Specific Relief Act | In Agreement To Sell Property Under Joint Ownership, Onus Is On Plaintiff To Secure Consent Of All Co-Owners : Supreme Court

Recently, the Supreme Court observed that when the plaintiff seeks specific performance of the agreement to sell a property (being jointly owned by multiple persons), then the onus is on the plaintiff to ensure that all necessary consents and participations are secured to prove his readiness and willingness towards the performance of the contract.

The bench comprising Justices Vikram Nath, Pankaj Mithal, and Prasanna B. Varale heard a matter where the plaintiff claimed specific performance of the agreement to sell a property that was jointly owned by five persons (two brothers and three sisters). Despite knowing that the sisters (co-owners) haven't consented to the sale of the suit property, the plaintiff filed a suit for specific performance based on the oral assurance of the brothers that they will procure the sisters for the execution of the sale deed.

In this case, the respondents/plaintiff sought to enforce the agreement to sell against the owners of the suit property after coming to know that they had executed a sale deed in favor of the appellant. The trial court held against the plaintiff, however, the High Court allowed the plaintiff's appeal and decreedspecific performance of agreement to sell. Following this, the appellant preferred the appeal before the Supreme Court.

The agreement to sell entered between the plaintiff and the owners of the suit property required the plaintiff to ensure that Defendant Nos. 6 to 8 (sisters) would come within three months to execute the sale deed. The plaintiffs, however, did not take any concrete steps to secure the consent or presence of the sisters within the stipulated period. They relied solely on Defendant No. 1 and the late Soumendra (another co-owner) to procure the sisters, despite knowing that the sisters were not signatories to the agreement and held a significant share in the property.

Setting aside the High Court's decision which observed that the plaintiff (respondent) had shown readiness and willingness for specific performance of the contract, the Court observed as follows:

“The reliance placed by the plaintiffs on Defendant No. 1 and late Soumendra to bring their sisters for execution cannot absolve them of their responsibility to demonstrate readiness and willingness. In contracts involving multiple parties with distinct interests, especially when some parties are absent or not signatories, the onus is on the plaintiff to ensure that all necessary consents and participations are secured. The plaintiffs' passive approach and failure to act proactively undermine their claim of readiness and willingness.”

The Court observed that the plaintiff's failure to contact the sisters, who are co-owners of a 3/5th share in the suit property, would not absolve him from his commitment to perform the contract under Section 16(c) of the Specific Relief Act, 1963.

“Upon perusal of the records and submissions, we find merit in the appellants' contention that the plaintiffs failed to prove their continuous readiness and willingness as required under Section 16(c) of the Specific Relief Act. The terms of the agreement imposed specific obligations on the plaintiffs, particularly in ensuring that Defendant Nos. 6 to 8 would participate in the execution of the sale deed within three months. The plaintiffs' failure to take any initiative in this regard is indicative of their lack of commitment to perform the contract. It is pertinent to note that the plaintiffs were aware that Defendant Nos. 6 to 8 were not parties to the agreement and that their consent was crucial for the completion of the sale. Despite this knowledge, the plaintiffs did not attempt to contact the sisters or address any correspondence to them. The plaintiffs also did not furnish any evidence to show that they had arranged the balance consideration amount or were prepared to pay it upon execution of the sale deed.”, the Court observed.

“In light of the above reasoning, we agree with the Trial Court's findings that the plaintiffs failed to prove their continuous readiness and willingness to perform their part of the contract as mandated under Section 16(c) of the Specific Relief Act. The High Court erred in not adequately addressing this critical aspect and in overlooking the plaintiffs' inaction and lack of diligence. The plaintiffs' failure to comply with the essential terms of the agreement and to take necessary steps within the stipulated time demonstrates a lack of readiness and willingness, which is fatal to their claim for specific performance.”, the Court held.

Accordingly, the appeal succeeded.

Appearances:

For Appellant(s) Mr. Umakant Misra, Adv. Mrs. Prabhati Nayak, Adv. Mr. Niranjan Sahu, AOR Mr. Monomoy Basu, Adv. Ms. Apoorva Sharma, Adv.

For Respondent(s) Mr. S.R.Singh, Sr. Adv. Mr. A.C.Pradhan, Sr. Adv. Mr. Saurabh Mishra, AOR Mr. Shrimay Mishra, Adv. Mr. Abhinav Pandey, Adv.

Case Title: JANARDAN DAS & ORS. VERSUS DURGA PRASAD AGARWALLA & ORS, CIVIL APPEAL NO.613 OF 2017

Citation : 2024 LiveLaw (SC) 813

Click here to read/download the order