Apex Court allows appeal challenging order upholding suit for specific performance, says no willingness shown by parties to pay balance amount or get sale deed ascribed on necessary stamp paper
Justices Vikram Nath & Justice Ahsanuddin Amanullah [10-01-2024]

Read Order: ALAGAMMAL AND ORS v. GANESAN AND ANR(In CIVIL APPEAL No. 8185 OF 2009-SC)

Tulip Kanth

New Delhi, January 19, 2024: The Supreme Court has allowed an appeal challenging a Madras High Court order upholding the suit for specific performance after considering the fact that payments were being made at great intervals by the respondents, no willingness was shown by them to pay the remaining amount or give notice to the appellants to execute the Sale Deed.

The facts of the case indicated that the appellants no.1, 2 and 3 entered into a registered Agreement of Sale with the respondents in the year1990 to sell the suit property for a consideration of Rs 21,000, against which Rs 3000 had been received in advance. Further, six months’ time was fixed for completion of the transaction. The appellants in the meantime, had executed a Sale Deed with regard to the property in question with appellant no.7 for a consideration of Rs 22,000.

Thereafter, the respondents sent a Notice to the appellants calling upon them to execute the Agreement. This led to the respondents filing an Original Suit before the District Court  against the appellants for specific performance of the Agreement, damages and for recovery of money with interest. The suit stood dismissed by the Principal District Munsif Judge, Dindigul. An appeal filed by the respondents was allowed by the First Appellate Court, and the same had been upheld by the High Court by the Impugned Judgment.

It was the case of the appellants that as per the Agreement, the balance consideration amount of Rs 18,000was to be paid within six months which was admittedly not done. The fingerprint expert had found the thumb-impression of appellant no.1 as not matching the admitted actual sample thumb-impression of the appellant and, thus, the very basis of holding that time was not the essence of the agreement was washed away. It was submitted that the Agreement stipulated that if there was default on the part of the respondents, the advance paid would be forfeited, and the entitlement to obtain the Sale Deed and get possession free from all encumbrances would also end.

On the contrary, the respondent submitted that the appellants even after accepting Rs425  over and above the amount indicated in the Agreement and even after getting a decree for declaration and possession of the suit property in her favour did not execute the Sale Deed. Further, it was submitted that it is the obligation of the seller to hand over possession at the time of sale, as was stipulated in the Agreement.

The moot question, before the Division Bench of Justice Vikram Nath & Justice Justice Ahsanuddin Amanullah, was whether the Agreement dated 22.11.1990 disclosed a fixed time-frame for making payment in full by the respondents that is, in terms of the recitals in the agreement for sale executed by the appellant no.1 in favour of the respondents.

It was observed by the Bench that within six months there existed the onus of paying the entire balance amount of Rs 18,000 by the respondent no.1 to the appellant no.1. It was not the case of the respondents that they had even offered to pay the remaining/balance amount before the expiry of the six-month period. Thus, payment of Rs 3,000 only out of Rs 21,000having been made, or at best Rs 7,000/- out of Rs21,000/-, which is the amount indicated in the Legal Notice sent by the respondents to the appellants, the obvious import would be that the respondents had not complied with their obligation under the Agreement within the six-month period.

Moreover, there was no explanation, as to why, an excess amount of Rs 425 as claimed, was paid by respondent no.1 to the appellant no.1, when the respondents specific stand was that due to the appellants not being in possession of the property so as to hand over possession to the respondents, delay was occasioned. The submission that no adverse effect could be saddled on the respondents as decree for declaration and recovery of possession was obtained by appellant no.1 in her favour only on 27.04.1996 was not acceptable for the reason that there was no averment that pursuant to such decree, she had also obtained possession through execution. Thus, the decree dated 27.04.1996 also remained only a decree on paper without actual possession to appellant no.1, the Bench held.

Reliance was also placed upon the judgment of the Top Court in K.S. Vidyanadam v Vairavan [LQ/SC/1997/221].

The Bench concluded the matter by observing that later payments by the respondents to the appellants were being done at great intervals and there was no willingness shown by them to pay the remaining amount or getting the Sale Deed ascribed on necessary stamp paper and giving notice to the appellants to execute the Sale Deed. This fact alongwith the conduct of parties, especially the appellants, made it clear that time would not remain the essence of the contract.

Hence, allowing the appeal, the Bench restored the judgment/order of the Trial Court.