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2024 Supreme(AP) 1031

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
V.R.K. KRUPA SAGAR, J.
Sajja Subhash Chandra Bose - Appellant
Versus
Mr. Kota Suryanarayana and Others - Respondents
First Appeal No. 754 of 2010
Decided On : 21-06-2024

Advocates Appeared:
For the Appellant : Sri V.V.N. Narayana Rao.
For the Respondent: Sri P. Narasimha Rao, Achanta Srinivas.

IMPORTANT POINT
An unregistered agreement for sale can be enforced for specific performance, and a rise in property prices alone does not justify denying such relief if the purchaser is ready and willing to perform.

Headnote:

Specific Performance - Agreement for Sale - Section 54 of the Transfer of Property Act, 1872; Section 17 of the Registration Act, 1908; Section 16(c) of the Specific Relief Act, 1963 - The court interpreted the enforceability of an unregistered agreement for sale and the implications of time being of the essence in contracts, ultimately allowing specific performance despite the rise in property prices.

Fact of the Case:

The appellant sought specific performance of an agreement for sale of a property, which was disputed by the respondents on grounds of non-registration and lapse of time. The trial court granted alternative relief of refund instead of specific performance.

Finding of the Court:

The court found that the agreement for sale was valid and enforceable despite being unregistered, and that the appellant was ready and willing to perform his part of the contract. The rise in property prices was not a valid reason to deny specific performance.

Issues: Whether the agreement for sale was enforceable despite being unregistered, whether time was of the essence, and whether the rise in property prices justified refusal of specific performance.

Ratio Decidendi: The court held that an unregistered agreement for sale can be enforced in a suit for specific performance, and that mere rise in property prices does not negate the right to specific performance if the plaintiff is ready and willing to perform.

Result: The appeal is allowed, and the appellant is entitled to specific performance of the agreement for sale.

JUDGMENT :

V.R.K. Krupa Sagar, J.

An agreement for sale is the cause of controversy. Seeking specific performance of the agreement for sale, the purchaser filed O.S.No.99 of 2007 before the learned VII Additional District and Sessions Judge, (Fast Track Court) at Vijayawada. After due contest, judgment and decree were passed in favour of the plaintiff. What is to be noticed is that in the said suit the plaintiff/purchaser primarily sought the relief of specific performance of the agreement for sale and made an alternative prayer for refund of advance sale consideration along with interest. The learned trial Court by its judgment dated 02.09.2010 granted the alternative relief. Feeling prick for not getting the primarily relief the plaintiff in the suit preferred this appeal under Section 96 C.P.C. Respondent Nos.1 to 4 in this appeal are the defendants in the suit. In this appeal the appellant prays this Court to grant him the relief of specific performance of agreement for sale.

2. Sri V.V.N. Narayana Rao, the learned counsel for appellant/plaintiff and Sri P.Narasimha Rao, the learned counsel for respondents argued their respective contentions.

3. Prefatory facts:

As could be seen from the record, the facts are that the appellant and the respondents are strangers to each other. A plot of land in an extent of 512.55 square yards with a terraced building therein door No.31-4-4 in Municipal Ward No.27 in Gadde Purnachandra Rao street of Maruthi Nagar, Machavaram area of Vijayawada is a property owned by respondent No.1. His ownership was by virtue of certain relinquishment deeds dated 27.02.1974 and 21.12.1988 executed by the relevant family members. It is this property he offered for sale and the appellant agreed to purchase. The family of respondent No.1 consists of his wife/respondent No.4 and their two sons being respondent Nos.2 and 3. It is undisputed that respondent Nos.2 to 4 have no rights over the property of respondent No.1, but the intending purchaser/appellant requested the first respondent to join the execution by his family members also. Accordingly, all the respondents together executed an unregistered non-possessory agreement for sale dated 13.11.2000 which was marked as Ex.A.1 by the trial Court. Under this agreement respondents agreed to sell the above referred property to the appellant. Rs.20,00,000/- was settled as the sale consideration. Under three different cheques a total amount of Rs.2,50,000/- was paid by the appellant and was received by the respondents. This money was towards part of the sale consideration. The balance sale consideration of Rs.17,50,000/- was to be paid by the appellant on or before 12.11.2001. Thus, one year time was prescribed for payment of this balance sale consideration. It is agreed that on making such payment of balance sale consideration the respondents would execute a regular registered sale deed. In this agreement for sale, it is also mentioned that if the purchaser delayed his payment, he had to pay 12% interest per annum over the balance sale consideration. It is also stipulated that if the vendors delayed their execution of sale deed, they would pay 12% interest per annum over the advance sale consideration they had received and the accrued interest could be deducted by the purchaser from the balance sale consideration and then pay the balance sale consideration to the respondents. This agreement for sale refers to certain litigation in the Courts. It is mentioned that O.S.No.139 of 1988 and O.S.No.709 of 1991 were tried and disposed of by learned Principal Senior Civil Judge, Vijayawada whereunder the agreement referred property was found to be exclusively belonging to respondent No.1. Here itself it is to be recorded that this agreement for sale does not contain any other recital about pendency of any appeals or other cases pertaining to those two suits referred therein. It is also mentioned in Ex.A.1 that the vendors agreed to deliver the original settlement deeds and the

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