Details Of Funds In Possession Not Necessary In A Plaint For Specific Performance Of Sale Deed: Kerala High Court

The Kerala High Court has held in a suit for specific performance under the Code of Civil Procedure, even if the plaintiff has not given details of funds in her possession or the manner in which she intended to raise them in the plaint, this is not fatal to the suit since those aspects are matters of evidence which need not be pleaded. 

While allowing an appeal, a Division Bench of Justice P. B. Suresh Kumar and Justice C. S. Sudha observed that although the appellant who was the plaintiff in the suit had not given the details of the funds in her possession or the manner in which she intended to raise them in the plaint, the suit will survive since those aspects are matters of evidence, which as per Order VI Rule 1 of CPC need not be pleaded.

"There could, therefore, be no objection if the owner raises the money for payment when the time for doing so comes as Clause (1) of the Explanation to Section 16(c) (of the Specific Relief Act) clearly enacts that money need be produced only when directed by the court. Therefore, the plaintiff need only establish that she had the capacity to raise the necessary funds, which she has done in this case."

The explanation states: 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.

The appellant herein had entered into a sale agreement in 2006 where the respondents agreed to sell their plaint schedule property of 12.32 acres for a total sale consideration of ₹ 55,44,000/-. On the date of the agreement, an amount of ₹10,00,000/- was paid in advance. The agreement was to execute the sale deed within three months.

The appellant was always ready and willing to perform her part of the contract. However, the respondents were never ready to perform their part of the contract. The appellant thereby issued a lawyer notice calling upon the respondents to execute the deed, to which they sent a reply notice raising false and untenable contentions. Later, the appellant filed a suit for specific performance or in the alternative, return of advance money. 

The respondents contended that there was never any sale agreement and that it was executed as security when the respondent borrowed ₹10,00,000/- from the appellant. Though styled as a sale agreement, parties never intended to act upon the same, they argued. It was asserted that when the respondents received the lawyer's notice, along with the reply notice, they had also sent a cheque for ₹10,00,000 returning the amount borrowed.

Further, they claimed that the appellant drafted and brought the agreement and that the respondent was forced to sign the agreement to obtain the loan amount, failing which the amount was refused to be advanced. None of the terms in the agreement had been agreed to by them and the appellant got the agreement executed by playing fraud, exercising undue influence and coercion, they alleged. Thus, according to them, the agreement is void ab initio and is not binding on them.

The court below decreed the suit partly by allowing the prayer for the return of advance money. The court below disbelieved the case of the appellant and so disallowed the prayer for specific performance. Aggrieved, she moved an appeal before the High Court.

Advocate Abraham P. George appeared for the appellant and Advocate P.K Babu represented the respondents. 

Section 16(c) of the Specific Relief Act mandates that readiness and willingness have to be proved right from the date of the contract till the date of the decree. In a suit for specific performance of a contract, it is necessary for the purchaser to show that he was ready and willing to fulfil the terms of the agreement, that he had not abandoned the contract and that he had kept the contract subsisting.

The respondents argued that the plaint did not give the details of the funds in the possession of the appellant or how she intended to raise the necessary funds to pay the balance sale consideration. These facts are revealed only in the proof affidavit of the power of attorney of the plaintiff (PW1). Since Section 16(c) was not complied with, she is not entitled to the relief of specific performance, they argued.

As per Section 16(c) of the Act, specific performance of a contract cannot be enforced in favour of 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. This was the pre-amendment position. After the amendment of the Section in the year 2018, now it is not necessary for the plaintiff to 'aver and prove', it is sufficient that he proves his readiness and willingness.

The Court noted that to succeed in a suit of this nature, compliance with Section 16 (c) of the Act is mandatory. However, it was noted that procedural law is intended to facilitate and not obstruct the course of substantive justice.

"Provisions relating to pleading in civil cases are meant to give to each side intimation of the case of the other so that it may be met to enable Courts to determine what is really at issue between the parties."

In this case, the Bench noted that the lawyer notice and the plaint clearly stated that the appellant was and is ready and willing to perform her part of the contract and that though she had approached and requested the respondents to execute the deed in her favour, they have failed to perform their part of the agreement.

"It is true that the plaintiff has not given the details of the funds in her possession or the manner in which she intended to raise them in the plaint. Those aspects are matters of evidence, which as per O.VI Rule 1 need not be pleaded."

It was also observed that the words "ready and willing" are simple and that all that they mean is that a plaintiff, in order to succeed in a suit for specific performance must aver and prove that he has performed or has throughout been prepared to do his part under the contract, that preparedness may not, however, be a mere verbal show of readiness to do his part.

"It should be backed by the means to perform his part of the contract when called upon to do so. The plaintiff does not have in such a case to go about jingling money to demonstrate his capacity to pay the purchase price, all that the plaintiff has to do in such a situation is to be really willing to purchase the property when the time for doing so comes and to have the means to arrange for payment of the consideration payable by him."

Therefore, it was held that there could be no objection if the owner raises the money for payment when the time for doing so comes as the Explanation to Section 16(c) clearly enacts that money need be produced only when directed by the court. She only had to establish that she had the capacity to raise the necessary funds, which she did in this case through the testimony of witnesses. 

As the result, the appeal was allowed and the impugned judgment and decree of the court below were set aside.

The suit was partly decreed and the appellant was granted a decree of specific performance relating to 2.22 acres out of the total extent of 12.32 acres of the plaint schedule property. If the respondents failed to execute the sale deed within three months, it was held that the appellant was entitled to get the decree executed through court. The appellant will also be entitled to realise the costs of the suit and the appeal.

Case Title: Asha Joseph v. Babu C. George & Ors. 

Citation: 2022 LiveLaw (Ker) 192

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