Specific performance: Appellant had mortgaged the suit property with a bank and the bank had initiated recovery proceedings – Meanwhile, appellant entered into a sale agreement to sell the suit property to respondent no.1 and pursuant thereto, respondent no.1 made some payments also – Thereafter, dispute arose between the parties and respondent no.1 filed suit for specific performance – Trial Court held in favour of respondent no.1 and directed appellant to execute sale deed – High Court dismissed the appeals holding that appellant had not disclosed about the existence of encumbrance which came to the knowledge of respondent no.1 subsequently and that there was readiness and willingness on the part of respondent no.1 – On appeal, held: The understanding between the parties as on date when the sale agreement was entered into was reflected in a communication of respondent no.1 which clearly showed that the existence of the encumbrance was a well known fact – In the face of such clear understanding under which the suit agreement was entered into, the High Court completely erred in ignoring the entire case put forth on the part of the appellant – The facts on record disclosed that there were recurring delays on part of respondent no.1 – There are no details in the plaint as to what exactly respondent no.1 had done towards fulfillment of his obligations and completion of the transaction – Further, there was an arrangement between the parties by which respondent no.1 was to make payment of Rs.13.5 lakhs to the bank directly and Rs.6 lakhs to the appellant, however, the facts do not indicate any observance of these conditions – In fact, the amount of Rs.13.5 lakhs was independently deposited and discharge was obtained by the appellant – Therefore, issue whether respondent no.1 was ready and willing to perform his part of the contract is answered against him and suit for specific performance preferred by the respondent no.1 is dismissed – The case put up by respondent no.1 that he was put in possession pursuant to an arrangement is also doubtful – If respondent no.1 was put in possession of the suit property pursuant to the arrangement as in the suit agreement, his corresponding obligation under such arrangement was two fold namely to pay off the dues to the Bank directly and pay rest of the sum to the appellant – There is nothing on record which could be consistent with discharge of such obligation on part of respondent no.1 – Appellant is entitled to recovery of possession – Possession.
Specific performance: Readiness and willingness to perform the contract – Held: As regards suit for specific performance, the law is very clear that 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. Allowing the appeals, the Court
HELD: 1. If respondent No.1 was well aware about the existence of encumbrance over the suit property at the time when suit agreement was entered into, he cannot thereafter submit to the contrary. In the face of such clear understanding under which the suit agreement was entered into, the High Court was completely in error in observing that the entire case put forth on the part of the appellant was required to be summarily thrown out. [Para 7] [679-E, F]
2. The assertion made by respondent No.1 of the plaint is a mere assertion without any relevant details as to what exactly he had done towards fulfillment of his obligations and completion of the transaction. Respondent No.1 had completely failed in his obligations and was not ready and willing to perform his part of the contract. Even going by the case set up by respondent No.1, that around 29.07.2002 an arrangement was arrived at, under which out of the balance amount Rs.19.5 lakhs, Rs. 13.5 lakhs were to be made over by respondent No.1 to the Bank directly and rest of the sum of Rs.6 lakhs was to be paid to the appellant in cash, the facts do not indicate any observance of these conditions. Beyond filing an application for impleadment which came to be dismissed, respondent No.1 did not take any step. The amount of Rs.13.5 lakhs was independently deposited and discharge was obtained by the appellant. [Para 9] [680-D-F]
3. If respondent No.1 was put in possession of the suit property pursuant to the arrangement as suggested by him, his corresponding obligation under such arrangement was also twofold namely to pay off the dues to the Bank directly and pay rest of the sum to the appellant. There is nothing on record which could be consistent with discharge of such obligation on the part of respondent No.1. The case put up by respondent No.1 that he was put in possession pursuant to an arrangement arrived at on or around 29.07.2002 is not free from doubt. In a matter where Rs.19.5 lakhs were still outstanding, it is not possible to accept that the vendor may put the purchaser in possession when the original agreement did not contemplate handing over of the possession even before execution of the sale deed. The contemporaneous facts including the aspects that the appellant had initiated criminal proceedings and made complaints to various authorities about forcible possession having been taken by respondent No.1, also indicate falsity in the claim of respondent No.1. [Paras 10, 11] [680-G; 681-A, B]
S.P. Chengalvaraya Naidu (Dead) by LRs. v. Jaganath (Dead) by LRs and Others (1994) 1 SCC 1 : [1993] 3 Suppl. SCR 422 – held inapplicable.
Gomathinayagam Pillai and Others v. Pallaniswami Nadar [1967] 1 SCR 227 ; Ardeshir Mama v. Flora Sassoon L.R. 55 I.A. 360 ; J.P. Builders and Another v. A. Ramadas Rao and Another (2011) 1 SCC 429 : [2010] 15 SCR 538 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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