Case Note & Summary
The appellant, original plaintiff, filed a suit for specific performance of an agreement of sale dated 14-12-1988, whereby the respondent-defendant agreed to sell a field for Rs.32,500/- and received Rs.5,000/- as earnest. The balance was to be paid on 29-6-1989. The plaintiff gave notice on 16-3-1989 upon learning of defendant's attempt to sell elsewhere. The defendant replied falsely claiming the transaction was a loan. The trial court decreed specific performance, but the appellate court set it aside and ordered refund of earnest. The High Court allowed the second appeal, holding that the plaintiff was ready and willing to perform, as she gave notice and filed suit before the due date. The appellate court's reasoning that the property was ancestral and that specific performance would cause hardship was not justified. The court restored the trial court's decree of specific performance.
Headnote
A) Specific Relief Act, 1963 - Section 16(c) - Readiness and Willingness - Plaintiff must plead and prove continuous readiness and willingness to perform contract - In the present case, plaintiff gave notice and filed suit before the stipulated date, demonstrating readiness - Held that the plaintiff's conduct showed readiness and willingness (Paras 6-8).
B) Specific Relief Act, 1963 - Section 20 - Discretion of Court - Court may refuse specific performance if it would cause undue hardship - However, mere fact that property is ancestral does not automatically constitute hardship - Held that the appellate court erred in refusing specific performance on ground of hardship (Paras 9-10).
C) Contract Act, 1872 - Section 74 - Earnest Money - Earnest money is a guarantee for performance; if contract fails due to defendant's default, plaintiff is entitled to specific performance or refund - Held that the defendant's defence of loan was not proved (Paras 3-5).
Issue of Consideration
Whether the plaintiff was ready and willing to perform her part of the contract and whether the defendant's defence that the transaction was a loan was valid.
Final Decision
The High Court allowed the second appeal, set aside the judgment of the first appellate court, and restored the trial court's decree of specific performance of the agreement of sale dated 14-12-1988. The respondent was directed to execute the sale deed within three months upon payment of balance consideration.
Law Points
- Specific performance
- Readiness and willingness
- Agreement of sale
- Earnest money
- Loan transaction defence
- Ancestral property
- Section 16(c) Specific Relief Act
- 1963
- Section 20 Specific Relief Act
Case Details
2005 LawText (BOM) (12) 89
Second Appeal No.105 of 1996
Shri A.G. Gharote for Appellant, Shri N.K. Deshpande for Respondent
Smt. Jaywantabai W/o Hansraj Gajbhjiye
Raghunath S/o Kisan Lanjewar
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Nature of Litigation
Civil suit for specific performance of an agreement of sale of land.
Remedy Sought
Appellant/plaintiff sought decree of specific performance of contract of sale and possession of suit field.
Filing Reason
Respondent/defendant attempted to sell the property elsewhere and falsely claimed the transaction was a loan.
Previous Decisions
Trial court decreed specific performance; First appellate court set aside decree and ordered refund of earnest.
Issues
Whether the plaintiff was ready and willing to perform her part of the contract?
Whether the appellate court was justified in refusing specific performance on the ground that the property was ancestral?
Submissions/Arguments
Appellant argued that she was ready and willing to pay balance consideration and gave notice before due date.
Respondent argued that the transaction was a loan and property was ancestral, so he could not sell.
Ratio Decidendi
A plaintiff seeking specific performance must plead and prove readiness and willingness to perform the contract. Giving notice and filing suit before the stipulated date for performance demonstrates such readiness. The court's discretion under Section 20 of the Specific Relief Act, 1963 cannot be exercised arbitrarily; mere ancestral nature of property does not constitute undue hardship to refuse specific performance.
Judgment Excerpts
The plaintiff had given a notice on 16-3-1989, i.e., much before the date fixed for performance, and had also filed the suit on 24-4-1989, i.e., before the date fixed for performance. This clearly shows that the plaintiff was ready and willing to perform her part of the contract.
The appellate court's reasoning that the property was ancestral and that the defendant would be put to hardship is not justified. The defendant himself had agreed to sell the property and received earnest money.
Procedural History
The appellant/plaintiff filed Special Civil Suit No.428 of 1989 in the trial court for specific performance. The trial court decreed the suit. The respondent/defendant appealed to the District Court, Nagpur, which was heard by the 9th Additional District Judge, who set aside the decree and ordered refund of earnest. The plaintiff then filed the present second appeal in the High Court, which was admitted on 16-10-1997.
Acts & Sections
- Specific Relief Act, 1963: Section 16(c), Section 20
- Indian Contract Act, 1872: Section 74
