Party Seeking Specific Performance Of Contract Has To Prove Readiness And Willingness To Perform Their Part: Allahabad High Court Reiterates

The Allahabad High Court has reiterated that in a suit for Specific Performance, the party filing has to necessarily show that they are, or have been ready and willing to perform their part of the contract before pursuing such a direction.

“...a decree of specific performance of contract can not be passed unless the person, who prays for a decree for specific performance of contact, proves that he has performed or always ready and willing to perform the essential terms and conditions of the contract, which were to be performed by him, therefore, it is sine qua non for grant of a decree of specific performance of contract.It has to be determined on the basis of entirety of facts, relevant circumstances and the intention and conduct of the parties and financial capacity of the party,” held Justice Rajnish Kumar while referring to Section16(c) of the Specific Relief Act. 

The court further referred to various Supreme Court's decisions including Jagjit Singh (D) Through LRs. Vs. Amarjit Singh (2018) which held that it is settled law that a plaintiff who seeks specific performance of contract is required to plead and prove that he was always ready and willing to perform his part of the contract.

Background

The predecessor-in-interest of the appellants executed a registered sale agreement in the favour of the predecessor-in-interest of the respondents. It was for the sale of a plot amounting to Rs. 50,000, for which an advance of Rs.200 was paid by the respondents. The time period of a year was granted to the respondents to arrange the money, after receiving which, the defendants would execute the sale deed.

The respondents, while showing their readiness and willingness to make the payment, asked the appellants to execute the sale deed, however, no action was taken. Through notice of August 27,1983, the respondents then served them with a notice, which was deliberately not received by the appellants. Subsequently, the respondents filed a suit for specific performance which was decreed against the appellants.

Aggrieved, the they filed an appeal which was also dismissed. Thus, they filed a second appeal before the High Court, contending that the Trial Court had failed to frame an issue regarding readiness and willingness in terms of Section 16(c) of the Specific Relief Act, 1963.

The Court allowed the second appeal, remanding the matter back to the lower appellate court and directed them to frame points of consideration and decide the case on merits. Appellant contended that while the appellate court framed the points for determination, it decided the case on the basis of existing evidence and did not permit the parties to lead fresh evidence, violating Order-41, Rule 25 C.P.C. Thus, they filed the present second appeal.

The predecessor-in-interest of the respondent filed a statement, admitting himself to be the owner of the property in question. He contended that the land in question was the only source of income for his family and that he had been made to sign the agreement to sale under coercion. It was stated that the property had in fact been undervalued and that the appellants had exerted undue influence on him to get the agreement executed.

Findings

The Court examined Section 16(c) of the Specific Reliefs Act, 1963 and held that a decree of specific performance cannot be passed without establishing that the person who prays for such a decree had performed or was always capable of performing their end of the contract.

Further, the Court held that as per the judgement of the Apex Court in Kalyan Singh Chouhan v. C.P. Joshi, the issues that the Court deals with have to be settled prior to the start of the trial. Justice Kumar held that in a suit for specific performance of a contract, the issue of readiness and willingness of the person claiming the relief is required to be framed so that they may know that they need to prove the same.

Examining the proceedings of the lower courts, the Court held that the only question that lay before it was whether the issue of readiness and willingness has been pleaded and proved in accordance with the law. Regarding Order 41, Rule 25 CPC, it was held that the appellate court had merely directed the Trial Court to frame fresh points for determination and not allow any fresh issues, and thus, no new evidence could be permitted.

The Court observed that the pleadings did not indicate that the respondents had arranged the money and that they were ready to pay the same. It was held that there was insufficient evidence to support the contentions advanced by the respondents and that the Trial Court had made its judgement solely on the basis of the notice dated 27.08.1983, which was not served to the appellants.

“The suit was filed after more than a year of the aforesaid notice dated 31.10.1984, therefore in view of the aforesaid discussions and law on the issue, it was incumbent upon the respondents to specifically state in the plaint that they have arranged the remaining money of sale consideration and ready to pay the same and prove it,” held the Court.

Justice Kumar held that the Courts below had failed to consider the case in terms of Section 16(c) of the Act and allowed the suit filed by the respondents without considering the evidence on record in terms of their readiness and willingness. It was also held that the date mentioned by the respondents for the payment of the advance was distinct from the date presented before the trial court.

Further, the Court held that there was insufficient evidence to hold that the appellants had not been coerced or subjected to undue influence. It relied on the decision of the Supreme Court in Prem Singh and Ors. v. Birbal and Ors. to hold that in a case of specific performance, unless readiness and willingness is shown and proved, mere registration of a document does not give the right to enforce performance.

“… in a case of specific performance of a contract/agreement, merely registration of an agreement does not five right for a direction for performance unless the readiness and willingness is shown and proved, which the respondents have failed to do in this case. Even otherwise as discussed above, the same also does not seem to have been validly executed,” held the Court.

Accordingly, the impugned decrees were set aside, and the appeal was allowed.

Case Title: Rama Kant and Ors. v. Smt. Prema Devi and Ors. [SECOND APPEAL No. - 112 of 2023]

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