Specific Performance Act, 1963 – Specific performance of an agreement – Acceptance by buyer of refund of consideration amount – Effect on relief of specific performance – Unregistered agreement to sell executed between the buyer-respondent no. 1 and the seller – Buyer paid certain sum in cash and issued three post-dated cheques – Upon failure of seller to execute the sale deed, buyer filed a suit seeking specific performance of agreement to sell – Seller made a complaint to the police stating that her signatures had been fraudulently taken on the agreement to sell and seller issued a letter cancelling the agreement, and refunded some amount through demand drafts and returned two of three post dated cheques, which were subsequently encashed – On death of the seller, respondent no. 3-step grandson of seller impleaded along with appellant in whose favour subject property had been bequeathed – Trial court passed the judgment in favour of the buyer – High Court upheld the same – Correctness:
Held: Conduct of buyer in encashing the demand drafts establishes beyond doubt that the buyer was not willing to perform her part of agreement to sell and proceed with execution of the sale deed, and the fact that entire advance consideration/earnest money had not been returned to the buyer is irrelevant and immaterial – Act of buyer in encashing the demand drafts leads to an irresistible conclusion that the agreement stood cancelled – Seller had issued a letter cancelling the Agreement to Sell prior to the filing of the suit, the same constitutes a jurisdictional fact as till the said cancellation is set aside, the buyer is not entitled to the relief of specific performance – Thus, in absence of a prayer for declaratory relief that cancellation of the agreement is bad in law, suit for specific performance not maintainable – Plea that appellant lacked the locus standi to file the present appeal as she did not have any right, interest or title over the subject property is misconceived on facts – Appellant is a beneficiary under the Will executed by the original owner/seller, whereby the subject property was bequeathed in her favour – Appellant, being a necessary and interested party to the lis, has the locus to file the present appeal – Furthermore, the onus to establish readiness and willingness is on the buyer and the failure to establish the same disentitles the buyer from the equitable and discretionary relief of specific performance – Buyer failed to disclose in the plaint that the seller had issued the cancellation letter, enclosing demand drafts and cheques which amounts to suppression of material fact, disentitling her from the discretionary relief of specific performance – Thus, agreement to sell cannot be specifically enforced – Impugned judgment set aside – Sale deed executed in favour of buyer declared null and void. [Paras 15, 17-21, 25-30]
Specific performance – Specific performance of – Grant of relief – ‘Readiness’ and ‘willingness’ to perform contract – Explanation:
Held: ‘Readiness’ and ‘willingness’ are not one but two separate elements – ‘Readiness’ means the capacity of the buyer to perform the contract, which would include the financial position to pay the sale consideration – ‘Willingness’ refers to the intention of the buyer as a purchaser to perform his part of the contract, which is inferred by scrutinising the conduct of the buyer/purchaser, including attending circumstances – Continuous readiness and willingness on the part of the buyer/purchaser from the date of execution of Agreement to Sell till the date of the decree, is a condition precedent for grant of relief of specific performance – It is not enough to show the readiness and willingness up to the date of the plaint as the conduct must be such as to disclose readiness and willingness at all times from the date of the contract and throughout the pendency of the suit up to the decree. [Paras 17-20]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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