Buyer Proved Ready To Pay: Madras HC Upholds 5/6 Property Sale, Rejects Sellers’ Price-Hike Claim Over Post-Decree Deposit

In brief

The question

1. Whether the plaintiff’s failure to deposit the balance sale consideration when filing the suit entitled the appellants to consideration above the contract price.

The court held

The Court held that non-deposit of the balance consideration when the suit was filed did not entitle the appellants to an enhanced contractual price and that the Single Judge’s decree did not warrant interference.

It also directed

The appeal was disposed of with a direction for the first respondent to deposit ₹1.25 crore to the credit of the suit within 30 days.

The appellants were granted liberty to apply for payment out of the 5/6th share in the pending suit; there was no order as to costs.

01Facts

The parties entered into an agreement dated 11 November 2012 for sale of the suit property for ₹6.5 crore.

pp. 2, 4–5

The plaintiff paid ₹30 lakh as advance.

pp. 2, 4–5

The Single Judge decreed specific performance in respect of the vendors’ 5/6th share.

pp. 2, 4–5

The decree-holder deposited the balance consideration for that share after the decree, and the property was subsequently sold through execution.

pp. 2, 4–5

In appeal, the appellants argued that the balance had not been deposited when the suit was filed and that they were therefore entitled to an enhanced amount, including for price escalation.

pp. 2, 4–5

The appeal court noted that the agreement and advance payment were admitted and that readiness and willingness had not been seriously disputed.

p. 6

02Issues

i.1. Whether the plaintiff’s failure to deposit the balance sale consideration when filing the suit entitled the appellants to consideration above the contract price.

pp. 5–6

ii.2. Whether the Single Judge’s decree for specific performance of the vendors’ 5/6th share required interference.

p. 8

03Law Applied

The Court applied Section 16(c) of the Specific Relief Act, including its first Explanation, under which a plaintiff seeking specific performance of a contract involving payment of money need not actually tender the money to the defendant or deposit it in court unless directed to do so.

pp. 6–7

The plaintiff must establish readiness and willingness to perform the contract; non-deposit at the time of filing, by itself, does not entitle the vendor to an increased price or compensation.

pp. 6–7

No judicial precedents were cited.

Provisions in the judgment · 1 · Linked ones open on LawLens

Specific Relief Act, 1963 Section 16

04Reasoning

The Court treated the appellants’ claim for an enhanced amount as turning on the timing of the balance deposit.

pp. 6–7

Because the plaintiff had established readiness and willingness, and the agreement and advance payment were admitted, the absence of a deposit when the suit was filed did not justify enhancement under Section 16(c).

pp. 6–7

The balance for the 5/6th share had been deposited as directed after the decree, and execution had proceeded.

pp. 7–8

The Court therefore found no basis to interfere with the specific-performance decree.

pp. 7–8

Separately, to bring the dispute to a close, the first respondent offered to deposit an additional ₹1.25 crore within 30 days; the Court directed that this amount be deposited to the credit of the suit.

pp. 7–8