Ravi Setia vs Madan Lal and Others

2 – The findings to that effect therefore held to be unsustainable. Specific Relief Act, 1963: s.16(1)(c) – Suit for specific performance of contract – Readiness and willingness of plaintiff to perform his part of contract – Trial Court decreed the suit on 01.06.1994 and granted time to the plaintiff for deposit of the balance consideration within two months – Plaintiff offered no explanation whatsoever for the failure to comply the direction – After expiry of the time granted for deposit, plaintiff filed an application before the Trial Court that in view of the pendency of the First Appeal preferred by defendants, the time for deposit may be extended as otherwise the amount would lie in the bank without interest – Time for deposit was extended till disposal of the First Appeal – Held: The failure of the plaintiff to offer any explanation why the balance consideration was not deposited within the time granted, the filing of the application for extension of time after expiry of the prescribed period coupled with the frivolousness of the grounds taken in the application for extension that the money would lie in the bank without earning interest, were all but evidence of incapacity on part of the plaintiff to perform his obligations under the agreement and reflective of lack of readiness and willingness – The grant of relief for specific performance under s.16(1)(c) of the Act is a discretionary and equitable relief – The plea that the amount would lie in the bank without interest is unfounded and contrary to normal banking practice – This is sufficient evidence of the incapacity or lack of readiness and willingness on part of the plaintiff to perform his obligations – Undoubtedly, the time for deposit could be extended under s.28 of the Act – But the mere extension of time for deposit does not absolve the plaintiff of his obligation to demonstrate readiness and willingness coupled with special circumstances beyond his control to seek such extension – The pendency of an appeal by the defendant did not preclude the plaintiff from depositing the amount in proof of his readiness and willingness – High Court has rightly observed that there was no stay by the Appellate Court of the decree under appeal to justify non-deposit during the pendency of the appeal – There was no infirmity in the order of the High Court concluding that the plaintiff in the facts and circumstances was not ready and willing to perform his obligations.

Dismissing the appeal, the Court

HELD: 1. Defendant nos. 1 and 2 by registered notices dated 28.05.1990 and 12.06.1990 required the plaintiff to get the sale deed executed by 25.06.1990. The plaintiff does not dispute that the communication was properly addressed and sent through registered acknowledgement due. If it was returned back with the endorsement that the plaintiff was not available at his home, defendants 1 and 2 were not required to do anything further. If the plaintiff was of the opinion that the endorsement was wrong, it was for him to have contended so and led necessary evidence in this regard. The Trial Court rightly did not disbelieve defendants 1 and 2, but without returning any finding in that regard preferred to rely on the unsubstantiated claim of the plaintiff of having been present before the Sub-Registrar on 30.04.1990. The said finding is also held to be unsustainable. [Para 6][943-H; 944-A-C]

2. The Trial Court decreed the suit on 01.06.1994 and granted time to the plaintif f for deposit of the balance consideration within two months from 01.06.1994, i.e. by 31.07.1994. The plaintiff offered no explanation whatsoever for the failure to comply the direction. After expiry of the time granted for deposit, on 02.08.1994 the plaintiff filed an application before the Trial Court that in view of the pendency of the First Appeal preferred by defendants, the time for deposit may be extended as otherwise the amount would lie in the bank without interest. On 02.08.1994 itself, the time for deposit was extended till disposal of the First Appeal. The defendants’ challenge to the ex-parte order was unsuccessful on technical grounds. [Para 8][944-F-G]

3. The grant of relief for specific performance under Section

16 (1)(c) of the Act is a discretionary and equitable relief. Under Section 16 (1)(c), the plaintiff has to demonstrate readiness and willingness throughout to perform his obligations under the contract. The plea that the amount would lie in the bank without interest is unfounded and contrary to normal banking practice. This is sufficient evidence of the incapacity or lack of readiness and willingness on part of the plaintiff to perform his obligations. Undoubtedly, the time for deposit could be extended under Section 28 of the Act. But the mere extension of time for deposit does not absolve the plaintiff of his obligation to demonstrate readiness and willingness coupled with special circumstances beyond his control to seek such extension. The plaintiff did not aver in the application that he was ready and willing to perform his obligations and was prevented from any special circumstances from doing so. The pendency of an appeal by the defendant did not preclude the plaintiff from depositing the amount in proof of his readiness and willingness. [Para 10][945-C-F]

4. According to normal human prudence, land price escalates over time. Unless it be a situation of a distress sale, no land owner will sell his land for a lesser price than what may have been recorded in an agreement for sale. The fact that the defendants nos.1 and 2 subsequently sold the land on 16.01.1991 to defendants nos.4 to 7 at a lesser price, due to personal necessity, also mitigates against the plea of the plaintiff that he was ready and willing to perform his part of the obligations under the contract. [Para 14][947-B-C]

5. The plaintiff failed to prove readiness and willingness to perform its obligations under the agreement for sale. However, in the peculiar facts and circumstances of the case, the respondent is not entitled to retain the earnest money and it shall be refunded to the appellant without interest within a period of one month failing which it shall carry interest at the rate of 7 per cent. [Para 16][947-H; 948-A-B]

V. S. Palanichamy Chettiar Firm v. C. Alagappan, (1999)

4 SCC 702 : [1999] 1 SCR 349; Ramankutty Guptan v. Avara, (1994) 2 SCC 642 : [1994] 1 SCR 542; Umabai and Another v. Nilkanth Dhondiba Chavan (Dead) by Lrs. and Another, (2005) 6 SCC 243 : [2005] 3 SCR 521; Dilbagrai Punjabi v. Sharad Chandra, 1988 Supp SCC 710 : [1988] Suppl. SCR 276 – relied on.