Upgrad LLM

case law : specific performance


I have a situation wether a cheque was givenh as part consideration for purchase of a property while execution of a MoU. Now the said Mou is up for Specific Performance . My delima is though the Cheque has been given by the buyer the Seller did not encash it. Do we have any supreme court judgement wehre it is layed down that if a perty gives a cheque to the other party it is onus of the other party to deposit the same for encahsement and it will be presumed that the Buyer has dischrges his obligation under contract by giving the said cheque to the Seller. 

 
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Legal Manager

In my opinion MOU's are not legally enforceable.  Only agreement of sale or any other agreement can be enforced.  I am not sure about this.  I shall inform you tomorrow the correct position.


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MoU is legally enforceable though it is not properly stamped and registered under section 49 of Indian Registration Act. The questing hereis not of the MoU being enforceable or Not as the court has already taken cognigence of the MoU and have already passed entrim orderes.

the question is : Cheque has been given by the buyer the Seller did not encash it. Does it amount ot discharge of obligation on part of the Buyer.

I appriciate your prompt response. I shall be looking forward to your reply tomorrow.

 
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Advocate

I think giving a cheque will be a sufficient proof to prove the fact that buyer is always willing to perform the MOU. But the cheque is not cashed so how can it discharge the buyer

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Lawyer

 No one cannot prove in the court that it is obligatory or compulsory on the sellers part to encash it but a cheques is valid for 6 months and so he is liable to encash it whenever he requires.It is not the Buyer`s fault unless it is not a case of cheque Bounce.So You cannot make the court or anyone for that matter compel this seller to encash this cheque..Even if the seller fails to deposit the cheque exceeding 6 months its his fault and you are not liable and that can be prooved by the Bnk statemements


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Lawyer

 Even under specific relief Act 1963 there are no provisions..Sorry!


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Lawyer

 ‘Specific performance’ means Court will ask the party to perform his part of agreement, instead of asking him to pay damages to other party.and the court has passes interim orders for?


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Lawyer

 Only if a clause in the contract says that the seller shal deposit his cheque within stipulated time period can it be obligatory and you can use the specific performance which can lead the court to pass interim injunction ordering the seller to deposit the cheque,,,,


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Thank You Madam. As you rightly note in your first reply that Buyers Job is to give the cheque and he by no means can force the seller to encash it. In this particular case the cheque is valid even today and hence he can deposit the same any time he so wishes.

I have argued the caase in the exact fashion as is laid down in your reply. All i need is some case law which might support this theory-wich is practical and lawful.

Once again thanks for your precious time and comments.

 

 
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Dear Anish Sir

What i mean by dischrge here is that I have performed my part of the obligation casted on me by the MoU by giving the cheque and further doing all those ancillary work which i was requiered to do under the MoU. I have maintained the cheque amount in my bank account through out the relevent period.

I just want a case law to support my theory.

 
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