High Court Of Calcutta
MONORANJAN MALLICK, M. N. RAY
P.G.SINHA - Appellant
Versus
COMMODORE K.C.CHATTERJEE - Respondent
FIRST APPEAL 246 Of 1987
Decided On : 04/25/1991
SPECIFIC PERFORMANCE OF CONTRACT - SALE OF PROPERTY - CONCLUDED CONTRACT - READINESS AND WILLINGNESS TO PERFORM - DISCRETION OF COURT - SPECIFIC RELIEF ACT, 1963 - SECTION 20 - SECTION 16.
Fact of the Case:
The plaintiff and defendant entered into a contract for the sale of the suit property for Rs. 40,000. The plaintiff paid Rs. 8,000 as earnest money and was to pay the balance of Rs. 2,000 within two months. The defendant accepted the earnest money and gave time to pay the balance. Both parties applied for permission from the Estate Manager for the sale transaction. The permission was delayed due to outstanding dues of the defendant. The plaintiff failed to pay the balance amount and the defendant returned the earnest money. The plaintiff filed a suit for specific performance of the contract.
Finding of the Court:
The court held that there was a concluded contract for sale between the plaintiff and the defendant. However, the plaintiff failed to prove his readiness and willingness to perform his part of the contract. He did not pay the balance of Rs. 2,000 as agreed and did not respond to the defendant's requests for payment of 95% of the consideration money. The court also found that the plaintiff did not have the financial capability to pay the full consideration money.
Issues: 1. Whether there was a concluded contract for sale between the plaintiff and the defendant? 2. Whether the plaintiff was ready and willing to perform his part of the contract? 3. Whether the court should exercise its discretion to grant specific performance of the contract?
Ratio Decidendi: 1. A concluded contract for sale is created when an offer is accepted and the terms of the contract are agreed upon. In this case, the court found that the defendant's offer to sell the property for Rs. 40,000 was accepted by the plaintiff when he paid Rs. 8,000 as earnest money. The court also found that the parties agreed to the terms of the contract, including the payment of the balance of Rs. 2,000 within two months and the obtaining of permission from the Estate Manager. 2. In order to obtain specific performance of a contract, the plaintiff must prove that he was ready and willing to perform his part of the contract. This includes having the financial capability to pay the consideration money. In this case, the court found that the plaintiff did not have the financial capability to pay the full consideration money and that he did not take any steps to procure the necessary funds. 3. The court has the discretion to grant or refuse specific performance of a contract. In this case, the court found that the plaintiff was not entitled to specific performance because he had not proved his readiness and willingness to perform his part of the contract.
Final Decision: The appeal was dismissed.
( 1 ) THIS is an appeal against the judgment and decree passed by the Assistant District Judge, 2nd Court, Nadaia dated 17/07/1986 dismissing the plaintiff-appellant's suit for specific performance of contract,
( 2 ) THE facts, which are necessary to dispose of the appeal may be briefly stated as follows :-on or about the 12-3-83 the defendant No. 1 who is the owner of the suit properly proposed to sell the same to the plaintiff for a consideration of Rs. 40,000. 00 and asked for an advance of Rs. 10,000. 00 to be paid within a month from that date. The plaintiff accepted the said proposal with this modification that he could not pay the advance within one month and subsequently the plaintiff sent to the defendant No. 1 a sum of Rs. 8,000. 00 by bank draft and offered to pay the balance amounting to Rs. 10,000. 00 within two months thereafter. The defendant No. 1 accepted the bank draft, waiving the time element as well as the short advance. It was agreed between the parties that the balance amount of consideration would be paid after the permission has been obtained from the Estate Manager, Development and Planning Department, Kalyani, whose permission was necessary for the transfer of the suit property as the suit property is situated at Kalyani. Therefore, both the plaintiff and the defendant No. 1 applied for approval of transfer. In the meantime the plaintiff came in to possession of the suit property. Necessary permission could not, however, be obtained from the office of the defendant No. 2 because certain amounts found to have been outstanding against the defendant No. 1. The defendant No. 1 cleared up his dues payable to the defendant No. 2 in a certificate case but it was also detected that the defendant No. 1 had not paid the defendant No. 2 the last instalment for acquiring the house property. The said instalment was, however, actually paid by the defendant No. 2 by a bank draft which was even mouth received but it was misplaced and the Department could present it for encashment. The dispute over the draft could not be resolved and the plaintiff, therefore, failed to get the transaction completed as per agreement even though tie was all along ready and willing to fulfil the part of the contract. The plaintiff by a lawyer's notice asked the defendant No. 1 to execute and register the sale deed in his favour by accepting the balance amount due as per contract within 15-5-83. As the defendant No. l did not respond the plaintiff has filed the suit for specific performance of the contract against the defendant. The defendants on contesting the suit have made the following allegations. There was never any proposal for sale nor was there any acceptance of any such proposal. Under certain misconception of fact he made an offer to the plaintiff for payment of an advance of Rs. 10,000. 00 by April, 1980 and invited the plaintiff to enter into a proper agreement for sale on a payment of a balance consideration of Rs. 10,000. 00 but the plaintiff sent him a draft of Rs. 8,000. 00 only which was not in accordance with the terms of the offer and the defendant No. 1 accepted the draft on condition that the balance would be paid by the plaintiff within a couple of months. Only on such payment there could not have been a contract for sale. But the plaintiff did not pay the balance amount nor did he have any means either to pay the amount of advance as stipulated or to pay the balance consideration money and was, therefore, never ready and willing to perform his part of the contract. The plaintiff did not occupy the suit premises with the plaintiff's permission but as an employee of M/s. Andrew Yule and Co. Ltd. , who are actually the tenant in respect of the suit property under the defendant No. 1. The defendant No. 1 sent back Rs. 8,000. 00 to the plaintiff and there being no concluded contract between the parties, the plaintiff is not entitled to any relief in this suit. The defendant No. 2, the Estate Man
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