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2025 Supreme(P&H) 298

PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH 
Nidhi Gupta, J.
Tej Singh  - Appellant 
Versus 
Trilok Chand – Respondent 
RSA-4204-2013 (O&M)
Decided on : 18-03-2025

Advocates:
Advocate Appeared:
For the Appellant :Mr. Akshay Bhan, Senior Advocate assisted by Mr. Santosh Sharma, Advocate and Mr. Varun Sandhu, Advocate
For the Respondent:Mr. Adarsh Jain, Advocate with Ms. Amandeep Kaur, Advocate and Ms. Kamaldeep Kaur, Advocate

The obligation to clear a mortgage lies with the seller, and the buyer's readiness to perform arises only after the seller fulfills this condition.

Headnote:(A) Specific Relief Act, 1963 - Section 13C - Agreement to Sell - Plaintiff filed suit for specific performance of an agreement dated 23.11.2005 for agricultural land, having paid Rs. 8 lacs as earnest money - Trial Court decreed suit for specific performance and directed defendant to clear mortgage and execute sale deed - First Appellate Court upheld the decree, dismissing defendant's appeal - Defendant contended that plaintiff failed to demonstrate readiness and willingness to perform contract, yet courts found defendant failed to redeem mortgage, making execution of sale deed impossible - Court emphasized that the onus to clear encumbrances lay with the defendant. (Paras 1-43)

(B) Readiness and Willingness - The plaintiff's readiness to perform the contract only arises after the defendant fulfills his obligation to clear the mortgage, as per the agreement - The plaintiff's presence at the Sub Registrar's office and assertion of funds were deemed sufficient to establish willingness. (Paras 12, 34, 36)

Facts of the case:
The plaintiff entered into an agreement with the defendant to purchase agricultural land, paying Rs. 8 lacs as earnest money. The defendant failed to clear a mortgage on the property, leading the plaintiff to file suit for specific performance after the defendant's non-compliance.

Findings of Court:
The courts found the defendant responsible for not clearing the mortgage, thus preventing the execution of the sale deed. The plaintiff was deemed ready and willing to perform the contract.

Issues: Whether the defendant's failure to clear the mortgage precluded the execution of the sale deed and whether the plaintiff demonstrated readiness and willingness to perform his part of the agreement.

Ratio Decidendi: The court held that the defendant's obligation to clear the mortgage was a condition precedent for executing the sale deed, and the plaintiff's readiness was contingent upon this condition being met.

Result: Appeal dismissed; decree for specific performance upheld.

JUDGMENT :

Nidhi Gupta, J.

The defendant is in second appeal against the concurrent judgments and decrees of the learned Courts below, whereby the suit for possession by way of specific performance of the Agreement to Sell dated 23.11.2005 filed by the plaintiff/ respondent herein, has been decreed by the learned trial Court vide judgment and decree dated 25.04.2012 holding the plaintiff entitled to money decree for return of earnest money of Rs. 8 lacs from the defendant with interest @ 6% per annum from the date of institution of suit till the realization of the amount. The Civil Appeal No. 66 dated 25.05.2012 filed by the defendant against the said judgment and decree dated 25.04.2012 was dismissed by the learned Additional District Judge, Faridabad vide judgment and decree dated 26.04.2013; and the cross-objections filed by the plaintiff were allowed with costs decreeing the suit of the plaintiff; and the defendant was directed to clear the mortgage with the Syndicate Bank, Seekri, within 15 days of the passing of the said judgment and thereafter, he shall be liable to get the sale deed executed in favour of the plaintiff within 30 days thereof on payment of balance sale consideration by the plaintiff.

2. The parties shall hereinafter be referred to as per their status before the learned trial Court i.e. the appellant is the defendant'; and the respondent is the plaintiff'.

3. The brief facts of the case as set out in the plaint are that on 23.11.2005, the defendant entered into contract with the plaintiff to sell his agricultural land as detailed in para 1 of the plaint, situated within the revenue estate of Vill. Piala, Teh. Ballabgarh, Distt. Faridabad total measuring 8 kanal 13 marla for a sum of Rs.28,32,875/-. The defendant received a sum of Rs. 3 lacs on 23.11.2005 as part payment from the plaintiff and he executed an Agreement to Sell and receipt on the said date. The defendant on 25.11.2005 further received a part payment of Rs. 5 lacs from the plaintiff in which Rs. 4 lacs was paid in cash and Rs. 1 lac through cheque No. 051910 dated 25.11.2005. So the defendant received a total sum of Rs. 8 lacs from the plaintiff and he also executed a separate receipt on 25.11.2005 in favour of the plaintiff. The land in dispute was under mortgage with the Syndicate Bank, Seekri and as per terms and conditions of the Agreement, it was for the defendant to get the land free from all kinds of encumbrances. The plaintiff was always ready and willing to perform his part of contract and is still ready and willing to perform his part of contract but the defendant did not perform his obligation despite repeated requests of the plaintiff. The sale deed was agreed to be executed and got registered on or before 30.05.2006 but the said day was a public holiday and so the plaintiff went in the office of Sub Registrar, Ballabgarh on 31.5.2006 along with balance sale consideration amount and miscellaneous expenses but the defendant did not turn up to perform his part of agreement. On 29.05.2006, the plaintiff had also obtained a copy of jamabandi and found that the land was still having lien of the bank and was not got released by the defendant. Thereafter a legal notice dated 30.5.2006, was also served upon the defendant to get the land released from the lien of the bank and execute the sale deed in favour of the plaintiff but in vain forcing the plaintiff to file the present suit.

4. Upon notice, the defendant appeared and filed written statement contesting the suit on various grounds inter alia stating that the target date of 30.05.2006 being public holiday, the defendant had duly reached the office of Sub Registrar for execution of sale deed on 31.05.2006 but the plaintiff did not reach the office of Sub-Registrar along with balance sale consideration amount and other miscellaneous expenses. It was further stated in the written statement that the defendant had received a notice dated 30.5.2006 through counsel of the plaintiff which was duly

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