2000 Supreme(SC) 1511

2000(6) Supreme 251
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
V.N. Khare & S.N. Variava, JJ.
Surjit Kaur -Appellant
versus
Naurata Singh & Anr. -Respondents
Civil Appeal No. 4701 of 1994
Decided on 13-9-2000
Counsel for the Parties :
For the Appellant : Ujjagar Singh, Sr. Advocate, Girish Sharma, Devender Verma, Ms. Naresh Bakshi, Advocates.
For the Respondents : (Sunil Gupta, A. Mariarputham, Mrs. Aruna Mathur and Anurag D. Mathur) Advocates for M/s. Arputham Aruna and Co., Advocates.

IMPORTANT POINT
If a contract is not capable of being performed in whole and a party clearly indicates that he is not willing to accept part performance, then there is no readiness and willingness, at all stages, to accept part performance. In that case there can be no specific performance of a part of the contract at a later stage.

Headnote:(i) Specific Relief Act, 1963-Section 12(3)-Specific performance-Sale agreement-Performance of part of contract-Condition precedent to grant-Contract providing for delivery of possession and then execution of sale deed-As on date fixed for execution of sale deed suit against vendor pending and injunction granted against her-Vendor willing to execute sale deed-Purchaser not willing unless possession given-Suit for specific performance claiming compensation in alternative-Specific performance refused as delivery of possession could not take place-On appeal purchaser expressing willing and ready to accept part performance-Held, not entitled to part performance-He already elected not to accept part performance-He cannot resile or get out of such election.

       Held : Both the parties understood that the date for performance was 30th June, 1981. The 1st Respondent sent a notice dated 22nd June, 1981 calling upon the Appellant to remain present before the Sub-Registrar on 30th June, 1981. Both the parties remained present before the Sub-Registrar on 30th June, 1981. The Appellant clarified that she could not deliver possession but that she was willing to execute Sale Deed and get it registered. The Appellant could not deliver possession because the 2nd Respondent had filed a suit had obtained an injunction in that suit. To be remembered that the 1st Respondent was also a party to that suit. This was the time when the 1st Respondent had to elect either to accept part performance and/or to complete the sale by executing Sale Deed and making payment of money. By refusing to accept part performance the 1st Respondent has elected not to accept part performance. To be seen that delivery of possession formed a considerable part of the whole and did not admit of compensation in money. The 1st Respondent had to pay the consideration of the whole without any abatement. He had to pay this consideration on 30th June, 1981. He appeared before the Sub-Registrar. He refused to execute the Sale Deed and pay the consideration. He refused to relinquish all claims to the performance of the remaining part of the contract. By refusing to have Sale Deed executed he was in effect refusing to pay the balance consideration. One he did that he no longer became entitled to claim part performance. This fact was lost sight off by the first Appellate Court as well as the High Court. The first Appellate Court failed to notice that in this case provisions of sub-clause (3) of Section 12 had not been met inasmuch as the 1st Respondent had not paid the consideration for the whole of the contract without abatement and he had elected not to relinquish all claims to the performance of the remaining part of the contract. It is settled law that in cases of part performance of contracts once an election is made then that party cannot at a later date resile or get out of the election. Once 1st Respondent elected not to accept part performance it was no longer open to him, on finding that he could not get the specific performance of the whole, to claim part performance at a later date. If this was to be permitted then all vendees would not pay the consideration amount on the dates fixed for performance. Whilst such dates may not be of the essence of the Contract, they still have some meaning. If this was to be permitted then vendees would withhold payments by first refusing to accept part performance and then after years of litigation agree to accept part performance at the Appellate stage. If this was to be permitted then the sellers would be kept out of their money for long periods of time by vendees. In our view, both the first Appellate Court as well as the High Court have committed a serious error in law by ignoring the fact that the conditions of Section 12(3) were not met in this case inasmuch as 1st Respondent had already elected not to accept part performance. Both these Courts ignored the fact that the 1st Respondent had elected not to relinquish all claims to performance of the remaining part of the Contract and had not paid the consideration. Both the Courts erred in law and on facts in allowing the 1st Respondent to resile from his earlier election. (Para 9)

       It is also settled law that specific performance cannot be granted to a party who has not been ready and willing at all stages to perform the contract. Of course, the 1st Respondent was ready and willing to perform the contract in its entirety. To that extent there would be readiness and willingness on the part of the 1st Respondent. But in cases where a contract is not capable of being performed in whole then the readiness and willingness, at all stages, is the readiness and willingness to accept part performance. If a contract is not capable of being performed in whole and a party clearly indicates that he is not willing to accept part performance, then there is no readiness and willingness, at all stages, to accept part performance. In that case there can be no specific performance of a part of the contract at a later stage. None of the authorities cited by Mr. Rao lay down anything contrary. In all those cases the party had been insisting on part performance and/or the time for election had not arrived. In none of those cases an election not to accept part performance had been made. It is under those circumstances that the Courts held that the party could elect to accept part performance at any stage of the litigation. In those cases it could not be said that there was no readiness and willingness to accept part performance. (Para 11)

       It must be clarified that this Court is not saying that merely because in correspondence or orally a party has insisted on performance of the whole contract he cannot thereafter elect to accept performance in part. A mere assertion that contract must be performed in full or even a filing of a suit for specific performance of the whole contract without averring that the Plaintiff is willing to accept performance in part may not amount to electing not to accept performance in part. It is only in cases where a party has categorically refused to accept performance in part i.e. he has unambiguously elected not to accept part performance that he will be precluded from subsequently turning around and electing to accept performance in part. Whether a party has categorically elected or not will depend on facts of each case. (Para 10)

       (ii) Specific Relief Act, 1963-Specific Performance-Sale agreement-Agreement providing for double the amount as compensation to be paid by vendor in case of failure on his part-Court awarding lesser compensation without assigning reason-Held, plaintiff entitled to compensation in terms of agreement. (Para 13)