In CIVIL APPEAL Nos. 8050-8051 of 2022-SC- In suit for specific performance, specific issue must be framed on readiness & willingness on part of plaintiff; Parties must be put to notice before giving any specific finding: SC
Justices M.R. Shah & M.M.Sundresh [09-11-2022]

Read Judgment: V.S. Ramakrishnan v. P.M. Muhammed Ali 

LE Correspondent

New Delhi, November 10, 2022: While directing the Trial Court to frame the specific issue on the readiness and willingness on the part of the plaintiff to perform his part of the contract, the Supreme Court has opined that there must be a specific issue framed on readiness and willingness on the part of the plaintiff 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 Division Bench of Justice M.R.Shah and Justice M.M.Sundresh said.

Herein, the respondent – original defendant entered into an agreement to sell with the appellant – original plaintiff for a consideration with respect to the property situated in Karukutty Village. Under the said agreement to sell a sum of Rs 1 crore was paid by the appellant to the defendant towards earnest money of which Rs 65 lakh were paid in cash and Rs 35 lakh were in the form of post­dated cheque. 

The post­dated cheque of Rs 35 lakh deposited by the defendant came to be dishonoured/returned for the reasons “payment stopped by attachment order”. A raid conducted by the Income Tax Department and the bank account of which the post­dated cheque of Rs 35 lakh, was drawn came to be attached by the IT Department. 

The cheque was returned by the bank. According to the plaintiff an offer was made to pay the amount of Rs 35 lakhs in cash which according to the plaintiff the defendant refused to accept. The defendant was also called upon to accept Rs 35 lakhs in cash and the plaintiff was prepared to handover cash. 

Thereafter, through a notice, the defendant terminated the agreement to sell/contract and forfeited Rs 10 lakh and called upon the plaintiff to take back an amount of Rs 55 lakh. The plaintiff served a legal notice and called upon the defendant to execute the sale deed after accepting balance sale consideration. The defendant was called upon to inform the plaintiff the date on which he has to pay the balance sale consideration and to execute the sale deed. As the defendant failed to act as per the legal notice, the appellant – original plaintiff instituted a suit before the learned Trial Court for specific performance of agreement to sell.

It was only when that the Kerala High Court dismissed the appeal preferred by the appellant herein – original plaintiff and partly allowed the appeal preferred by the original defendant with respect to the proportionate cost, the original plaintiff had preferred the present appeals.

The Bench was of the opinion that at the time when the post­dated cheque of Rs 35 lakhs was tendered, the same couldnot be said to be worthless cheque as the post­dated cheque was returned by the bank was with an endorsement “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.

Though there was no specific issue framed by the Trial Court on readiness and willingness on the part of the plaintiff, the Trial Court had given the findings on the same and had non­suited the plaintiff by observing that the plaintiff was not having sufficient funds to make the full balance consideration. As per the Bench, such a finding could not have been given by the 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 Bench asserted.

On such ground, the Bench held that the judgment of the Trial Court dismissing the suit and refusing to pass the decree for specific performance of the agreement to sell confirmed by the High Court deserved to be quashed and set aside.

Thus, the Bench remitted back to the Trial Court to decide and dispose of the suit afresh and also gave a direction to frame the specific issue on the readiness and willingness on the part of the plaintiff to perform his part of the contract.