Case Note & Summary
The appellant, M/s. Dreams Construction Private Limited, filed a suit for specific performance of an agreement to sell a land admeasuring 1 Hector and 62.63 R situated at Mou'je Koregaon, Taluka Haveli, District Pune. The suit property was owned by respondent No.1, Ravindra Manohar Kulkarni, who had executed a power of attorney in favour of respondent No.2, Balasaheb Baburao Tupe, on 28th August 2007. The plaintiff claimed that an agreement to sell was executed on 5th September 2007 between the plaintiff and defendant No.2 (as power of attorney holder of defendant No.1) for a total consideration of Rs.1,10,00,000/-. The plaintiff paid an earnest amount of Rs.10,00,000/- on the date of the agreement. The balance consideration was to be paid within 12 months. The plaintiff alleged that despite being ready and willing to perform its part, the defendants failed to execute the sale deed. The defendants denied the execution of the agreement and contended that the plaintiff was not ready and willing to pay the balance amount. The trial court dismissed the suit for specific performance but directed refund of the earnest amount. The High Court, in appeal, examined the evidence and found that the plaintiff failed to prove its readiness and willingness to perform the contract. The court noted that the plaintiff did not produce any evidence of financial capacity or steps taken to arrange the balance consideration. The court also observed that the plaintiff did not issue any notice to the defendants demanding execution of the sale deed within the stipulated period. Consequently, the High Court dismissed the appeal and upheld the trial court's order for refund of earnest money.
Headnote
A) Specific Relief Act - Specific Performance - Readiness and Willingness - Section 16(c) Specific Relief Act, 1963 - The plaintiff must prove continuous readiness and willingness to perform its part of the contract from the date of the agreement till the decree. The court held that the plaintiff failed to adduce sufficient evidence to show financial capacity and willingness to pay the balance consideration. (Paras 1-29)
B) Contract Law - Agreement to Sell - Earnest Money - Refund - The court upheld the trial court's direction to refund the earnest money to the plaintiff as the agreement was not specifically enforced. (Paras 1-29)
Issue of Consideration
Whether the plaintiff was ready and willing to perform its part of the contract for specific performance of an agreement to sell the suit property.
Final Decision
The High Court dismissed the appeal and upheld the trial court's judgment and order dated 24th August 2011, directing refund of earnest money to the appellant.
Law Points
- Specific performance
- Readiness and willingness
- Section 16(c) Specific Relief Act
- 1963
- Power of attorney
- Agreement to sell
- Earnest money
- Refund
Case Details
2021 LawText (BOM) (04) 70
First Appeal No.2201 of 2011
Dr. Uday P. Warunjikar a/w Ms. Vaishnavi M. Gujarathi a/w Ms. Sonali Chavan a/w Mr. K. Gadade a/w Mr. Sumit Kate a/w Mr. Siddhesh Pilankar, for Appellant. Mr. Atul Damle, Senior Advocate a/w Ms. Niranjan P. Shimpi, for Respondents No.2 and 3.
M/s. Dreams Construction Private Limited through Shri Ramesh Ghisulal Mehta
Shri Ravindra Manohar Kulkarni, Shri Balasaheb Baburao Tupe, Shri Yogesh Balasaheb Tupe
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Nature of Litigation
Civil appeal against dismissal of suit for specific performance of agreement to sell immovable property.
Remedy Sought
Appellant sought specific performance of the agreement to sell the suit property and in the alternative, refund of earnest money with interest.
Filing Reason
Appellant claimed that respondents failed to execute the sale deed despite receipt of earnest money and readiness and willingness of the appellant.
Previous Decisions
The trial court (Joint Civil Judge, Senior Division, Pune) dismissed the suit for specific performance but directed refund of earnest amount of Rs.10,00,000/- to the appellant within two months.
Issues
Whether the plaintiff was ready and willing to perform its part of the contract for specific performance of the agreement to sell the suit property.
Submissions/Arguments
Appellant argued that it was always ready and willing to perform its part of the contract and had paid earnest money, but respondents failed to execute the sale deed.
Respondents contended that the plaintiff was not ready and willing to pay the balance consideration and did not take any steps to complete the transaction within the stipulated time.
Ratio Decidendi
The plaintiff must prove continuous readiness and willingness to perform its part of the contract from the date of the agreement till the decree. Failure to adduce evidence of financial capacity and steps taken to arrange balance consideration results in dismissal of suit for specific performance.
Judgment Excerpts
This is an appeal challenging the judgment and order dated 24th August, 2011 passed by the learned Joint Civil Judge, Senior Division, Pune in Special Civil Suit No.1780 of 2009 by which the learned Judge has dismissed the suit for specific performance and directed respondents No.1 and 2 to refund the earnest amount to the appellant within two months.
The plaintiff must prove continuous readiness and willingness to perform its part of the contract from the date of the agreement till the decree.
Procedural History
The appellant (original plaintiff) filed Special Civil Suit No.1780 of 2009 before the Joint Civil Judge, Senior Division, Pune for specific performance of an agreement to sell. The suit was dismissed on 24th August 2011, with a direction to refund earnest money. The appellant then filed the present First Appeal No.2201 of 2011 before the Bombay High Court.
Acts & Sections
- Specific Relief Act, 1963: Section 16(c)
