Sunday, 22 September 2019

Necessary requirement for proving readiness and willingness in suit for specific performance of contract

 Coming to the facts of the present case, the sole document relied upon by the appellant to prove her readiness and willingness is the
approval of loan on July 30, 2004 by the ICICI. Such approval was
subject to two conditions, viz., furnishing of income tax documents
of the appellant and the property documents. M/s. ICICI has sent
an Email on May 12, 2005 to the husband of the appellant
requiring an Agreement to Sell on a stamp paper of Rs.50/- to be
executed between the parties, as per the legal opinion sought from
the empaneled lawyer, without which ICICI will not be able to
disburse the loan. Admittedly, no agreement was executed on
stamp paper, therefore, the appellant could not avail loan of Rs.50
lakhs from ICICI. Independent of such loan, there is mere
statement that appellant and her husband have income of Rs.80
lakhs per annum unsupported by any documentary evidence. Such
statement will be in the nature of ipsi dixit of the appellant and/or
her husband and is without any corroborating evidence. Such selfserving
statements without any proof of financial resources cannot
be relied upon to return a finding that the appellant was ready and
willing to perform her part of the contract. The appellant has not
produced any income tax record or the bank statement in support
of her plea of financial capacity so as to be ready and willing to
perform the contract. Therefore, mere fact that the bank has
assessed the financial capacity of the appellant while granting loan
earlier in respect of another property is not sufficient to discharge
of proof of financial capacity in the facts of the present case to hold
that the appellant was ready and willing to perform her part of the

contract. Such is the finding recorded by both the courts below as
well.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 7268-7269 OF 2019

RITU SAXENA Vs  J.S. GROVER 

HEMANT GUPTA, J.
Dated:SEPTEMBER 17, 2019.


1) The unsuccessful plaintiff is in appeals before this Court arising out
of a suit for specific performance of an Agreement dated July 18,
2004 in respect of Flat No. 272, Ground Floor, Gulmohar Enclave,
New Delhi.
2) The husband of the appellant, who as an employee of M/s. GE
Capital Services India Ltd., was in occupation of the said residential
premises on a monthly rent of Rs.13,000/- to be paid by the tenant
i.e. M/s. GE Capital Services India Ltd. since September 2002 to the
landlord. On the expiry of the existing lease, the Agreement of
Lease was extended for 11 months from September 01, 2004 but
before the expiry of the lease, the appellant claims to have entered
into an Agreement of Purchase the said property for a total sum of
Rs.50 lakhs. A sum of Rs.1 lakh by cheque was paid to the
1
defendants. It was agreed that all further relevant documents such
as Agreement to Sell, Sale Deed, Will, Possession Certificate and
No Objection Certificate for the purpose of transferring the said
property shall be executed. The Agreement reads thus:
“I, J. S. Grover S/o G. S. Grover, resident of M-12 (First
Floor) Kailash Colony, New Delhi 48 have agreed in
principle and in terms to sell my house (for a
consideration of Rs. 50 lacs) which is a freehold joint
property in my name and in my wife’s name Smt. Veena
Grover, known as house bearing no.272, Gulmohar
Enclave New Delhi 1100049.
In this transaction I acknowledge the receipt of Rs. 1 lac
as advance money by cheque number 044386 dt.
18.7.2004 issued from ICICI Bank Vasant Vihar New
Delhi and agree to furnish all the further relevant
document such as Agreement to Sale, Sale Deed, Will,
Possession Certificate, NOCs etc. for the purpose of
transferring the above said property in the name of Ritu
Saxena at present residing at 272, Gulmohar Enclave
New Delhi 110049 and a permanent resident of B-377
Indira Nagar Lucknow, U.P.
-sd-
18.7.2004
(J. S. Grover)”
3) The appellant relies upon communication dated July 30, 2004 that
a loan of Rs.50 lakhs has been approved by the ICICI Home Finance
Company Limited1 but the disbursal of the loan was only after the
bank receives all income tax and property documents as discussed
with her husband. The appellant is said to have written a letter to
the defendants on September 14, 2004 to fix the date to complete
the pending documentation and other formalities followed by
another letter dated December 21, 2004. A legal notice dated
April 19, 2005 was also served. In reply dated April 27, 2005, it
was asserted that a formal Agreement to Sell was to be executed
1 for short, ICICI

on or before July 21, 2004 and the appellant was to pay 25% of the
total consideration. Since the appellant has failed to pay 25% of
the total consideration amount, therefore, the Agreement is not
enforceable. It is thereafter on May 25, 2005, suit for specific
performance was filed.
4) The respondents denied the claim of the appellant to seek specific
performance of the Agreement dated July 18, 2004. The parties
led the evidence. The learned Trial Court dismissed the suit on
February 28, 2018, inter alia, holding that though the Agreement to
Sell was executed but appellant has failed to prove her readiness
and willingness to perform her part of the contract. However, the
appellant was found entitled to Rs.1 lakh and interest thereon. A
decree to this effect was passed by the learned Trial Court. The
first appeal was dismissed by the High Court on July 17, 2018
affirming the findings recorded by the Trial Court. Still aggrieved,
the appellant is before this Court.
5) Learned counsel for the appellant vehemently argued that the
appellant has earlier availed the loan of Rs.13 lakhs for purchase of
a flat in Ghaziabad. At that time, Rs.90 lakhs were assessed as the
capacity to avail loan by ICICI. Later, the appellant applied for loan
to purchase the property in question. The Bank has approved the
loan of Rs.50 lakhs but same was not disbursed since an
Agreement on a stamp paper of Rs.50/- was not executed by the
defendants. Therefore, the appellant has proved her readiness and
willingness to perform her part of the contract and the finding
3
recorded by the High Court is not sustainable.
6) In support of her claim, the appellant tendered her evidence on
affidavit and made herself available for cross-examination as PW-1.
PW-2 is her husband whereas PW-3 is the official from the ICICI who
has deposed regarding the loan sought by the appellant and/or her
husband. The appellant relied upon sanction letter dated July 30,
2004 (Ex.PW3/1) issued by ICICI. She stated that she had sufficient
funds and resources which she can draw and is in a position to
complete the transaction in her favour. She also stated that the
combined annual income of her and her husband is about Rs.80
lakhs per annum and they can easily avail a loan of upto Rs.1 crore
from any bank and a sum of Rs.50 lakhs is very easy to muster.
Similar is the affidavit of PW-2 Vishnu Kant, husband of the
appellant. PW-3 is Anil Kumar Shrivastava, Zonal Head (North),
ICICI who confirmed that the letter dated July 30, 2004 shown to
him from judicial file was issued by his Company though, his
Company does not have any copy of this letter in the record. In
cross-examination, he stated that 2-3 months prior to the said
approval, Vishnu Kant and the appellant were sanctioned home
loan to the tune of Rs.13 lakhs though they were entitled for the
loan to the extent of Rs.90 lakhs keeping in view their solvency.
They had applied for a loan of Rs.60 lakhs but later on, down sized
their requirement to about Rs.13 lakhs for purchasing the property
other than the suit property and that they have never received the
papers related to Flat No. 272, Ground Floor, Gulmohar Enclave,
4
New Delhi.
7) The document of availing loan of Rs.13 lakhs shows that the loan
has been sanctioned in respect of application No. 777-2415523. It
is the same application number which is relied upon by the
appellant for approval of Rs.50 lakhs as home loan to purchase the
property in question.
8) The learned Trial Court in respect of issue no. 2 as to whether the
plaintiff was ready and willing to perform her part of the
Agreement to Sell, returned the following finding:
“However, both the plaintiff – PW-1 and her husband –
PW-2 have throughout the cross-examination deposed
that they were having funds/financial capacity to
purchase the property. PW-1 has deposed that on
09.04.2005 when they went to the defendants house
they were carrying a banker’s cheque with them. But
has neither given any details of the banker’s cheque
nor has placed on record a copy of the banker’s cheque.
Further, even copy of the passbook/bank statement of
the account from which the banker’s cheque was got
prepared, has been filed in support of her averment and
to show that the banker’s cheque was actually got
prepared. Further, PW-1 deposed that they had a
property worth Rs.80 lakhs but again neither any details
of the said property have been stated nor a copy of
those property documents has been placed on record in
support of this version. Thus, not even a single
document has been filed to show that the plaintiff at
any point of time from 18.07.2004 till filing of the suit,
owned other property or had money in her bank
account or in the account of her husband or any other
source of fund for payment of the balance sale
consideration of Rs.49 lakhs. In absence thereof, the
statements of PW-1 and PW-2 are nothing more than
bald averments carrying no weight.”
9) The Trial Court, thus, held that the appellant is not entitled to the
specific performance of the Agreement to Sell but granted a decree
5
of recovery of Rs.1 lakh with 15% interest per annum from the date
of Agreement till recovery thereof.
10) In appeal, the High Court initially has taken into consideration that
only loan of Rs.13 lakhs were sanctioned as against the balance
sale consideration of Rs.49 lakhs but subsequently, the said aspect
was corrected finding error in view of the fact that a loan of Rs.13
lakhs was sanctioned in respect of the another property. The High
Court held that self-serving averments in the affidavit of the
appellant and her husband cannot be taken as discharge of onus of
proof of having financial capacity. What is the evidence and what
is the weight to be attached to the evidence are two separate
aspects and oral statements on important aspects of financial
capacity cannot be accepted by the courts as proof of financial
capacity. The High Court did not find any favour with the argument
that there is no cross-examination in respect of financial capacity
of the appellant and her husband. It was found that suggestion,
that the appellant and her husband have deposed falsely, was
considered sufficient so as to dispute her financial capacity and to
disprove her readiness and willingness to perform her part of the
agreement. The High Court also took the fact that the appellant is
not entitled to discretionary specific performance as the appellant
has paid Rs.1 lakh which is 2% of the total sale consideration of
Rs.50 lakhs. The High Court also took notice of the fact that the
defendants have filed a suit for possession against the tenant that
is the employer of her husband as they failed to vacate the suit
6
property after the expiry of the lease period. The decree of
possession has attained finality and that the defendants have
taken possession of the property as well.
11) Learned counsel for the appellant refers to judgment of this Court
in A. Kanthamani v. Nasreen Ahmed2 to contend that readiness
and willingness is not as if the appellant is to carry hard cash or the
amount in Bank but it is financial capacity to pay. The appellant
has proved her capacity to pay the balance sale consideration. This
Court in the cited case held as under:
“26. This Court in Sukhbir Singh v. Brij Pal
Singh [Sukhbir Singh v. Brij Pal Singh, (1997) 2 SCC
200 : AIR 1996 SC 2510] followed the aforesaid
principle with these words: (SCC p. 202, para 5)
“5. Law is not in doubt and it is not a condition
that the respondents should have ready cash
with them. The fact that they attended the Sub-
Registrar's office to have the sale deed executed
and waited for the petitioners to attend the office
of the Sub-Registrar is a positive fact to prove
that they had necessary funds to pass on
consideration and had with them the needed
money with them for payment at the time of
registration. It is sufficient for the respondents to
establish that they had the capacity to pay the
sale consideration. It is not necessary that they
should always carry the money with them from
the date of the suit till the date of the decree. It
would, therefore, be clear that the courts below
have appropriately exercised their discretion for
granting the relief of specific performance to the
respondents on sound principles of law.”
xx xx xx
28. At the outset, we may observe that this Court is
loath to undertake the task of appreciating the evidence
2 (2017) 4 SCC 654
7
in an appeal filed under Article 136 of the Constitution
of India. It is more so when such appeal arises out of
the judgment, which has recorded concurrent findings
of fact.”
12) The argument of the appellant that the capacity to pay is proved
by the approval of loan by ICICI and the fact that the appellant and
her husband have substantial income of Rs.80 lakhs per annum,
therefore, the findings recorded by both the Courts below are not
sustainable.
13) On the other hand, Mr. Narender Hooda, learned senior counsel for
the respondents, submitted that the appellant is seeking
reappreciation of evidence in the present appeal under Article 136
of the Constitution of India. There is no substantial question of law
of general importance which is arising for consideration of this
Court. It is also argued that relief for specific performance is a
discretionary relief. Both the courts have declined discretionary
relief, therefore, no case is made out for interference in the present
appeals.
14) We do not find any merit in the present appeals. The judgment in
A. Kanthamani was in an appeal filed by the defendant against
the concurrent finding of fact recorded by the courts below
granting decree of specific performance of the Agreement. This
Court has not interfered with the findings of fact recorded even
after reappreciation of evidence.
15) Coming to the facts of the present case, the sole document relied upon by the appellant to prove her readiness and willingness is the
approval of loan on July 30, 2004 by the ICICI. Such approval was
subject to two conditions, viz., furnishing of income tax documents
of the appellant and the property documents. M/s. ICICI has sent
an Email on May 12, 2005 to the husband of the appellant
requiring an Agreement to Sell on a stamp paper of Rs.50/- to be
executed between the parties, as per the legal opinion sought from
the empaneled lawyer, without which ICICI will not be able to
disburse the loan. Admittedly, no agreement was executed on
stamp paper, therefore, the appellant could not avail loan of Rs.50
lakhs from ICICI. Independent of such loan, there is mere
statement that appellant and her husband have income of Rs.80
lakhs per annum unsupported by any documentary evidence. Such
statement will be in the nature of ipsi dixit of the appellant and/or
her husband and is without any corroborating evidence. Such selfserving
statements without any proof of financial resources cannot
be relied upon to return a finding that the appellant was ready and
willing to perform her part of the contract. The appellant has not
produced any income tax record or the bank statement in support
of her plea of financial capacity so as to be ready and willing to
perform the contract. Therefore, mere fact that the bank has
assessed the financial capacity of the appellant while granting loan
earlier in respect of another property is not sufficient to discharge
of proof of financial capacity in the facts of the present case to hold
that the appellant was ready and willing to perform her part of the

contract. Such is the finding recorded by both the courts below as
well.
16) In view of the said fact, we do not find, even on reappreciation of
evidence, that the finding recorded by the High Court suffers from
any illegality which may warrant interference in the present
appeals. Consequently, the appeals are dismissed.
17) The amount of Rs. 3.5 crores deposited by the appellant in terms of
order dated November 19, 2018 of this Court, which has been
invested in the FDR, may be returned to her, along with the interest
accrued thereon, as per rules.
.............................................J.
(L. NAGESWARA RAO)
.............................................J.
(HEMANT GUPTA)
NEW DELHI;
SEPTEMBER 17, 2019.

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