U.N. KRISHNAMURTHY (SINCE DECEASED) THR. LRS. VERSUS A. M. KRISHNAMURTHY

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4703 OF 2022

[ARISING OUT OF SLP (C) NO. 19463 OF 2018]

U.N. KRISHNAMURTHY (SINCE DECEASED) THR. LRS. …...Appellant (s)

VERSUS

A. M. KRISHNAMURTHY ...…Respondent (s)

J U D G M E N T

Indira Banerjee, J.

Leave granted.

2. Heard Mr. Krishnan Venugopal learned Senior Advocate appearing

with Mr. Mahesh Thakur, AOR on behalf of Appellants and Mr. N.D.B

Raju, learned Advocate appearing with Mr. M.A. Chinnasamy, AOR on

behalf of Respondent.

3. This Appeal is against a final judgment and decree dated 30th

October 2017 passed by the High Court of Judicature at Madras,

dismissing the Appeal Suit No. 262 of 2011 filed by the Appellants and

confirming a judgment and order and decree dated 30th November

2010 passed by the Principal District Judge, Krishnagiri, hereinafter

referred to as “the Trial Court” in Original Suit No. 30 of 2005 filed by

the Respondent Plaintiff, for specific performance of an agreement for

sale of the suit property.

4. In the plaint, it is pleaded that the original Defendant U.N.

Krishnamurthy’s father, U.R. Narasaiah had executed a will on or about

th May 1984, bequeathing the suit property to the original Defendant,

U.N. Krishnamurthy (since deceased). After the death of his father,

U.R. Narasaiah, on 25th April 1987, the original Defendant U. N.

Krishnamurthy became the absolute owner of the suit property.

5. It is the case of the Appellants that on 11th November 2002, while

the original Defendant was getting the suit property whitewashed, a

real estate agent Mr. N. Anjappa approached the original Defendant

with an offer to arrange the sale of the suit property at a good price.

6. As per the pleadings in the plaint, the original Defendant agreed

to sell the suit property to the Respondent Plaintiff, in the presence of

Mr. N. Anjappa, Mr. S.A. Muralidharan and Mr. M. Murali Reddy. The

terms and conditions of the agreement for sale of the suit property

were recorded by the original Defendant U.N. Krishnamurthy in his own

handwriting in a letter dated 11th November 2002 given by the original

Defendant to the Respondent Plaintiff.

7. It is the case of the Respondent Plaintiff that the original

Defendant agreed to sell the suit property to the Respondent Plaintiff

for a consideration of Rs.15,10,000/-, out of which sum of Rs.10,001/-

was paid by the Respondent Plaintiff to the original Defendant in

advance. It was further agreed between the parties, that the

Respondent Plaintiff would get the sale deed registered on or before

15th March 2003, upon payment of the full sale consideration. The

agreement was allegedly witnessed by the real estate agent, Mr. N.

Anjappa.

8. According to the Respondent Plaintiff, the Respondent Plaintiff

approached the original Defendant with the balance consideration

several times and requested the original Defendant to execute the sale

deed in his favour, but the original Defendant kept postponing

execution of the sale deed on one pretext or the other.

9. On or about 13th February 2003, the Respondent Plaintiff issued a

legal notice to the original Defendant through his lawyer stating that

the Respondent Plaintiff is ever ready and willing to perform his part of

the contract and called upon the original Defendant to execute the sale

deed in favour of Respondent Plaintiff after receiving the balance

consideration. By a letter dated 10th March 2003 sent in response to

the aforesaid legal notice, the original Defendant denied having

entered into any oral sale agreement for sale of the suit property.

10. On 8th October 2005, the Respondent Plaintiff allegedly

approached the original Defendant with a request to receive the

balance consideration and to execute the sale deed in favour of the

Respondent Plaintiff. It is alleged that the original Defendant went

back upon his promise and refused to accede to the request made by

the Respondent Plaintiff.

11. In the circumstances, on or about 17th October 2005, the

Respondent Plaintiff filed the suit. The original Defendant filed a written

statement denying the allegations in the plaint. In the written

statement, the original Defendant denied the execution of any

agreement for sale of the suit property for consideration of

Rs.15,10,000/- as alleged.

12. The original Defendant has categorically stated that he did not

agree to sell the suit property to the Respondent Plaintiff as alleged

and that he did not receive any advance on 11th November 2002 as

alleged or on any other date. It is the case of the Appellants that there

was no concluded contract to sell the suit property. In the written

statement it is also pleaded that in any case, the Respondent Plaintiff

was never ready or willing to perform his part of the contract.

13. The Trial Court framed the following issues:-

“1. Whether the oral agreement of sale in the 1

week of

November, 2002 is true?

2. Whether the alleged confirmation letter dated

11.11.2002 is true and valid?

3. Whether there is no concluded contract between the

plaintiff and defendant is true?

4. Whether the plaintiff always ready and willing to

perform his part of contract?

5. Whether the plaintiff is entitled to get the relief of

specific performance and possession?

6. To what relief the plaintiff is entitled to?”

14. The Respondent Plaintiff examined three witnesses and the

original Defendant deposed as witness on his own behalf. By a

judgment and order dated 30th November 2010, the Trial Court

decreed the suit and directed the original Defendant to receive the

balance sale consideration of Rs.15 lakhs and execute the sale deed in

favour of the Respondent Plaintiff.

15. All the issues framed by the Trial Court were answered in favour

of the Respondent Plaintiff. The Trial Court found that the Respondent

Plaintiff was ready and willing to perform his part of the contract, and

thus entitled to the relief of specific performance. The relevant part of

judgment of the Trial Court is set out hereinbelow:-

“21. But I already discussed that the plaintiff is a businessman

and he is having sufficient means to pay the amount to the

defendant Rs.15,00,000/- also deposited into court. The amount

has not shown in Ex. A4 to A6 is not the ground for denying the

prayer. The plaintiff is also ready and willing to perform his

contract and in view of the above discussions, the plaintiff is

entitled the relief of Specific performance and possession of

schedule property. Accordingly, I answered the Issues Nos.4 and

5.”

16. By the impugned judgment and order dated 30th October 2017,

the High Court upheld the judgment and decree passed by the Trial

Court, holding that the Respondent Plaintiff had always been ready and

wiling to perform his part of the contract. The relevant part of the

impugned judgment and order reads:-

“18. The letter dated 11.11.2002 has been marked as Ex. A-1. In

Ex. A1 period has been fixed for execution of a registered sale

deed. The consistent case of the plaintiff is that despite of

repeated demands, the defendant has not come forward to

execute a sale deed in favour of the plaintiff and therefore, a

legal notice has been issued. Ex.A2 is a copy of the legal notice

dated 13.02.2003 and the same has also been received by the

defendant. After receipt of the same he has given a false reply

notice dated 10.03.2003. Since on the side of the plaintiff,

necessary documentary and oral evidence have been let in, it is

easily discernible that the plaintiff has always been ready and

willing to perform his part of the contract. Therefore, the fourth

contention put forth on the side of the appellants/defendant[s]

also goes out without merit.

...

20. It has already been discussed in detail that the suit property

is the absolute property of the defendant. From the evidence

given by the defendant [D.W.1], the Court can very well come to

conclusion that the entire transaction is based upon on oral sale

agreement emerged between the plaintiff and defendant.

Further, the plaintiff has shown his readiness and willingness to

perform his part of the contract. Therefore, viewing from any

angle, the contentions put forth on the side of the appellants

/defendants[s] cannot be accepted.”

17. Mr. Krishnan Venugopal, learned Senior Counsel appearing on

behalf of the Appellants argued that both the Trial Court and the High

Court committed an error on facts and also in law. According to him

the issue relating to “readiness and willingness” on the part of the

Respondent Plaintiff, had not been properly appreciated by the Courts

below. Emphasizing on Section 16(c) of the Specific Relief Act, 1963,

Mr. Venugopal submitted that the Respondent Plaintiff had not adduced

any evidence to demonstrate continuous “readiness and willingness”

which the Respondent Plaintiff was required to prove, regardless of any

default by the original Defendant. Mr. Venugopal also argued that the

Court should also take judicial notice of the steep rise in the price of

real estate, before granting the discretionary relief of specific

performance.

18. Mr. N.D.B. Raju appearing on behalf of the Respondent Plaintiff

submitted that the issues framed by the Trial Court of whether there

was a concluded contract between the Plaintiff and the Defendant, and

whether the Plaintiff was always ready and willing to perform his part of

the contract were factual issues determinable on evidence.

19. Mr. Raju argued that this Court should not disturb the concurrent

factual findings of the Trial Court and the High Court of readiness and

willingness of the Respondent Plaintiff to perform his part of the

contract.

20. Mr. Raju has emphatically argued that the Respondent Plaintiff

was ever ready and willing to perform his part of the contract and that

the original Defendant had been delaying the execution of the sale

deed. To prove readiness and willingness of the Respondent Plaintiff,

Mr. Raju referred to the testimony of the Plaintiff’s witnesses, N.

Anjappa (PW 2) and S.A. Muralidharan (PW3) who have stated that the

Respondent Plaintiff had on multiple occasions, before the cut-off date

of 15.03.2003 approached the original Defendant for execution of the

sale deed, but the original Defendant delayed the execution of the sale

deed.

21. It is well settled that, in a suit for Specific Performance of an

agreement, it is for the Plaintiff to prove his readiness and willingness

to perform his obligations under the agreement. Where a certain

amount has been paid in advance and the balance is required to be

paid within a stipulated time, it is for the Plaintiff to show that he was

in a position to pay the balance money. The Plaintiff has to prove that

he has the money or has alternatively made necessary arrangements

to get the money. In this case, the Original Defendant/Appellants have

all along contended that the Plaintiff Respondent neither offered to pay

nor was in a position to pay the balance consideration of

Rs.15,00,000/-.

22. The primary question for determination is whether the

Respondent Plaintiff has proved his readiness and willingness to

perform his part of the contract or not?

23. Section 16 of the Specific Relief Act, 1963, as it stood at the

material time (prior to amendment with effect from 1.10.2018), inter

alia, provides:-

“16. Personal bars to relief.—Specific performance of a contract

cannot be enforced in favour of a person—

(a) who would not be entitled to recover compensation for its

breach; or

(b) who has become incapable of performing, or violates any

essential term of, the contract that on his part remains to be

performed, or acts in fraud of the contract, or wilfully acts at

variance with, or in subversion of, the relation intended to be

established by the contract; or

always been ready and willing to perform the essential terms of

the contract which are to be performed by him, other than terms

the performance of which has been prevented or waived by the

defendant.

Explanation. —For the purposes of clause (c), —

(i) where a contract involves the payment of money, it is not

essential for the plaintiff to actually tender to the defendant or to

deposit in court any money except when so directed by the court;

(ii) the plaintiff must aver performance of, or readiness and

willingness to perform, the contract according to its true construction.”

24. Section 16 (c) of the Specific Relief Act, 1963 bars the relief of

specific performance of a contract in favour of a person, who fails to

aver and prove his readiness and willingness to perform his part of

contract. In view of Explanation (i) to clause (c) of Section 16, it may

not be essential for the plaintiff to actually tender money to the

defendant or to deposit money in Court, except when so directed by

the Court, to prove readiness and willingness to perform the essential

terms of a contract, which involves payment of money. However,

explanation (ii) says the plaintiff must aver performance or readiness

and willingness to perform the contract according to its true

construction.

25. To aver and prove readiness and willingness to perform an

obligation to pay money, in terms of a contract, the plaintiff would

have to make specific statements in the plaint and adduce evidence

to show availability of funds to make payment in terms of the

contract in time. In other words, the plaintiff would have to plead

that the plaintiff had sufficient funds or was in a position to raise

funds in time to discharge his obligation under the contract. If the

plaintiff does not have sufficient funds with him to discharge his

obligations in terms of a contract, which requires payment of money,

the plaintiff would have to specifically plead how the funds would be

available to him. To cite an example, the plaintiff may aver and

prove, by adducing evidence, an arrangement with a financier for

disbursement of adequate funds for timely compliance with the terms

and conditions of a contract involving payment of money.

26. In Man Kaur v. Hartar Singh Sangha

, this Court held that:

“40. …..A person who fails to aver and prove that he has

performed or has always been ready and willing to perform the

essential terms of the contract which are to be performed by him

(other than the terms the performance of which has been

prevented or waived by the defendant) is barred from claiming

specific performance. Therefore, even assuming that the

defendant had committed breach, if the plaintiff fails to aver in

the plaint or prove that he was always ready and willing to

perform the essential terms of contract which are required to be

performed by him (other than the terms the performance of

which has been prevented or waived by the plaintiff), there is a

bar to specific performance in his favour. Therefore, the

assumption of the respondent that readiness and willingness on

the part of the plaintiff is something which need not be proved, if

the plaintiff is able to establish that the defendant refused to

execute the sale deed and thereby committed breach, is not

correct. Let us give an example. Take a case where there is a

contract for sale for a consideration of Rs. 10 lakhs and earnest

money of Rs. 1 lakh was paid and the vendor wrongly refuses to

execute the sale deed unless the purchaser is ready to pay Rs.

15 lakhs. In such a case there is a clear breach by the defendant.

But in that case, if the plaintiff did not have the balance Rs. 9

lakhs (and the money required for stamp duty and registration)

or the capacity to arrange and pay such money, when the

contract had to be performed, the plaintiff will not be entitled to

specific performance, even if he proves breach by the defendant,

as he was not “ready and willing” to perform his obligations.”

27. In Pt. Prem Raj v. D.L.F. Housing and Construction

(Private) Ltd. And Anr.

cited by Mr. Venugopal, this Court speaking

1 (2010) 10 SCC 512

2 AIR 1968 SC 1355

through Ramaswamy J. held that “it is well-settled that in a suit for

specific performance the plaintiff should allege that he is ready and

willing to perform his part of the contract…..” and if the fact is

traversed, he is required to prove a continuous readiness and

willingness from the date of the contract to the time of the hearing, to

perform the contract on his part. For such conclusion the learned Judge

relied upon the opinion of Lord Blanesburgh, in Ardeshir Mama v.

Flora Sassoon

28. In D.L.F. Housing and Construction (Pvt.) Ltd. (supra), in the

absence of an averment on the part of the Plaintiff in the plaint, that he

was ready and willing to perform his part of the contract, it was held

that the Plaintiff had no cause of action so far as the relief for Specific

Performance was concerned. In this case, of course, there is an

averment in the plaint that the Respondent Plaintiff was all along ready

and willing to perform his obligations under the contract. The question

is whether the Respondent Plaintiff had proved his readiness and

willingness to perform his obligations under the contract.

29. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors.

this Court reiterated that Section 16(c) of the Specific Relief Act, 1963

envisages that the Plaintiff must plead and prove that he had

performed or has always been ready and willing to perform the

essential terms of the contract which were to be performed by him

3 55 IA 300, at pg. 372:AIR 1928 PC 208

4 (1995) 5 SCC 115

other than those terms, the performance of which has been prevented

or waived by the Defendant. In N.P. Thirugnanam (supra) this Court

said that the continuous readiness and willingness on the part of the

Plaintiff was a condition precedent for grant of the relief of Specific

Performance.

30. This Court, in effect, held that for determining whether the

Plaintiff was ready and willing to perform his part of the agreement it is

necessary for the Court to consider the conduct of the Plaintiff prior

and subsequent to filing the suit for specific performance. The relevant

part of the judgment is extracted hereinbelow:–

“5. …Section 16(c) of the Act envisages that plaintiff must plead

and prove that he had performed or has always been ready and

willing to perform the essential terms of the contract which are

to be performed by him, other than those terms the performance

of which has been prevented or waived by the defendant. The

continuous readiness and willingness on the part of the plaintiff

is a condition precedent to grant the relief of specific

performance. This circumstance is material and relevant and is

required to be considered by the court while granting or refusing

to grant the relief…”

31. In Umabai v. Nilkanth Dhondiba Chavan

, this Court held that

a finding as to whether the Plaintiffs were all along and still ready and

willing to perform their part of the contract, was a mandatory

requirement under Section 16(c) of the Specific Relief Act. The Court

would necessarily have to arrive at the finding that the Plaintiff all

along were, and still are ready and also willing to perform their part of

5 (2005) 6 SCC 243

the contract, taking into account the entirety of the pleadings as also

the evidence brought on record. To quote this Court:-

“So far there being a plea that they were ready and willing to

perform their part of the contract is there in the pleading, we

have no hesitation to conclude, that this by itself is not sufficient

to hold that the appellants were ready and willing in terms of

Section 16(c) of the Specific Relief Act. This requires not only

such plea but also proof of the same. Now examining the first of

the two circumstances, how could mere filing of this suit, after

exemption was granted be a circumstance about willingness or

readiness of the plaintiff. This at the most could be the desire of

the plaintiff to have this property. It may be for such a desire this

suit was filed raising such a plea. But Section 16(c) of the said

Act makes it clear that mere plea is not sufficient, it has to be

proved.”

32. In K.S. Vidyanadam v. Vairavan

, Justice B.P. Jeevan Reddy

said that grant of the relief of specific performance is discretionary and

the Court is not bound to grant it. This Court further held that though

time is not of essence to a contract relating to transfer of property,

such contracts need to be completed within a reasonable time period.

Thus the time element cannot be completely ignored.

33. In a suit for Specific Performance of a contract, the Court is

required to pose unto itself the following questions, namely:-

(i) Whether there is a valid agreement of sale binding on both

the vendor and the vendee and

(ii) Whether the Plaintiff has all along been and still is ready and

willing to perform his part of the contract as envisaged under

Section 16(c) of the Specific Relief Act, 1963.

6 (1997) 3 SCC 1

34. There is a distinction between readiness and willingness to

perform the contract and both ingredients are necessary for the relief

of Specific Performance. In His Holiness Acharya Swami Ganesh

Dassji v. Sita Ram Thapar

7 cited by Mr. Venugopal, this Court said

that there was a difference between readiness and willingness to

perform a contract. While readiness means the capacity of the Plaintiff

to perform the contract which would include his financial position,

willingness relates to the conduct of the Plaintiff. The same view was

taken by this Court in Kalawati v. Rakesh Kumar

35. Even in a first appeal, the first Appellate Court is duty bound to

examine whether there was continuous readiness and willingness on

the part of the Plaintiff to perform the contract. This proposition finds

support from Balraj Taneja v. Sunil Madan

, and H.P. Pyarejan v.

Dasappa

where this Court approved the views taken by the Privy

Council in Ardeshir Mama v. Flora Sassoon

36. In Malluru Mallappa v. Kuruvathappa

, this Court observed

and held:-

“13. It is a settled position of law that an appeal is a continuation

of the proceedings of the original court. Ordinarily, the appellate

jurisdiction involves a rehearing on law as well as on fact and is

invoked by an aggrieved person. The first appeal is a valuable

7 (1996) 4 SCC 526

8 (2018) 3 SCC 658

9 (1999) 8 SCC 396

10 (2006) 2 SCC 496

11 AIR 1928 PC 208

12 (2020) 4 SCC 313

right of the appellant and therein all questions of fact and law

decided by the trial court are open for reconsideration. Therefore,

the first appellate court is required to address itself to all the

issues and decide the case by giving reasons. The court of first

appeal must record its findings only after dealing with all issues

of law as well as fact and with the evidence, oral as well as

documentary, led by the parties. The judgment of the first

appellate court must display conscious application of mind and

record findings supported by reasons on all issues and

contentions [see : Santosh Hazariv. Purushottam Tiwari [Santosh

Hazari v. Purushottam Tiwari, (2001) 3 SCC

179] , Madhukar v. Sangram [Madhukar v. Sangram, (2001) 4 SCC

756] , B.M. Narayana Gowda v. Shanthamma [B.M. Narayana

Gowda v. Shanthamma, (2011) 15 SCC 476 : (2014) 2 SCC (Civ)

619] , H.K.N. Swami v. Irshad Basith [H.K.N. Swami v. Irshad

Basith, (2005) 10 SCC 243] and Sri Raja Lakshmi Dyeing

Works v. Rangaswamy Chettiar [Sri Raja Lakshmi Dyeing Works v.

Rangaswamy, (1980) 4 SCC 259]]

14. A first appeal under Section 96 CPC is entirely different from

a second appeal under Section 100. Section 100 expressly bars

second appeal unless a question of law is involved in a case and

the question of law so involved is substantial in nature.

***

18. It is clear from the above provisions and the decisions of this

Court that the judgment of the first appellate court has to set out

points for determination, record the decision thereon and give its

own reasons. Even when the first appellate court affirms the

judgment of the trial court, it is required to comply with the

requirement of Order 41 Rule 31 and non-observance of this

requirement leads to infirmity in the judgment of the first

appellate court. No doubt, when the appellate court agrees with

the views of the trial court on evidence, it need not restate effect

of evidence or reiterate reasons given by the trial court.

Expression of a general agreement with the reasons given by the

trial court would ordinarily suffice.

37. In H.P. Pyarejan v. Dasappa (supra), Justice Arijit Pasayat

speaking for this Court reversed the judgment of the High Court

holding that High Court did not provide reasoning for its conclusion that

Plaintiff was ready and willing to perform his part of contract. To arrive

at such conclusion the Court had relied upon Cort v. Ambergate etc.

and Rly. Co

where Lord Campbell observed that in common sense,

13 (1851) 117 ER 1229

the meaning of such an averment of readiness and willingness must be

that the non-completion of contract was not the fault of the Plaintiff.

38. In this case, we cannot overlook the fact that the suit property is

located in the industrial town of Hosur located about 30/40 kms. from

Bengaluru. The Court is obliged to take judicial notice of the

phenomenal rise in the price of real estate in Hosur. The proposition

finds support from case reported in K.S. Vidyanadam v. Vairavan

(supra). To quote this Court “we cannot be oblivious to reality – and

the reality is constant and continuous rise in the values of urban

properties -fuelled by large scale migration of people from rural areas

to urban centres and by inflation.”

39. Mr. Venugopal argued that the Plaintiff had only paid an

insignificant amount of Rs.10,001/- as advance when the consideration

was Rs.15,10,000/-. Having paid an insignificant amount the Plaintiff

was not entitled to discretionary equitable relief of Specific

Performance, as observed by this Court in Saradamani Kandappan

v. S. Rajalakshmi

. The relevant paragraph of the judgment of this

Court is set out hereinbelow:-

“37. The reality arising from this economic change cannot

continue to be ignored in deciding cases relating to specific

performance. The steep increase in prices is a circumstance

which makes it inequitable to grant the relief of specific

performance where the purchaser does not take steps to

complete the sale within the agreed period, and the vendor has

not been responsible for any delay or non-performance. A

purchaser can no longer take shelter under the principle that

time is not of essence in performance of contracts relating to

immovable property, to cover his delays, laches, breaches and

14 (2011) 12 SCC 18

“non-readiness”. The precedents from an era, when high inflation

was unknown, holding that time is not of the essence of the

contract in regard to immovable properties, may no longer

apply, not because the principle laid down therein is unsound or

erroneous, but the circumstances that existed when the said

principle was evolved, no longer exist. In these days of galloping

increases in prices of immovable properties, to hold that a

vendor who took an earnest money of say about 10% of the sale

price and agreed for three months or four months as the period

for performance, did not intend that time should be the essence,

will be a cruel joke on him, and will result in injustice. Adding to

the misery is the delay in disposal of cases relating to specific

performance, as suits and appeals therefrom routinely take two

to three decades to attain finality. As a result, an owner agreeing

to sell a property for rupees one lakh and receiving rupees ten

thousand as advance may be required to execute a sale deed a

quarter century later by receiving the remaining rupees ninety

thousand, when the property value has risen to a crore of

rupees.”

40. As argued by Mr. Venugopal, the fact that the suit had been filed

after three years, just before expiry of the period of limitation, was also

a ground to decline the Respondent Plaintiff the equitable relief of

Specific Performance for purchase of immovable property. Mr.

Venugopal’s argument finds support from the judgments of this Court

in P.R. Deb and Associates v. Sunanda Roy

; K.S. Vidyanadam

v. Vairavan

; Manjunath Anandappa v. Tammanasa

, Azhar

Sultana v. B. Rajamani

; Saradamani Kandappan v. S.

Rajalakshmi

41. In K.S. Vidyanadam v. Vairavan (supra) this Court held:

15 (1996) 4 SCC 423

16 (1997) 3 SCC 1

17 (2003) 10 SCC 390

18 (2009) 17 SCC 27

19 (2011) 12 SCC 18

“10. It has been consistently held by the courts in India,

following certain early English decisions, that in the case of

agreement of sale relating to immovable property, time is not of

the essence of the contract unless specifically provided to that

effect. The period of limitation prescribed by the Limitation Act

for filing a suit is three years. From these two circumstances, it

does not follow that any and every suit for specific performance

of the agreement (which does not provide specifically that time

is of the essence of the contract) should be decreed provided it

is filed within the period of limitation notwithstanding the timelimits stipulated in the agreement for doing one or the other

thing by one or the other party. That would amount to saying

that the time-limits prescribed by the parties in the agreement

have no significance or value and that they mean nothing. Would

it be reasonable to say that because time is not made the

essence of the contract, the time-limit(s) specified in the

agreement have no relevance and can be ignored with impunity?

It would also mean denying the discretion vested in the court by

both Sections 10 and 20. As held by a Constitution Bench of this

Court in Chand Rani v. Kamal Rani [(1993) 1 SCC 519] : (SCC p.

528, para 25)

“… it is clear that in the case of sale of immovable property

there is no presumption as to time being the essence of the

contract. Even if it is not of the essence of the contract, the

Court may infer that it is to be performed in a reasonable time

if the conditions are (evident?): (1) from the express terms of

the contract; (2) from the nature of the property; and (3) from

the surrounding circumstances, for example, the object of

making the contract.”

In other words, the court should look at all the relevant

circumstances including the time-limit(s) specified in the

agreement and determine whether its discretion to grant specific

performance should be exercised...”

42. In Azhar Sultana v. B. Rajamani (supra) this Court held:-

“28. …The court, keeping in view the fact that it exercises a

discretionary jurisdiction, would be entitled to take into

consideration as to whether the suit had been filed within a

reasonable time. What would be a reasonable time would,

however, depend upon the facts and circumstances of each

case. No hard-and-fast law can be laid down therefor. The

conduct of the parties in this behalf would also assume

significance.

***

35. We, therefore, are of the opinion that interest of justice

would be subserved if this Court refuses to exercise its

discretionary jurisdiction in terms of Section 20 of the Act,

directing the defendant to pay a sum of Rs. 60,000 to the

plaintiff which sum would include the amount of advance paid by

her.”

43. In Saradamani Kandappan (supra) this Court reiterated that (i)

while exercising discretion in suits for Specific Performance, the Courts

should bear in mind that when the parties prescribed a time for taking

certain steps or for completion of the transaction, that must have some

significance and therefore time/period prescribed cannot be ignored;

(ii) the Courts will apply greater scrutiny and strictness when

considering whether purchaser was ready and willing to perform his

part of the contract and (iii) every suit for Specific Performance need

not be decreed merely because it is filed within the period of limitation,

by ignoring time limits stipulated in the agreement. The courts will

also frown upon suits which are not filed immediately after the

breach/refusal. The fact that limitation is three years does not mean

that a purchaser can wait for one or two years to file a suit and obtain

Specific Performance. The three year period is intended to assist the

purchaser in special cases, as for example where the major part of the

consideration has been paid to the vendor and possession has been

delivered in part performance, where equity shifts in favour of the

purchaser.

44. In Atma Ram v. Charanjit Singh

Justice V. Ramasubramanian

speaking for this Court made the following pertinent observation:-

“9... No explanation was forthcoming from the petitioner for the

long delay of three years, in filing the suit (on 13.10.1999) after

20 (2020) 3 SCC 311

issuing a legal notice on 12.11.1996. The conduct of a plaintiff is

very crucial in a suit for specific performance. A person who

issues a legal notice on 12.11.1996 claiming readiness and

willingness, but who institutes a suit only on 13.10.1999 and that

too only with a prayer for a mandatory injunction carrying a fixed

court fee relatable only to the said relief, will not be entitled to

the discretionary relief of specific performance.”

45. The Respondent Plaintiff has relied upon the notice dated

13.02.2003 and evidences of PW2 & PW3 to prove that he was always

ready and willing to perform his part of the contract. Even though it

may be true that the Respondent Plaintiff had deposited the balance

sale consideration in court on 06.04.2010, it cannot be ignored that

such deposit was made by him seven years after 15.3.2003, being the

date by which the sale had to be concluded. No evidence has been

adduced on behalf of the Respondent Plaintiff as to how the

Respondent Plaintiff was in a position to pay or make arrangements for

payment of the balance sale consideration within time. The Courts

below also erred in not adjudicating upon this vital issue except to

make a sweeping observation that, given that the Respondent Plaintiff

was a businessman he had sources to arrange the balance funds.

Careful study of balance sheet dated 31.03.2003 of the Respondent

Plaintiff would demonstrate that he did not have sufficient funds to

discharge his part of contract.

46. It is settled law that for relief of specific performance, the Plaintiff

has to prove that all along and till the final decision of the suit, he was

ready and willing to perform his part of the contract. It is the bounden

duty of the Plaintiff to prove his readiness and willingness by adducing

evidence. This crucial facet has to be determined by considering all

circumstances including availability of funds and mere statement or

averment in plaint of readiness and willingness, would not suffice.

47. In this case, the Respondent Plaintiff has failed to discharge his

duty to prove his readiness as well as willingness to perform his part of

the contract, by adducing cogent evidence. Acceptable evidence has

not been placed on record to prove his readiness and willingness.

Further, it is clear from the Respondent Plaintiff’s balance sheet that he

did not have sufficient funds to discharge his part of contract in March

2003. Making subsequent deposit of balance consideration after lapse

of seven years would not establish the Respondent Plaintiff’s readiness

to discharge his part of contract. Reliance may be placed on Umabai

v. Nilkanth Dhondiba Chavan (supra) where this Court speaking

through Justice SB Sinha held that deposit of amount in court is not

enough to arrive at conclusion that Plaintiff was ready and willing to

perform his part of contract. Deposit in court would not establish

Plaintiff’s readiness and willingness within meaning of section 16(c) of

Specific Relief Act. The relevant part of the judgment is reproduced

below: -

“45. …Deposit of any amount in the court at the appellate

stage by the plaintiffs by itself would not establish their

readiness and willingness to perform their part of the contract

within the meaning of Section 16(c) of the Specific Relief Act…”

48. It is, therefore, patently clear that the Respondent Plaintiff has

failed to prove his readiness to perform his part of contract from the

date of execution of the agreement till date of decree, which is a

condition precedent for grant of relief of specific performance. This

Court finds that the Respondent Plaintiff was not entitled to the relief of

specific performance.

49. The Respondent Plaintiff may have been willing to perform his

part of contract. It however appears that he was not ready with funds.

He was possibly trying to buy time to discharge his part of contract.

50. In Bhavyanath v. K.V. Balan

cited by Mr. Raju to contend that

the Respondent Plaintiff was entitled to relief of specific performance

and the courts had rightly granted such relief, the Plaintiff had filed the

suit for specific performance three days after the last day for execution

of the sale deed. In this case however, the Respondent Plaintiff waited

for nearly 3 years and filed the suit for specific performance just before

expiry of the limitation period. Furthermore, in Bhavyanath v. K.V.

Balan (supra) the Plaintiff had adduced cogent evidence to prove his

readiness and willingness to discharge his part of the contract and to

prove that he had sufficient funds to discharge his obligation. No such

evidence has been adduced by the Respondent Plaintiff in this case

either to show his readiness or to prove that sufficient funds were

available with him to enable him to discharge his part of contract.

Therefore, Bhavyanath v. K.V. Balan (supra) is of no assistance to

the Respondent Plaintiff.

21 (2020) 11 SCC 790

51. In view of foregoing, this Court is of the considered opinion that

the Respondent Plaintiff was not entitled to the relief of specific

performance. The Trial Court and the High Court erred both in law and

on facts in granting such relief.

52. The appeal is accordingly allowed. The impugned judgment of

the High Court and the judgment and decree of Trial court are

accordingly set aside. The Appellants shall return the earnest money

to the Respondent Plaintiff, within 4 weeks from today with interest at

the rate of 7% per annum from the date of deposit of the same, till the

date of refund. It will also be open to the Respondent Plaintiff to

withdraw the deposit if any of the balance consideration in Court.

Parties to bear their own costs.

.................................J

[INDIRA BANERJEE]

.................................J

[HRISHIKESH ROY]

JULY 12, 2022;

NEW DELHI.

संविधान की प्रमुख विशेषताओं का उल्लेख | Characteristics of the Constitution of India

- March 04, 2020

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U.N. KRISHNAMURTHY (SINCE DECEASED) THR. LRS. VERSUS A. M. KRISHNAMURTHY

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