Featured image for Supreme Court Judgment dated 17-09-2019 in case of petitioner name Ritu Saxena vs J.S. Grover & Anr.
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Specific Performance in Property Agreements: Supreme Court Upholds Dismissal of Suit

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The case under discussion involves a dispute over the enforcement of a property sale agreement. The appellant, Ritu Saxena, had filed a suit for specific performance, claiming that the respondents, J.S. Grover and Veena Grover, had agreed to sell a residential property in Gulmohar Enclave, New Delhi, but later refused to honor the agreement. The case was dismissed by both the Trial Court and the High Court, prompting the appellant to approach the Supreme Court.

Background of the Case

The appellant’s husband was an employee of M/s. GE Capital Services India Ltd., which had leased the disputed property. The lease was extended for 11 months from September 1, 2004. However, before the expiry of the lease, the appellant claimed to have entered into an agreement to purchase the property for Rs.50 lakhs.

According to the appellant, a sum of Rs.1 lakh was paid by cheque as an advance. The agreement stated that the respondents would execute all relevant documents, including the sale deed, possession certificate, and no-objection certificates (NOCs), for the transfer of the property.

The appellant submitted a letter dated July 30, 2004, indicating that ICICI Home Finance had approved a loan of Rs.50 lakhs. However, she alleged that the disbursal of the loan was contingent upon the respondents providing all required property documents. The appellant further claimed that despite repeated attempts to complete the sale, the respondents failed to comply, leading to the filing of a suit for specific performance on May 25, 2005.

Petitioner’s (Appellant’s) Arguments

The appellant argued:

  • The agreement to sell was valid and enforceable.
  • She was financially capable of paying the balance amount and had obtained loan approval from ICICI.
  • The respondents unreasonably refused to execute the sale deed.
  • The courts below erred in holding that she was not ready and willing to perform her part of the contract.

Respondents’ Arguments

The respondents denied any binding obligation under the alleged agreement and contended:

  • The agreement did not fulfill the requirements of a formal sale agreement.
  • The appellant failed to make the necessary payments as per the terms.
  • The suit was filed as a delaying tactic to obstruct their attempts to recover possession of the property.
  • Both the Trial Court and the High Court had rightly dismissed the claim for specific performance.

Trial Court and High Court’s Findings

The Trial Court held that the appellant had failed to prove her financial readiness and willingness to perform her obligations under the agreement. It observed:

“The plaintiff has neither produced details of the banker’s cheque nor submitted any bank statement showing availability of funds. There is no documentary evidence to prove her financial capacity.”

The High Court upheld this decision, stating that the appellant’s claim of financial readiness was not supported by any concrete proof, such as income tax records or bank statements.

Supreme Court’s Judgment

The Supreme Court, after analyzing the evidence, upheld the dismissal of the suit, stating:

“The sole document relied upon by the appellant to prove her readiness and willingness is the loan approval letter. However, this was subject to conditions, including the furnishing of property documents. The appellant has not produced any independent proof of financial capacity.”

The Court further noted that specific performance is a discretionary relief and cannot be granted in cases where the claimant fails to establish their readiness and willingness to fulfill contractual obligations.

Key Takeaways from the Judgment

  • Readiness and Willingness: A party seeking specific performance must provide concrete evidence of their financial ability and intention to execute the contract.
  • Discretionary Nature of Relief: Courts have the discretion to deny specific performance if the claimant fails to meet the legal requirements.
  • Significance of Documentary Evidence: Self-serving oral claims without supporting documents do not suffice in contractual disputes.

Conclusion

The Supreme Court’s decision reaffirms the principle that specific performance is not an absolute right but a discretionary remedy. Buyers seeking to enforce property agreements must ensure that they can substantiate their claims with solid evidence, particularly regarding their financial preparedness.


Petitioner Name: Ritu Saxena.
Respondent Name: J.S. Grover & Anr..
Judgment By: Justice L. Nageswara Rao, Justice Hemant Gupta.
Place Of Incident: New Delhi.
Judgment Date: 17-09-2019.

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