Readiness & Willingness Insufficient For Decree Of Specific Performance Of Sale Agreement When Executor Lacks Requisite Competence To Execute It: Madhya Pradesh HC

The Madhya Pradesh High Court held that merely demonstrating readiness and willingness is inadequate for securing a specific performance decree concerning a joint family property, especially when the agreement's executor lacks the requisite competence. 

The Court, in appeals contesting the Trial Court's judgment dismissing a specific performance plea, directed a refund of Rs.5,00,000/- with 10% per annum interest.

The Court noted that a sole person is not having any right to dispose of a joint family property.

The Bench headed by Chief Justice Ravi Malimath and comprising Justice Vishal Mishra observed, “merely proving the readiness and willingness is not sufficient for a decree of specific performance especially in the circumstances when the executor of the agreement to sell was not competent to execute the same”.

Advocate Ritesh Kumar Sharma appeared for the Appellant and Advocate Manish Kumar Verma appeared for the Respondents.

In this case, appeals were filed before the High Court against a District Court's judgment and decree. As the appeals shared a common issue, they were consolidated for joint consideration. The Appellant sought specific performance of a contract based on an agreement to sell a land parcel. Despite proving all necessary elements, the Trial Court dismissed the claim, ordering a refund of Rs.5,00,000/- with 10% per annum interest. Both parties filed separate appeals. In the First Appeal, the Appellant contested the decision, arguing for the execution of the sale deed instead of a refund. The Respondents challenged the characterization of the agreement as an agreement to sell, asserting it was a loan transaction, and contested the awarded interest rate as excessive.

The Court noted that the Trial Court's denial of relief on the sale deed execution was appropriate. Upon examination of the records, the Trial Court framed nine issues, finding the first issue regarding the execution of the agreement to be proven. The defendant's claim of executing the agreement as security for a Rs.2,00,000/- loan was dismissed. Evidence showed a payment of Rs.5,00,000/- for the property, but uncertainty persisted regarding possession. Cogent evidence established the property as a joint family asset, and the defendant lacked the authority to sell it. The Trial Court, considering these factors, correctly concluded that the plaintiff's claim for a sale deed execution lacked merit, as the joint family property's status was supported by revenue records. The Appellant failed to dispute this evidence.

The Court referred to the Supreme Court Judgment in the case of Hemanta Mondal and Others v Ganesh Chandra Naskar [(2016) 1 SCC 567] and noted that an individual lacks the authority to dispose of such property. The discretion of the court plays a crucial role in deciding on specific performance.

The Bench noted that the Trial Court correctly concluded that the property, being joint family-owned and not partitioned, rendered the executor incompetent. Therefore, the Trial Court exercised its discretion to direct a refund of Rs.5,00,000/- along with a 10% per annum interest in lieu of the agreement.

The Court noted that the Trial Court was well within its jurisdiction. The decision to order the refund of Rs.5,00,000/- with 10% per annum interest from the suit's filing date was deemed appropriate. Consequently, the appeal filed by the Appellant, lacking merit, was dismissed.

Accordingly, the Court dismissed the Appeals.

Cause Title: Manohar Lal Soni v Fakir Chand Agrawal

Click here to read/download Order