Saturday, 13 February 2016

When court is bound to dismiss suit for specific performance of contract?

To ascertain as to whether suit of the plaintiff is maintainable in terms of
Section 16 ( c) of the Specific Relief Act, I have perused the plaint in entirety.
Plaintiff has not stated anywhere that she is or has been ready and willing to
perform the essential terms of the contract. Although in para-4 of the plaint it is
stated that defendants did not file necessary application for getting sale
permission from competent authority and that plaintiff approached the
defendants on several dates but nowhere a specific date has been mentioned.
Agreement was executed on 28.1.1995 and the suit was instituted on 5.2.1996.
Plaintiff was duty bound to state as to what had happened in the meantime and
as to what action the plaintiff had taken for the purpose of getting the sale deed
executed. The mandate of Section 16 ( c ) of the Specific Relief Act is clear. It
provides that specific performance of a contract cannot be decreed unless
plaintiff avers and proves that he has performed his part of the contract or that
he has been ready and willing to do the same. Even under the Code of Civil
Procedure, Appendix-A provides essential of a plaint in a suit for specific
performance of contract. In Form No. 47 and 48 to Appendix-A of the Code of 
Civil Procedure, it would appear that the averment as to readiness and
willingness has been prescribed under the Form .
14. In the case of JP Builders(supra) Hon’ble Supreme Court observed that
Section 16 ( c ) of the Specific Relief Act mandates averment as to readiness and
willingness on the part of the plaintiff and that it is a condition precedent for
obtaining relief. The plaintiff is duty bound to allege and prove a continuous
readiness and willingness to perform the contract on his part from the date of
the contract and that the onus is on the plaintiff alone. In para-27 of this
judgment, Hon’ble Supreme Court has held that when there is non-compliance
with these statutory mandates, court is not bound to grant specific performance
and is left with no other alternative but to dismiss the suit.
IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM
AND ARUNACHAL PRADESH)
RFA. No. 152/ 2005
Smti Niva Baruah

 -Versus-
Smti Mamoni Baruah

PRESENT
HON’BLE MR. JUSTICE N. CHAUDHURY

Date of Judgment : 19.05.2015
Citation;AIR 2016(NOC)139 GAUHATI

Decree of specific performance passed by the learned trial court in Title
Suit No. 19 of 2003 by judgment dated 21.7.2005 has been challenged in this
first appeal by the defendants..
2. Plaintiff Mamoni Baruah filed Title Suit No. 8 of 1996 in the Court of
Assistant District Judge, Jorhat stating that a plot of land measuring 1 katha
covered by Dag No.5128 of P.P. No.102 old 49 new of Block No.2 in Jorhat is
owned by defendants No. 1 to 5. They entered into a written agreement with the
plaintiff on 28.1.1995 for sale at a total consideration of Rs.4,00,000/- and
received Rs.2,00,000/- as advance on the date of execution of the agreement. As
per terms of the agreement, the defendants were supposed to execute sale deed
in favour of the plaintiff on receipt of the balance amount of money but plaintiff
approached the defendants time and again, however, to no avail. Defendants
appeared to be avoiding the plaintiff for performing their part of the contract and
so a pleader’s notice was issued to the defendants asking them to execute and
register sale deed as per the agreement dated 28.1.1995 upon receipt of
Rs.2,00,000/- . Said notice was served on 23.5.1995 and 18.7.1995 but even 
thereafter, the defendants did not come forward to perform their part of the
agreement. Under such circumstances, plaintiff instituted the suit praying for a
decree of specific performance of contract and in the alternative it was prayed
that in the event sale deed is found to be not executable in that event the suit be
decreed with cost and interest @ 18 % per month from 28.1.1995 till realization.
3. On being summoned, defendants No. 1 to 5 appeared and contested the suit
by filing joint written statement . According to these defendants, the suit is
premature one and vitiated for non impleading necessary party. It was further
contended that the contract was not a concluding and complete one and unless
the defendants No. 6 and 7 vacate the hotel situated on the suit land, no sale
deed could be executed by defendants. Defendants No. 6 and 7 entered
appearance by filing written statement and contended that they are not remotely
associated with the contract in question and so they have been wrongly
impleaded as defendants in the suit. Defendant No. 6 was only attesting witness
to the agreement and he had nothing to do in regard to the performance of the
contract. These defendants also prayed that suit is liable to be dismissed with
cost.
4. Upon such contention of the parties, the learned trial court has framed as
many as seven issues which are quoted below:
(i) Whether there is any cause of action for the suit?
(ii)Whether the contract for sale is a contingent
contract and not enforceable in law?
(iii) Whether the suit is bad for non-joinder of
necessary parties?
(iv)Whether the contract for sale is a Benami
transaction?
(v)Whether the contract for sale is an invalid contract?
(vi) Whether the plaintiff is entitled to any decree for
specific performance of the contract?
(vii) To what relief/reliefs the parties are entitled to ?
5. In course of trial, plaintiff examined herself , her husband and four other
witnesses who are duly cross-examined by defendants. Plaintiff also exhibited
documents. Defendants on the other hand did not examine any witness and did
not produce any documents.
6. Learned trial court after consideration of the materials available on record
and after hearing the learned counsel for the parties passed the impugned
judgment and decree holding, inter-alia, that the agreement is contingent one
but enforceable in law and is not invalid in any way. It is held that suit is not bad
for defect of parties and it is also not vitiated under Benami transaction. The trial
court so found that there was cause of action for the suit and also decided issue 
No.1 in favor of the plaintiff. Coming to issue No. 6, trial court considered exhibit-
1 agreement and arrived at the finding that plaintiff made payment of
Rs.2,00,000/- to the defendants No. 1 to 5 on 28.1.1995 as part of the total
payment of total consideration of Rs.4,00,000/- and the defendants No. 1 to 5
had agreed to execute the sale deed in favour of the plaintiff upon receipt of
balance consideration of Rs.2,00,000/-. Noticing para-2 of Exhbit-1, the learned
trial court found that plaintiff was given symbolical possession of the suit land
with structures standing thereon and the plaintiff is entitled to a decree of
specific performance under Section 53-A of the Transfer of Property Act. With
these findings, learned trial court decreed the suit in entirety directing
defendants No. 1 to 5 to execute and register valid sale deed within a period of
three months from the date of judgment upon receipt of Rs.2,00,000/- from the
plaintiff. It is this judgment which has been brought under challenge in the
present appeal.
7. I have heard Mr. D Mozumdar, learned senior counsel assisted by Mr. R
Sharma, learned counsel for the appellant/defendants No. 1 to 5 and Mr. DR
Gogoi, learned counsel appearing for respondent/plaintiff.
8. After hearing the parties , it appears that the points for determination in this
appeal would be as follows:
(a)Whether the suit of the plaintiff is maintainable in
view of the provision under Section 16(c) of the
Specific Relief Act, 1963?
(b)If not whether respondent/plaintiff is entitled to
relief under Section 22 of the Specific Relief Act,
1963?
9. Mr. D Mozumdar, learned senior counsel for the appellants would argue that
the plaintiff has failed to specifically aver necessary material facts in the plaint so
as to arrive at a finding that plaintiff is and has been always ready and willing to
perform her part of the contract. The learned counsel has read out the entire
plaint and wanted to show that there is no mention whatsoever anywhere in the
body of the plaint as is mandated under Section 16 ( c ) of Specific Relief Act.
According to the learned counsel after considering the plaint in entirety, no
material is available to arrive at a finding that plaintiff is or has been ready and
willing to perform her part of the contract. The learned counsel further argues
that plaintiff not having deposited the sum of Rs.2,00,000/- which is admittedly
due to the defendants the irresistible conclusion would be that the plaintiff does
not have financial capability to make the payment and so it should be held that
plaintiff was never ready and willing to perform her part of the contract. The
learned counsel has also placed reliance in the case of J.P Builder –vs- A
Ramadas Rao reported in 2011(1) SCC 429 and in the case of Balkrishna –
vs- Bhagwan Das reported in AIR 2008 SC 1786 to buttress his argument that 
in case a plaintiff fails to aver and establish readiness and willingness as
mandated under Section 16 ( c ) of Specific Relief Act, the suit must be dismissed
and no relief can be granted to the plaintiff under Section 20 of the Specific
Relief Act.
10. Per contra, Mr. DR Gogoi, learned counsel appearing for the respondent
would argue that defendants never denied to have received Rs.2,00,000/- from
the plaintiff and such payment was made only for the purpose of purchasing the
suit land and not for any other cause. This being the position, there is no reason
as to why suit of the plaintiff should not be decreed by upholding judgment
passed by the trial court. According to the learned counsel, defendants having
entered into agreement with the plaintiff did not perform their part of the
contract to avoid liability. Calling attention of the court to para-4 of the plaint,
learned counsel claimed that defendants who did not perform their part of the
contract ,plaintiff had always been ready and willing to get the sale deed
executed . According to him, PW-1 Income Tax Officer was examined to prove
financial capability of the plaintiff and so there is not merit in the appeal and it
should be consequently dismissed.
11. The admitted fact in this appeal is that defendants No. 1 to 5 are owners of
the suit land and that they agreed to sell the land to the plaintiff by executing a
written agreement on 28.1.1995. The admitted total consideration was
Rs.4,00,000/- out of which defendants received Rs.2,00,000/-. The dispute
arises in regard to performance of this contract only. While drawing attention of 
the court to para-2 of the agreement (exhibit-1), learned counsel for defendants
argued that the question of sale would arise only when defendants No. 6 and 7
would vacate the suit premises and transaction of sale is complete. Learned
counsel for the respondent on the other hand would argue that plaintiff cannot
be trapped by technical interpretation of the Clause once it is found that
defendants received money from the plaintiff agreeing to sell the suit land. This
takes us to Clause -2 of the agreement which is quoted below:
“ That the second party has paid to day an amount of
Rupees Two Lakhs ( the receipt whereof the first part
hereby acknowledge) and symbolical possession is also
given in favor of the second party and actual physical
possession would be delivered to the second party as soon
as the house is vacated before completion of the
transaction by evicting the present tenants.”
12. The language of the aforesaid Clause of the contract indicates that
symbolical possession of the suit premises was only given to the plaintiff and it
was agreed between the parties that actual possession would be delivered as
soon as defendants No. 6 and 7 vacate the premises. It was indicated that such
vacation by defendants No. 6 and 7 would be before completion of the
transaction by evicting them. In course of cross-examination , a specific question
was put to PW-5 who is the plaintiff in the case and she stated that as per the
agreement between the parties, sale of the land was supposed to be made only 
after the hotel of defendants No. 6 and 7 standing on the suit land would be
vacated. By pointing to these pieces of evidence, the appellants wanted to
establish that there was no breach from the side of the defendants in regard to
performance of the contract. The contract was there for sale of the land but time
had not yet come for executing the contract as defendants No. 6 and 7 were still
possessing the same.
13. To ascertain as to whether suit of the plaintiff is maintainable in terms of
Section 16 ( c) of the Specific Relief Act, I have perused the plaint in entirety.
Plaintiff has not stated anywhere that she is or has been ready and willing to
perform the essential terms of the contract. Although in para-4 of the plaint it is
stated that defendants did not file necessary application for getting sale
permission from competent authority and that plaintiff approached the
defendants on several dates but nowhere a specific date has been mentioned.
Agreement was executed on 28.1.1995 and the suit was instituted on 5.2.1996.
Plaintiff was duty bound to state as to what had happened in the meantime and
as to what action the plaintiff had taken for the purpose of getting the sale deed
executed. The mandate of Section 16 ( c ) of the Specific Relief Act is clear. It
provides that specific performance of a contract cannot be decreed unless
plaintiff avers and proves that he has performed his part of the contract or that
he has been ready and willing to do the same. Even under the Code of Civil
Procedure, Appendix-A provides essential of a plaint in a suit for specific
performance of contract. In Form No. 47 and 48 to Appendix-A of the Code of 
Civil Procedure, it would appear that the averment as to readiness and
willingness has been prescribed under the Form .
14. In the case of JP Builders(supra) Hon’ble Supreme Court observed that
Section 16 ( c ) of the Specific Relief Act mandates averment as to readiness and
willingness on the part of the plaintiff and that it is a condition precedent for
obtaining relief. The plaintiff is duty bound to allege and prove a continuous
readiness and willingness to perform the contract on his part from the date of
the contract and that the onus is on the plaintiff alone. In para-27 of this
judgment, Hon’ble Supreme Court has held that when there is non-compliance
with these statutory mandates, court is not bound to grant specific performance
and is left with no other alternative but to dismiss the suit.
15. The readiness and willingness of the plaintiff is not only to be present at the
time of institution of the suit but it should continue to exist during whole period
even after passing of the judgment. This is because under Section 28 of the
Specific Relief Act, if the plaintiff does not perform his part after the suit is
decreed in that event the decree of specific performance of contract is liable to
be rescinded. This is why under Order XX Rule 12 –A of the Code of Civil
Procedure there is a requirement that decree for specific performance of contract
should specify the period within which the payment should be made.
16. The Hon’ble Supreme Court held in the case of N.P. Thirugnanam (D) –
vs- Dr. R. Jagan Mohan Rao reported in 1995 (5) SCC 115 that plaintiff must RFA No.152 of 2005 Page 11 of 12
not only aver and establish readiness and willingness but plaintiff is also duty
bound to show that he has financial ability to make payment of the balance
consideration. Herein this case, plaintiff initially attempted to prove her financial
capability by examining PW-1 , Income Tax Office but subsequently abandoned
the endeavor by not producing him on the adjourned date of evidence. The
examination-in-chief of PW-1 was dis-continued by recording that the
examination was discontinued for failure on the part of the witnesses to bring
balance sheets. Plaintiff thereafter did not make any attempt to produce balance
sheet to prove her financial capability. Had the plaintiff been ready and willing to
make payment of Rs.2,00,000/- she could have deposited the amount with the
learned trial court even during the pendency of the suit. Besides, after the suit
was decreed on 21.7.2005 and the defendants were directed to execute sale
deed within three months after receipt of balance consideration of Rs.2,00,000/-
plaintiff could have deposited the amount with the trial court to show her
readiness and willingness. Apart from avoiding consequences of Section -28 of
the Specific Relief Act , this was necessary for the plaintiff to prove her
continuance as to readiness and willingness to get the sale deed executed. The
totality of circumstances only lead to show that plaintiff was not ready and
willing to perform her part of the contract. Once such a finding is arrived at , the
court is left with no other alternative but to dismiss the suit by setting aside the
judgment and decree passed by the learned trial court. Accordingly, the appeal
stands allowed and the impugned judgment and decrees are hereby set aside. RFA No.152 of 2005 Page 12 of 12
16. Before parting it is to be noted that plaintiff had made prayer in the plaint
for getting cost along with 18% interest on the whole amount w.e.f. 28.1.1995.
This is the date of execution of the agreement and so plaintiff must have meant
to get interest on the amount advanced by her to the defendants No. 1 to 5 on
28.1.1995. Apart from that in Clause -6 of Exhbit-1, the defendants No. 1 to 5
had agreed to return the advance amount to the plaintiff in case sale deed is not
executed. So there is substantial compliance of Section-22 (1) of the Specific
Relief Act,. As pointed out above, there is no dispute as to whether receipt of
Rs.2,00,000/- by defendants No. 1 to 5 from the plaintiff on 28.1.1995. This
being the position, the defendants No. 1 to 5 are liable to refund Rs.2,00,000/- to
plaintiff @ 9 % per annum from the date of payment till realization. The
defendants shall make the payment within a period of one month from today.
17. Accordingly, appeal stands allowed. No order as to cost.
18. Send down the records after framing of the decree.

JUDGE
Nivedita 
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