Specific Performance Suit -Trial Court Should Frame Specific Issue On Readiness & Willingness : Supreme Court

The Supreme Court observed that a specific issue on readiness and willingness on the part of the plaintiff must be framed by the trial court in a suit for specific performance.

The object and purpose of framing the issue is so that the parties to the suit can lead the specific evidence on the same, the bench of Justices MR Shah and MM Sundresh observed.

Under the  agreement to sell, a sum of Rs. 1 crore was paid by the buyer to the seller towards earnest money of which Rs. 65 lakhs were paid in cash and Rs. 35 lakhs were in the form of post­dated cheque dated 25.08.2005. The post­dated cheque deposited by the seller came to be dishonoured/returned for the reasons "payment stopped by attachment order". Thereafter, the buyer filed a suit for specific performance. The Trial Court dismissed the suit observing that the plaintiff was never in possession of the balance consideration of about Rs. 3 crores and 9 lakhs and therefore, it can be said that there was no readiness and willingness on the part of the plaintiff. Dismissing the appeal, the High Court held that as the post­dated cheque of Rs. 35 lakhs which was paid towards part sale consideration was returned therefore full payment towards part sale consideration was not made and therefore there was no concluded contract between the parties for sale of the suit property.

Post dated cheque not worthless

In appeal, the Apex Court bench disagreed with the observation made qua the cheque. It said:

"It is required to be noted that at the time when the post­dated cheque of Rs. 35 lakhs was tendered the same cannot be said to be worthless cheque. The post­dated cheque of Rs. 35 lakhs returned by the bank was with an endorsement i.e., "payment stopped by attachment order" as there was a raid conducted by the IT Department and the bank account was attached and therefore, the post­dated cheque was returned. At this stage, it is required to be noted that the cheque was not returned for the reasons of insufficient funds in the bank account. Therefore, the observation made by the High Court that the post­dated cheque was worthless cheque and tendering such worthless cheque cannot be said to be a payment towards part sale consideration cannot be accepted. We do not approve such observations/reasoning given by the High Court."

Specific issue on the readiness and willingness must be framed

The court further noticed that no specific issue framed by the Trial Court on readiness and willingness on the part of the plaintiff, but gave the findings on the same and has non­suited the plaintiff.

"Such a finding could not have been given by the learned Trial Court without putting the plaintiff to notice and without framing a specific issue on the readiness and willingness on the part of the plaintiff. There must be a specific issue framed on readiness and willingness on the part of the plaintiff in a suit for specific performance and before giving any specific finding, the parties must be put to notice. The object and purpose of framing the issue is so that the parties to the suit can lead the specific evidence on the same.", the court said.

The court therefore remanded the case to the Trial Court to frame the specific issue with respect to the readiness and willingness on the part of the plaintiff.

Case details

V.S. Ramakrishnan vs. P.M. Muhammed Ali | 2022 LiveLaw (SC) 935 | CA 8050­-8051 OF 2022 | 9 Nov 2022 | Justices MR Shah and MM Sundresh 

Counsel: Sr. Adv V. Chitambaresh for appellant, Sr. Adv Joseph Kodianthara for respondent

Headnotes

Specific Relief Act, 1963 - Specific Performance Suit - There must be a specific issue framed on readiness and willingness on the part of the plaintiff in a suit for specific performance and before giving any specific finding, the parties must be put to notice. The object and purpose of framing the issue is so that the parties to the suit can lead the specific evidence on the same. (Para 4.1)

Click here to Read/Download Judgment