Featured image for Supreme Court Judgment dated 01-10-2019 in case of petitioner name Mohinder Kaur vs Sant Paul Singh
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Enforcement of Sale Agreements: Supreme Court Denies Specific Performance in Property Dispute

The case between Mohinder Kaur and Sant Paul Singh revolves around the enforcement of a sale agreement concerning a property in Rupnagar Municipality. The dispute stems from an agreement dated 16.03.1988 for a consideration of Rs.1,50,000, with an initial payment of Rs.15,000. The sale was contingent upon the release of the property from mortgage, leading to a further agreement on 20.06.1988, outlining that the sale deed would be executed within 15 days of redemption.

Upon redemption of the mortgage on 04.07.1989, the appellant (defendant) notified the respondent (plaintiff) on 27.07.1989, seeking payment of the remaining consideration and execution of the sale deed. The respondent, however, sought proof of redemption, leading to the appellant canceling the agreement on 01.09.1989 and forfeiting the earnest money. The respondent subsequently filed a suit for specific performance, which was decreed in his favor, upheld on appeal.

Background of the Dispute

The controversy started when the appellant and respondent entered into a sale agreement for the property in question. The terms of the agreement stipulated that upon redemption of the mortgage, the appellant would provide due intimation to the respondent, who would then proceed with the remaining payment and execution of the sale deed.

However, after the appellant informed the respondent about the mortgage redemption, disputes arose over the adequacy of the intimation. The respondent insisted on further proof and failed to act in accordance with the agreement, leading to the appellant canceling the contract and forfeiting the initial payment.

Arguments Presented

Appellant’s Arguments

  • Shri Neeraj Kumar Jain, senior counsel for the appellant, contended that due intimation was provided regarding the redemption of the mortgage.
  • The respondent failed to fulfill his obligations by not paying the remaining amount or executing the sale deed.
  • The suit for specific performance was not maintainable without challenging the cancellation of the agreement.
  • The respondent did not appear in the witness box to establish his readiness and willingness to complete the transaction.
  • Relying on precedents such as I.S. Sikandar (D) by L.Rs. v. K. Subramani and Janki Vashdeo Bhojwani v. Indusind Bank Ltd., the appellant argued that failure to provide direct testimony weakened the respondent’s case.

Respondent’s Arguments

  • Shri Vineet Bhagat, counsel for the respondent, asserted that proper intimation regarding mortgage redemption was not given.
  • The respondent was ready and willing to perform but was hindered by the appellant’s conduct.
  • The absence of an explicit cancellation challenge did not preclude relief for specific performance.

Supreme Court’s Decision

The Court noted that while the property was redeemed on 04.07.1989 and intimation was sent on 27.07.1989, the respondent failed to act accordingly. The respondent’s absence from the witness stand and failure to provide evidence of readiness and willingness were crucial in the Court’s assessment.

The Court cited Janki Vashdeo Bhojwani v. Indusind Bank Ltd., stating that a power of attorney holder cannot testify on facts personal to the principal. Since the respondent had migrated to America and executed a power of attorney, the witness was not competent to deny the appellant’s claims.

Furthermore, the Court referenced I.S. Sikandar (D) by L.Rs. v. K. Subramani, emphasizing that a suit for specific performance requires a challenge to the agreement’s cancellation. The failure of the respondent to appear and testify was held as an adverse factor.

Thus, the Supreme Court concluded that the High Court’s ruling was unsustainable, as the respondent failed to prove his case for specific performance. The appeal was allowed, and the previous judgments were set aside.

Legal Precedents Cited

  • Janki Vashdeo Bhojwani v. Indusind Bank Ltd. (2005) 2 SCC 217: A power of attorney holder cannot testify on matters personal to the principal.
  • I.S. Sikandar (D) by L.Rs. v. K. Subramani (2013) 15 SCC 27: Failure to challenge agreement cancellation weakens a specific performance claim.
  • Vidhyadhar v. Manikrao: Absence of a party from the witness box can lead to an adverse presumption.

Key Legal Takeaways

  • A plaintiff seeking specific performance must prove their readiness and willingness to complete the transaction.
  • Failure to challenge the cancellation of an agreement can render a specific performance suit untenable.
  • A power of attorney holder cannot testify on matters personally known only to the principal.
  • The discretionary nature of specific performance relief requires clear evidence of compliance with contractual obligations.
  • The absence of a party from testifying in court can be held against them in legal proceedings.

Conclusion

The judgment underscores the importance of compliance with contractual terms and the necessity for plaintiffs to establish a clear case when seeking discretionary relief like specific performance. The Supreme Court’s decision reaffirms that courts will not enforce agreements where the party seeking enforcement fails to prove their capability and willingness to perform their part.


Petitioner Name: Mohinder Kaur.
Respondent Name: Sant Paul Singh.
Judgment By: Justice Navin Sinha, Justice Indira Banerjee.
Place Of Incident: Rupnagar Municipality.
Judgment Date: 01-10-2019.

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