Case Note & Summary
The case involves a second appeal arising from a suit for specific performance of an agreement to sell agricultural land. The plaintiffs (respondents) claimed that the defendant (appellant's predecessor) agreed to sell 10 acres 31 gunthas of land for Rs. 1,20,000 and received Rs. 25,000 as earnest money. The defendant denied the agreement and alleged that the plaintiffs were not ready and willing to perform. The trial court partly decreed the suit, ordering refund of earnest money but refusing specific performance. The appellate court reversed this, decreeing specific performance and directing execution of sale deed. The defendant appealed to the High Court. The High Court framed substantial questions of law regarding proof of the agreement, readiness and willingness, and the appellate court's approach. The High Court found that the plaintiffs failed to prove the agreement as required under Section 68 of the Evidence Act, as no attesting witness was examined. Further, the plaintiffs did not plead or prove readiness and willingness to pay the balance consideration, and their conduct showed lack of readiness. The High Court held that the appellate court erred in decreeing specific performance and restored the trial court's decree for refund of earnest money with interest. The second appeal was allowed, and the suit was decreed only for refund of earnest money.
Headnote
A) Specific Relief Act, 1963 - Section 16(c) - Readiness and Willingness - Burden of Proof - The plaintiff must plead and prove continuous readiness and willingness to perform the contract from the date of agreement till the decree. Failure to do so disentitles the plaintiff to specific performance. (Paras 10-15)
B) Contract Act, 1872 - Section 55 - Time as Essence - In agreements for sale of agricultural land, time is not ordinarily of the essence unless expressly stipulated. However, the plaintiff must still show readiness and willingness. (Para 12)
C) Evidence Act, 1872 - Section 68 - Proof of Execution - An agreement to sell must be proved by examining an attesting witness if the document is required to be attested. Failure to do so renders the document not proved. (Para 9)
D) Specific Relief Act, 1963 - Section 20 - Discretionary Relief - Specific performance is a discretionary remedy and cannot be granted if the plaintiff fails to show readiness and willingness or if the agreement is not proved. (Para 16)
Issue of Consideration
Whether the plaintiff proved readiness and willingness to perform the contract for specific performance of an agreement to sell agricultural land, and whether the appellate court erred in decreeing specific performance instead of refund of earnest money.
Final Decision
Second Appeal allowed. Judgment and decree of the appellate court set aside. Judgment and decree of the trial court restored, directing refund of earnest money of Rs. 25,000 with interest at 6% per annum from the date of suit till realization. Civil applications disposed of.
Law Points
- Specific performance
- Readiness and willingness
- Section 16(c) Specific Relief Act
- 1963
- Burden of proof
- Agreement to sell
- Earnest money
- Refund
Case Details
2023 LawText (BOM) (10) 252
Second Appeal No. 764 of 2004 with Civil Application No. 459 of 2020, Civil Application No. 7654 of 2002, Civil Application No. 11011 of 2016
Mr. M.A. Manjramkar for Appellants, Mr. Sharad S. Halkude for Respondents
Devidas Jaiwantrao Deshmukh (died) through LRs: Smt. Shobhabai w/o Devidas Deshmukh, Sow. Chayabai w/o Pravinkumar Kulkarni, Sow. Maya w/o Arvindkumar Deshpande, Jaikumar Devidas Deshmukh, Kum. Shanta Devidas Deshmukh
Bhagwat s/o Vishwanath Gheware, Rajabhau s/o Shankarrappa Gheware (died) through LRs: Sanjay Rajabhau Gheware, Bhimashankar s/o Rajabhau Gheware, Smt. Shalubai Widow Rajabhau Gheware
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Nature of Litigation
Civil suit for specific performance of contract and perpetual injunction
Remedy Sought
Plaintiffs sought specific performance of an agreement to sell agricultural land and perpetual injunction restraining defendant from alienating the land
Filing Reason
Defendant allegedly agreed to sell 10 acres 31 gunthas of land for Rs. 1,20,000 and received Rs. 25,000 as earnest money, but failed to execute sale deed
Previous Decisions
Trial Court partly decreed suit directing refund of earnest money with interest; Appellate Court reversed and decreed specific performance directing execution of sale deed
Issues
Whether the plaintiffs proved the execution of the agreement to sell as required under Section 68 of the Indian Evidence Act, 1872?
Whether the plaintiffs proved their readiness and willingness to perform the contract as required under Section 16(c) of the Specific Relief Act, 1963?
Whether the appellate court erred in decreeing specific performance instead of refund of earnest money?
Submissions/Arguments
Appellants argued that the agreement was not proved as no attesting witness was examined, and plaintiffs failed to show readiness and willingness to pay balance consideration.
Respondents argued that the agreement was proved by plaintiff's testimony and that readiness and willingness was established by their conduct and filing of suit.
Ratio Decidendi
For a decree of specific performance, the plaintiff must prove the agreement in accordance with law and must plead and prove continuous readiness and willingness to perform the contract. Failure to examine an attesting witness renders the agreement not proved under Section 68 of the Evidence Act. Absence of pleading and proof of readiness and willingness disentitles the plaintiff to specific performance under Section 16(c) of the Specific Relief Act, 1963.
Judgment Excerpts
The plaintiffs have not examined any attesting witness to the agreement. Therefore, the agreement is not proved as required under Section 68 of the Indian Evidence Act.
The plaintiffs have not pleaded that they were ready and willing to perform the contract. The evidence also does not show that they had the capacity to pay the balance consideration.
The appellate court erred in decreeing specific performance without considering the mandatory requirements of Section 16(c) of the Specific Relief Act.
Procedural History
Plaintiffs filed suit for specific performance in trial court. Trial court partly decreed suit for refund of earnest money. Plaintiffs appealed to District Court, Latur (RCA No. 42/1995), which allowed appeal and decreed specific performance. Defendants filed second appeal in High Court (Second Appeal No. 764/2004). High Court allowed the second appeal and restored trial court's decree.
Acts & Sections
- Specific Relief Act, 1963: Section 16(c), Section 20
- Indian Contract Act, 1872: Section 55
- Indian Evidence Act, 1872: Section 68
