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2025 Supreme(Gau) 2317

THE GAUHATI HIGH COURT, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
DEVASHIS BARUAH, J.
On The Death Of Birendra Kumar Saikia, His Legal Heirs Namely- Mrs Pranati Saikia – Appellant
Versus
Ajit Chandra Bora, S/o. Late Milaram Bora – Respondent
RSA No.175 of 2012
Decided On : 25-03-2025

Advocates Appeared:
For the Appellant :Mr. A. Dhar, Advocate
For the Respondent:Mr. C. Goswami, Advocate

In a suit for specific performance, the unexplained acceptance of a partial refund of the advance consideration by the plaintiff signifies a lack of the requisite continuous readiness and willingness, rendering the agreement unenforceable under the law of specific relief.

Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Specific Relief Act, 1963 - Section 16(c) - Suit for specific performance - Readiness and willingness - Essential prerequisite - Acceptance of partial refund of advance consideration by a party without satisfactory explanation demonstrates a lack of continuous readiness and willingness to perform contractual obligations - Sustained readiness must be established from the date of the agreement through the suit proceedings. (Paras 24, 25, 26).

(B) Appeal - Scope and ambit - High Court’s jurisdiction in second appeal - Legal findings must emerge from established facts - Where pleadings fail to explain the return of advance payment, the trial court is justified in drawing an inference that the agreement has been cancelled, precluding a decree for specific performance. (Paras 25, 28).

Facts of the case:
The parties entered into a sale agreement for land with an advance payment made by the buyer. Subsequently, a portion of the advance was returned by the seller to the buyer. The buyer filed a suit for specific performance. The trial court dismissed the suit, concluding the buyer lacked readiness and willingness. The first appellate court reversed this decision, but the High Court restored the trial court's dismissal after finding that the buyer failed to explain the acceptance of the partial refund, thereby negating the continuation of the contract.

Findings of Court:
The court determined that the unexplained acceptance of a partial refund of the advance consideration serves as evidence that the plaintiff was not continuously ready and willing to perform, consequently proving that the agreement for sale had been effectively rescinded.

Issues: Whether the acceptance of a partial refund of the advance consideration vitiates the requirement of readiness and willingness under statutory provisions; and whether such conduct renders the contract unenforceable.

Ratio Decidendi: A plaintiff seeking specific performance must prove continuous readiness and willingness to perform their obligations. The receipt of a partial refund of advance consideration without clear explanation is inconsistent with a subsisting, enforceable contract, and failure of the plaintiff to justify this conduct during trial warrants the dismissal of the suit.

Result: Appeal allowed.

Table of Content
1. procedural context and factual origin of the suit for specific performance. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7)
2. defendant's contention regarding the cancellation of the agreement and framing of trial issues. (Para 8 , 9 , 10 , 11)
3. appraisal of findings by trial and first appellate courts regarding agreement validity and performance readiness. (Para 12 , 13 , 14 , 15 , 16 , 17)
4. assessment of the necessity of determining the first substantial question of law regarding third-party injury. (Para 18 , 19 , 20)
5. acceptance of partial refund constitutes non-readiness under section 16(c) of the specific relief act. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27)
6. doctrine of frustration is inapplicable if not specifically pleaded or supported by evidence. (Para 28)
7. setting aside appellate judgment and restoring trial court's decision to dismiss the suit. (Para 29 , 30 , 31)

JUDGMENT :

DEVASHIS BARUAH, J.

Heard Mr. A. Dhar, the learned counsel appearing on behalf of the appellants and Mr. C. Goswami, the learned counsel appearing on behalf of the respondent.

2. This is an appeal filed under Section 100 of the Code of Civil Procedure, 1908 (for short ‘the Code’) challenging the judgment and decree dated 19.05.2012 passed by the learned Civil Judge and Assistant District Judge, Jorhat (hereinafter referred to as ‘the learned First Appellate Court’) in Title Appeal No.7/2011 whereby the judgment and decree dated 14.02.2011 passed by the learned Munsiff No.2, Jorhat (hereinafter referred to as ‘the learned Trial Court’) in Title Suit No.11/2008 was reversed.

3. It is seen from the records that vide an order dated 04.12.2012, the Coordinate Bench of this Court had admitted the instant appeal by formulating three substantial questions of law. The said three substantial questions of law are reproduced herein under:

“1. Whether the decree passed in a suit for specific performance of an agreement could be enforced which involves injury to the property of a third party?

2. Whether demanding refund and acceptance of advance money of an agreement vitiate “willingness” of the party to perform the obligation of the promise?

3. Whether an agreement is dissolved by the doctrine of frustration when the entire performance of the agreement becomes substantially impossible?”

4. For the purpose of deciding as to whether the three substantial questions of law which are formulated by the Coordinate Bench of this Court vide the order dated 04.12.2012 are involved in the present appeal, this Court takes note of the facts which led to the filing of the instant appeal.

5. For the purpose of convenience, the parties herein are referred to in the same status as they stood before the learned Trial Court.

6. An agreement dated 14.12.2006 admittedly was entered into between the plaintiff and the defendant for sale of a plot of land which was specifically described in Schedule-A to the plaint at a consideration of Rs.50,000/-. The case of the plaintiff is that the plaintiff had paid an amount of Rs.20,000/- on the date of execution of the deed of agreement for sale and the remaining amount of Rs.30,000/- was to be paid at the time of execution of the registered deed of sale. It is the specific case of the plaintiff that the plaintiff had requested the defendant to execute the deed of sale and receive the remaining amount of Rs.30,000/- but the defendant did not take any steps in that regard. As such, a legal notice was also issued 07.09.2007 asking the defendant to execute the deed of sale within a period of 30 days from the date of receipt of the said notice. However, the defendant did not take any steps. It is under such circumstances, the plaintiff instituted the suit being Title Suit No. 79/2007 before the Court of the Munsiff No.1 at Jorhat.

7. In the said suit, the plaintiff sought for a decree for specific performance of the agreement dated 14.12.2006 thereby directing the defendant to execute and register the deed of sale in favour of the plaintiff in re

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