2012 Supreme(Mad) 1218

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. MOHAN RAM & THE HONOURABLE MR. JUSTICE G.M. AKBAR ALI
G. Janobai & Others
Versus
V.N. Devadoss
A.S.No.1114 of 2007 & MP No.2 of 2007
Decided On: 07-03-2012

Ratios
a. In a suit for specific performance, limitation to file a suit would commence from the date of expiry of the time granted for completion of the contract.
b. In a suit for specific performance of the sale agreement in respect of an immovable property, the plaintiff has to plead and prove his readiness and willingness to perform his part of the agreement throughout.
c. Time is not the essence of the contract in the case of sale of immovable property unless there is positive evidence regarding the actual intention of the parties to fix the time as the essence of contract.
d. In case of suit for specific performance of the sale agreement in respect of an immovable property, the readiness is related to the compliance of certain terms which are agreed upon in the sale agreement before completing the sale and also the financial position of the buyer to pay the balance of sale consideration.
e. In a suit for specific performance of an agreement in respect of an immovable property, mere failure of the purchaser in paying the full court fees at the initial stage of the filing of the suit or his expression of his inability in paying the same would not raise any presumption against him regarding his readiness or capacity to pay the balance of sale price.

Headnote:(A)Specific Relief Act, 1963(47 of 1963)-Sec.20-Specific performance-Immovable property-Sale-Agreement-Failure-Enforcement-Time-Essence-Readiness-Delay-Pauper suit-Capacity-Limitation-Plaintiff had entered into an agreement with the defendants/owners for plotting out the agricultural lands belonging to the defendant, get necessary approvals and exemptions and 18 months time limit was fixed to complete the transaction-After the expiry of 18 months, defendants revoked the agreement against which the plaintiff filed a suit for specific performance-While the purchaser contended that he had spent his money and labour for getting approval and exemptions, and was ready and willing to pay the balance of sale price, seller had contended that the purchaser had failed to complete the transaction within 18 months, had stated in a suit that he was not having funds to pay court fee which disclosed that he was not having the capacity to pay the balance, purchaser had alienated a part of the land to others and they had not been impleaded as parties which was a vital flaw and sought for dismissal of the suit-When the trial Court had decreed the suit and directed the purchaser to deposit the sale consideration which was also complied with by the purchaser, seller had preferred appeal-Parties stood by their stands-Held, limitation for filing the suit for specific performance would commence from the date of refusal of a party to perform his part of the obligation-Mere fact of expressing inability to pay the court fee in a suit filed would not create a presumption that the concerned party was not having the capacity to pay the balance of sale price-As the deed executed in favour of the subsequent purchasers had been cancelled by the Court, they were not the necessary parties-As the purchaser had performed all his obligation and he had not committed any default the balance of convenience was only in his favour-Appeal was dismissed with a direction to the purchaser to pay compensation to the seller for the escalation in the price of the land.

       (B)Specific Relief Act, 1963(47 of 1963)-Sec.20-Limitation Act, 1963(36 of 1963)-Art.54-Specific performance-Immovable property-Sale-Agreement-Failure-Enforcement-Limitation-Commencement-In a suit for specific performance, limitation to file a suit to enforce it would commence from the date of expiry of the time granted for completion of the contract.

       The sale agreement was entered on 2.9.1996. The time to complete the contract was agreed as 18 months. In a suit for specific performance, Art.54 of the Limitation Act applies.

        35. Therefore, the time starts only from 1.3.1998 or from the date of refusal to perform the contract. Three years is the period of limitation. The agreed date expired on 1.3.1998. Therefore, the suit can be filed on or before 1.3.2001 and the same has been filed on 1.3.2001. Therefore, the suit is not barred by limitation. Para 34, 35

       (C)Specific Relief Act, 1963(47 of 1963)-Sec.20-Specific performance-Immovable property-Sale-Agreement-Failure-Enforcement-Time-Essence-Readiness-Delay-Capacity-Limitation-In a suit for specific performance of the sale agreement in respect of an immovable property, the plaintiff has to plead and prove his readiness and willingness to perform his part of the agreement throughout-Time is not the essence of the contract in the case of sale of immovable property unless there is positive evidence regarding the actual intention of the parties to fix the time as the essence of contract-In case of suit for specific performance of the sale agreement in respect of an immovable property, the readiness is related to the compliance of certain terms which are agreed upon in the sale agreement before completing the sale and also the financial position of the buyer to pay the balance of sale consideration.

       The settled principle in a suit for the specific performance of the sale agreement is that it is the duty of the plaintiff to plead and prove the readiness and willingness. It is also well settled that the time is not the essence of the contract in the case of sale of immovable property unless there is positive evidence regarding the actual intention of the parties to fix the time as the essence of contract. Further the readiness may mean the capacity of the party to perform the contract which includes his financial position to pay the sale consideration. The readiness is also related to the compliance of certain terms which are agreed upon in the sale agreement before completing the sale. The willingness is the conduct of the party. Para 68

       It is also well settled that the purchaser need not actually tender the balance of sale consideration but need to prove that he had or has resources to pay the balance consideration. Para 70

       (D)Specific Relief Act, 1963(47 of 1963)-Sec.20-Specific performance-Immovable property-Sale-Agreement-Failure-Enforcement- Readiness-Delay-Pauper suit-Capacity-In a suit for specific performance of an agreement in respect of an immovable property, mere failure of the purchaser in paying the full court fees at the initial stage of the filing of the suit or his expression of his inability in paying the same would not raise any presumption against him regarding his readiness or capacity to pay the balance of sale price.

       In the decision in AIR 1994 SC 105, the failure of the purchaser to pay sufficient court fee was relied upon by the lower court to draw the inference that the purchaser had no capacity to pay the consideration and therefore, the relief of specific performance was refused. But the Apex Court has held that the mere failure of the purchaser to pay the sufficient court fee initially when the purchaser had pleaded his readiness and willingness to perform his part of the contract and had deposited the balance amount of sale consideration into the Court, the inference drawn by the Court below is not correct and the Apex Court granted the relief of specific performance. Para 81