AOR

Case Link : https://pdf.caselaw.in/sc/2022/01/1228/

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