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2010 Supreme(SC) 946

2010 (7) Supreme 209
SUPREME COURT OF INDIA
R. V. Raveendran and Aftab Alam, JJ.
Man Kaur (Dead) By Lrs. — Appellants
versus
Hartar Singh Sangha — Respondent
Civil Appeal Nos. 147-148 of 2001
Decided on : 5-10-2010

IMPORTANT POINTS
The term “acts” in O. III, r. (1) and (2) would not include deposing in place and instead of the principal.
Specific performance could be enforced as provided in the Act even in the absence of a specific term for specific performance in the contract.

Headnote:(a) Specific Relief Act, 1963 – Section 16(c) – In a suit for specific performance, the plaintiff should not only plead and prove the terms of the agreement, but should also plead and prove his readiness and willingness to perform his obligations in terms of the contract. (Para 9)

        AIR 1996 SC 116; (2002) 9 SCC 582; (2003) 10 SCC 390; (1999) 3 SCC 573 – Relied upon

        (b) Code of Civil Procedure, 1908 – Order III, Rules 1 and 2 – The term “acts” would not include deposing in place and instead of the principal. (Para10)

        (2005) 2 SCC 217; (2008) 8 SCC 536 – Relied upon

        (c) Code of Civil Procedure, 1908 – Order III, Rules 1 and 2 r/w section 20, Indian Evidence Act, 1872 – Position in law as to who should give evidence in regard to matters involving personal knowledge stated. (Para 12)

        (d) Specific Relief Act, 1963 – Section 16(c) – No acceptable or valid evidence of such readiness and willingness of plaintiff to perform his part of the obligations in terms of the contract – Provisions of Section 16(c) not complied with – Suit for specific performance must fail. (Para 14)

        (2004) 6 SCC 649; (2005) 7 SCC 534 – Distinguished

        (e) Specific Relief Act, 1963 – Section 10 r/w section 21(2) and (5) – If the legal requirements for seeking specific enforcement of a contract are made out, specific performance could be enforced as provided in the Act even in the absence of a specific term for specific performance in the contract. (Para 18)

        (f) Specific Relief Act, 1963 – Section 23 – Even where the agreement of sale contains only a provision for payment of damages or liquidated damages and does not contain any provision for specific performance, the party in breach cannot contend that court cannot grant specific performance – Where the contract provides for compensation on breach of conditions of contract, specific performance may not be permissible. (Para 18)

        (g) Specific Relief Act, 1963 – Section 23 – The material on record showing breach of the conditions of sale by respondent-plaintiff Therefore, the earnest money stood forfeited disentitling respondent for refund of the earnest money. (Para 25)

       Facts of the case:

        1. The appellant Man Kaur was the owner of the suit property.

        2. The respondent-plaintiff was a Non-Resident Indian. An agreement of sale was entered between defendant represented by her husband and attorney holder Kartar Singh, as vendor, and plaintiff represented by his attorney holder Paramjit Singh, as purchaser.

        3. The respondent (represented by his attorney holder Jagtar Singh Sangha under power of attorney dated 1.3.1980), filed a suit for specific performance of the said agreement of sale, against the appellant.

        4. The trial court held that the plaintiff was entitled to specific performance.

        5. The appeal filed by the defendant was dismissed by the District Judge as also by the High Court.

       Finding of the Court:

        Plaintiff will be entitled to seek specific performance.

       Result : Appeal allowed.

       

Judgement Key Points

Based on the provided legal document, here are the key points:

  • Subject Matter: The case concerns a suit for specific performance of an agreement of sale regarding a plot of land in Chandigarh. (!) (!)
  • Parties Involved: The appellant (Man Kaur, the vendor) appealed against the respondent (Hartar Singh Sangha, the purchaser), who was a Non-Resident Indian. (!) (!)
  • Agreement Terms: An agreement dated 20.10.1978 was executed where the sale price was Rs. 1,50,000/- (or Rs. 1,60,000/- if vacant possession of the entire premises could be delivered). Rs. 10,000/- was paid as earnest money, and the sale was to be completed by 20.12.1978. (!) (!) (!) (!)
  • Breach Allegations: The vendor alleged that the purchaser failed to pay the balance consideration on the stipulated date (7.6.1979) despite being present at the Sub-Registrar's office, and that the purchaser's lack of funds constituted a breach, leading to the forfeiture of the earnest money. (!) (!) (!) (!)
  • Lower Courts' Findings: The trial court, District Judge, and High Court held that the plaintiff was duly authorized, time was not of the essence, the plaintiff was ready and willing, and the defendant was in breach, thus decreeing specific performance. (!) (!)
  • Appellant's Contentions: The appellant argued that the plaintiff failed to prove readiness and willingness because the plaintiff did not appear in the witness box, and the attorney holder examined had no personal knowledge of the transaction. The appellant also argued that the agreement only provided for damages, not specific performance. (!) (!) (!)
  • Legal Principle on Readiness and Willingness: Under Section 16(c) of the Specific Relief Act, 1963, a plaintiff must plead and prove readiness and willingness to perform their obligations. This is a condition precedent for specific performance. (!) (!)
  • Evidentiary Requirement for Principal: Generally, the principal must give evidence regarding their own state of mind and conduct (readiness and willingness). An attorney holder cannot depose in place of the principal for matters involving personal knowledge unless the principal has no knowledge at all. (!) (!) (!)
  • Facts Regarding Evidence: The plaintiff neither signed the agreement nor the plaint nor gave evidence. The attorney holder (Jagtar Singh Sangha) examined had no personal knowledge of the transaction prior to his appointment in 1980. The property dealer (Balraj Singh) could not testify to the plaintiff's internal readiness or financial capacity. (!) (!) (!) (!)
  • Conclusion on Readiness and Willingness: The Supreme Court held that there was no acceptable or valid evidence of the plaintiff's readiness and willingness. The plaintiff's failure to appear and testify, combined with the lack of personal knowledge in the witnesses examined, resulted in the failure to comply with Section 16(c). (!) (!)
  • Specific Performance vs. Damages: Even if the agreement provides for liquidated damages, specific performance can be enforced unless the contract clearly gives the defaulting party an option to pay money in lieu of performance. In this case, the agreement did not bar specific performance. (!) (!) (!)
  • Final Ruling: The appeal was allowed, the judgments of the courts below were set aside, and the suit for specific performance was dismissed. The earnest money stood forfeited. (!) (!)

JUDGMENT

R. V. Raveendran, J. —

The appellant (Man Kaur, who died during the pendency of this appeal and is represented by her Legal Representatives) was the defendant in a suit for specific performance of an agreement of sale, filed by the respondent. For convenience the appellant and respondent will also be referred by their ranks in the suit as ‘defendant’ and ‘plaintiff’ respectively.

2. The appellant Man Kaur was the owner of the suit property, a plot admeasuring 1000 sq.yards with the building thereon, identified as ‘Annexe No 508’ situated in Sector-18B, Chandigarh. The respondent-plaintiff was, at all the relevant points of time, a Non-Resident Indian living in United Kingdom. An agreement of sale dated 20.10.1978 was entered between defendant represented by her husband and attorney holder Kartar Singh, as vendor, and plaintiff represented by his attorney holder Paramjit Singh, as purchaser. The material terms of the said agreement were:

(i) The defendant shall sell the suit property to plaintiff for a consideration of Rs.1,50,000/-.

(ii) As the premises was tenanted the defendant was liable to deliver vacant possession of only a small portion which was in her occupation. If the vendor was able to get the tenant vacated and deliver vacant possession of the entire premises, then the sale price shall be Rs.1,60,000/-.

(iii) A sum of Rs.10,000/- was paid in cash as earnest money by the attorney holder of the purchaser to the attorney holder of the vendor.

(iv) The sale had to be completed by 20.12.1978 and the balance sale price shall be paid at the time of registration of the sale deed.

(v) The vendor had to deliver at the time of registration of the sale deed, her title deed, as also the NOC from the Estate Office, Chandigarh, permission for the sale under Urban Land (Ceiling and Regulation) Act 1976, and Clearance Certificate under section 230A of the Income Tax Act, 1961 and other relevant documents if any.

(vi) If the vendor committed default, he had to pay double the amount of earnest money to the purchaser and if the purchaser committed any default, the sum of Rs.10,000/- paid as earnest money would stand forfeited; and

(vii) The bargain was entered through the property dealer — M/s R. P. Sethi & Co. to whom both the parties should pay 2% commission on the total price; and in the event of default, the defaulting party shall pay 4% commission.

The agreement of sale was signed by the attorney holder of the vendor and attorney holder of the purchaser and witnessed by Hari Singh (Property Dealer) and Balraj Singh (property dealer carrying on business under the name and style of M/s R. P. Sethi & Co.). The agreement also contained an endorsement by Kartar Singh acknowledging the receipt of Rs.10000/- as earnest money in addition to another sum of Rs.1500/-.

3. On 25.4.1980 the respondent (represented by his attorney holder Jagtar Singh Sangha under power of attorney dated 1.3.1980), filed a suit for specific performance of the said agreement of sale, against the appellant. The plaint after referring to the terms of the agreement of sale, averred that the bargain was struck through property dealer Balraj Singh of M/s. R.P. Sethi & Co; that the time for performance was extended from time to time till 7.6.1979; that the defendant’s attorney holder and plaintiff reached Chandigarh on 7.6.1979; that though defendant’s attorney holder stated that he had come to Chandigarh to execute the sale deed, he did not go over to the Sub-Registrar’s office nor executed the sale deed; that plaintiff remained present in the Sub-Registrar’s office at Chandigarh, and recorded his presence on 7.6.1979 by presenting an application and getting an acknowledgement from the Sub-Registrar; that after 7.6.1979, neither the defendant nor her attorney holder Kartar Singh came to Chandigarh; that they did not also contact the plaintiff or the property dealer Balraj Singh; and that the repeated attempts of the property dealer Balraj Singh to contact defenda

























































































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