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2023 Supreme(AP) 1342

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
A.V.Ravindra Babu, J.
B.Sof - Appellant
Versus
K.Nagamma - Respondent
Appeal Suit No. 748 of 2018
Decided On : 23-08-2023

Advocates appeared:
N.Sriram Murthy, Advocate, K.Rajanna, Advocate, Vangara Kishore, Advocate

In specific performance cases, mutual obligations must be met; time is not of essence if one party defaults, necessitating performance from both sides.

Headnote:(A) Specific Relief Act, 1963 - Section 16 - Agreement of Sale - Suit filed for specific performance of agreement dated 3/8/2009. The trial court refused specific performance stating plaintiff failed to prove readiness and willingness; instead granted refund of advance sale consideration. The appellate court found both the defendants failed to fulfill essential obligations, and the plaintiff had substantial evidence of financial capacity and willingness. Appeals allowed to grant specific performance of contract against defendants 1 and 2, while claim against the 3rd defendant dismissed. (Paras 90 and 91)

Facts of the case:
The plaintiff, having advanced Rs.10,00,000 for the property, sought to compel defendants to execute a sale deed for the remaining balance of Rs.11,00,000 but was denied, resulting in the present appeal. Defendants argued plaintiff was not ready and did not comply with contractual timelines. (Paras 2-4)

Findings of Court:
The court emphasized the mutual obligations of parties under the agreement and established that the plaintiff was both present with payment and ready to perform. Defendants did not demonstrate readiness as stipulated and timed conditions were not essential under the facts presented. (Paras 46, 72, 83)

Issues: Whether the plaintiff demonstrated readiness to perform and whether time was essential to the contract. (Paras 18, 40)

Ratio Decidendi: The court ruled that the mutual obligations in the agreement necessitated reciprocal performance, thus determining timing not detrimental to one party's claims where the other failed to perform concurrently. The plaintiff's financial evidence underscored his readiness—an ingrained principle in contract law, emphasizing action over non-communication. (Paral 46, 74)

Result: The appellate court decreed specific performance of the agreement for defendants 1 and 2 and dismissed claims against the 3rd defendant, ordering execution of the registered sale deed. (Paras 90 and 91)

Table of Content
1. appellant's challenge of prior judgment. (Para 1 , 2 , 3)
2. plaintiff's claim of specific performance. (Para 4 , 5)
3. defendants' counterarguments against performance. (Para 6 , 7 , 8)
4. disclosure of ownership dispute over property. (Para 10 , 11 , 12)
5. issues settled for trial. (Para 13 , 14)
6. petition to receive additional evidence. (Para 18 , 19 , 20)
7. examination of the trial court witnesses. (Para 28 , 29 , 30)
8. conduct and arguments around readiness and willingness. (Para 34 , 35 , 36 , 37 , 38)
9. evaluation of mutual obligations in contract. (Para 39 , 40 , 41)
10. assessment of specific performance criteria. (Para 52 , 53 , 54)
11. implications of third-party ownership claims. (Para 67 , 68 , 69)
12. conclusion on specific performance entitlement. (Para 71 , 72)
13. final order and the implications of the decision. (Para 91 , 92)

JUDGMENT

1. The judgment, dtd. 16/3/2018, in Original Suit No.12 of 2010, on the file of the Court of II Additional District Judge, Kurnool at Adoni (for short, 'the learned Additional District Judge') is under challenge in this Appeal filed by the appellant.

2. The appellant in the capacity of the plaintiff filed the aforesaid Suit with a prayer to grant specific performance of agreement of sale, dtd. 3/8/2009, so as to direct the defendants 1 to 3 to execute a regular sale deed in his favour in pursuance of the said agreement of sale and in alternative prayed for a direction to the defendants 1 and 2 to pay an amount of Rs.10,00,000.00, which was paid to them by the plaintiff as advance sale consideration, with interest at the rate of 24% per annum from 3/8/2009 till the date of payment.

3. The learned Additional District Judge, granted alternative relief of refund of advance sale consideration by directing the defendants 1 and 2 to refund the advance sale consideration amount of Rs.10,00,000.00 to the plaintiff with interest at the rate of 6% per annum from the date of agreement of sale i.e., 3/8/2009 till the date of realization and further directed that in the circumstances of case each party shall bear their own costs.

4. Aggrieved of the said judgment, declining to grant the relief of specific performance and inclining to grant the alternative relief of refund of advance sale consideration, the plaintiff filed the present Appeal challenging the judgment, as above, by contending that he is entitled to the relief of specific performance of agreement of sale, dtd. 3/8/2009.

5. Interlocutory Application No.1 of 2023 is filed by the petitioner/appellant seeking to receive the documents annexed to the Application as additional evidence in the present Appeal.

6. The case of the plaintiff, in brief, before the learned Additional District Judge, as set out in the averments of the plaint, is that defendants 1 and 2 agreed to sell the plaint schedule property in favour of the plaintiff for a sum of Rs.21,00,000.00. After receiving the advance amount of Rs.10,00,000.00 from the plaintiff, they executed an agreement of sale on 3/8/2009. They have to execute the regular registered sale deed in favour of the plaintiff after receiving the balance sale consideration of Rs.11,00,000.00 on or before 2/11/2009. As per the recitals of the agreement of sale, defendants 1 and 2 have to get the land measured on or before 2/11/2009. When the plaintiff approached defendants 1 and 2 and requested them to receive the balance sale consideration to execute regular sale deed in his favour, they postponed the issue on one pretext or the other. Plaintiff has been always ready and willing to perform his part of contract. Therefore, he sent a notice, dtd. 31/10/2009, through telegram as well as by courier service calling upon the defendants 1 and 2 to execute regular sale deed in his favour after receiving the balance sale consideration of Rs.11,00,000.00 on 2/11/2009. The defendants 1 and 2 received the said notice. The plaintiff was present in the Sub-Registrar's Office (SRO), Adoni on 2/11/2009 with

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