Summary
A buyer paid Rs. 3 lakh as earnest money under a 2007 agreement to sell land for Rs. 12.74 lakh. When the seller denied the agreement, he sued for specific performance and won at trial. He deposited the balance of Rs. 9.74 lakh within a month of the decree. The Karnataka High Court reversed, holding readiness and willingness unproved because he produced no bank passbook or accounts. The Supreme Court restored the decree. The buyer had pleaded readiness, served notice, and testified without challenge that he offered the cash in June and July 2007, and the attesting witnesses corroborated him. Following Ramrati Kuer and Indira Kaur, no adverse inference arises from not producing accounts unless the opposite party or the court called for them. To do complete justice, the buyer was directed to pay a further Rs. 10 lakh.
Issues
- Whether the High Court was justified in reversing the trial court's finding of readiness and willingness, and the decree for specific performance, on the ground that the buyer did not produce a passbook or accounts showing sufficient funds.
Provisions considered
- Section 16(c), Specific Relief Act, 1963Readiness and willingness were established by pleading, the suit notice, unchallenged testimony of tender, corroboration by attesting witnesses and prompt deposit of the balance after decree. The absence of a passbook or accounts could not found an adverse inference where their production was never sought. (¶¶ 6, 6.1, 6.2, 6.3)
- Article 142, Constitution of IndiaTo do complete justice, the buyer was directed to pay a further Rs. 10 lakh before execution of the sale deed. (¶¶ 7, 8)
Held
- The trial court's finding of readiness and willingness, resting on the buyer's averments, notice, uncross-examined evidence of tender in June and July 2007, the attesting witnesses' corroboration, the proved earnest money and deposit of Rs. 9,74,000 within a month of decree, was wrongly reversed. (¶ 6)
- The High Court erred in drawing an adverse inference from non-production of a passbook or bank accounts, since the defendants never sought their production nor did the court direct it. (¶¶ 6.1, 6.2, 6.3)
- The decree is restored on the buyer paying a further Rs. 10 lakh within eight weeks, after which the seller must execute the sale deed within two weeks and may withdraw the earlier deposit with interest. (¶¶ 7, 8)
Result
Civil Appeal Nos. 8962-8963 of 2022 allowed; the Karnataka High Court (Kalaburagi Bench) judgments dated 27.11.2020 in R.F.A. No. 5033 of 2011 and 06.12.2021 in R.P. No. 200036 of 2021 set aside and the trial court's decree restored subject to a further payment of Rs. 10 lakh; no costs.