1. Specific performance suit for agreement to sell immovable property — Appeal against reversal of trial decree. (Para 1 , 2 , 3 )
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2022 Supreme(Online)(MAD) 11764
HIGH COURT OF MADRAS
C.V. Karthikeyan, J
Munnusamy Chetty – Appellant
Versus
Ponnusamy Naidu – Respondent
S.A.No.630 of 2012|M.P.No.1 of 2012
Advocates:
For the Appellants/Petitioners: R. Thirugnanam
For the Respondents: P. Sankara Narayanan
For the Appellants/Petitioners: R. Thirugnanam
For the Respondents: P. Sankara Narayanan
In specific performance suits for immovable property, time is generally not the essence of the contract. Readiness and willingness can be established by filing a lodgment schedule for the balance consideration, and the absence of a pre-suit notice is not fatal to the suit.
Headnote:(A) Code of Civil Procedure, 1908 - Order 41 Rule 31 and Order 6 Rule 3 - Specific Relief Act, 1963 - Section 16(c) and Section 20 - Specific performance of contract - Readiness and willingness of the plaintiff - Deposit of balance sale consideration through lodgment schedule along with the plaint - Whether non-issuance of pre-suit notice is fatal to the suit.
(B) Time as essence of contract - In agreements for sale of immovable property, there is no presumption that time is the essence unless specifically agreed upon or inferred from express terms, the nature of the property, and surrounding circumstances. (Para 34)
(C) Readiness and willingness - Filing of a lodgment schedule to deposit the balance sale consideration into Court serves as strong evidence of the plaintiff's readiness and availability of funds to perform their part of the contract. (Paras 24, 26)
Facts of the case:
The plaintiff sought specific performance of an agreement/undertaking dated 09.10.1992 for the sale of three Punja lands. The defendant admitted to the execution of the agreement and receipt of advance payments. The trial court decreed the suit in favor of the plaintiff. However, the first appellate court reversed this decision and dismissed the suit solely on the ground that the plaintiffs had not issued a pre-suit notice before instituting the action. The plaintiffs subsequently filed a second appeal.
Findings of Court:
The court found that since the defendant had not rescinded the agreement, had not stipulated a forfeiture clause for time, and had admitted to the execution of the undertaking, the plaintiff's act of filing a lodgment schedule for the balance consideration established bona fide readiness and willingness.
Issues: The main issues were whether the deceased first plaintiff was ready and willing to perform his part of the contract despite the non-issuance of a pre-suit notice, and whether the deposit of balance sale consideration via a lodgment schedule was sufficient to establish such readiness.
Ratio Decidendi: The court ruled that non-issuance of a pre-suit notice is not a mandate in every case and does not disqualify a plaintiff from seeking specific performance if readiness and willingness are demonstrated. In cases of immovable property, time is not presumed to be the essence of the contract unless explicitly stated or inferred.
Result: Second appeal allowed; First Appellate Court judgment set aside and Trial Court decree restored.
Legal Category Hierarchy
- practice and procedure
- contract law
Table of Contents
2. Plaintiff argued readiness and willingness; defendant disputed time essence and lack of pre-suit notice. (Para 4 , 14 , 15 )
3. Execution and advance payment admitted; substantial consideration deposited; no rescission by defendant — readiness established. (Para 19 , 20 , 22 , 23 , 24 , 26 , 29 , 31 , 33 )
4. Time not essence of agreement unless expressly stipulated; non-issuance of pre-suit notice not fatal when readiness shown. (Para 21 , 22 , 34 , 35 )
5. Appeal allowed; trial decree restored; first appellate judgment set aside. (Para 36 , 37 )
6. When is time the essence of an agreement for sale of immovable property?
Only when parties expressly stipulate it; otherwise, no presumption of time being essence exists. (Para 21 , 22 , 34 )
7. Is a pre-suit notice mandatory before filing a suit for specific performance?
No, non-issuance is not fatal if the plaintiff demonstrates readiness and willingness through other conduct. (Para 14 , 15 , 35 )
8. What establishes readiness and willingness of a plaintiff in a specific performance suit?
Admission of agreement and substantial advance payment, plus filing a lodgment schedule to deposit balance, establishes readiness. (Para 19 , 24 , 26 , 29 )
9. Can a court refuse specific performance despite proved agreement and readiness?
Discretion must be exercised judiciously; refusal penalizes honest conduct and is disfavored. (Para 28 )
PRAYER: The Second Appeal filed under Section 100 of CPC, against the judgment and decree made in A.S.No.23 of 2008 dated 30.09.2011 on the file of the Principal District Court, Villupuram, reversing the judgment and decree made in O.S.No.279 of 1994 dated 10.04.2006 on the file of the Additional Subordinate Judge, Tindivanam.
JUDGMENT
The plaintiffs in O.S.No.279 of 1994 on the file of the Additional Sub Court, Tindivanam, are the appellants herein.
2.O.S.No.279 of 1994 had been originally filed by Munusamy Chetty against the defendant Ponnusamy Naidu seeking specific performance of an agreement dated 09.10.1992, by which, the defendant had undertaken and agreed to convey the suit schedule property on receipt of the balance sale consideration. There were three items of the suit schedule properties and they were Punja lands. The first item was in survey No.33/2 measuring 1.18 acres, the second item was in survey No.25/2 measuring 1.48 acres and the third item was in survey No.47/3 measuring 2.61 acres all at Sevanur village in Tindivanam.
3.The plaintiffs claimed in the plaint that the defendant had debts and therefore, was in need of money and had agreed to convey the aforementioned properties by way of the said undertaking given by him on 09.10.1992. It had been stated that the total sale consideration for the aforementioned properties was determined as Rs.1,34,000/- and on the date of the agreement dated 09.10.1992, an advance amount of Rs.55,000/- had been paid. A further advance amount of Rs.10,000/- had been paid on 11.02.1993. The sale should have been completed by 28.02.1993. The suit was filed on 14.11.1994. It had been stated that the plaintiff had also filed a lodgment schedule undertaking to pay the balance sale consideration of Rs.69,000/-. Stating that the plaintiff was ready and willing to perform his part of the agreement, the suit had been filed seeking specific performance directing the defendant to perform his part of the agreement, to register the sale deed with respect to the aforementioned properties.
4.A written statement was filed by the defendant. In the preliminary portion of the written statement from paragraphs 1 to 9, the defendant had denied the execution of the agreement. However, in paragraph No.10, he admitted that he had actually executed the said agreement dated 09.10.1992 but that he had received an advance of Rs.50,000/- and not Rs.55,000/-as alleged. He also admitted to receiving a further advance amount of Rs.10,000/- on 11.02.1993. The defendant also stated that owing to various other factors, there were some debts over the properties. The agreement had therefore been entered into and it was also stated that the suit for specific performance was beyond the period as stipulated in the agreement and therefore, not maintainable and that the relief sought should not be granted.
5.It must also be mentioned that during the course of the pendency of the original suit, the plaintiff died and his legal representatives were brought on record as 2 to 9th plaintiffs.
6.The trial Court, on the basis of the aforementioned pleadings, framed the following issues:
"1.Whether the undertaking dated 09.10.1992 is true, valid and enforceable?
2. whether the plaintiff was ready and willing to perform his part of the undertaking?
3.Whether the contention of the plaintiff that a sum of Rs.17,000/- should be adjusted towards the balance sale consideration consequent to the cutting and selling of the trees in the properties by the defendant is acceptable?
4.Whether the suit is maintainable without issuing a pre suit notice?
5.Whether the plaintiff is entitled to any further reliefs?
6.To what other reliefs, the plaintiffs are entitled to?"
7.The parties were invited to adduce evidence and accordingly, on the side of the plaintiffs, the 9th plaintiff Kaliammal was examined as PW1 and one other independent witness was examined as PW2. On the side of the defendant, the defendant was examined as DW1 and two other wit
