Supreme Court of India
P. MEENAKSHISUNDARAMversusP. VIJAYAKUMAR & ANR.
- Citation
- 2018 INSC 289
- Decided
- 28 March 2018
- Disposal
- Appeal(s) allowed
- Bench
- UDAY UMESH LALIT
Holding
The suit for specific performance is dismissed because the plaintiff failed to establish continuous readiness and willingness to perform, and the appellant is entitled to possession and refund of the advance.
Summary
The appellant had mortgaged a marriage hall property and later entered into a sale agreement with respondent No.1, who paid part of the consideration. Disputes arose over the existence of the mortgage and the performance of the contract, leading respondent No.1 to sue for specific performance. The trial court ordered specific performance, but the Madras High Court dismissed the appellant's appeal, holding that respondent No.1 was ready and willing to perform. The Supreme Court held that the plaintiff must prove continuous readiness and willingness from the date of the contract, which respondent No.1 failed to do, especially given the encumbrance and lack of compliance with payment conditions. Consequently, the Court dismissed the suit for specific performance, ordered the refund of Rs.18 lakhs to the appellant, and granted the appellant recovery of possession, denying mesne profits to the respondent.
Issues considered
- Whether respondent No.1 proved continuous readiness and willingness to perform his part of the sale agreement for specific performance.
- Whether the High Court erred in holding that respondent No.1 was ready and willing to perform despite the encumbrance and delayed payments.
- Whether specific performance can be granted when the seller concealed a mortgage on the property.
- Whether the appellant is entitled to recovery of possession and refund of the advance paid by the respondent.
Legislation cited
- Specific Relief Act, 1963s. 16(c)
Subjects
specific performancereadiness and willingnessencumbrancemortgagesale agreementpossessionrefund of advancemesne profitscontract law
Judgment
[2018] 6 S.C.R. 667 667
P. MEENAKSHISUNDARAM A
v.
P. VIJAYAKUMAR & ANR.
(Civil Appeal Nos. 3353-3354 of 2018)
MARCH 28, 2018 B
[R. BANUMATHI AND UDAY UMESH LALIT, JJ.]
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
C
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 D
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
E
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 F
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,
G
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
H
667
668 SUPREME COURT REPORTS [2018] 6 S.C.R.
A 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
B
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
C 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
D
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
E 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
F 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
G 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
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P. MEENAKSHISUNDARAM v. P. VIJAYAKUMAR & ANR. 669
came to be dismissed, respondent No.1 did not take any step. A
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 B
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 C
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 D
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 E
(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. F
A. Ramadas Rao and Another (2011) 1 SCC 429 :
[2010] 15 SCR 538 – referred to.
Case Law Reference
[1993] 3 Suppl. SCR 422 referred to Para 3
G
[1967] 1 SCR 227 referred to Para 5
L.R. 55 I.A. 360 referred to Para 5
[2010] 15 SCR 538 referred to Para 6
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670 SUPREME COURT REPORTS [2018] 6 S.C.R.
A CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3353-
3354 of 2018.
From the Order dated 07.01.2014 of the High Court of Judicature
at Madras in APPSU Nos. 218 and 219 of 2010.
V. Mohana, Sr. Adv., B. Raghunath, N. C. Kavitha, Vijay Kumar,
B Advs. for the Appellant.
V. Prabhakar, Ms. Jyoti Parasher, N. J. Ramchandar, S. Rajappa,
Advs. for the Respondents.
The Judgment of the Court was delivered by
C UDAY UMESH LALIT, J. 1. Leave granted.
2. These appeals by special leave challenge the correctness of
the judgment and order dated 07.01.2014 passed by the High Court of
Madras in Appeal Suit (MD) Nos. 218-219 of 2010.
3. The facts leading to the filing of these appeals in brief are as
D
under :-
A. The property in question is a plot admeasuring about 3708
sq.ft., with a marriage hall (“Suit Property”, for short) situated in Village
Parasuramanpatti, Madurai North Taluk, Tallakulakam sub- Division,
Madurai North. The appellant had mortgaged the suit property with the
E Catholic Syrian Bank (later Federal Bank Ltd.) and the bank had initiated
recovery proceedings, namely, O.S. No.40 of 1996 before 3 rd Additional
Sub-Court, Madurai which was later transferred to DRT, Coimbatore
and renumbered as Transfer Application No.1441 of 2002.
B. On 30.06.2000 the appellant entered into an agreement
F (Ex.A1) intending to sell the suit property to respondent No.1. The
consideration agreed was Rs.19 lakhs out of which Rs.1 lakh was paid
by way of advance. This agreement recited an assurance on the part of
the appellant, “…that there is no encumbrance over the Schedule
mentioned property” but went on to state:-
G “The 2nd Party says that the original Parent Document in respect
of the property is not available with the 2nd party and it is in the
bank. In case, there is any loan availed by the 2nd party either on
the schedule property or on other property, then the 2nd party has
to pay the said loan amount by getting it from the 1st party and to
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P. MEENAKSHISUNDARAM v. P. VIJAYAKUMAR & ANR. 671
[UDAY UMESH LALIT, J.]
get the Original Parent Document and other supportive records in A
respect of the schedule property and the 2nd party has to hand
over the same to the 1st party.”
C. The cheques issued thereafter by respondent No.1 were
dishonored (as evident from Notice Ex.A-2 dated 18.09.2000) but the
parties entered into a subsequent agreement on 20.09.2000 (“the suit B
agreement”, for short) under which the consideration was fixed at Rs.37.5
lakhs. As per this agreement, even the movables utilized for marriage
hall were also included. Over and above Rs.1 lakh which was already
received as advance, additional sums of Rs.2 lakhs by way of cheque
and Rs.3 lakhs by way of demand draft were paid on the same day.
The suit agreement recited that the remaining amount had to be paid and C
the sale deed to be registered by 20.03.2001 in following terms:-
“………the 1st party has to pay the remaining amount of sale
consideration of Rs.26,50,000/- (Rupees twenty six lakhs and fifty
thousand only) within 20.03.2001 either before the Sub Registrar
or in person and the 2nd party has to receive the same and give D
proof to that effect and the said Sale Deed has to be registered by
the 2nd party without any encumbrance and that there is no other
person except the 2nd party to have title over the same.”
D. Though the relevant terms in the suit agreement were identical
to those in agreement (Ex.A1), the understanding between the parties E
as on the date when the suit agreement was entered into was captured
in the subsequent communication of respondent No.1 dated 22.09.2001
(Ex.A6) as under :-
“That on further persuasion and negotiations between the parties,
it was agreed to have a fresh sale agreement with reference to F
the said Kalyana Mandapam and annexe. As your client wanted
to clear the entire loan in the Catholic Syrian Bank only by himself,
the sale price of the said property was agreed for Rs.37,50,000/-
only and a sum of Rs.5,00,000/- (Rupees five lakhs only) through
D.D. and Cheque was paid additionally to your client by making G
the total advance of Rs.6,00,000/- including the cash advance of
Rs.1,00,000/- already paid on the earlier agreement dated
30.06.2000. Therefore in supersession of the earlier agreement
dated 30.06.2000 a fresh sale agreement was made on 20.09.2000
with the parties concerned.”
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672 SUPREME COURT REPORTS [2018] 6 S.C.R.
A E. On 21.02.2001 a further sum of Rs.2 lakhs was paid by way of
cheque by respondent No.1. Though the transaction was to be completed
by 22.03.2001 the record is silent about any communication between the
parties around that time towards completion of transaction. However,
amount of Rs.10 lakhs was paid by cheque on 22.09.2001, which
according to respondent No.1 was made over to the appellant so that
B
the dues of the bank could be settled.
F. The record is again silent about any developments after
22.09.2001 till 29.07.2002 when a legal notice was issued by respondent
No.1 through his advocate. According to respondent No.1 this was
responded by the advocate for the appellant and in the ensuing discussion
C it was agreed that possession of the suit property be handed over to
respondent No.1. According to respondent No.1, out of the balance
amount of Rs.19.5 lakhs, Rs.13.5 lakhs was to be made over by
respondent No.1 to the bank directly and the remaining sum of Rs.6
lakhs was agreed to be paid to the appellant in cash on the day the
D document was to be registered. According to respondent No.1, possession
of the suit property was handed over to him by the appellant on 03.08.2002.
The aforesaid case set up by respondent No.1 is disputed and
denied by the appellant and according to him, with the intervention of
local police and other hirelings, the possession was forcibly taken by
E respondent No.1 on 16.09.2002.
G. On 01.09.2002, a telegram was sent by the advocate for
respondent No.1 to the appellant. Immediately thereafter i.e. on
02.09.2002 an IA No.126 of 2002 was preferred by respondent No.1 to
implead himself in the Transfer Application No.1441 of 2002 before DRT,
F Coimbatore. In his reply telegram dated 03.09.2002 appellant denied all
the assertions made by the advocate for respondent No.1 and cancelled
the agreement dated 20.09.2000. The appellant also complained to DIG
of the relevant range and sought police protection and preferred OP
No.226 of 2002 in the High Court of Madras against respondent No.1,
Inspector of Police, Oomachikulam and Deputy Superintendent of Police
G of the concerned Division. According to the appellant, he was threatened
by the hirelings employed by respondent No.1 and possession of the suit
property was taken over by respondent No.1 on 16.09.2002. This
prompted the appellant to prefer an appropriate petition before the
Superintendent of Police, Madurai, Rural.
H
P. MEENAKSHISUNDARAM v. P. VIJAYAKUMAR & ANR. 673
[UDAY UMESH LALIT, J.]
H. In the aforesaid background, on 19.02.2002, respondent No.1 A
filed OS No.764 of 2002 seeking specific performance of the agreement
dated 20.09.2000. The plaint was later amended and the Federal Bank
Ltd. through its Branch Manager was added as second defendant. As
regards arrangement under which respondent No.1 was put in possession,
it was averred:
B
“……. Meanwhile, as necessary steps have to be taken for
settlement of the loan availed on the suit property, the advocates
of both the sides have held a meeting on 29.07.2002 to execute
the Sale Agreement made on 20.09.2000 and it was agreed that
this defendant has to execute the Sale Deed in respect of the suit
property on the 18th day of Aadi month of this year (3.08.2002); C
that the remaining sale consideration of Rs.13,00,000/- out of
Rs.19,50,000/- has to be paid by the plaintiff to settle the case
which is being conducted at Debts Recovery Tribunal; that the
remaining amount of Rs.6,50,000/- (Rupees six lakhs and fifty
thousand only) has to be given to the 1st defendant as cash ….” D
In respect of readiness and willingness on the part of respondent
No.1 to perform his obligations under the suit agreement, Para 7 of the
amended plaint was as under:
“(7) While this plaintiff was ready to fulfill the sale agreement on
3.8.2002 as per the above said arrangement, as agreed to execute E
the Sale Deed either on the 3rd day of Aavani Month (19.8.2002)
or on 5th day of Aavani (21.8.2002) and that there is some
difficulty according to religious custom in registering the sale deed
in the month of Aadi and to give consent to this plaintiff to take
the possession of the marriage hall, this plaintiff took the F
possession of the suit property on the 18th day of Aadi Month on
3.8.2002 and he has been enjoying the same. The marriage
functions which were being booked by the 1st defendant are being
conducted by this plaintiff under his supervision.”
I. In his written statement, the appellant denied relevant assertions G
made by respondent No.1. As regards readiness and willingness on the
part of respondent No.1, it was stated:-
“It is submitted that in spite of defendant’s repeated demands the
plaintiff has not come forward either to pay balance sale price or
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674 SUPREME COURT REPORTS [2018] 6 S.C.R.
A to complete the sale immediately. Even though specific condition
to complete the sale on or before 20.03.2001 is mentioned in the
sale agreement and time is mentioned as essence of the contract,
the plaintiff has not completed the sale within the stipulated time.
The plaintiff was not ready and willing to perform his part of
contract even though the defendant was ready to clear the
B
encumbrance over the suit property.”
The matter regarding handing over of possession was elaborated
as under:
“On 16.09.2002, the plaintiff came with his men and threatened
C the defendant that why he had cancelled the sale agreement and
if he did not execute sale deed in his favour he would not permit
the defendant to enjoy the suit property. The defendant
immediately went to the office of the Police Commissioner, Madurai
City wherein he was asked to come tomorrow. On 17.09.2002
he presented a petition to the Police Commissioner, Madurai City
D and it was forwarded to SP, Madurai Rural. When the defendant
was in the office of the SP, Madurai Rural, at the instigation of the
plaintiff one Karthick Muniasamy of Pudur with his men namely
Rajesh, Kannan, Muniasamy and other attacked the watchman
of the suit property and illegally trespassed into the suit property
E and damaged the property and took illegal possession of the suit
property. On coming to know about the illegal taking over possession
of the suit property by the plaintiff’s men, the defendant
immediately told this matter to the SP, Madurai Rural who made
endorsement on the petition directing the Inspector of Police,
Oomachikulam to register F.I.R. against the plaintiff and his
F men. .….”
J. In his Additional Written Statement-cum-Counter Claim the
appellant submitted:
“The application in I.A. No.126/2002 filed by the plaintiff in T.A.
G No. 1441/2002 pending before the DRT, Coimbatore was dismissed
on 03.01.2003. In the meantime the defendant has also paid Rs.13
lakhs to the Federal Bank, Madurai after the filing of the suit till
date.”
H
P. MEENAKSHISUNDARAM v. P. VIJAYAKUMAR & ANR. 675
[UDAY UMESH LALIT, J.]
He further submitted: A
“It is submitted that the plaintiff has taken illegal possession of the
suit property as stated above and his possession is unlawful. He
has been in receipt of unlawful gains on account of being in illegal
possession and receiving income from the suit property. The suit
property used to be booked for a minimum of 30 Muhoorthams B
per year. After deducting all expenses the year income from the
suit property is Rs.1,80,000/-. From 17.09.2002 to till filing of this
counter-claim approximately the past mesne profits would be
Rs.5,40,000/-. The plaintiff is liable to pay Rs.5,40,000/- as past
mesne profits from 17.09.2002 to the date of filing of this Additional
Written statement cum counter claim. In these circumstances a C
decree for mandatory injunction and for mesne profits is to be
granted, where the 1st defendant would be put to irreparable loss
and damage.”
The appellant in the circumstances prayed for delivery of
possession of the suit property, past mesne profits of Rs.5,40,000/- and D
future mesne profits as well.
K. The Presenting Officer of the Federal Bank Ltd. filed a memo
on 08.12.2009 in the proceedings before DRT Coimbatore that the
appellant had remitted a sum of Rs.13,42,173/- on 16.11.2009 towards
full and final settlement of the account. It was therefore prayed by the E
Presenting Officer that satisfaction of the claim be recorded.
L. The trial court by its judgment and decree dated 01.10.2010
decreed OS No.764 of 2002 and dismissed the counter claim preferred
by the appellant. All the issues were answered in favour of respondent
No.1. The appellant was directed to execute the sale deed in respect of F
the suit property and register the same in favour of respondent No.1
after receiving the balance sale consideration within three months and
the appellant was further directed to pay to respondent a sum of
Rs.3,23,038/- towards the costs of the suit. It was observed that time
was not the essence of the contract. As regards readiness and willingness G
on the part of respondent No.1, it was observed as under:
“While considering the readiness and willingness of the plaintiff
as to purchase the suit properties it was submitted by the counsel
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676 SUPREME COURT REPORTS [2018] 6 S.C.R.
A for the plaintiff that as agreed the plaintiff did issue the legal notice
to the 1st defendant to come forward to register suit properties
after getting full consideration and also the plaintiff was waiting
on 03.08.2002 in the suit Sub-Registrar office as to register the
suit properties as agreed and also the plaintiff was ready to pay
the full amount and willing to purchase the suit properties.”
B
M. The matter was carried further by filing Appeals by the appellant
in the Madras High Court, Madurai Bench. According to the High Court
before the execution of suit agreement the appellant had not disclosed
about the existence of encumbrance which fact came to the knowledge
of respondent No.1 subsequently. Relying on the decision of this Court
C in S.P. Chengalvaraya Naidu (Dead) by LRs v. Jaganath (Dead) by
LRs and Others.1 it was observed as under:
“Since the first defendant has suppressed the fact that he obtained
loan by way of encumbering the suit property and also pendency
of Original Suit No.40 of 1996 at the time of execution of Ex.A3,
D it is pellucid that the entire defence put forth on the side of the
first defendant is based upon falsehood.
….. But for the reasons best known to him, schemingly, deliberately
suppressed the existence of mortgage over the suit property and
further stated in Ex.A3 to the effect that there is no encumbrance
E over the same. Therefore, the entire defence put forth on the
side of the first defendant is purely based upon falsehood and as
per the dictum given by the Hon’ble Apex Court the defence put
forth by the first defendant in the present case can summarily be
thrown out.”
F The High Court found that the readiness and willingness on the
part of respondent No.1 stood established. The High Court, thus, by its
judgment and order dated 07.01.2014 dismissed the appeals, namely,
Appeal Suit Nos.218-219 of 2010 preferred by the appellant.
4. This Court issued notice on 25.08.2014 in petitions for special
G leave to appeal. The parties exchanged the pleadings and also filed
documents on record.
We heard Ms. V. Mohana, learned Senior Advocate in support of
the appeals and Mr. V. Prabhakar, learned Advocate for respondent
1
(1994) 1 SCC 1
H
P. MEENAKSHISUNDARAM v. P. VIJAYAKUMAR & ANR. 677
[UDAY UMESH LALIT, J.]
No.1. After conclusion of hearing, written submissions were filed A
by respondent No.1 submitting inter alia:-
“Apart from having averred regarding the readiness and
willingness, respondent No.1 by his conduct had proved the same
which are as below:-
i) Payment of an advance of Rs.6,00,000/- on 20.09.2000. B
ii) Further advance of Rs.2,00,000/- paid on 21.01.2001.
iii) Further advance of Rs.10,00,000/- paid on 22.09.2001.
iv) Notice dated 22.09.2001 issued by the respondent to the
petitioner to execute the sale deed.
C
v) Holding a meeting of the petitioner, his counsel with the
respondent and his counsel for determining the manner of
performance of the Agreement. The said factum of the meeting
and the outcome thereof as set out in the Plaint in Para 6 at Page
136 of Volume II stood admitted by the respondent in the Notice
dated 29.07.2002 issued on his behalf which had been marked as D
Exhibit A15.
vi) Taking possession of the property on 03.08.2002.
vii) Seeking impleadment in the Debt Recovery proceedings with
a view to settle the debt due from the Respondent.
E
viii) Filing of the Suit within 9 days after the telegram dated
03.09.2002 issued by the petitioner cancelling the agreement. Suit
had been filed on 12.09.2002. ……………..
The non deposit of the balance consideration by respondent No.1
cannot be put against respondent No.1 inasmuch as the
F
encumbrance came to light after the agreement to sell which ought
to have been cleared by the petitioner by demanding the amount
for the discharge in terms of the recital at page 37 of the SLP
paper book2 which was never done by the petitioner. As per the
recital in the Agreement to sell the petitioner had to handover the
original parent title deed and other supportive documents which G
was again not done despite having received nearly half of the sale
consideration. Since the parent title deed had not been given as
required under the agreement, possession was given to respondent
No.1.”
2
As quoted in Paragraph 3(B) above
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678 SUPREME COURT REPORTS [2018] 6 S.C.R.
A 5. In Gomathinayagam Pillai and Others v. Pallaniswami
Nadar3 after referring to the observations of the Privy Council in
Ardeshir Mama v. Flora Sassoon4, this Court laid down that in a suit
for specific performance of an agreement, the plaintiff must plead and
prove that he was ready and willing to perform his part of the contract
since the date of the contract, right upto the date of the hearing of the
B
suit. The observations by this Court in that behalf were as under:-
“But the respondent has claimed a decree for specific
performance and it is for him to establish that he was, since the
date of the contract, continuously ready and willing to perform his
part of the contract. If he fails to do so, his claim for specific
C performance must fail. As observed by the Judicial Committee
of the Privy Council in Ardeshir Mama v. Flora Sasson [ L.R.
55 I.A. 360, 372 ]
“In a suit for specific performance, on the other hand, he treated
and was required by the Court to treat the contract as still
D subsisting. He had in that suit to allege, and if the fact was
traversed, he was required to prove a continuous readiness
and willingness, from the date of the contract to the time of the
hearing, to perform the contract on his part. Failure to make
good that averment brought with it the inevitable dismissal of
E his suit.”
The respondent must in a suit for specific performance of an
agreement plead and prove that he was ready and willing to
perform his part of the contract continuously between the date of
the contract and the date of hearing of the suit.”
F 6. Similarly in J.P. Builders and Another v. A. Ramadas Rao
and Another5, it was observed by this Court in paragraphs 21 and 25 as
under :-
“21. Among the three clauses, we are more concerned about
clause (c). “Readiness and willingness” is enshrined in clause (c)
G which was not present in the old Act of 1877. However, it was
later inserted with the recommendations of the 9th Law
Commission’s Report. This clause provides that the person seeking
3
(1967) 1 SCR 227
4
L.R. 55 I.A. 360
5
H (2011) 1 SCC 429
P. MEENAKSHISUNDARAM v. P. VIJAYAKUMAR & ANR. 679
[UDAY UMESH LALIT, J.]
specific performance must prove that he has performed or has A
been ready and willing to perform the essential terms of the
contract which are to be performed by him.
25. Section 16(c) of the Specific Relief Act, 1963 mandates
“readiness and willingness” on the part of the plaintiff and it is a
condition precedent for obtaining relief of grant of specific B
performance. It is also clear that in a suit for specific performance,
the plaintiff must allege and prove a continuous “readiness and
willingness” to perform the contract on his part from the date of
the contract. The onus is on the plaintiff.”
7. The assurance given by the appellant at the time when the C
agreement dated 30.06.2000 (Ex.A1) was executed that there was no
encumbrance over the suit property was not a correct statement of fact.
The further recital that the “Original Parent Document” was in the Bank
again was not a fair and complete disclosure. It is true that these
averments were copied in the subsequent suit agreement dated
20.09.2000. However the communication dated 22.09.2001 (Ex.A6) D
emanating from respondent No.1 records that by the time the suit
agreement was entered into the existence of the encumbrance was a
well known fact. For the purposes of the present matter what is important
is the common understanding with which the parties had entered into the
transaction. If respondent No.1 was well aware about the existence of E
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. Further, reliance on the decision in S.P. F
Chengalveraya Naidu (supra) was also misplaced. That case did not
arise from a suit for specific performance and more over the plaintiff in
that case was found to have withheld relevant documents and as such
the judgment rendered by the trial Court dismissing his claim was restored
by this Court. The principle laid down therein cannot apply either on G
facts or in law to the present case.
8. As regards suit for specific performance, the law is very clear
that the plaintiff must plead and prove his readiness and willingness to
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680 SUPREME COURT REPORTS [2018] 6 S.C.R.
A 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. If respondent No.1 was well
aware about the encumbrance and the parties had chosen that the balance
consideration be paid to the appellant before 20.03.2001 so that the sale
deed could be registered without any encumbrance, it was for respondent
No.1 to have taken appropriate steps in that behalf for completion of
B
transaction. The facts on record disclose that the first step taken by
respondent No.1 after the suit agreement was well after four months,
when further amount of Rs.2 lakhs was paid on 21.01.2001. Thereafter
nothing was done till 20.03.2001 by which the transaction had to be
completed. The record is completely silent about any communication
C sent around 20.03.2001 towards completion of transaction. As a matter
of fact the first step thereafter was six months after the deadline namely
on 22.09.2001 when the communication (Ex.A6) was sent along with
amount of Rs.10 lakhs. The written submissions filed on behalf of
respondent No.1 also do not indicate any steps till this time so as to say
that he was all the while ready and willing to complete the transaction.
D
9. The assertion made by respondent No.1 in paragraph 7 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. The factual aspects as detailed above are quite clear that
E 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
F 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.
10. If respondent No.1 was put in possession of the suit property
G 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.
H
P. MEENAKSHISUNDARAM v. P. VIJAYAKUMAR & ANR. 681
[UDAY UMESH LALIT, J.]
11. The case put up by respondent No.1 that he was put in A
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.
B
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. Be that as it may the
basic issue is whether respondent No.1 was ready and willing to perform
his part of the contract which in our considered view has to be answered C
against him. We are conscious that two Courts have arrived at a finding
of fact but in our view such finding is completely opposed to and contrary
to the facts on record and is completely unsustainable.
12. We, therefore, reject the claim of respondent No.1 and hold
that the suit for specific performance preferred by respondent No.1 is D
required to be dismissed. At the same time we accept the counter claim
made by the appellant and hold that he is entitled to recovery of
possession. It appears that the assertions in the counter claim that the
Kalyana Mandapam was fetching Rs.1,80,000/- per annum were not
disputed or denied by respondent No.1. On the score that the appellant E
was wrongfully denied and deprived of the earnings from Kalyana
Mandapam for the last 16 years, he would be entitled to reasonable
return. But at the same time he had retained and enjoyed sum of Rs.18
lakhs which he had received by way of advance from respondent No.1.
In the circumstances, though we would direct refund of the sum of Rs.18
lakhs, we further deem it appropriate to direct that in the circumstances F
neither would respondent No.1 be entitled to any interest on the sum of
Rs.18 lakhs which was given by way of advances under the suit
agreement to the appellant nor would appellant be entitled to any sum by
way of mesne profits for last 18 years of wrongful possession of the suit
property by respondent No.1.
G
13. Allowing the appeal, we therefore direct:-
(a) The suit for specific performance filed by respondent No. 1 is
dismissed. Respondent No.1 shall be entitled to the refund of sum of
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682 SUPREME COURT REPORTS [2018] 6 S.C.R.
A Rs.18 lakhs paid by way of advance under the suit agreement. Said
sum shall be refunded by the appellant within three months from the
date of this judgment. No interest shall be payable on said sum. However,
if the said sum is not paid within three months from today as directed, it
shall carry interest @ 7½ per cent from the date of expiry of said period
of three months.
B
(b) Counter claim preferred by the appellant is allowed.
Respondent No.1 shall deliver vacant and peaceful possession of the
suit property to the appellant within one month from the date of this
judgment. The appellant shall however not be entitled to any mesne
profits in respect of wrongful possession of the suit property by respondent
C
No.1.
(c) The decree passed by the trial court and affirmed by the High
Court stands modified accordingly. Each party shall bear his own costs
throughout.
D 14. The appeals stand allowed in the aforesaid terms.
Ankit Gyan Appeals allowed.
E
F
G
H
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