Summary
The Court set aside a High Court decree of specific performance of an agreement to sell signed by only two of five co-owners. The plaintiffs had not proved continuous readiness and willingness under Section 16(c) of the Specific Relief Act; the signing co-owner had no subsisting authority to bind his three sisters, because the old power of attorney was impliedly revoked by a later partition deed; and the discretionary relief could not be used to unsettle a registered sale by all co-owners to bona fide purchasers.
Issues
- Whether the plaintiffs proved continuous readiness and willingness to perform their part of the contract as Section 16(c) of the Specific Relief Act, 1963 requires.
- Whether the agreement to sell dated 06.06.1993 was enforceable against the three sisters (Defendant Nos. 6 to 8), given whether Defendant No. 1 had valid authority under a 1982 General Power of Attorney.
- Whether the High Court was right to grant the discretionary relief of specific performance after the Trial Court had refused it.
Provisions considered
- Section 16(c), Specific Relief Act, 1963Treated as a condition precedent requiring the plaintiff to plead and prove readiness and willingness throughout, judged from conduct before and after suit. The plaintiffs took no steps to secure the sisters' participation within three months, did not show that they had arranged the balance consideration, and sued only after the sale to the appellants, so the requirement was not met. (¶¶ 8, 9, 10, 11, 12, 13)
- Section 20 (as it stood before the Amendment Act 18 of 2018), Specific Relief Act, 1963Applied in its pre-2018 form because the case predated the amendment: specific performance was discretionary and the court was not bound to grant it merely because it was lawful, though the discretion had to rest on sound principles. The factors here weighed against granting it. (¶¶ 19, 20, 21, 22, 23)
Held
- Readiness and willingness under Section 16(c) must be shown throughout, from the plaintiff's conduct and the surrounding circumstances; a party seeking equitable relief must itself have acted with diligence. The High Court's finding on this point was cursory and ignored the Trial Court's findings on the plaintiffs' inaction. (¶¶ 8, 10, 13)
- Where an agreement involves several owners and some of them have not signed it, the plaintiff bears the burden of securing their consent and participation. The plaintiffs relied passively on the two brothers, never contacted the sisters, gave no evidence that the balance consideration was ready, and moved only after the sale to the appellants, which showed a lack of readiness and willingness. (¶¶ 9, 11, 12, 13)
- All co-owners must either sign an agreement to sell or authorise an agent through a valid, subsisting power of attorney. An undisclosed agent can bind a principal only if his authority actually subsists. (¶¶ 14, 16)
- The unregistered 1982 General Power of Attorney was impliedly revoked by the registered partition deed of 1988, which limited Defendant No. 1's role to collecting rent. The agreement did not mention the power of attorney, and Defendant No. 1 signed it in his personal capacity. The plaintiffs knew the sisters' consent was needed, so the agreement was incomplete and unenforceable against the sisters, who held a majority share. (¶¶ 16, 17, 18)
- Specific performance was refused in the exercise of discretion. The agreement did not bind the majority co-owners, the plaintiffs lacked readiness and willingness, and refund of the earnest money with interest would adequately compensate them. The registered sale by all co-owners to bona fide purchasers for value had not even been challenged, so once the Trial Court had declined relief, the appellate court should not have decreed specific performance against those purchasers. (¶¶ 20, 22, 23, 24)
Result
Appeal allowed; High Court decree set aside and the Trial Court's dismissal of the suit restored. The appellants were directed to pay the plaintiffs Rs 10,00,000 within two months, covering the earnest money, interest and expenses; no order as to costs.