Case Note & Summary
The present second appeal arises from a suit for specific performance of an agreement of sale. The plaintiff (respondent) and defendant (appellant) entered into an agreement dated 19.06.1996 whereby the defendant agreed to sell his agricultural land bearing Survey No. 10/1-B admeasuring 1 H 62 R for a consideration of Rs.80,000. The defendant accepted Rs.60,000 as earnest money. The sale deed was to be executed on or before 02.04.1997. The defendant failed to execute the sale deed, leading the plaintiff to issue a public notice on 02.06.1997 and file Special Civil Suit No. 337 of 1997 for specific performance. The defendant contended that the agreement was a security for a hand-loan of Rs.20,000 taken due to his father's heart attack. The trial court partly decreed the suit, granting recovery of Rs.60,000 with interest but refusing specific performance. The plaintiff appealed to the First Appellate Court, which allowed the appeal and decreed specific performance. The defendant then filed this second appeal. The High Court framed a substantial question of law regarding the plaintiff's readiness and willingness. After analyzing the evidence, the court found that the plaintiff had proved his readiness and willingness by issuing notice and filing suit within time. The defendant's plea of loan transaction was not supported by evidence. The court upheld the First Appellate Court's decree for specific performance, directing the defendant to execute the sale deed within three months upon payment of the balance consideration of Rs.20,000. The appeal was dismissed with costs.
Headnote
A) Specific Relief Act - Specific Performance of Contract - Agreement to Sell - Section 16(c) - Readiness and Willingness - The plaintiff must prove continuous readiness and willingness to perform his part of the contract from the date of agreement till the date of decree. In the present case, the plaintiff issued notice and filed suit within the limitation period, and the trial court's finding of readiness was upheld. (Paras 1-10) B) Contract Law - Agreement to Sell - Earnest Money - Nature of Transaction - The agreement dated 19.06.1996 for sale of agricultural land for Rs.80,000 with receipt of Rs.60,000 as earnest money was held to be a genuine sale agreement and not a loan transaction. The defendant's plea that it was a security for a loan of Rs.20,000 was disbelieved due to lack of evidence. (Paras 2-8) C) Evidence Act - Burden of Proof - Onus to Prove Loan Transaction - The defendant who alleged that the agreement was a loan transaction had the burden to prove the same. The defendant failed to adduce any evidence to show that the agreement was not intended to be acted upon. (Paras 6-8)
Issue of Consideration
Whether the plaintiff is entitled to specific performance of the agreement of sale dated 19.06.1996?
Final Decision
The High Court dismissed the second appeal with costs, upholding the First Appellate Court's decree for specific performance. The defendant is directed to execute the sale deed within three months upon payment of the balance consideration of Rs.20,000 by the plaintiff.
Law Points
- Specific performance of contract
- Agreement to sell
- Earnest money
- Burden of proof
- Readiness and willingness
- Section 16(c) Specific Relief Act
- 1963
