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1994 Supreme(Kar) 388

Karnataka High Court
E.S.RAJAN - Appellant
Versus
R.MOHAN - Respondent
Decided On : 12-22-94
R.F.A. : 145 of 1993

Advocates:
B.H.KATARKI, S.Sekhar Shetty

The readiness and willingness of the vendee in a specific performance suit is not solely dependent on the actual availability of funds, but also on the vendee's capability to raise the requisite amount.

Headnote:

specific performance - Agreement to Sell - Section 55 of the Contract Act - Gomathinayagam Pillai and Others v Palaniswamy Nadar - Govind Prasad Chaturvedi v Hari Dutt Shastri and another - Smt. Chand Rani (dead) by L. Rs. v Smt. Kamal Rani (dead) by L. Rs. - readiness and willingness of the vendee - Kirpal Singh v Mst, Kartaro and Others

Fact of the Case:

The defendant, an absolute owner of a property, agreed to sell it to the plaintiff for a total consideration of Rs. 6,30,000. The agreement specified various conditions including the execution and registration of the sale deed within six months, securing a sale deed from the B. D. A., and vacating the premises from the tenants. Disputes arose when the defendant sent a notice stating that the plaintiff had not turned up to get the sale-deed registered after paying the balance consideration amount, and the plaintiff claimed readiness and willingness to finalize the sale transaction.

Finding of the Court:

The trial Court decreed the suit in favor of the plaintiff, holding that the plaintiff was ready and willing to perform his part of the contract, and it was the defendant who had avoided carrying out his part of the contract.

Issues: The issues framed by the trial Court included whether the plaintiff was ready and willing to perform his part of the contract, whether it was the defendant who evaded to execute the sale-deed, and whether the plaintiff was entitled to alternative prayer of liquidated damages.

Ratio Decidendi: The Court held that the mere fixation of a time period for the performance of a contract does not by itself make time the essence of the contract. The plaintiff in a suit for specific performance is obliged to prove readiness and willingness to perform his part of the contract. The plaintiff's financial position is a circumstance to show his readiness and willingness, but the actual availability of the amount with him as cash in hand at all times is not necessary.

Final Decision: The Court affirmed the trial Court's decision, dismissing the defendant's appeal without any order as to costs.

TIRATH SINGH THAKUR, J.

( 1 ) THIS is a Defendant's Appeal arising out of a suit for specific performance tried and decreed against him by the III Additional city Civil Judge, Bangalore. A few facts that have led to the filing of this Appeal may be stated first: the Defendant/appellant before us is the absolute owner of the suit property comprising a two-storeyed house situated at 5th Main Road, 'a' Block, Rajajinagar, Second Stage, bangalore-560 010. By an Agreement to Sell, dated 3rd January, 1985, the Appellant agreed to sell the said property to the respondent-Vendee for a total sale consideration of Rs. 6,30,000/ -. The Agreement, execution whereof is not in dispute interalia, envisaged the following:" (I) Out of the total consideration of Rs. 6,30,000/- the vendor acknowledged the receipt of Rs. 50,000/- as advance and agreed to receive the balance of rs. 5,80,000/- at the time of registration of the sale deed; (ii) The sale deed was to be executed and registered within six months from the date of the execution of the agreement to sell; (iii) The Vendor had to secure a sale-deed in his favour from the B. D. A. in respect of the property in question within the time granted for completion of the Sale deed in favour of the Vendee; (iv) The Vendor had also to secure and produce the Income-tax clearance Certificate at the time of registration of the sale-deed, in favour of the Vendee; (v) The Vendor had to get the premises vacated from the tenants who were occupying a portion of the same; (vi) After the tenants vacated and the Vendor vacated the portion which he was himself occupying,. the Vendor was to intimate to the Vendee in writing about his (Vendor's) preparedness to execute the sale deed; (vii) In case the Vendor committed any default in performance of his part of the contract he was liable to refund the sum of Rs. 50,000/- received as advance by him and also pay to the Vendee liquidated damages to the tune of Rs. 50,000/ -. Similarly in case the Vendee failed to pay the balance amount and get the sale- deed executed in his favour the advance of Rs. 50,000/- paid by him was to stand forfeited".

( 2 ) IN pursuance of the Agreement aforesaid, the Vendor-Appellant here in received on different occasions a total sum of Rs. 2 lakhs, from the Respondent-Vendee. The receipt of the said amount is not denied by the Appellant-Vendor, nor is it denied that even though the time originally fixed for completion of the sale transaction was six months from the date of the execution of the Agreement, the said period had been later extended by the parties mutually upto the 10th October, 1985. There is some dispute between the parties as to the reasons behind the extension in the period fixed for completion of the sale but the endorsement made on the foot of Agreement indicates that the extension of the period was by the mutual consent of the parties. The endorsement reads thus: endorsement No. V dated:it is mutually agreed to have the registration on the above deed of sale on 10-1-1985 i. e. on 10-10-1985. Sd/- (Sundarrajan)"

( 3 ) ON the 2nd October, 1985 while the period fixed for the completion of sale transaction had still not expired, the appellant-Vendor through his Counsel Mr. B. H. Katarki, advocate sent a telegraphic Notice to the Respondent-Vendee in which he stated that the Respondent-Vendee had not turned up to get the sale-deed registered after paying the balance consideration amount and that since the extended time had expired the Vendor was no longer obliged to perform his part of the contract. Since this notice has a bearing on the question of the Vendor's preparedness for completing the sale transaction, it is necessary to reproduce the same in extenso. "r. Mohan, M/s. Mohan Steel corporation 59/1, First n Block Rajajinagar, bangalore-560 010. 0 1030 R 22 Bangalore 285 under instruction and on behalf of my client E. S. Rajan, I issue this notice as under as per the sale agreement you have not turned up to get the sale-de



























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