Case Note & Summary
The plaintiff, Kanchan Gopal Rohira, filed a suit against Nirman Construction Pvt. Ltd. and others seeking a declaration that the termination of an agreement for sale dated 9th January 1977 was illegal and for specific performance of the agreement. The agreement was for the sale of Flat No.15 on the fourth floor of building no.11 for a total consideration of Rs.26,000. The plaintiff paid Rs.10,500 as part of the consideration. The first defendant company was a builder and developer. After the agreement, some shareholders filed a company petition under sections 397, 398, 402, and 403 of the Companies Act, 1956, which was settled by consent terms on 4th March 1980. The consent terms mentioned the consideration as Rs.31,000 and acknowledged payment of Rs.10,500. The plaintiff alleged that after the settlement, the first defendant demanded an extra Rs.10,000 (Rs.5,000 by cheque and Rs.5,000 in cash) over the agreed consideration, and when she refused, the first defendant terminated the agreement by letter dated 30th September 1981 and forfeited the amount paid. The plaintiff contended that she was always ready and willing to perform her part and had offered the balance consideration. The first defendant denied the allegations and stated that the plaintiff failed to pay the balance despite demands. The court framed issues including whether the plaintiff was ready and willing to perform the contract and whether the termination was illegal. The court held that the plaintiff failed to prove her readiness and willingness as she did not produce evidence of having the balance amount ready or making repeated offers. The court also found that the plaintiff did not prove the alleged demand for extra payment. Consequently, the court dismissed the suit with costs, holding that the termination was valid and the plaintiff was not entitled to specific performance.
Headnote
A) Specific Relief Act, 1963 - Section 16(c) - Readiness and Willingness - The plaintiff must prove continuous readiness and willingness to perform the contract from the date of agreement till the date of decree. The court found that the plaintiff failed to adduce sufficient evidence to show that she had the balance consideration ready and that she made repeated offers to pay. (Paras 1-10) B) Contract Act, 1872 - Section 39 - Termination of Contract - The first defendant's letter dated 30th September 1981 terminating the agreement was held to be valid as the plaintiff had failed to pay the balance consideration despite the defendant's readiness to perform. The plaintiff's allegation of demand for extra payment was not proved. (Paras 11-15) C) Specific Relief Act, 1963 - Section 20 - Discretionary Relief - Even if the agreement was valid, the court has discretion to refuse specific performance if the plaintiff has not come with clean hands or has not performed her obligations. The plaintiff's conduct in not paying the balance amount despite the defendant's readiness disentitled her to relief. (Paras 16-20)
Issue of Consideration
Whether the plaintiff was ready and willing to perform her part of the agreement for sale and whether the termination of the agreement by the first defendant was illegal.
Final Decision
The suit is dismissed with costs.
Law Points
- Specific performance
- Readiness and willingness
- Termination of contract
- Forfeiture of earnest money
- Burden of proof
