Summary
Under an agreement of sale of August 2002 the vendor undertook to measure and demarcate the land within three months, after which the purchaser was to pay the balance; the vendor instead demanded the balance and died, and the purchaser sued his widow and minor children for specific performance. The trial court refused relief but the High Court decreed the suit. The Supreme Court affirmed: Section 16(c) of the Specific Relief Act as it stood before the 2018 amendment applies, readiness and willingness is judged in spirit and substance, the purchaser's obligation to pay depended on the vendor's unperformed obligation to demarcate, a purchaser need not produce the money to prove readiness, and where the vendor's own obligation was unperformed the question of time being of the essence does not arise.
Issues
- Whether the High Court was justified in decreeing specific performance on the finding that the vendor and his heirs failed to perform the obligation to measure and demarcate the property while the purchaser was always ready and willing to pay the balance consideration.
- Whether the purchaser's failure to prove possession of funds negates readiness and willingness under Section 16(c) of the Specific Relief Act, 1963.
- Whether time was of the essence of the agreement of sale of immovable property.
Provisions considered
- Section 16(c) with Explanation (as it stood before the 2018 amendment), Specific Relief Act, 1963The plaintiff must aver and prove readiness and willingness to perform the essential terms of the contract according to its true construction, in spirit and substance rather than in any specific phraseology; the pre-amendment provision governs a 2002 transaction because the 2018 amendment is prospective. (¶¶ 23, 24, 27, 28, 29, 30)
- Section 12(1), Specific Relief Act, 1963The appellants' contention that the suit for 50 cents out of the agreed 90 cents could not be maintained was noted among their submissions; the Court upheld the decree on the ground that the vendor could sell only the 50 cents he owned. (¶¶ 20, 21, 30)
Held
- Under the agreement the vendor was to measure and demarcate the land within three months, after which the purchaser was to pay the balance; the purchaser's obligation was thus dependent on the vendor's, and as the vendor and his heirs never demarcated the land the question of paying the balance did not arise. The purchaser, who had paid Rs. 4,00,000 in advance and whose husband's unchallenged evidence established readiness, was always ready and willing to perform within Section 16(c). (¶¶ 26, 29, 30, 34, 35)
- To prove readiness and willingness a purchaser need not produce the money or vouch a concluded scheme for financing the transaction; the contention that the purchaser lacked funds has no substance once readiness and willingness is otherwise established. (¶ 31)
- In the sale of immovable property there is no presumption that time is of the essence; Katta Sujatha Reddy v. Siddamsetty Infra Projects is distinguishable because there the purchaser's payment obligation was independent and carried a forfeiture consequence, whereas here performance by the purchaser was contingent on the vendor's prior obligation, so the question of time being of the essence does not arise. (¶¶ 32, 33, 34, 35)
Result
Appeals dismissed; High Court judgment dated 05.10.2010 decreeing specific performance of the agreement of sale dated 14.08.2002 and order dated 10.12.2010 refusing recall affirmed; no order as to costs.