2022 Supreme(SC) 54

SUPREME COURT OF INDIA
(From the High Court of Judicature at Madras)
Dhananjaya Y Chandrachud, AS Bopanna, JJ.
Shenbagam & Ors. – Appellants
Versus
KK Rathinavel – Respondent
Civil Appeal No 150 of 2022
Decided On : 20-01-2022

IMPORTANT POINTS
(1) Suit for Specific Performance – Plaintiff must establish that he was ready and willing to perform contract – In this regard, conduct of plaintiff must be consistent.
(2) Generally, time is not of essence in an agreement for sale of immoveable property – Remedy provided must not cause injustice to a party, specifically when they are not at fault.

Headnote:

(A) Agreement to Sell – Suit for Specific Performance – Suit decreed by Courts in favour of plaintiff-respondent – Plaintiff must establish that he was ready and willing to perform contract – In this regard, conduct of plaintiff must be consistent – No issue on readiness and willingness was framed by trial court – Foundation of a suit for specific performance lies in ascertaining whether plaintiff has come to court with clean hands and has, through his conduct, demonstrated that he has always been willing to perform contract – There is conspicuous absence in judgment of trial court of any reference to evidence led by respondent to indicate his willingness to perform contract – In evaluating whether respondent was ready and willing to perform his obligations under the contract, it is not only necessary to view whether he had financial capacity to pay balance consideration, but also assess his conduct throughout the transaction – Merely averring that he was waiting with balance consideration and believed that appellants would clear encumbrance is insufficient to prove that respondent-plaintiff was willing to perform his obligations under the contract – Payment of income tax by itself does not show that respondent had sufficient resources to pay for suit property – Plaintiff must prove that he is ready and willing to perform contract – Burden lies on plaintiff – Respondent has not led any evidence that he was ready or willing to perform his obligations under the agreement – Three decades have passed since agreement to sell was entered into between parties – Price of suit property would have escalated – Given blemished conduct of respondent-plaintiff in indicating his willingness to perform contract, remedy of specific performance of contract declined – Appellants directed to refund advance amount of Rs. 35,000/- received from respondent with 6% interest. [Specific Relief Act, 1963 – Section 16(c)] (Paras 16, 24, 25, 26, 29, 31, 36 and 37)

(B) Specific Relief Act, 1963 – Section 20 – Specific Performance of Contract – Generally speaking, time is not of essence in an agreement for sale of immoveable property – In deciding whether to grant remedy of specific performance, specifically in suits relating to sale of immovable property, courts must be cognizant of conduct of parties, escalation of price of suit property, and whether one party will unfairly benefit from decree – Remedy provided must not cause injustice to a party, specifically when they are not at fault. (Para 36)

Facts of the case:

Present appeal arises from a judgment and order dated 7th January 2019 of a Single Judge of the High Court of Judicature at Madras. The High Court dismissed the second appeal of the appellants, who are defendants to the suit for specific performance. The High Court confirmed decree for specific performance, and affirmed the decision of the first appellate court against the decree for specific performance.

Findings of Court:

First appellate court shifted the burden on appellants to prove that the respondent-plaintiff was incapable of paying balance consideration. It is an established principle of law that the plaintiff must prove that he is ready and willing to perform the contract. The burden lies on plaintiff. The respondent has not led any evidence that he was ready or willing to perform his obligations under the agreement.

Result : Appeal allowed.