300-Acre Buyer Loses Bid To Force Sale After Madras HC Finds Survey List Created For Suit And No Proof Of Readiness

The landowning defendants agreed to sell properties said to comprise more than 300 acres at ₹16,250 per acre.

The plaintiff paid ₹30,00,001 and alleged that a survey showed only 205.15 acres were available.

He sought specific performance for that reduced extent; the trial court decreed the suit.

The landowners appealed.

During the appeal, the defendant companies were struck off and dissolved under Section 248(5) of the Companies Act, 2013.

The High Court first considered whether the appeal could continue, then examined the plaintiff’s readiness and willingness, the alleged shortage, and the subsequent purchasers’ claims.

Under Sections 248 and 250 of the Companies Act, 2013, a company struck off under Section 248 generally ceases to operate as a company, but the cancellation does not apply for the purpose of realising amounts due or discharging its liabilities or obligations; the Court treated a contractual obligation arising from a sale agreement as within that exception.

A challenge to the striking-off action must be pursued through the statutory remedy under Section 252.

Under Section 16(c) of the Specific Relief Act, 1963, a plaintiff seeking specific performance must plead and prove continuous readiness and willingness; the court assesses this from the plaintiff’s conduct and the surrounding circumstances.

Specific performance is discretionary under Section 20 as applicable to the suit.

The Court also applied the principle that time is not ordinarily presumed to be of the essence in a contract for sale of immovable property, but the parties’ conduct and the requirement to perform within a reasonable time remain relevant.

It considered the principles in N. Thirugnanam v. R. Jagan Mohan Rao, (1995) 5 SCC 115; Zarina Siddiqui v. A. Ramalingam, (2015) 1 SCC 705; Surinder Kaur v. Bahadur Singh, (2019) 8 SCC 575; and C.S. Venkatesh v. A.S.C. Murthy, (2020) 3 SCC 280.

The Court held that the appeal could proceed because the dispute concerned the enforcement of a contractual obligation preserved by Section 250, notwithstanding the companies’ dissolution.

It found that the landowners’ post-deadline conduct showed they had not treated the stipulated date as an inflexible deadline, so time was not the essence; however, the plaintiff still had to prove performance within a reasonable time.

He did not do so: the alleged survey report (Ex. A6) lacked essential particulars and contained discrepancies, while the plaintiff’s notice, sent more than a year after the alleged survey, did not mention the survey, the claimed shortage, or readiness to buy the reduced extent.

The evidence also failed to establish that he had communicated the alleged extent to the landowners or taken possession.

The Court therefore found that continuous readiness and willingness had not been proved.

It rejected the objection that specific performance for the reduced extent was impermissible under Section 12, because the agreement contemplated determination of the available extent after survey.

Finally, it found no proof that the subsequent purchasers knew of the unregistered agreement; their title documents and revenue records supported their claim of purchase and possession.

It also held that the subsequent purchasers were bona fide purchasers for value without notice.

The appeal was allowed, the trial court’s decree for specific performance was set aside, and the suit was dismissed.

No costs were awarded.