Summary
The Supreme Court dismissed the purchaser’s specific-performance claim for failure to establish continuous readiness and willingness, and allowed the vendor’s counterclaim for possession. The purchaser knew of the bank encumbrance, yet did not take the steps required to complete payment or discharge the loan. The vendor was to refund Rs. 18 lakh within three months and receive vacant possession within one month. Balancing use of the advance against lost property income, the Court denied pre-default interest and mesne profits, with 7.5 per cent interest if refund was late.
Issues
- Whether the purchaser established continuous readiness and willingness despite knowledge of the encumbrance.
- Whether the concurrent specific-performance findings could stand on the record.
- How possession, refund, interest and mesne profits should be adjusted.
Held
- The purchaser bore the burden of pleading and proving continuous readiness and willingness from contract to hearing. Knowing the encumbrance, he was required to take steps to complete the agreed transaction. Bare assertions and later partial payments did not overcome the periods of inactivity or failure to fulfil even his alleged subsequent arrangement. (¶¶ 5, 6, 8, 9, 10, 11)
- Although the vendor’s initial disclosure was incomplete, the purchaser’s own communication showed knowledge of the encumbrance when entering the suit agreement. The High Court wrongly treated the defence as founded on fraud and misapplied Chengalvaraya Naidu. Concurrent findings contrary to the record could not be sustained. (¶¶ 7, 11)
- Specific performance was refused and the vendor was entitled to possession. The purchaser was to receive Rs. 18 lakh refund within three months without interest for that period or earlier retention; default thereafter would attract 7.5 per cent interest from expiry of the three months. Vacant peaceful possession was due within one month, without mesne profits to the vendor. (¶¶ 12, 13, 14)
Result
Appeals allowed; specific-performance suit dismissed and counterclaim for possession allowed. Possession due within one month; Rs. 18 lakh refund within three months, with 7.5 per cent interest thereafter on default. No mesne profits; parties bear their own costs throughout.