Appellant – Jaswinder Kaur (Now Deceased) Through Her Lrs. & Others
Respondent – Gurmeet Singh & Others
Decided On: 18 April 2017
Civil Appeal Nos. 5636 of 2017 (Arising out of SLP (C) No. 8112 of 2016)
Bench – Arun Mishra, Amitava Roy
Statutes Referred:
The Specific Relief Act, 1963
The Urban Land Ceiling Act
Case Referred:
Abdul Rahim & Ors. v. Tufan Gazi and Ors. AIR 1928 Cal. 584.
William Graham v. Krishna Chandra Dey, AIR 1925 PC 45
Facts:
The facts unfold that initially an agreement dated 13.01.1990 was entered into, in which it was agreed that for the sum of Rs. 55,00,000/- defendants would sell the property in area 10.75 acres situated at village Mehmoodpura Ludhiana, and on that day a sum of Rs. 50,000/-was paid as earnest money.
At the time of payment of Rs. 14,50,000/- on 31.1.1990 further agreement was entered into which was also reduced in writing in which it was stipulated that sale deed would be executed by 30.10.1990.
That It would be open to the plaintiffs to construct boundary wall between 24.4.1990 to 15.5.1990 at their own cost and the possession of the land would be delivered to the purchaser at the time of registration of the sale deed
The plaintiffs filed suit for specific performance of the agreement to sale dated 31.1.1990 or in alternative, refund of earnest money with interest and damages were claimed
Trial court came to the conclusion that plaintiffs were not ready and willing to perform their part of the agreement neither they were having the required balance amount for the purchase of the property in question as per the aforesaid agreements.
Feeling aggrieved from the decision of trail court and high court they refer the case in Supreme Court.
Plaintiff’s contention
It was averred by the plaintiffs that they were ready and willing to purchase property and were present before the Sub Registrar on the date fixed i.e. 30.10.1990 with the balance amount whereas the defendants did not turn up to execute the sale deed.
Plaintiffs further said they served a telegraphic notice but in futile.
Defendant’s contention
The defendants in the written statement contended that plaintiffs had failed to perform their part of the agreement and as such the agreement stood cancelled and earnest money forfeited.
Defendants further said that they was ready and willing to execute the sale deed and were present before the Sub-Registrar on 30.10.1990. Telegram was also sent to the plaintiffs but they were not ready and willing to perform their part of the contract
Further he averred that Plaintiffs were not ready and willing to perform their part of the contract, hence agreements stood cancelled after service of another notice by defendants and the suit was dismissed.
Judgement:
“The section 12 of the Act does not apply where the inability to perform specific performance on part of contract arises because of the plaintiff own conduct as held in Abdul Rahim & Ors. v. Tufan Gazi and Ors. AIR 1928 Cal. 584. In William Graham v. Krishna Chandra Dey, AIR 1925 PC 45 it has been laid down that the explanation in the section exhaust all the circumstances in which part performance can be granted. Section 12(2) deals with the situation where a party is unable to perform and such part is only a small proportion in value and capable of compensation in form of money.
It was not a case covered in Section 12(2) at all. Under Section 12 (3) party in default is entitled to specific performance on payment of whole consideration or for the part left unperformed but here in the instant case plaintiff being in default could not be said to be entitled to invoke Section 12(3) also.”
“It is also settled law that specific performance cannot be granted to a party who has not been ready and willing at all stages to perform the contract. Of course, the 1st respondent was ready and willing to perform the contract in its entirety.
To that extent there would be readiness and willingness on the part of the 1st respondent. But in cases where a contract is not capable of being performed in whole then the readiness and willingness, at all stages, is the readiness and willingness to accept part performance.
If a contract is not capable of being performed in whole and a party clearly indicates that he is not willing to accept part performance, then there is no readiness and willingness, at all stages, to accept part performance. In that case there can be no specific performance of a part of the contract at a later stage”.
“Reliance had rightly been placed by appellants on the decision of Privy Council in William Graham’s case (supra) in which it had been laid down that it is not for the High Court to make out a new contract, when specific performance is possible with respect to the entire contract.
It has to be ordered for the entire contract not for part as has been ordered in this case by the High Court. However, in the instant case as earnest money has been paid i.e. initially Rs. 50,000/- and subsequently advance of Rs. 14,50,000/-. In our opinion, forfeiture of the amount paid as earnest money of Rs. 50,000/- had rightly been made as plaintiffs were delaying to perform their essential part of contract which was enjoined upon them. Remaining money paid in advance on 31.1.1990 is ordered to be refunded with simple interest at the rate of 6% per annum to the plaintiffs within three months from today.
However, the plaintiffs shall bear the cost of the appellants of courts below and the cost of the appeal in this Court which is quantified at Rs. 5,00,000/- The amount of cost payable to the defendants shall be adjusted out of the amount which has to be paid along with interest to the plaintiffs.”
Held:
It was held that the appeal is allowed to the aforesaid extent. The impugned judgment and the decree passed by the High Court is set aside.
Prepared by – Devyansh Narula