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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K. Lakshman, B.R. Madhusudhan Rao, JJ
Yogasai Health Resorts Limited – Appellant
Versus
S. Padmavathi – Respondent
APPEAL SUIT No.60 OF 2008

A suit for specific performance is maintainable without a separate declaratory relief challenging a unilateral cancellation notice if the contract holds no express right for such termination. Readiness and willingness are demonstrated by the plaintiff's overall conduct and the fulfillment of reciprocal obligations by the parties.

Headnote:(A) Specific Relief Act, 1963 - Sections 16(c), 20 - Indian Contract Act, 1872 - Sections 39, 55 - Suit for specific performance - Readiness and willingness - Unilateral cancellation of agreement to sell - Maintainability of suit without separate declaration - Contractual obligations regarding mutation - Applicability of time as essence of contract. The court held that unilateral termination of a non-determinable agreement to sell is impermissible. A suit for specific performance is maintainable without seeking a declaration to challenge an invalid unilateral cancellation notice if the contract itself provides no right for such termination or if the right has been waived. (Paras 18, 23, 29, 30)

(B) Specific Relief Act, 1963 - Section 16(c) - Readiness and willingness - Demonstration of financial capacity and intention - Tendency to deposit balance consideration in Court - The court held that while readiness relates to financial capacity and willingness to intent, these must be established from the conduct of the parties. Tendering the balance amount, especially through court deposits, constitutes strong evidence of a bona fide intention to perform. (Paras 58, 69, 73, 82)

(C) Transfer of Property Act, 1882 - Section 53-A - Doctrine of part performance - Where possession has been delivered pursuant to an agreement of sale, the vendor cannot unilaterally disturb such possession without lawful termination of the agreement. (Paras 108, 110, 111)

Facts of the case:
The plaintiff entered into an agreement to purchase agricultural land. The defendant, having received part payment and handed over possession, failed to perform its obligation to mutate the land records as stipulated in the contract. The defendant subsequently issued a notice rescinding the agreement claiming the plaintiff failed to pay installments in time. The plaintiff, having approached the defendant repeatedly and offered payment, filed the suit for specific performance without formally challenging the rescission notice as a separate declaratory relief.

Findings of Court:
The court found that the defendant breached the contract by failing to perform the obligation of mutation. The unilateral rescission by the defendant was invalid as no such right was provided in the agreement. The plaintiff established continuous readiness and willingness by depositing the balance consideration in court and by the conduct of approaching the defendant despite the invalid termination notice. Time was not the essence of the contract despite the existence of a clause mentioning it, given the mutual obligations and the defendant's own failure to perform.

Issues: Whether the suit for specific performance is maintainable without a separate declaration for cancellation of the notice; whether time was the essence of the contract; and whether the plaintiff proved continuous readiness and willingness.

Ratio Decidendi: Where no right to unilateral termination exists in the contract, a party may treat the contract as subsisting and sue for specific performance without seeking a declaration that the rescission is invalid. Readiness and willingness are evidenced by the totality of conduct, including the deposit of consideration and insistence on the performance of reciprocal obligations.

Result: Appeal dismissed. Judgment of the trial court decreed in favour of the plaintiff affirmed.