1. Agreement for sale of property subject to mortgage — Redemption of mortgage and notice — Cancellation of agreement — Suit for specific performance. (Para 2 )
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2019 Supreme(SC) 1089
SUPREME COURT OF INDIA
NAVIN SINHA, INDIRA BANERJEE, JJ.
Mohinder Kaur – Appellant
Versus
Sant Paul Singh – Respondents
Civil Appeal No(s). 2869-2870 of 2010
Decided on : 01-10-2019
Advocates Appeared:
For the Appellant(s) :Neeraj Kr.Jain, Tanuj Bagga, Siddharth Jain, Advocates
For the Respondent(s):Vineet Bhagat, Advocate
For the Appellant(s) :Neeraj Kr.Jain, Tanuj Bagga, Siddharth Jain, Advocates
For the Respondent(s):Vineet Bhagat, Advocate
IMPORTANT POINTS
(1) Power of attorney holder cannot depose for principal in respect of matters of which principal alone can have personal knowledge and in respect of which principal is entitled to be cross-examined.
(2) Suit for specific performance – It is for plaintiff to establish his readiness and willingness for execution of agreement by proving his capacity to pay balance consideration amount.
Headnote:
Specific Relief Act, 1963 – Sections 16(c) and 20 – Agreement to sell – Suit for specific performance – It was for respondent to establish his readiness and willingness for execution of agreement by entering witness box and proving his capacity to pay balance consideration amount – Except for solitary statement in plaint no evidence whatsoever was led on behalf of respondent with regard to same – Failure of respondent to appear in witness box can well be considered to raise adverse presumption against him – Power of attorney holder cannot depose for principal in respect of matters of which principal alone can have personal knowledge and in respect of which principal is entitled to be cross-examined – Agreement was cancelled by appellant and consideration already paid confiscated under intimation to respondent – Merely because respondent may not have been satisfied by intimation given by appellant regarding release of property from mortgage, it cannot be construed as readiness and willingness on part of respondent and his capacity to perform his obligations under agreement, particularly when he is stated to have subsequently migrated to America – Specific performance being discretionary in nature, respondent cannot be held to have established his case for grant of such relief – Impugned orders under appeal set aside. (Paras 5, 6, 7, 8 and 9)
Facts of the Case:
Defendant is in appeal, aggrieved by concurrent findings decreeing suit for specific performance filed by respondent.
Findings of the Court:
Agreement was cancelled by appellant on 01.09.1989 and consideration already paid confiscated under intimation to respondent. Respondent never challenged communication of cancellation.
Result : Appeals allowed.
Legal Category Hierarchy
Table of Contents
2. Maintainability of specific performance suit without challenging cancellation — Competency of power of attorney holder to prove readiness and willingness — Validity of redemption notice. (Para 3 , 4 )
3. Failure of plaintiff to testify creates adverse presumption — Power of attorney holder cannot depose on matters of personal knowledge of the principal. (Para 5 , 6 , 8 )
4. Suit for specific performance is unsustainable if the agreement is cancelled and the cancellation is not challenged by a prayer for declaratory relief. (Para 7 )
5. Impugned orders set aside and appeals allowed. (Para 9 )
6. Can a power of attorney holder depose on behalf of the principal regarding matters of personal knowledge?
No. A power of attorney holder can depose regarding acts performed by them in pursuance of the power, but cannot depose on acts done by the principal or matters of which the principal alone has personal knowledge and is entitled to be cross-examined. (Para 6 )
7. What is the legal effect when a party to a suit fails to enter the witness box to state their case on oath?
Where a party to the suit does not appear in the witness box to state their case on oath and does not offer themselves to be cross-examined, a presumption arises that the case set up by them is not correct. (Para 6 )
8. Is a suit for specific performance maintainable if the agreement of sale has been cancelled and the cancellation is not challenged?
No. In the absence of a prayer for declaratory relief to declare the termination of the agreement as bad in law, a suit for specific performance based on a non-existing agreement is unsustainable in law. (Para 7 )
9. How must a plaintiff establish readiness and willingness in a suit for specific performance?
The plaintiff must establish their capacity to pay the balance consideration and perform obligations through evidence; mere bald assertions in the plaint are insufficient, especially if the plaintiff fails to testify personally. (Para 5 , 8 )
JUDGMENT :
NAVIN SINHA, J.
The defendant is in appeal, aggrieved by the concurrent findings decreeing the suit for specific performance filed by the respondent.
2. An agreement for sale with regard to House no.3343/3, situated in Rupnagar Municipality was executed between the parties on 16.03.1988 for an agreed consideration of Rs.1,50,000/-. At the time of execution, a sum of Rs.15,000/-was paid. As the suit property stood mortgaged to the education department, a further agreement dated 20.06.1988 was executed between the parties, that the sale deed would be executed within 15 days of the defendant obtaining release of the property from mortgage, giving due intimation to the plaintiff. A further sum of Rs.53,000/-and cash of Rs.2,000/-was paid to the defendant. The appellant after redemption of the mortgage, intimated the respondent on 27.07.1989 in accordance with the agreement, requiring payment of balance consideration and execution of the sale deed. The respondent disputed the redemption requiring proof of the same. The appellant, after due notice cancelled the agreement for sale on 01.09.1989 and forfeited the earnest money. The plaintiff then filed the instant suit seeking specific performance of the agreement by the defendant. The suit was decreed and the appeal preferred by the defendant was also dismissed. The second appeal of the defendant having also been dismissed, the present appeal has been lodged before this Court.
3. Shri Neeraj Kumar Jain, learned senior counsel appearing for the appellant, submitted that indisputably due intimation was given to the respondent after redemption of the mortgage, as required under the agreement. The respondent raised frivolous objections and failed to perform its obligations by payment of the balance consideration amount and to take steps for execution of the sale deed. The appellant, after due notice cancelled the agreement and confiscated the amount paid, for lapses of the respondent. Relying on I.S. Sikandar (D) by L.Rs. vs. K. Subramani and Ors., (2013) 15 SCC 27, it was submitted that the suit for specific performance simpliciter was not maintainable in absence of any challenge to the cancellation of the agreement, and seeking consequential declaratory relief. It was next submitted that the respondent did not enter the witness box to establish his readiness and willingness to perform his obligations under the agreement for sale. PW-1 was a power of attorney holder from the respondent by execution on 02.11.1989. She was not competent to depose with regard to events prior to the same, especially with regard to facts personal to the knowledge of the respondent. Reliance was placed on Janki Vashdeo Bhojwani and Ors. vs. Indusind Bank Ltd. and Ors., (2005) 2 SCC 217. Mere bald assertions in the plaint, were not sufficient, in absence of any evidence to establish readiness and willingness. Reliance was placed on Vijay Kumar and Ors. vs. Om Parkash, 2018 (15) SCALE 65.
4. Shri Vineet Bhagat, learned counsel for the respondent, submitted that the appellant did not give proper intimation regarding the redemption from mortgage of the suit property. The respondent was always ready and willing to perform his obligations under the agreement, but was hindered by the conduct of the appellant in not placing correct and relevant information in accordance with the agreement.
5. We have considered the submissions on behalf of the parties. It is an undisputed fact that the suit property stood redeemed from mortgage on 04.07.1989. The appellant sent due intimation by registered post to the respondent on 27.07.1989 and also provided him with a photocopy of the release deed, requiring the respondent to take steps for execution of the sale deed. The respondent by reply dated 02.08.1989 insisted on the nodues certificate, denying receipt of the release deed. The respondent then gave a power of attorney on 02.11.1989 to PW1. The witness was naturally unaware of the preceding events and denied receipt of t
