SRI. HOOR PASHA vs SRI. NAGENDRA RAO
- Court
- Karnataka High Court
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 16 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
REGULAR SECOND APPEAL NO. 638 OF 2019 (SP)
BETWEEN:
SRI. HOOR PASHA S/O. K. MEHABOOB MIYA,
R/O. MOMIN MOHALLA, ANWAR COLONY,
BHADRAVATHI 577 301, SHIVAMOGGA DIST.
…APPELLANT
(BY SRI. MALLIKARJUN C BASAREDDY, ADVOCATE)
AND:
1. SRI. NAGENDRA RAO
S/O. KHANDOJI RAO,
AGED ABOUT 73 YEARS.
2. SRI. N. RAVINDRA RAO
S/O. SRI. NAGENDRA RAO,
AGED ABOUT 39 YEARS.
3. SRI. N SREEDHARA
S/O. SRI. NAGENDRA RAO,
AGED ABOUT 32 YEARS.
ALL ARE R/O. BESIDE SHANIMAHATMA TEMLE,
BHOOTHANAGUDI, OLD TOWN, BHADRAVATHI 577301.
SHIMOGGA DISTRICT.
…RESPONDENTS
(BY SRI. S.V. PRAKASH, ADVOCATE)
Digitally
signed by
VANDANA S
Location:
High Court
of Karnataka
THIS RSA IS FILED UNDER SEC.100 OF CPC AGAINST THE
JUDGMENT AND DECREE DATED 19.11.2018 PASSED IN
RA.NO.5016/2017 ON THE FILE OF THE IV ADDITIONAL DISTRICT AND
SESSIONS JUDGE, SHIMOGA, SITTING AT BHADRAVATHI DISMISSING
THE APPEAL AND CONFIRMING THE JUDGMENT AND DECREE DATED
27.04.2017 PASSED IN OS.NO.99/2014 ON THE FILE OF THE PRINCIPAL
SENIOR CIVIL JUDGE AND JMFC, BHADRAVATHI.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
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CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
ORAL JUDGMENT
Plaintiff is the appellant in the present appeal being
aggrieved by the impugned judgment and decree dated
27.04.2017 passed by the learned Prl. Senior Civil Judge
and JMFC at Bhadravathi (for short, the ‘trial Court’) in
O.S. No. 99/2014 of a sale agreement dated 08.06.2011
was rejected by the trial Court which granted the
alternative relief of refund of the advance amount of
Rs.2,50,000/- together with interest at 6% per annum
from the date of suit till date of realization in favour of the
appellant-plaintiff against the respondent-defendant which
was confirmed by the learned IV Addl. District and
Sessions Judge, Shimoga sitting at Bhadravathi (for short,
the ‘first appellate Court’) in R.A. No. 5016/2017 dated
19.11.2018 which dismissed the appeal filed by the
appellant-plaintiff.
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2. Learned counsel for the appellant would reiterate the
various contentions urged in the appeal and invite my
attention to the material on record including the impugned
judgment and decree passed by the trial Court and the
first appellate Court in order to contend that having come
to the conclusion that the appellant-plaintiff had proved
execution of the sale agreement dated 08.06.2011
executed by the respondent in favour of the appellant and
payment of advance sale consideration of Rs.2,50,000/-
by the appellant in favour of the respondent, both the
Courts committed an error in rejecting the relief of specific
performance by incorrectly holding that the plaintiff was
not ready and willing to perform his part of the contract.
3. It is also submitted that both the Courts committed
an error of law in coming to the conclusion that the
plaintiff was not entitled to the discretionary and equitable
relief of specific performance as contemplated under
Section 20 of the Specific Relief Act (for short, the ‘Act’). It
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is further contended that having regard to the specific
obligation cast upon the respondent-defendant in the sale
agreement at Exhibit P1 which did not stipulate any time
for completion of the sale transaction and on the other
hand, the respondent-defendant obtained a survey sketch
and other records prior to execution of the sale deed in
favour of the appellant-plaintiff, both the Courts
committed an error in holding that the plaintiff was not
entitled to the relief of specific performance. It is therefore
submitted that the impugned judgment and decree passed
by the trial Court and first appellate Court deserve to be
set aside and the suit of the plaintiff for relief of specific
performance deserves to be decreed in his favour against
the respondent-defendant.
4. Per contra, learned counsel for the respondent-
defendant would support the impugned judgment and
decree and submit that having regard to the material on
record which indicated that there was complete / total
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inaction and silence on the part of the appellant-plaintiff in
not taking any steps pursuant to the sale agreement dated
08.06.2011 till he issued a legal notice only after a period
of almost 2 (two) years coupled with the fact that the
appellant-plaintiff had not placed any material as regards
his readiness to pay the balance sale consideration either
by way of actual funds or capacity to raise funds to pay
the balance sale consideration. Both the Courts were fully
justified in coming to the correct conclusion that the
appellant plaintiff had not complied with the mandatory
requirements contained in Section 16(c) of the Act which
mandates that the plaintiff should be continuously ready
and willing to perform his part of the contract from the
date of the agreement till the date of the execution and
the judgment and decree passed by the trial Court and
first appellate Court do not warrant interference by this
Court in the present appeal especially when both the
Courts have granted refund of the advance amount paid
by the defendant together with interest at 6% which had
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already been deposited by the respondent-defendant
before the trial Court on 03.01.2024 in a sum of
Rs.3,83,750/-. It is therefore submitted that there is no
merit in the appeal and the same is liable to be dismissed.
5. A perusal of the material on record will indicate that
the appellant-plaintiff instituted the aforesaid suit inter alia
contending that the respondent-defendant executed a sale
agreement dated 08.06.2011 agreeing to sell the suit
schedule property in favour of the appellant-plaintiff for a
total sale consideration of Rs.7,50,000/- and received a
sum of Rs.2,50,000/- by way of advance and part of the
sale consideration from the appellant-plaintiff. It was also
contended that no time was stipulated for completion of
the sale transaction and the respondent-defendant needed
to obtain a survey sketch and other records and intimate
the plaintiff, who would thereafter come forward and pay
the balance sale consideration and get the sale deed
executed in his favour.
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6. It was further contended that since the respondent-
defendant did not come forward to perform his part of the
contract, the plaintiff got issued legal notices dated
26.07.2013 and 09.10.2014 calling upon the respondent
to execute the registered sale deed which was not
complied with by the respondent as a result of which the
plaintiff instituted the aforesaid suit against the
respondent-defendant. The respondent-defendant filed the
written statement disputing and denying the various
allegations and claim made by the appellant-plaintiff and
took up a specific contention that the transaction between
the parties was a loan transaction and not a sale
transaction and that the appellant was guilty of fraud and
misrepresentation in obtaining the sale agreement dated
08.06.2011 and accordingly the respondent-defendant
disputed and denied the various allegations and claims
made by the plaintiff including readiness and willingness,
limitation etc. and sought for dismissal of the suit.
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7. Based on the aforesaid pleadings the trial Court
framed the following issues:
1. Whether the plaintiff proves that the defendants
have executed the registered sale agreement dated
8.6.2011 to sell the suit property for Rs.7,50,000/- and
received advance amount of Rs.2,50,000/-?
2. Whether the plaintiff proves his readiness and
willingness to perform the contract?
3. Whether the defendants prove that, the suit is
barred by limitation?
4. Whether the plaintiff is entitled to the relief of
specific performance of contract?
5. Whether the plaintiff is entitled to the alternative
relief of recovery of Rs.2,50,000/- with interest?
6. What order or decree?
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8. Plaintiff examined himself as PW1, two witnesses as
PW2 and 3 and documents vide Exs.P1 to P14. Defendant
no. 1 got examined as DW1, two witnesses DW2 and 3
and documentary evidence as per Exs.D1 to D3.
9. After hearing the parties, the trial Court answered
issue No.1 in favour of the appellant-plaintiff by coming to
the conclusion that he had proved that the defendants had
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executed a sale agreement at Exhibit P1 in favour of the
plaintiff and the plaintiff had paid an advance sale
consideration of Rs.2,50,000/- in favour of the defendants.
However, issues No.2 and 4 were answered by the trial
Court against the appellant-plaintiff by coming to the
conclusion that the plaintiff was not ready and willing to
perform his part of the contract and that in the light of
Section 20 of the Act, the evidence on record discloses the
suit property was valued much more than Rs.7,50,000/-
as on the date of the agreement and consequently the
respondent-defendant would be put to more comparative
hardship within the meaning of Section 20 of the Act as a
result of which the appellant-plaintiff would not be entitled
to the discretionary and equitable relief of specific
performance. However, the trial Court granted the
alternative relief/prayer of refund of the advance amount
of Rs.2,50,000/- together with interest at 6% per annum
and partially decreed the suit of the appellant-plaintiff by
holding as under:
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14. Issue No.1: - It is the specific case of the plaintiff that
defendants have executed the registered sale agreement dated
8.6.2011 to sell the suit property for Rs.7,50,000/- and
received advance amount of Rs.2,50,000/-. According to the
defendants, defendant No.1 was in urgent need of money. As
such he approached the brother of plaintiff Azeez Mehedi and
obtained loan of Rs.50,000/- by executing certain documents
in favour of Azeez Mehedi as per the say of Azeez Mehedi.
15. Further case of the defendants is that they are innocent
and they put their signatures in the documents wherever as
directed by Azeez Mehedi and plaintiff. That the defendants
never intended to sell the suit schedule property in favour of
anyone and they came to know of execution of the alleged sale
agreement only after receipt of legal notice by the plaintiff and
Azeez Mehedi. Therefore defendants have termed the sale
agreement as created, concocted and fraudulent document.
16. Plaintiff to prove the due execution of sale agreement
got examined himself as PW-1 by filing an affidavit in lieu of
his examination in chief. PW-1 has produced the registered
sale agreement dated 8.6.2011 at Ex.P.1. As per the
document, plaintiff and defendants are parties to the sale
agreement with respect to suit schedule property. Ex.P.1
discloses that defendants have agreed to sell the suit property
for Rs.7,50,000/- and on the day of execution of
the said document, defendants have received Rs.2,50,000/-
and further agreed to execute the sale deed after receiving
balance consideration of Rs.5,00,000/-. Ex.P.1 shows that
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defendants have agreed to sell the property as they are in
financial difficulties.
17. As per the evidence of the DW-1/defendant No.1, he had
obtained loan of Rs.50,000/- from plaintiff and his brother and
the DW-1 and his children were asked to go to Sub-Registrar’s
office, Bhadravathi wherein plaintiff had obtained signatures of
DW-1 and his children on 7-8 bond papers. According to the
DW-1, signatures of DW-1 and his children were obtained on
the said bond papers and Rs.50,000/- was lent to the DW-1
and defendants were not allowed to go through the contents of
the said documents.
18. Evidence of the DW-1 further goes to show that he came
to know of the execution of the alleged sale agreement only
when he received the notice. Plaintiff to prove execution of the
sale agreement has examined two other witnesses as PW-2
and PW-3. PW-2 is the scribe of Ex.P.1. He has denied that the
alleged transaction pertained to loan transaction. But PW-2
does not know the advance consideration mentioned in the
sale agreement. PW-2 was not in a position to identify
signatures of parties to the sale agreement at the time of his
evidence as he was not well since three years.
19. PW-3 deposed that defendants intended to sell the plaint
schedule property in favour of plaintiff for their urgent
necessities and financial commitments. Defendants agreed to
sell the suit property for a consideration of Rs.7,50,000/- and
defendants received Rs.2,50,000/- as advance on 8.6.2011.
PW-3 is a witness to the sale agreement along with
Mohammed Khaleel. As per the evidence of the PW-3, the sale
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agreement was written by K.S.Balasubramanyam – PW-2. That
the PW-3 has seen Khaleel Sab signing the sale agreement.
20. As per the evidence of the PW-1, K.Balasubramanyam
wrote the sale agreement and the stamp paper was brought by
the defendant No.1 in the name of plaintiff. That the defendant
No.1 instructed the scribe to write the sale agreement and the
witnesses-Khaleel Sab and Syed Sab were brought by the
defendant No.1. Suggestion put to the PW-1 shows that
defendant No.1 had approached brother of the plaintiff to lend
him a loan of Rs.50,000/- and defendant No.1 was asked to
execute a deed as a security to the loan.
21. A perusal of evidence of PW-1 and DW-1 as well as
written statement shows that defendants have executed sale
agreement in favour of the plaintiff. Because defence of the
defendants is that they had obtained loan and as a security to
the said loan they executed a document, but they were not
allowed to go through the contents of the document. DW-1 has
admitted that he had signed some bond papers. DW-1 has also
admitted that he had obtained Rs.50,000/- from brother of the
plaintiff. But as per the Ex.P.1 – registered sale agreement
defendants had received advance consideration of
Rs.2,50,000/- and agreed to execute registered sale
agreement in favour of plaintiff after receiving
balance consideration. Further there is no occasion to
disbelieve the registered sale agreement. Such being the case,
plaintiff has proved that defendants have executed sale
agreement on 8.6.2011 in favour of the plaintiff. Accordingly
issue No.1 is answered in the affirmative.
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22. Issue No.2: - It is the case of plaintiff that he has been
ready and willing to perform his part of contract. As such, he
got issued legal notices dated 26.11.2013 and 9.10.2014 to
the defendants calling upon them to come and execute the
registered sale deed in favour of plaintiff by receiving balance
consideration of Rs.5,00,000/-
23. PW-1 has produced office copy of legal notices dated
26.11.2013 and 9.10.2013 to show that, he had issued legal
notices to the defendant expressing his readiness and
willingness to perform his part of contract. As per the notices
and evidence of the PW-1 he had repeatedly requested and
demanded the defendants to execute the registered sale deed.
As per the evidence of PW-1, he had
issued notice to the defendant No.1, two years after execution
of the sale agreement to obtain 11E sketch, but plaintiff
approached the defendant No.1 and asked him to obtain 11E
sketch. Evidence of the PW-1 is that 3 or 4 months after
execution of the sale agreement he had approached the
defendant No.1 and asked him to obtain 11E
sketch. Since the defendant No.1 promised the plaintiff to
obtain the 11E sketch, the plaintiff has not issued notice to the
defendant No.1.
24. As per Ex.P.1 – sale agreement, it was executed on
8.6.2011 and defendants had agreed to execute the registered
sale deed whenever plaintiff or his legal heirs asks the
defendants to execute the sale deed. In case, defendants fail
to execute the document plaintiff can approach the Court for
the relief.
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25. In the present case as aforesaid the date of execution of
sale agreement is 8.6.2011. The date of issuance of first legal
notice is 26.7.2013. Normally a prudent man will not wait for
two years to get executed a sale deed when he had paid
advance consideration to the vendor. Though the PW-1 has
deposed that he had made personal approaches asking the
DW-1 to obtain 11E sketch, there is no proof with respect to
the same. Therefore it cannot be said that plaintiff has been
ready and willing to perform his part of contract. Hence I
answer issue No.2 in the negative.
26. Issue No.3: - As per the case of defendants, the suit is
barred by limitation. The sale agreement was executed on
8.6.2011. As per Article 54 of Limitation Act, period of
limitation for institution of a suit for specific performance is
three years from the date of execution of the sale agreement.
If no such time is fixed then the period of limitation is three
years from the day when the plaintiff gets
the knowledge that performance is denied.
27. In the case on hand, the suit was instituted on 3.12.2014.
However plaintiff got issued legal notice on 26.7.2013 and
9.10.2014 when he came to know that defendants have failed
to execute the registered sale deed. Further there is no recital
in the sale agreement fixing the time for execution of the
registered sale deed. As such, period of limitation starts to run
when the plaintiff gets the knowledge that the defendants have
denied the performance. Hence the suit is within the period of
limitation. Therefore I answer issue No.3 in the negative.
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28. Issue No.4: - The Court has discretion to grant the relief
of specific performance. Plaintiff to get the relief of specific
performance has to prove the due execution of sale agreement
and also has to prove his readiness and willingness to perform
his part of contract. In this case, though the plaintiff has
proved the due execution of the sale agreement he has not
proved his readiness and willingness to perform his part of
contract.
29. Learned counsel for the plaintiff argued that, the suit is
for the relief of specific performance of sale agreement dated
8.6.2011 executed by defendants No.1 to 3 in favour of
plaintiff with respect to suit schedule property for a sale
consideration of Rs.7,50,000/-. That the plaintiff has paid
Rs.2,50,000/- as advance consideration to the defendants on
8.6.2011. Defendants had agreed to execute
registered sale deed after receiving Rs.5,00,000/- from
plaintiff.
30. Learned counsel for plaintiff further argued that evidence
of PW-1 and PW-2 shows passing of consideration by the
plaintiff to the defendants in the presence of PW-2. That the
DW-1 in his cross-examination deposed that he has received
Rs.50,000/- from the plaintiff. That DW-2 and DW-3 are not
attesting witnesses to the sale agreement. Hence their
evidence is of no relevance.
31. Learned counsel for the plaintiff further argued that
defendants have contended that plaintiff has played fraud upon
them, but there is no pleading and proof with respect to the
fraud played upon by the plaintiff. In case, fraud was played by
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the plaintiff upon the defendants nothing prevented them from
lodging the complaint. Further if the market value was more
than Rs.75,00,000/- then Sub-Registrar might not have
accepted the document.
32. Learned counsel for the plaintiff further argued that the
defendants have breached the contract inspite of legal notices
issued by the plaintiff to them. Because defendants have not
come forward to execute the registered sale deed though the
plaintiff was ready and willing to perform his part of contract.
That the plaintiff has sufficient source of income to get the
registered sale deed. Hence plaintiff is entitled for the relief
claimed by him.
33. The learned counsel for the plaintiff has relied upon the
following decisions:
1) 2013 (1) KCCR 105 [Vishnu Vs. Abdulgani], wherein it is
held that,
“SPECIFIC RELIEF ACT, 1963 – Sections 16 to 20 –
Whether the hike in price would be a ground to deny specific
performance and order for return of the amount when the
purchaser has paid the entire sale consideration to seller and is
to obtain a registered sale deed – No, the normal rule to be
adopted in such a case is to order for specific performance of
execution of the sale deed.”
2) 2005 (4) KCCR 2553 [Aniglase Yohannan Vs. Ramlatha
and others], wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Section 16(c) – Requisite
plea regarding readiness and willingness to perform his
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part of the contract and to obtain execution and
registration of sale deed.”
3) AIR 2007 SC 1256 [P.S.Ranakrishna Reddy Vs.
M.K.Bhagyalakshmi and another], wherein it is held that,
“Specific Relief Act (47 of 1963), S.20 – Specific
Performance – Agreement to sell – Relief of specific
performance – Cannot be denied on ground that price of
immovable property is on rise ”
4) 2013 (2) KCCR 1102 [S.Kashinath Vs. Smt.Padmini
Ramnath],wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Section 16(3) –
Agreement of sale – Plaintiff had paid 90% of the sale
consideration – Defendant failed to receive the balance
and execute sale deed – Defendant took various stands
as to transaction but admitted execution of agreement –
Finding of the Trial Court as to readiness and
willingness, in favour of plaintiff and that time was not
the essence of contract – Suit was decreed – Appeal by
defendant.”
34. Learned counsel for the defendants argued that, plaintiff
by profession is a mechanic and moneylender and not an
agriculturist. There is prohibition on holding lands by certain
persons under Section 79 of Karnataka Land Reforms Act.
Plaintiff never used to cultivate agricultural lands, as such he
could not purchase lands for the purpose of cultivation.
35. Learned counsel for the defendants further argued that
defendants have no avocation and no source of income except
the suit schedule property. That the defendants have borrowed
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only Rs.50,000/- from plaintiff and not Rs.2,50,000/- as
recited in the sale agreement. Further in the sale agreement
the reason for which the property is sold should be
enumerated and explained. But in Ex.P.1,
it is mentioned that for the purpose of urgent needs and
financial difficulties, defendants are going to sell the suit
schedule property, which is not a proper reason. The said
recital itself shows that defendants never intended to sell the
suit schedule property to anybody.
36. Learned counsel for the defendants further argued that
the relief of specific performance is a discretionary relief of the
Court. The Court cannot grant the relief for mere asking by the
plaintiff. While granting the relief the Court has to consider
comparative hardship. DW-2 and DW-3 deposed with regard to
the hardship. Further plaintiff was never ready and willing to
perform his part of contract, because he got issued legal
notices two years after execution of the alleged sale
agreement. Hence plaintiff is not entitled for any relief.
37. The learned counsel for the defendants has relied upon
the following decisions:
1) 2014 (2) ICC 183 [A.G.Sheshappa and another Vs.
R.Basappa], wherein it is held that,
“Specific Relief Act, 1963, Section 12 –
Specific performance of contract – Agreement to
sell – Whether document relied upon was an
agreement of sale, agreeing to sell the suit schedule
property or a document executed as security for the
loan advanced by the plaintiff? – What was the legal
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necessity for the defendants to sell the property has not
been stated either in the agreement or in the
plaint or in the evidence of PW-1 – Agreement of
sale, would only disclose the nature of transaction
the parties had – Held, document relied upon was
not an agreement of sale, but was an agreement
executed as a security – Merely because, an
agreement of sale was registered, the Court should
not come to the conclusion that it has to be
considered as an agreement of sale – While
considering an agreement of sale, Court has to look
into the entire pith and substance of the document –
nomenclature of the document will not alone decide
the nature of the document – Suit for specific
performance of agreement dismissed.”
“Specific Relief act, 1963, Section 12 –
Specific performance of agreement to sell – Refund
of advance money – Suit dismissed – When the
plaintiff failed to prove that he had cash to advance
on alleged date, held, he was not entitled for refund
of alleged payment of money.”
2) 2016 (4) KCCR 3720 [Nagaraj Vs. Smt. Uma],
wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Sections 16(c)
and 20 – Relief of specific performance – Legal
notice issued almost one year seven months after
execution of agreement of sale – If plaintiff had paid
entire sale consideration it would have been
something different – What made him not to make
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payment of balance of consideration not
forthcoming – Plaintiff admitting filing of a suit
against him for possession of suit schedule
property – First Appellate Court justified in rejecting
relief of specific performance also on ground of
non-fulfillment of mandatory Section 16 (c) holding
that it would cause more injustice to defendant than
to plaintiff.
SPECIFIC RELIEF ACT, 1963 – Section 16 (c) –
Readiness and willingness – Readiness as
contemplated under, indicates financial capacity of
a person to have a sale deed by paying balance
consideration amount – Willingness indicates
eagerness to have sale deed at earliest – Plaintiff
who seeks equitable relief of specific performance
must not only plead, but also to prove readiness
and willingness to perform his part of contract.
SPECIFIC RELIEF ACT, 1963 – Section 20 –
Relief of specific performance – Is equitable relief –
Need not be granted just because agreement is
proved – Court can refuse equitable relief, if it
would cause hardship to defendant.”
3) 2016 (3) KCCR 1935 [R.Narayanaswamy Vs.
A.V.Narayana Swamy], wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Section 20 –
Discretion of Court – Court has to examine as to
whether it is a fit case for exercising discretion to
decree to specific performance or not.”
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4) 2014 (3) ICC 721 [Mangat Singh Vs, Rakesh Kumar Gupta
and another], wherein it is held that,
“Specific Relief Act, 1963, Section 20 –
Specific relief – Discretion – Section 20 clearly
states that jurisdiction to decree specific
performance is discretionary and the Court is not
bound to grant such relief merely because it is
lawful to do so, but the discretion of the Court
cannot be arbitrary but is to be guided by sound
and reasonable judicial principles and capable of
correction by a court of appeal.
Specific Relief Act, 1963, Sections 16(c) and 20 –
Specific performance of sale agreement –
Defendant denied execution of sale agreement and
pleaded signatures obtained as security of loan
amount – Only person who could prove contents of
and truthfulness of the document was scribe, who
has not been examined – Held, although existence
of document had been proved on record but there
was no proof of contents of the document as scribe
had not been examined – As such document
clouded with suspicious circumstances – Such a
document cannot be a ground for grant of
discretionary relief of specific performance.”
5) 2015 (3) KCCR 2179 (DB) [M.V.Prema Chandra and another
Vs. Smt.Sarojamma and others], wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Sections 16 (c)
and 20 – Suit for specific performance – Plaintiffs
proving execution of agreement – But failing to
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prove it to be an out and out agreement of sale and
also their readiness and willingness – Specific
performance of contract is an equitable relief –
hence, plaintiffs must plead and prove that they
have been ready and willing to perform their part of
contract – Under agreement defendants not
expected to do anything except to execute sale
deed soon after remaining amount is paid to them –
Also, no evidence forthcoming with regard to dates
on which demand was made – Judgment and
decree of trial Court rejecting relief of specific
performance and ordering refund of advance money
with interest upheld – Proportionate costs imposed
on defendants.”
6) 2015 (3) KCCR SN 250 (SC) [Nanjappan Vs. Ramasamy and
another], wherein it is held that,
“SPECIFIC RELIEF CT, 1963 – Section 16(c) –
Suit for specific performance – Plaintiff has to aver
and prove with satisfactory evidence that he was always
ready and willing to perform his part of
contract at all material time as mandatory required
under.
SPECIFIC RELIEF ACT, 1963 – Section 20 –
Grant of specific performance of contract – Is
discretionary – yet court is not bound to grant such
a relief merely because it is lawful to do so – But
such discretion not arbitrary, but sound and
reasonable, guided by judicial principles of law and
capable of correction by a court of appeal and
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should be properly exercised keeping in view
settled principles of law – Court to take into
consideration circumstances of each case, conduct
of parties, recitals in sale agreement and
circumstances outside contract.”
7) ILR 2015 KAR 2695 [V.P.Venkatesh Vs.
Smt.G.Padmavathi], wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Suit for
enforcement of agreement to sell – Suit filed almost
three years after the date of breach of contract. –
HELD, Plaintiff is not entitled for the relief of
specific performance – Every suit for specific
performance need not be decreed merely because it
is filed within the period of limitation by ignoring the
time-limits stipulated in the agreement. Courts will
also ‘frown’ upon suits, which are not filed
immediately after the breach/refusal. The fact that
limitation is three years does not mean a purchaser
can wait for 1 or 2 years to file a suit and obtain specific
performance. – The plaintiff ought to have instituted the
suit immediately after the breach of contract. Even the
notice calling upon the defendant to perform his part of
the contract was issued one month after the alleged
breach of contract and the suit is actually filed almost
three years after the breach of contract. This would
clearly indicate that there has been inordinate delay on
the part of the plaintiff in seeking specific performance
of contract. Hence, the fact that the defendant has paid
a substantial price under the agreement of sale would
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not absolve the plaintiff of not having moving with
expedition.”
8) 2015 (3) KCCR 2817 [V.P.Venkatesh Vs. G.Padmavathi],
wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Section 16 (c) –
Suit for specific performance of agreement of sale – Out
of sale consideration of Rs.4.5 laksh, R.4.00 was given
as a advance.”
Held, when a substantial sum of the sale price is
paid under an agreement of sale and the remaining
amount is relatively small, it should be taken that there
is readiness and willingness on the part of the plaintiff.
But inordinate delay on the part of plaintiff in filing the
suit for specific performance would not absolve the
plaintiff of not having moved with expedition. Therefore,
readiness and willingness as contemplated under the
Specific Relief Act is also with reference to the
expedition, with which the plaintiff initiated action and in
the present case on hand, his explanation that he was
made to postpone the initiation of the suit, only on
account of the request made by the defendant, is not
established by any written documents, or exchange of
notices and it is only a self-serving claim of the plaintiff,
which is sought to be canvassed. That cannot be
accepted as establishing a reason for having remained
dormant without initiating a suit for specific
performance, especially when he claims to have paid the
entire sale consideration. It is also to be kept in view
that the decrease in the value of the money and the
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interest that the money would have earned in the hands
of the defendant is not proportionate to the increase in
the value of the property. It is one other ground, on
which it should be held that the time would necessarily
be of essence of the contract and the view taken would
require to be revisited, as held by the Supreme Court, is
to be kept in view. Judgment and Decree of Trial Court
dismissing the suit was affirmed but defendant was
directed to refund advance amount with interest at 18%
p.a., within one month and in default, rate of interest to
be 24% p.a.
9) Karnataka Land Reforms Act, 1961, Section 79 (B),
wherein it is held that,
“Prohibition of holding agricultural land by certain
persons. – (1) With effect on and from the date of
commencement of the Amendment Act, except as
otherwise provided in this Act, -
(a) no person other than a person cultivating land
personally shall be entitled to hold land;”
38. I have perused the decisions. It is true that merely
because there is rise of price specific performance can not be
denied. Further to grant the relief of specific performance the
plaintiff should prove his readiness and willingness to perform
his part of contract.
39. In this case, defendants have contended that they have no
source of income except the suit schedule property. That the
plaintiff is a moneylender and does oil vending business. That
the plaintiff is not an agriculturist. As per the evidence of PW-
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1, he is an agriculturist, as well as does oil vending business.
PW-1 has produced RTC standing in the name of himself and
his brother Azeez Mehedi to show that they possess
agricultural property in their names.
40. Defendants have strongly contended that they had
obtained only the loan and executed the document as a
security to the loan. As per the evidence of PW-2, plaintiff used
to get written sale agreements from the PW-2. As per the
evidence of PW-1, admittedly selling sites by converting the
land is his business. Therefore defendants have contended that
plaintiff is involved in real estate business. Be that as it may,
apart from the suit schedule property, defendants have some
other land, which is evident as per the RTC produced before
the Court at Ex.P.2. But as argued by the learned counsel for
the defendants the market value of the suit schedule property
mentioned in Ex.P.1 is only Rs.7,50,000/-. But according to the
defendants, market value of the suit schedule property is
nearly Rs.75,00,000/-.
41. As per the evidence of PW-3, the value of properties
adjacent to the suit schedule property is not Rs.75,00,000/-,
but Rs.25,00,000/-. Such being the case, a prudent man will
not sell his property for a paltry sum. Therefore it cannot be
ruled out that the defendants have executed the document
while obtaining the loan. Therefore, if specific performance is
ordered, then defendants will be put to untold hardship. Hence
plaintiff is not entitled for the relief of specific performance of
contract. Moreover as aforesaid plaintiff has not proved that he
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is ready and willing to perform his part of contract. Therefore I
answer issue No.4 in the negative.
42. Issue No.5: - Plaintiff has claimed the alternative relief
of recovery of Rs.2,50,000/- with interest. As per Ex.P.1 – sale
agreement, defendants have received Rs.2,50,000/- from
plaintiff on 8.6.2011. According to the defendants, they never
intended to sell the suit schedule property to anyone including
the plaintiff and his brother. That the defendants were in
urgent requirement of money. As such, they borrowed
Rs.50,000/- from the plaintiff by signing some bond papers
and they never knew that they are signing the sale agreement.
43. Further contention of the defendants is that, if at all they
had executed the document it is for security towards the loan
transaction. Defendants have averred that they are ready to
repay Rs.50,000/- to plaintiff obtained by him as loan. But
there is no proof forthcoming to come to the conclusion that
defendants have availed a loan of only Rs.50,000/- from the
plaintiff. The registered sale agreement shows that defendants
had received Rs.2,50,000/- from the plaintiff on 8.6.2011.
Therefore defendants shall repay Rs.2,50,000/- to the plaintiff.
Since the said amount is with defendants from 8.6.2011 they
shall repay the said amount with nominal interest of 6% per
annum as there is no clause in the sale agreement that
defendants shall repay the amount with an interest of 18% per
annum in case defendants failed to execute the sale
agreement. Therefore plaintiff is entitled to the relief of
recovery of Rs.2,50,000/- with interest @ 6% per annum from
defendants. Hence I answer issue No.5 in the affirmative.
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44. Issue No.7: - In view of my findings and discussions as
above, I proceed to pass the following:
O R D E R
Suit of the plaintiff for the relief of specific
performance is dismissed.
Suit of the plaintiff for the alternative relief of
refund of Rs.2,50,000/- is decreed.
Defendants are directed to refund Rs.2,50,000/-
with interest @ 6% per annum from the date of suit till
date of realization to plaintiff.
Draw decree accordingly.
Parties are directed to bear their own costs.”
10. It is an undisputed fact that the decree of the trial
Court directing refund of the advance amount of
Rs.2,50,000/- was not challenged and the appellant-
plaintiff preferred an appeal to the limited extent of
challenging the judgment and decree of the trial Court
rejecting the relief of specific performance. The first
appellate Court framed the following points for
consideration:
1. Whether the plaintiff has proved that he was ready
and willing to perform his part of contract in terms of
registered sale agreement dated 08.06.2011 entering into
between him and defendants?
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2. Whether the impugned judgment and decree is
erroneous and unsustainable and calls for interference of
this Court, in view of the reasons assigned in the appeal
memo?
3. What order?
11. After hearing the parties, the first appellate Court
came to the conclusion that the trial Court had recorded
correct finding of fact that there was complete / total
inaction and silence on the part of the appellant-plaintiff in
not taking any steps to perform his part of the contract
nor was he ready and willing to perform his part of the
contract between the date of agreement, i.e. 08.06.2011
and the first legal notice dated 26.07.2013 which would
indicate that the plaintiff was not willing to perform his
part of the contract. The first appellate Court also
confirmed the finding of the trial Court that the plaintiff
having not produced any evidence to establish that he had
the requisite funds to pay the balance sale consideration
nor placed any material to show that he could generate or
had the capacity to raise the funds for payment of the
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balance sale consideration, it cannot be said that the
plaintiff was ready to perform his part of the contract and
consequently, the plaintiff having not complied with the
mandatory requirement of pleading and proving
continuous readiness and willingness from the date of the
agreement till the date of the decree, the plaintiff was not
entitled to the discretionary and equitable relief of specific
performance as contemplated under Section 20 of the Act.
12. Under these circumstances, the First Appellate Court
confirmed the Judgment and Decree of the Trial Court and
dismissed the appeal by holding as under:
13. POINT NO.1: Herein, the fact that the suit schedule
property belonged to the ownership of the defendants is not in
dispute. The plaintiff has filed suit for Specific Performance of
agreement to sell before the trial court on the ground that the
defendants for their urgent necessity and financial exigencies,
agreed to sell the suit schedule property in favour of the
plaintiff for consideration of Rs.7,50,000/ and also executed
registered sale agreement dated: 8.6.2011 in his favour by
receiving advance sale consideration of Rs.2,50,000/ and
agreed to execute the registered sale deed by getting survey
sketch and revenue records by receiving balance sale
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consideration of Rs.5,00,000/ as early as possible with clear
document. He is every ready and willing to perform his part of
contract, he called upon the defendants to deliver the
possession of the suit schedule property, though they agreed
to deliver the same from free encumbrance, they are not ready
and willing to execute the registered sale deed, they have
failed to perform their part of contract, in spite of repeated
requests and demands.
14. The defendants have denied all these facts and
contended that plaintiff is carrying a real estate business and
money lending business along with his brother Azeez Mehadi,
the defendant No.1 approached said Azeez Mehadi for loan of
Rs.50,000/ as he was in urgent need of money, at that time,
Azeez Mehadi insisted him to execute document for the said
loan transaction and insisted to bring his son, as he was in
need of money, he agreed to execute the documents as
demanded and Azeez Mehadi told him that he ill prepare all the
papers and asked them to come near the Taluka Office,
Bhadravathi, accordingly, they went there, at that time and
place fixed by Azeez Mehadi, where Azeez Mehadi, Tippu,
plaintiff and others were present, accordingly, Azeez Mehadi
and others took them to the Sub Registrar Office, Bhadravathi
and obtained their signature on all the documents without
allowing them to go through the contents of the documents, as
these defendants are very innocents, believing Azeez Mehadi
and plaintiff, put their signature at the place in the document
shown by said Azeez Mehadi and plaintiff and received sum of
Rs.50,000/ and when they received notice from the plaintiff
and Azeez Mehadi, they came to know that they have played
fraud on them and fraudulently obtained the document and
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coming to know that they have created and concocted three
sale agreements and fraudulently obtained it.
15. The trial court had answered issue No.1 in the
affirmative holding that the defendants have executed
registered sale agreement on 8.6.2011 agreeing to sell the suit
schedule property for a sum of Rs.7,50,000/ and received
advance sale consideration of Rs.2,50,000/ and agreed to
execute sale deed by receiving balance sale consideration.
16. During the course of argument of learned Advocate for
the defendants argued on par with the contention taken by
them before the trial court. But, admittedly, the defendants
have hot challenged this issue No.1 holding that they have
executed suit referred sale agreement on 8.6.2011 in favour of
the plaintiff agreeing to sell the suit schedule property in
favour of the plaintiff for Rs.7,50,000/. When such being the
fact, any amount of argument on par with the contentions
taken by the defendants before the trial court cannot be
considered. This court has to examine whether the plaintiff was
ready and willing to perform his part of contract, as this issue
before the trial court was negatived by the trial court.
17. At this stage, before coming into the evidence of the
parties and observation of the trial court, it is necessary to look
into the disputed sale agreement dated:8.6.2011. Ex.P.1 is the
suit referred original sale agreement dated:8.6.2011, where at
page No.2, para No.1, it is recited that:”
£ÁªÀÅ £ÀªÀÄä C¤ªÁAiÀÄð ªÀ±Ávï
DyðPÀ vÉÆAzÀgÉUÀ½AzÀ ºÀtzÀ CUÀvÀå«gÀĪÀÅzÀjAzÀ F ¢£À £ÀªÀÄUÉ K¼ÀÄ ®PÀëzÀ LªÀvÀÄÛ
¸Á«gÀ gÀÆ¥Á¬Ä(7,50,000/-) UÀ½UÉ ±ÀÄzÀÝ PÀæAiÀÄPÉÌ PÉÆqÀ¯ÉƦà PÀæAiÀÄ ºÀtzÀ ¥ÉÊQ
ªÀÄÄAUÀqÀªÁV JgÀqÀÄ ®PÀëzÀ LªÀvÀÄÛ ¸Á«gÀ gÀÆ¥Á¬Ä (2,50,000/-) UÀ¼À£ÀÄß £ÀUÀzÁV F
¢£À PɼÀPÀAqÀ ¸ÁQëUÀ¼À ªÉÆvÀÛ ¤«ÄäAzÀ ¥ÀqÉzÀÄPÉÆArgÀÄvÉÛêÉ. ¨ÁQAiÀiÁzÀ PÀæAiÀÄzÀ ºÀt LzÀÄ
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®PÀë gÀÆ¥Á¬Ä (5,00,000/-) UÀ¼À£ÀÄß ªÀÄÄAzÉ £ÀªÀÄUÉ ¥ÁªÀw ªÀiÁrzÁUÀ DUÉå PÀæAiÀÄPÉÌ
vÉUÉzÀÄPÉƼÀÄîwÛgÀĪÀ ¤ªÀÄä RZÀÄðUÀ¼À ªÀÄÆ®PÀ PÀæAiÀÄ £ÉÆAzÀt ªÀiÁr¹PÉÆqÀÄvÉÛêÉ.”
Nowhere the time is fixed for execution of the sale deed.
According to this document, before execution of the sale deed,
the defendants were required to clear loan if any due on the
suit property and also get ready with all the documents
including the survey sketch at their cost.
18. In para No.3 of the plaint the plaintiff has stated
that he called upon the defendants to deliver the possession of
the suit schedule property to him free from all encumbrance
and he was ready and willing to perform his part of contract,
he repeatedly requested them, even by issuing legal notice
dated: 26.7.2013 and 9.10.2014, in spite of that, the
defendants have failed to execute the sale deed in terms of the
suit referred sale agreement.
19. Ex.P.3 is the original notice dated: 26.7.2013 got
issued by the plaintiff through Advocate to the defendants,
which reveals that he called upon the defendants to execute
the sale deed saying that he is all along ready and willing to
perform his part of contract. For which, the defendants have
issued reply on 12.8.2013 as per Ex.P.5 saying that they never
agreed to sell the suit schedule property as contended in the
notice and they have not received any amount as sale
consideration or advance sale consideration amount and as the
plaintiff is doing money lending business along with his brother
Azeez Mehadi, taking undue advantage of faith and friendship
of this defendants with them, they have created documents
and there was no transaction as alleged in the notice.
20. Admittedly, the plaintiff has not taken any action
soon after the receipt of this reply, wherein, the defendants
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have denied the execution of the sale agreement
dated:8.6.2011 and also receipt of advance sale consideration
amount. He again issued a notice on 9.10.2014 calling upon
the defendants to execute registered sale deed in terms of the
suit referred sale agreement dated: 8.6.2011. For that, these
defendants have issued reply on 17.10.2014 denying the entire
transaction and repeated their contention in the written
statement. This suit is filed on 3.12.2014. If really, the plaintiff
was ready and willing to perform his part of contract, he would
have taken action against the defendants immediately after the
receipt of reply notice as per Ex.P.5 on 12.8.2013 to notice
dated: 26.7.2013 as per Ex.P.3. Why he kept quite, has not
been explained anywhere. He issued notice as per Ex.P.4 after
the expiry of 1 year 7 months and this suit is filed after one
year 9 months. This itself is sufficient to say that he was not
ready and willing to perform his part of contract. Therefore, I
answer this point in the negative.
21. POINT NO.2: It is the argument of the learned Advocate
for the plaintiff and also the grounds of this appeal memo that
when the trial court has held issue No.1 in the affirmative in
favour of the plaintiff, it ought to have held this issue No.2 in
favour of the plaintiff and it should have decreed the suit for
Specific Performance of Contract directing the defendants to
execute registered sale deed in his favour, in stead of granting
alternative relief of refund of earnest money.
22. When the plaintiff has failed to prove that he was ready
and willing to perform his part of contract, the question of
granting Specific Performance of agreement Ex.P.1 does not
arise. Even if for the moment it is assumed that the plaintiff
has proved that he was ready and willing to perform his part of
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contract, the court is not bound to grant the relief of Specific
Performance of Contract, it is a discretionary power of the
court as per Sec.20 of the Specific Relief Act.
23. It is the case of the defendants that this is the only
property available for their livelihood, they did not have any
other property, entire family depending upon the income of the
said property and they have taken contention that suit
schedule property is situated nearby the industrial area,
market value of the said property is more than Rs.75,00,000/
per acre, but sale consideration is shown as Rs.7,50,000/,
which is meager, so sale agreement has been created with an
intention to cheat them and they have further contended that
the plaintiff is not agriculturist and doing money lending
business, he cannot acquire suit schedule property.
24. It is the argument of the learned Advocate for the
plaintiff that defendants have failed to prove that valuation of
the suit property was more than Rs.7,50,000/ as on the date
of sale agreement and by playing fraud, sale agreement was
got executed by this plaintiff and there was a money
transaction between one Azeez Mehadi, the brother of the
plaintiff and defendants and he had borrowed loan of
Rs.50,000/ from Azeez Mehadi , as insisted by Azeez Mehadi,
they executed said document, but, fraudulently it was
converted into sale agreement, on the other hand, the trial
court has held that the plaintiff has proved the sale agreement,
when such being the fact, the plaintiff is entitled for the relief
of Specific Performance of Contract and whether the
defendants are having any other property except the suit
schedule property or not is not the criteria, when it is proved
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that the defendants have agreed to sell the suit schedule
property for their financial exigencies.
25. Per contra, the learned Advocate for the defendants
argued that it is proved that plaintiff and his brother Azeez
Mehadi are indulging in money lending business and whenever
they lend a money, they used to obtain documents as security
and by encashing the innocence of the debtors, they have
converted those documents into sale agreement. Herein, three
sale agreements were created by the plaintiff, his brother
Azeez Mehadi and Tippu and these defendants have not
executed any sale agreement to sell the suit schedule property
in favour of the plaintiff.
26. Further, it is the argument of the learned advocate for
the defendants that the recital in Ex.P.1 itself shows that the
defendants have never intended to sell the suit schedule
property to anybody, but for the purpose of urgent needs and
financial crisis, they borrowed the loan and executed the loan
documents.
27. As per the recital in Ex.P.1, as discussed above in point
No.1, it is very clear that due to the financial crisis and
exigencies, they have borrowed loan. If really, they have
agreed to sell the property for their financial crisis, they would
have demanded entire sale consideration at a time, they would
not receive only Rs.2,50,000/, which is even not 50% of the
total sale consideration amount and they would not have given
time to execute the sale deed as and when called by the
plaintiff as recited in Ex.P.1. This itself shows that as they were
in need of money, they borrowed loan and as a security they
might have executed suit referred sale agreement. However,
as discussed above, the defendants have not challenged the
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finding of the trial court on issue No.1. Hence, I do not want to
discuss much about this document as to whether it is a sale
agreement to sell the suit schedule property or security
document for loan.
28. In the course of cross-examination PW.1 has denied that
defendants have no other property for their livelihood and he
admitted that his occupation is purchasing the property and
selling the sites by converting those lands into sites. Further,
in the course of cross-examination PW.3 voluntarily deposed
that market value of the land situated nearby the suit schedule
property is about Rs.25,00,000/- per acre, though he denied
that it was Rs.75,00,000/ per acre. So, it proves that as on the
date of suit referred sale agreement, the market value of the
suit property was more than Rs.7,50,000/-.
29. In the course of cross-examination DW.1 deposed that
he was working as mason in C.M.C., Bhadravathi for about 30
years and in the year 2000, he retired. He denied that he was
working as a Bill Collector as on the date of his retirement. He
denied that there was no approach road to the suit property
and also there was no irrigation facility to the suit schedule
property and there was obstruction from the nearby land
owners to enter the suit schedule property, therefore, he could
not cultivate the suit schedule property, hence, he had agreed
to sell the same. This cross-examination falsifies the recital in
Ex.P.1 as discussed above in point No.1 that for financial
exigencies, they agreed to sell the property. Of course he
admitted that for the first time he is saying that his three
families are depending upon income of suit schedule property.
When it was suggested to him that as the value of the property
has been accelerated, he is objecting to sell the property as
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per the sale agreement, he deposed that his 3 families are
depending upon the income of this property for their livelihood.
Nothing has been elicited from the mouth of defendant No.1 to
say that he owned properties other than the suit schedule
property. So it proves that except this property, the
defendants do not have any property. Nothing has been
elicited from the mouth of this witness to say that they are
having income for their livelihood by some other mode or
manner. The fact that he was a retired CMC employee as on
the date of Ex.P.1 has not been denied in his cross-
examination. Therefore, it proved that except this property,
the defendants do not have property for their livelihood.
30. It is suggested to DW.1 that the plaintiff had invested
the amount pertaining to his business for purchase of the suit
property , hence he could not invest the said amount to his
automobile business, because of that, he suffered loss, but he
denied the said fact. No document has been produced by the
plaintiff to show that he is running automobile business or any
other business. In the cross-examination as discussed above,
PW.1 admitted that he is doing real estate business. So, it
falsifies that by investing money to the suit property, he could
not invest the same to his business and suffered loss. If really,
he has suffered any loss, he would not have waited to take
steps for performance of his part of contract till filing the suit
i.e, in the month of December 2014. When he admitted that he
is doing real estate business, no hardship would be caused to
him if the specific performance of Ex.P.1 is not granted.
Further, he has not paid major amount of the sale
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consideration. So, the question of suffering loss by him, does
not arise.
31. It is the argument of the learned Advocate for the
defendants that the defendants have borrowed only Rs.50,000/
that too from the brother of the plaintiff Azeez Mehadi, hence,
the plaintiff is not entitled for refund of Rs.2,50,000/ and even
there should not be earnest money, it is only a loan amount
borrowed from one Azeez Mehadi . As I already discussed
above, the defendants have not challenged the issue No.1
holding that they have executed Ex.P.1 agreeing to sell the suit
schedule property for Rs.7,50,000/- and received advance sale
consideration of Rs.2,50,000/-. Further more in reply as per
Ex.P.4 the defendants nowhere stated that they have borrowed
Rs.50,000/ from the brother of the plaintiff, but they have
denied the execution of sale agreement stating that by taking
undue advantage of their innocence and also their trust with
the plaintiff they obtained their signature on the document and
later converted the same into sale agreement. When such
being the fact, the argument of the learned Advocate for the
defendants that they are only due to pay Rs.50,000/ cannot be
accepted.
32. The learned advocate for the plaintiff with respect to the
argument that the trial court ought to have held issue No.2 in
favour of plaintiff, but granted alternative relief of refund of
earnest money, has relied upon following decisions:
1. 2013(1) KCCR 105 (Vishnu Vs. Abdulgani),
wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Sections 16 to 20 –
whether the hike in price would be aground to deny
specific performance and order for return of the amount
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when the purchaser has paid the entire sale
consideration to seller and is to obtain a registered sale
deed – No, the normal rule to be adopted in such a case
is to order for specific performance of execution of the
sale deed.”
2. 2005(4) KCCR 2553 (Aniglase Yohannan V/s Ramlatha
and others), wherein it is held that,
“SPECIFIC RELIEF ACT, 1963 – Sections 16(c) –
Requisite plea regarding readiness and willingness to
perform his part of the contract and to obtain execution
and registration of sale deed.”
3. AIR 2007 SC 1256 (P.S.Ranakrishna Reddy V/s M.K.
Bhagyalakshmi and another, wherein it is held that,
“SPECIFIC RELIEF ACT (47 of 1963), S.20 – Specific
Performance – Agreement to sell – Relief of specific
performance – Cannot be denied on ground the price of
immovable property is on rise.”
4. 2013(2) KCCR 1102 (S. Kashinatha V/s Smt.Padmini
Ramnath), wherein it is held that,
“SPECIFIC FELIEF ACT, 1963 – Sections 16(3) –
Agreement of sale – Plaintiff had paid 90% of the sale
consideration – Defendant failed to receive the balance
and execute sale deed – Defendant took various stands
as to transaction but admitted execution of agreement –
Finding of the Trial Court as to readiness and
willingness, in favour of plaintiff and that time was not
the essence of contract – Suit was decreed – Appeal by
defendant.”
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33. I have gone through the decisions relied upon by the
learned Advocate for the plaintiff, these decisions no way help
the plaintiff, as he failed to prove his ready and willingness to
perform his part of contract and the hardship that will be
caused to him in case specific performance of Ex.P.1 is not
granted.
34. I have gone through the judgment of the trial court,
where, I do not find any reason to interfere with. Of course
different views are possible while appreciating the facts and
evidence, but that is not a ground to interfere with. The
learned trial court has properly appreciated the facts and
evidence and settled principles of law and rightly come to the
conclusion holding that the plaintiff is not entitled to the relief
of Specific Performance of Agreement. Hence, I answer this
point in the negative.
35. POINT NO.3: In view of the aforesaid discussion, I
proceed to pass the following:
ORDER
The appeal is dismissed. No order as to costs.
The judgement and decree passed by the trial
court in OS.No.99/2014 dated:27.04.2017 is hereby
confirmed.
Send back the L.C.R. to the trial court forthwith,
along with copy of this judgement.”
13. A perusal of the material on record including the
judgment and decree of the trial Court and the first
appellate Court will indicate that except producing the sale
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agreement at Exhibit P1, the legal notices and the reply
notices at P3 to P6 respectively, the plaintiff had not
produced any evidence to show that he was ready and
willing to perform his part of the contract; it is an
undisputed fact as borne out from the material on record
that during the period from the date of the agreement i.e.
08.06.2011 till the plaintiff issued the first legal notice on
26.07.2013, there was complete / total inaction / silence
on the part of the plaintiff to perform his part of the
contract. Further except producing RTC's, legal notices,
sale agreement, etc. there is absolutely no material, much
less any iota of evidence produced by the plaintiff that he
possessed the requisite funds to pay the balance sale
consideration or the capacity to raise funds to pay the
balance sale consideration for the purpose of completing
the sale transaction.
14. It is trite law that the statutory requirement of
Section 16(c) of the Act mandates that the plaintiff has to
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be continuously ready and willing to perform his part of
the contract from the date of the agreement till the date of
the decree as held by the Apex Court in various Judgments
including the recent Judgment in the case of Mohd
Khaleel (D) through LRs. & Ors. versus Jayamma
reported in 2026 INSC 651 wherein it is held as under:
28. The only question that arises for our consideration is —
whether the High Court was correct in concluding that the
appellant/plaintiff failed to establish his readiness and
willingness to perform his obligations under the contract and
whether the delayed filing of the suit for specific performance
undermines such readiness and willingness.
The Statutory mandate of ‘readiness and willingness’ and its
continuing nature
29. The relief of specific performance is one based on equity
for enforcing contractual obligations undertaken by the parties.
Section 16(c) of the Specific Relief Act, 1963 (as it stood prior
to the amendment dated 01.10.2018) required the person
seeking specific performance to specifically aver and prove his
continuous readiness and willingness to perform his
obligations. A failure to satisfy these requirements would
ultimately make him disentitled for the relief of specific
performance.
30. The term ‘readiness’ refers to the financial capacity, and
the term ‘willingness’ reflects the conduct and intention of the
party seeking the relief to perform the contract. Thus, both
these conditions cumulatively have to be seen for making out a
case of specific performance.
31. The principles governing readiness and willingness have
been well settled through a long line of decisions of this Court.
In the case of N.P. Thirugnanam (Dead) by LRs. vs. Dr. R.
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Jagan Mohan Rao and Others , this Court held that
continuous readiness and willingness to perform the part of the
contract is a condition precedent to grant the relief of specific
performance. This Court held thus:
“5. It is settled law that remedy for specific performance
is an equitable remedy and is in the discretion of the
court, which discretion requires to be exercised
according to settled principles of law and not arbitrarily
as adumbrated under Section 20 of the Specific Relief
Act, 1963 (for short “the Act”). Under Section 20 , the
court is not bound to grant the relief just because there
was a valid agreement of sale. Section 16(c) of the Act
envisages that 3 (1995) 5 SCC 115 plaintiff must plead
and prove that he had performed or has always been
ready and willing to perform the essential terms of the
contract which are to be performed by him, other than
those terms the performance of which has been
prevented or waived by the defendant. The continuous
readiness and willingness on the part of the plaintiff is a
condition precedent to grant the relief of specific
performance. This circumstance is material and relevant
and is required to be considered by the court while
granting or refusing to grant the relief. If the plaintiff
fails to either aver or prove the same, he must fail. To
adjudge whether the plaintiff is ready and willing to
perform his part of the contract, the court must take into
consideration the conduct of the plaintiff prior and
subsequent to the filing of the suit along with other
attending circumstances. The amount of consideration
which he has to pay to the defendant must of necessity
be proved to be available. Right from the date of the
execution till date of the decree he must prove that he is
ready and has always been willing to perform his part of
the contract.
As stated, the factum of his readiness and willingness to
perform his part of the contract is to be adjudged with
reference to the conduct of the party and the attending
circumstances. The court may infer from the facts and
circumstances whether the plaintiff was ready and was always
ready and willing to perform his part of the contract."
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32. This Court in the case of His Holiness Acharya Swami
Ganesh Dassji vs. Sita Ram Thapar held as follows:
“2. There is a distinction between readiness to perform
the contract and willingness to perform the contract. By
readiness may be meant the capacity of the plaintiff to
perform the contract which includes his financial position
to pay the purchase price. For determining his
willingness to perform his part of the contract, the
conduct has to be properly scrutinised. There is no
documentary proof that the plaintiff had ever funds to
pay the balance of consideration. Assuming that he had
the funds, he has to prove his willingness to perform his
part of the contract. According to the terms of the
agreement, the plaintiff was to supply the draft sale
deed to the defendant within 7 days of the execution of
the agreement, i.e., by 27-2-1975. The draft sale deed
was not returned after being duly approved by the
petitioner. The factum of readiness and willingness to
perform 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 facts of this case would amply
demonstrate that the petitioner/plaintiff was not ready
nor had the capacity to perform his part of the contract
as he had no financial capacity to pay the consideration
in cash as 4 (1996) 4 SCC 526 contracted and intended
to bide for the time which disentitles him as time is of
the essence of the contract.”
33. In Umabai and Another vs. Nilkanth Dhondiba Chavan
(Dead) by LRs . and Another5, this Court held that a finding as
to whether the plaintiffs were all along and still ready and
willing to perform their part of the contract, was a mandatory
requirement under Section 16(c) of the Specific Relief Act.
Thus, to examine the readiness and willingness, the Court will
have to take into account the entirety of the pleadings and also
the evidence brought on record.
34. Further in the case of Man Kaur (Dead) by LRs. vs. Hartar
Singh Sangha6, this Court held as under:
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“40. ….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 the terms the
performance of which has been prevented or waived by
the defendant) is barred from claiming specific
performance. Therefore, even assuming that the
defendant had committed breach, if the plaintiff fails to
aver in the plaint or prove that he was always ready and
willing to perform the essential terms of contract which
are required to be performed by him (other than the
terms the performance of which has been prevented or
waived by the plaintiff), there is a bar to specific
performance in his favour. Therefore, the assumption of
the respondent that readiness and willingness on the
part of the plaintiff is something which need not be
proved, if the plaintiff is able to establish that the
defendant refused to execute the sale deed and thereby
committed breach, is not correct. Let us give an
example. Take a case where there is a contract for sale
for a consideration of Rs. 10 lakhs and earnest money of
Rs. 1 lakh was paid and the vendor wrongly refuses to
execute the sale deed unless the purchaser is ready to
pay Rs. 15 lakhs. In such a case there is a clear breach
by the defendant. But in that case , if the plaintiff did not
have the balance Rs. 9 lakhs (and the money required
for stamp duty and registration) or the capacity to
arrange and pay such money, when the contract had to
be performed, the plaintiff will not be entitled to specific
performance, even if he proves breach by the defendant,
as he was not “ready and willing” to perform his
obligations.”
35. Coming to the case before us, it was argued on behalf of
the appellants that they possessed a sum of Rs. 2,80,000/- at
the relevant period, through four FDRs and that such
availability of funds established their readiness and willingness
to perform their part of the contract. However, looking at the
dates on these FDRs, it can be seen that these four FDRs are
dated 04.10.1999, 22.11.1999, 03.04.2001 and 23.08.2001,
all of which were created after several years of the institution
of the suit on 20.12.1993. Therefore, these FDRs cannot be
said to establish appellants’ financial readiness during the
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relevant period, namely from the date of the agreement till the
filing of the suit.
36. Though it was not necessary for the appellants to
physically deposit the consideration amount before the Court,
they must nevertheless have to place reliable and acceptable
evidence on record to show that they possessed sufficient
funds to complete the transaction at the relevant time.
37. In the present case, there is no material whatsoever to
show that the appellant/plaintiff had the balance sale
consideration available either at the time of execution of the
agreement, within the stipulated period of four months for
performance of the contract, or even at the time of filing of the
suit in the year 1993. Thus, in our view, the High Court has
rightly observed that the availability of funds must be proved
with reference to the relevant point of time and not by relying
upon financial documents generated long after the filing of the
suit.
38. Further, on the issue of obtaining permission under ULCRA,
it is clear from the record that the permission was to be
obtained by both the parties. Even testimony of PW-1, son of
the appellant/plaintiff makes it evident that the
appellant/plaintiff did not furnish the necessary affidavit or
requisite forms for obtaining such clearance. The
appellant/plaintiff instead remained passive and waited for the
respondent/defendant to take steps. Such conduct clearly
establishes that the appellant/plaintiff failed to prove his
continuous readiness and willingness.
The impact of unexplained delay on claiming an equitable relief
39. Now, let us examine the conduct of the appellant/plaintiff
on the aspect of approaching the Court for relief of specific
performance at a belated stage.
40. It is settled that for claiming an equitable relief such as
that of specific performance, the conduct of the party claiming
it must be beyond reproach. This includes that the plaintiff
approaches the Court on time, which does not merely mean
within the period of limitation itself but also promptly with
diligence and equitability.
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41. This Court in Rajesh Kumar vs. Anand Kumar and Others7
speaking through one of us (Prashant Kumar Mishra, J.) while
denying the relief of specific performance on account of long
delay in filing the relief of specific performance held as under:
“23. The effect of filing a suit for specific performance
after long delay, may be at the fag end of period of
limitation fell for consideration before this Court in K.S.
Vidyanadam v. Vairavan [K.S.Vidyanadam v. Vairavan,
(1997) 3 SCC 1] wherein this Court held thus in para
10: (SCC p. 7) “
10. It has been consistently held by the courts in
India, following certain early English decisions,
that in the case of agreement of sale relating to
immovable property, time is not of the essence of
the 7 (2024) 13 SCC 80 contract unless
specifically provided to that effect. The period of
limitation prescribed by the Limitation Act for filing
a suit is three years. From these two
circumstances, it does not follow that any and
every suit for specific performance of the
agreement (which does not provide specifically
that time is of the essence of the contract) should
be decreed provided it is filed within the period of
limitation notwithstanding the time-limits
stipulated in the agreement for doing one or the
other thing by one or the other party. That would
amount to saying that the time-limits prescribed
by the parties in the agreement have no
significance or value and that they mean nothing.
Would it be reasonable to say that because time is
not made the essence of the contract, the time-
limit(s) specified in the agreement have no
relevance and can be ignored with impunity? It
would also mean denying the discretion vested in
the court by both Sections 10 and 20. As held by
a Constitution Bench of this Court in Chand Rani
v. Kamal Rani [Chand Rani v. Kamal Rani, (1993)
1 SCC 519] : (SCC p. 528, para 25)….”
24. In Azhar Sultana v. B. Rajamani [Azhar Sultana v. B.
Rajamani, (2009) 17 SCC 27 : (2011) 1 SCC (Civ) 761] , this
Court held thus in para 28: (SCC p. 35)
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“28. … The court, keeping in view the fact that it
exercises a discretionary jurisdiction, would be entitled
to take into consideration as to whether the suit had
been filed within a reasonable time. What would be a
reasonable time would, however, depend upon the facts
and circumstances of each case. No hard-and-fast law
can be laid down therefor. The conduct of the parties in
this behalf would also assume significance.”
25. In Saradamani Kandappan v. S. Rajalakshmi [Saradamani
Kandappan v. S. Rajalakshmi (2011) 12 SCC 18 : (2012) 2
SCC (Civ) 104], this Court held that every suit for specific
performance need not be decreed merely because it is filed
within the period of limitation by ignoring time-limits stipulated
in the agreement. The courts will also frown upon suits which
are not filed immediately after the breach/refusal. The fact that
limitation is three years does not mean that a purchaser can
wait for one or two years to file a suit and obtain specific
performance.
26. In Atma Ram v. Charanjit Singh [Atma Ram v. Charanjit
Singh, (2020) 3 SCC 311 : (2020) 2 SCC (Civ) 107] , this
Court has observed in para 9 thus: (SCC p. 316)
“9. … No explanation was forthcoming from the
petitioner for the long delay of three years, in filing the
suit (on 13-10-1999) after issuing a legal notice on 12-
11-1996. The conduct of a plaintiff is very crucial in a
suit for specific performance. A person who issues a
legal notice on 12-11-1996 claiming readiness and
willingness, but who institutes a suit only on 13-10-1999
and that too only with a prayer for a mandatory
injunction carrying a fixed court fee relatable only to the
said relief, will not be entitled to the discretionary relief
of specific performance.”
42. Coming to the facts of the present case, it is important
to note that the first legal notice was issued on 15.4.1991 by
the appellant/plaintiff, after which the respondent/defendant
gave a categorical refusal to effectuate her obligations under
the agreement vide reply dated 26.04.1991 as the
appellant/plaintiff failed to take necessary permission under
ULCRA prior to the registration of the sale deed; the time
stipulated for completion of the sale transaction had also
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expired; and the appellant/plaintiff failed to tender the balance
sale consideration within the stipulated time or initiate prompt
legal proceedings. In fact, the appellant/plaintiff chose to file
the suit for specific performance after two years and nine
months i.e., on 20.12.1993. This conduct of the
appellant/plaintiff, in our view, reflects lack of continuous
readiness and willingness to perform his part of the contract,
which is a sine qua non for the grant of relief of specific
performance.
D. CONCLUSION
43. After examining the entire facts of the case and the
evidence produced on record, we are of the definite view that
this is not a fit case where the discretionary relief of specific
performance can be granted in favour of the appellants.
Keeping in view the twin statutory mandate of ‘readiness’ and
‘willingness’, the appellants not only failed to demonstrate their
readiness and willingness but also failed to approach the Court
with quite promptitude, which disentitle them from grant of the
equitable relief of specific performance.
44. For all these reasons, the Appeal deserves to be dismissed
and the same is hereby dismissed.”
15. The aforesaid principles reiterated by the Apex Court
as regards the mandatory requirement on the part of the
appellant plaintiff to continuously perform his part of the
contract and demonstrate continuous readiness and
willingness in terms of Section 16(c) of the Act is no longer
res integra as can be seen from the aforesaid judgment.
At any rate, in the instant case, except producing the legal
notice issued almost after two years from the date of the
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alleged agreement of sale, the plaintiff had not
demonstrated by legal and acceptable evidence that he
had the balance sale consideration / requisite funds to pay
the balance sale consideration or capacity to raise the
funds nor any steps had been taken by him to call upon
the respondent to perform his part of the contract by
obtaining a survey sketch.
16. Under these circumstances, merely because there
was a mutual and reciprocal obligation cast upon the
respondent-defendant to obtain a survey sketch and
thereafter execute a sale deed in favour of the appellant-
plaintiff, in the absence of any material to demonstrate
that the plaintiff was ready and willing to perform his part
of the contract, it cannot be said that the inaction on the
part of the respondent-defendant would lead to an
inference that the plaintiff was ready and willing to
perform his part of the contract which had to be pleaded
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and proved by him independent of the conduct of the
respondent defendant.
17. For the aforesaid reasons, I am of the considered
opinion that both the Courts were fully justified in coming
to the correct conclusion by recording findings of fact that
the appellant-plaintiff was not ready and willing to perform
his part of the contract and was consequently not entitled
to the relief of specific performance.
18. A perusal of the judgment and decree of both the
Courts will also indicate that the material on record has
been examined and scrutinized by both the Courts by
recording a finding that in the facts of the instant case, the
appellant-plaintiff would not be entitled to the
discretionary and equitable relief of specific performance
since granting a decree for specific performance would
result in more comparative hardship as against the
respondent-defendant if a decree was granted when
compared to the appellant-plaintiff who would not be put
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to similar hardship if specific performance was refused and
by directing refund of the advance amount of
Rs.2,50,000/- paid by the appellant-plaintiff to the
respondent-defendant together with interest at 6% per
annum from the date of suit till date of payment.
19. In this context, it is an undisputed fact that during
the pendency of the present appeal, the respondent-
defendant has deposited a sum of Rs.3,83,750/- on
05.01.2024 before the trial Court together with interest as
directed by the trial Court. The said amount would
obviously have been invested in a fixed deposit by the trial
Court which would inure to the benefit of the appellant-
plaintiff, who would be entitled to seek release /
disbursement of the same in his favour. Under these
circumstances also, I am of the considered opinion that
both the Courts were fully justified in refusing to grant
specific performance and the decree for refund of advance
amount together with interest having been complied with
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by the respondent-defendant, no prejudice can be said to
have been caused to the appellant-plaintiff by confirming
the judgment and decree of the trial Court and first
appellate Court.
20. In view of the foregoing reasons, I am of the
considered opinion that no question of law, much less
substantial question of law arises for consideration in the
present appeal which is accordingly dismissed.
21. The registry of the trial Court is directed to release/
disburse the entire sum of Rs.3,83,750/- deposited by the
respondent-defendant before the trial Court on 05.01.2024
immediately upon receipt of a copy of this order.
Sd/-
(S.R.KRISHNA KUMAR)
JUDGE
BVV
List No.: 1 Sl No.: 38