The Apex Court in , Mayawati v. Kaushalya Devi had held that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. Where a valid and enforceable contract has not been made, the Court will not make a contract for the parties and the specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable. It was rather held that even if the contract is valid and enforceable, the discretion of the Court will be there to pass or not to pass a decree of specific performance but if the stipulation and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all. Where there are negotiations, the Court has to determine at what point, if at all, the parties have reached. It was observed by the Supreme Court:
8...The jurisdiction to order a specific performance of a contract is based on the existence of a valid and enforceable contrAct the law of contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts. Where a valid and enforceable contract has not been made, the court will not make a contract for them. Specific performance will Page 3858 not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable.The discretion of the court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract.It is, therefore, necessary first to see whether there has been a valid and enforceable contract and then to see the nature and obligations arising out of it.The contract being the foundation of the obligation the order of specific performance is to enforce that obligation.
11... It is settled law that if a contract is to be made, the intention of the offeree to accept the offer must be expressed without leaving room for doubt as to the fact of acceptance or to the coincidence of the terms of acceptance with those of the offer. The rule is that the acceptance must be absolute, and must correspond with the terms of the offer. If the two minds were not ad idem in respect of the property to be sold, there cannot be said to have been a contract for specific performance.If the parties themselves were not ad idem at to the subject matter of the contract the Court cannot order specific performance.
18...The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the courts direct the party in default to do the very thing which he contracted to do.The stipulations and the terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem.The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff.If the stipulations and the terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all.Where there are negotiations, the Court has to determine at what point, if at all, the parties have reached agreement. Negotiation thereafter would also be material if the agreement is rescinded.Whether there was a concluded agreement to sell which can be specifically enforced, therefore, has to assessed from the facts of the case. It is necessary first to see whether there has been a valid and enforceable contract and then to see the nature and obligations arising out of it? Whether the intention of the offeree to accept the offer was express without leaving room for doubt as to the fact of acceptance or to the coincidence of the terms of acceptance with those of the offer? Was this acceptance absolute and corresponded to the terms of the offer? Whether the two parties were or were not at ad-idem in respect of the terms of the sale of the property? If parties are themselves are not ad-idem regarding the sale of the property, the Court cannot order specific performance and if the Court cannot order specific performance the Court should not pass any interim order in such facts and circumstances.
Delhi High Court
Deepak Ansal vs Ansal Properties And Industries ... on 29 November, 2006
Equivalent citations: 138 (2007) DLT 560
Bench: A Kumar
