Specific Performance in Property Contracts: Supreme Court Reverses High Court Decision

The case of Jagjit Singh (D) Through LRs v. Amarjit Singh (D) Through LRs revolved around a dispute over the enforcement of a property sale agreement. The Supreme Court had to decide whether the plaintiff had fulfilled the legal requirement of proving his readiness and willingness to perform his part of the contract, a crucial element in a suit for specific performance.

Background of the Case

The dispute arose from an agreement dated 17.10.2000 between Amarjit Singh (plaintiff) and Jagjit Singh (defendant). According to the plaintiff, the defendant agreed to sell a half share in a shop for Rs. 1,50,000. The plaintiff claimed that Rs. 1,30,000 was paid in cash at the time of execution of the agreement, with the remaining balance due before 30.03.2003, when the sale deed was to be executed.

The plaintiff alleged that by mutual consent, the execution of the sale deed was extended to 09.10.2003. However, the defendant denied ever executing the sale agreement and claimed he had not received any payment.

Trial Court Decision

The trial court dismissed the suit, finding that no agreement to sell had been executed between the parties. It concluded that the plaintiff failed to prove the existence of a valid sale agreement and that the defendant had not received any payment.

First Appellate Court’s Findings

The plaintiff appealed against the trial court’s decision. The first appellate court set aside the trial court’s finding that no agreement to sell was executed. However, it held that:

• Even if the agreement was valid, the plaintiff failed to prove his readiness and willingness to perform his part of the contract.
• The plaintiff did not take any steps to complete the transaction from 17.10.2000 to 09.10.2003.
• There was no evidence to show that the plaintiff had the financial capability or intention to pay the remaining amount within the agreed period.

Consequently, the first appellate court dismissed the suit.

High Court Decision

The plaintiff filed a second appeal before the High Court, which reversed the first appellate court’s ruling. The High Court held that:

• The finding of the lower appellate court was “erroneous, fallacious, and perverse.”
• The fact that the plaintiff sent a legal notice on 13.10.2003 and filed the suit on 09.01.2004 was sufficient proof of his readiness and willingness to perform the contract.

Supreme Court’s Observations

The Supreme Court strongly disagreed with the High Court’s reasoning. It held:

“We fail to understand as to how the issuance of notice on 13.10.2003 or the filing of the suit on 09.01.2004 can lead to the conclusion that the plaintiff was always ready and willing to perform his part of the contract from the date of agreement to sell till the date of filing of the suit.”

The Court reiterated the settled legal principle that a plaintiff seeking specific performance must plead and prove continuous readiness and willingness to fulfill their contractual obligations.

Key Legal Principles Cited

• Section 16(c) of the Specific Relief Act: This provision mandates that the plaintiff must prove readiness and willingness to perform the contract.
• Gomathinayagam Pillai v. Pallaniswami Nadar (1967) 1 SCR 227: The plaintiff must demonstrate readiness and willingness from the date of the agreement until the filing of the suit.
• J.P. Builders v. A. Ramadas Rao (2011) 1 SCC 429: It is not enough to merely assert readiness and willingness; evidence must support such claims.

Supreme Court’s Final Verdict

The Supreme Court ruled that the High Court had wrongly interfered with the well-reasoned findings of the first appellate court. It stated:

“The High Court, while upsetting the judgment of the District Judge, lost sight of the provisions of the Specific Relief Act and the law in this regard.”

The Supreme Court:

• Set aside the High Court’s ruling.
• Restored the decision of the first appellate court.
• Dismissed the plaintiff’s claim for specific performance.

Conclusion

This case underscores the importance of proving readiness and willingness in a suit for specific performance. The Supreme Court reaffirmed that mere filing of a suit or sending a legal notice does not automatically satisfy this requirement. A plaintiff must provide clear evidence demonstrating an unbroken commitment to fulfilling their contractual obligations from the date of agreement until litigation.

Petitioner Name: Jagjit Singh (D) Through LRs.
Respondent Name: Amarjit Singh (D) Through LRs.
Judgment By: Justice Madan B. Lokur, Justice Deepak Gupta.
Place Of Incident: Punjab.
Judgment Date: 13-09-2018.

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