Case Note & Summary
The dispute arose from an agreement to sell property between the appellant and the respondent, where the appellant paid a substantial earnest money amount. The respondent's postdated cheque for part of the sale consideration was dishonoured due to an attachment order by the Income Tax Department. The appellant attempted to rectify the situation by offering cash, but the respondent terminated the agreement and forfeited part of the earnest money. The appellant filed a suit for specific performance, which was dismissed by the trial court on grounds of lack of readiness and willingness. The High Court upheld this dismissal, leading to the present appeal. The Supreme Court found that the trial court failed to frame a specific issue regarding the plaintiff's readiness and willingness, which is essential in such cases. The court noted that the cheque was not returned due to insufficient funds but due to an attachment, thus questioning the High Court's reasoning. The Supreme Court remanded the case to the trial court for fresh consideration, directing it to frame the necessary issues and allow both parties to present evidence. The court ordered that this process be completed within twelve months, with no costs awarded.
Headnote
A) Contract Law - Specific Performance - Readiness and Willingness - Specific issue on readiness and willingness must be framed - Code of Civil Procedure, 1908, Section 20 - The court held that the trial court's dismissal of the suit for specific performance was improper as it did not frame a specific issue regarding the plaintiff's readiness and willingness to perform the contract. The matter was remanded for fresh consideration on this aspect (Paras 4-5).
Issue of Consideration
Whether the plaintiff was ready and willing to perform his part of the contract for specific performance of the agreement to sell.
Final Decision
The Supreme Court allowed the appeals in part, quashed the High Court's judgment and the trial court's dismissal of the suit, and remanded the matter for fresh consideration on the issue of readiness and willingness, directing the trial court to complete the exercise within twelve months.
Law Points
- Specific performance
- readiness and willingness
- dishonoured cheque
- agreement to sell
- legal notice
