Relief Of Specific Performance Of Contract Cannot Be Granted In The Absence Of A Clear Title: Supreme Court
The Supreme Court has observed that the relief of specific performance of a contract cannot be granted in the absence of a clear title.
The Court was considering an appeal filed by the Defendant in a suit for Specific Performance of a contract. The Trial Court had dismissed the suit. The first Appellate Court allowed the appeal of the plaintiff and decreed the suit. The High Court dismissed the second appeal filed by the appellant.
The Bench of Justice Vikram Nath and Justice Prasanna Bhalachandra Varale observed, “the plea taken by the defendant appellant regarding non-execution of the sale deed on the ground that he did not have a clear title cannot be said to be without any basis. The Trial Court was right in holding that in the absence of a clear title no relief of specific performance of a contract could have been granted.."
Senior Advocate Siddharth Bhatnagar appeared for the Appellant whereas Senior Advocate Manoj Swarup appeared for the Respondent.
The parties entered into an agreement to sell with respect to a property for a total sale consideration of Rs.16,25,000/- out of which Rs.1 lakh was to be paid as advance money and the remaining amount of Rs.15,25,000/- was to be paid within 60 days.
The agreement further provided that in case the Defendant-appellant refuses to transfer the suit property in favour of the Plaintiff-Respondent, the Plaintiff-Respondent would have a right to get double the amount of advance money from the appellant and in the event the Plaintiff-Respondent fails to purchase the suit property by making the full and final balance amount within the time specified the advance/earnest money of Rs.1 lakh would stand forfeited on the expiry of the period of 60 days. Other formal terms and conditions were also mentioned in the Agreement to Sell.
No sale took place within the stipulated time. The Plaintiff-Respondent instituted a suit praying that a decree of possession by way of specific performance of contract based on the agreement to sell be granted.
According to the plaint allegations, the Plaintiff-Respondent, to show his readiness and willingness to perform his part of the contract, stated that he went to the office of the Sub-Registrar on the 60th day and also got his presence marked, as the Defendant-appellant failed to appear, he returned disappointed.
The Court took note of the fact that the authorities had cancelled the auction proceedings with respect to which some litigation was pending. The Court said that once this was the situation, the plea taken by the defendant-appellant regarding the non-execution of the sale deed on the ground that he did not have a clear title cannot be said to be without any basis.
“The Trial Court was right in holding that in the absence of a clear title no relief of specific performance of a contract could have been granted.”, the Court said.
"The relief of decree of specific performance is a discretionary relief and where an alternative was already provided in the Agreement itself and there was a valid reason for the defendant to not execute the sale deed, alternative relief ought to have been granted.”, the court added.
Another aspect which was dealt with by the Court was that no readiness and willingness was proved by the plaintiff-respondent.
The Court held, “Apart from a bald statement that he was ready and willing and that he went to the office of the Sub-Registrar on the 60th day i.e. 15.12.2005 and marked his presence, there is no other evidence or pleading for establishing readiness and willingness. This was without any prior notice to the defendant-appellant or without even offering him the balance amount before the said date. The readiness and willingness was clearly lacking and, therefore, the suit would also be hit by Section 16(c) of the Specific Relief Act.”
Accordingly, the Court allowed the appeal and set aside the impugned judgment and order.
Cause Title: Jai Kishan Garg v. Randhir Singh
Appearances:
Appellant: Senior Advocate Siddharth Bhatnagar, AOR Vanshdeep Dalmia, Advocates Suchakshu Jain, Anisha Jain and Sarthak Dora.
Respondent: Senior Advocate Manoj Swarup, AOR Dr. Surender Singh Hooda, Advocates Apoorva Singh, Shaurya Lamba, Yuvraj Nandal, Shiv Bhatnagar, Tannu, Saurabh Jain, Mohit Khandelwal and Jaya.