In A.S.No.848 of 2020-MAD HC-Unless purchaser approaches Court within reasonable time or immediately after breach or refusal by vendor, purchaser is not entitled to equitable relief of specific performance: Madras HC 
Justices V.M. Velumani & Sunder Mohan [17-11-2022] 

Read Order: S.MURALIDARAN AND ORS V. K.BHASKARAN 

Masimran Kaur

Chennai, November 19, 2022: While discussing the law relating to specific performance, the Madras High Court has opined that the plaintiff must allege and prove that he was always ready and willing to perform his part of the contract from the date the sale consideration became payable till the decision in the suit. 

The Division bench of Justice V.M. Velumani and Justice Sunder Mohan allowed the present appeal preferred by the appellants by stating that  the amounts received by the appellants after expiry of four months without taking any action to cancel the agreement, concluded   that time was   not the essence of the contract, 

The respondent filed the suit for specific performance of agreement of sale in respect of suit property and permanent injunction. According to the respondent, the first appellant was the owner of 18 cents and the second appellant was the owner of 17 cents of suit property situated at Kancheepuram District . 

The appellants were in need of funds and they were unable to defend the suit filed against one D.Balaraman. They decided to sell the suit property to the respondent. After discussions, the respondent and appellants entered into an agreement of sale on July 4, 2006. The total sale consideration was fixed at Rs.52 Lakh and respondent paid an advance of Rs.10 Lakhs on the date of agreement. The appellants admitted and acknowledged the same. The balance sale consideration of Rs.42 Lakh was to be paid within 4 months from the date of agreement, however  the same was  subject to Clause 13 of agreement of sale dated July 4, 2006 . 

The respondent was always ready and willing to pay the balance sale consideration. The suit on the file of the Principal District Court, Chengalpet same was dismissed and application filed by the D.Balaraman, the defendant was also dismissed by this Court,  confirming the judgment and decree passed in original suit.

After succeeding in Second Appeal, the appellants, in collusion with D.Balaraman, the first defendant and local politicians, are trying to sell the property to defeat the interest of the respondent. The respondent gave a complaint to the Police. But the Police refused to entertain the complaint stating that it was a civil matter.

 In the above circumstances, the respondent filed the present suit for the relief mentioned in the plaint. The Judge decreed the suit as prayed for and directed the appellant to execute the sale deed in favour of the respondent within 3 months and also restrained the appellants from alienating or encumbering the suit property by any manner till the date of execution of the sale deed in favour of the respondent by means of permanent injunction. 

Challenging the said judgment and decree, the appellants came out with the present appeal.

After hearing the submissions of the parties, the Court noted, “Unless the purchaser approaches the Court immediately after the breach or refusal by the vendor or within a reasonable time, the purchaser is not entitled to equitable relief of specific performance”.

 Further, the Court held that the respondent was not ready and willing to perform his part of the contract. For the said reason and delay of respondent in approaching the Court even after dismissal of Second Appeal by this Court on August 6, 2012, phenomenal increase in the suit property which is an urban vacant land and the respondent being a Real Estate dealer, the Court held that respondent was not entitled to equitable relief of specific performance. 

In a suit for specific performance, the Court has to see whether in the facts and circumstances of the case, the purchaser is entitled to the equitable relief of specific performance. As per Section 16(C) of the Specific Relief Act, the Court has power to decline to grant the relief of specific performance. The suit filed after considerable delay just before expiry of limitation is one of the grounds to decline the equitable relief of specific performance, the Court further remarked. 

In this case, the respondent curiously had  given only a complaint to the Police and when the Police did not take such a complaint on file and informed the respondent that it is a civil matter, he had  not issued any notice to the appellant, however  filed suit for specific performance, the Court noted.  The respondent had not given the date on which he gave a complaint to the Police. He had not produced the copy of the alleged complaint before the Trial Court. The respondent had filed suit after 11 months of dismissal of Second Appeal. The respondent had not given any valid reason for the delay. 

The above materials clearly showed that respondent was not willing to pay the balance sale consideration and complete the sale agreement. The intention of the respondent was not to complete the contract by paying balance sale consideration, the Court further noted. 

The Court noted that even if agreement is champertous agreement, unless appellants prove that it is illegal, opposed to public policy and immoral, the said agreement can be enforced in a Court of law. 

The respondent had to pay the balance sale consideration of Rs.42, 00,000/- within four months from the date of agreement. Time was fixed as the essence of the contract. However, the appellants did not take any action to cancel the agreement after expiry of four months. 

On the other hand, they were receiving amounts amounting to Rs.28, 00,000/-. The counsel appearing for the appellants contended that amounts so received were not towards part of sale consideration, it was only towards litigation expenses. In view of the same, the Court noted that the endorsements made by the appellants on the backside of the agreement, did not mention that the amounts received were only for litigation expenses. 

Therefore, the only conclusion that could be arrived at was that the said amounts were paid only towards sale consideration. In view of the amounts received by the appellants after expiry of four months without taking any action to cancel the agreement, the Court held that time was not the essence of the contract. In view of such observations, the appeal was allowed.