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NP Thirugnanam Vs Dr RJ Mohan Rao: A Plaintiff Not Ready And Willing To Perform His Part Of The Contract Would Not Be Entitled To A Specific Performance Decree

Megha Bindal ,
  08 October 2021       Share Bookmark

Court :
The Supreme Court of India
Brief :
In this case, the Supreme Court of India considered the provisions of Section 16(3) and Section 20 of the Specific Relief Act, 1963. According to the Court, the remedy for specific performance is equitable and subject to the Court's discretion. Simply signing a contract does not guarantee that the remedy will be available to one of the parties whenever it is needed.
Citation :
1996 AIR 116, 1995 SCC (5) 115

Crux:
A plaintiff not "ready and willing" to perform his part of the contract would not be entitled to a specific performance decree.

Date of Judgment:
July 12, 1995

Bench:
Justice Ramaswamy, K.
Justice Hanasria B.L.

Parties:
Petitioner: N.P. Thirugnanam (D) By Lrs
Respondent: Dr. R. Jagan Mohan Rao &Ors

Legal Provisions

  • Order 22Rule 6, Code of Civil Procedure:Regardless of whether the cause of action survives, the death of either party between the conclusion of the hearing and the pronouncement of the judgement shall not be abated. However, the judgement may be entered in such a case despite the death, and it will have the same force and effect as if it were entered before the death.
  • Order 22 Rule 11-A, Code of Civil Procedure:The Registrar may enter the name of a deceased appellant or respondent's representative on the record in a matter pending before the High Court in its appellate jurisdiction, except in cases under appeal to the Supreme Court.
  • Section16 (c), the Specific Relief Act, 1963:This section is related to personal bars to relief. Specific performance of a contract cannot be enforced in favor of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract that are to be performed by him unless the defendant has prevented or waived the defendant's performance of those terms.
  • Section 20, the Specific Relief Act, 1963:This section talks of the provision of discretion of the courts as to decreeing specific performance. The Court's authority to order specific performance is discretionary. It is not obligated to do so simply because it is legal. However, the Court's discretion is not arbitrary but sound and reasonable, and is guided by judicial principles and subject to review by an appeals court.

Overview

  • The petitioners are the legal representatives of N. P. Thirugnanam, the plaintiff, who entered into a sale agreement with the respondent to sell a house in Madras for Rs. 2,30,000, and paid Rs. 10,000 in advance. He was a tenant until the sale deed was signed, and he had agreed to pay a monthly rent of Rs. 1,650/-. He filed a suit for specific performance, alleging the respondents had failed to execute the sale deed.
  • The respondents argued they were ready and willing to fulfil their obligations. The plaintiffs also failed to pay a further advance of Rs. 20,000 to discharge mortgage debt due to the Madras Corporation by December 1979. The agreed amount of Rs. 20,000 was adjusted with the rent payable.
  • According to the single judge of the High Court, the plaintiff was not ready and willing to perform his part of the contract, who found this after examining the evidence and considering it. On appeal, the Division Bench dismissed the case in a well-considered decision. Hence, the SLP was filed before the Supreme Court of India.

Issues

  • Is the dismissal order against the deceased plaintiff-appellant a nullity?
  • Whether the plaintiff was ready and willing to fulfil his contractual obligations?

Analysis

  • The Court rejected the claim that the deceased plaintiff's dismissal order was null. The plaintiff died on December 26, 1994, after the appeal had been heard and the judgement reserved. The plaintiff's attorney had filed a Memorandum notifying the Court of the demise under Order 22 Rule 11-A of CPC and prayed for time to appoint the petitioners as the legal representatives of the deceased's estate. The Court refused.
  • The Court observed that in light of Rule 6 of Order 22, a party's death occurring between the conclusion of the hearing and the pronouncement of the judgement could not be excused. It can be pronounced even after the death and has the same force and effect as if it were pronounced before the death. Thus, the contention that the appellate Court's judgement and decree are null and void is immaterial.
  • The Court also stated that it does not accede to the contention that the plaintiff was ready and willing to perform the contract. The Court noted that the trial judge noted that on February 11, 1991, the plaintiff was ordered to deposit Rs. 2,00,000/- or furnish a bank guarantee on an application filed by the defendants. He didn't deposit the money or give a bank guarantee. The trial judge and the Division Bench concluded that the plaintiff was not ready and willing to perform his part of the contract.
  • As stated in Section 20 of the Specific Relief Act, 1963, the Court further noted that specific performance is an equitable remedy that the Court may grant or deny in its discretion.A court may grant or deny performance as an equitable remedy. A valid sale agreement does not obligate the Court to grant relief under Section 20.
  • The Court also stated that consistent with Section 16(c) of the Act, except for those terms that the defendant has prevented or waived, the plaintiff must plead and prove that he has performed or has always been ready and willing to perform the essential terms of the contract. The Court noted that the plaintiff's continued readiness and willingness is a requirement for specific performance relief. This fact is material and must be considered by the Court when granting or refusing relief. The plaintiff must fail if he fails to aver or prove this.
  • The Court also stated that to determine whether the plaintiff is ready and willing to perform his part of the contract, the Court must consider his actions before and following the filing of the suit.The amount he must pay the defendant must be proven available. He must demonstrate that he has always been willing to perform his part of the contract from the execution date to the decree date.

Conclusion

Hence, the Supreme Court agreed with the High Court in view of the findings and the legal position. It recorded that the plaintiff had failed miserably to fulfil his contractual obligations. The plaintiff was found to be unwilling to perform his part of the contract and lacked the funds or resources to do so. The defendants were reminded that they were under no legal obligation to sell the suit property. The Plaintiff's contract was speculative in nature, and it was entered into by the plaintiff, who had dabbled in real estate transactions but lacked the financial means to purchase a substantial immovable property like in the suit.

Finally, the Court determined that there was no flaw in the decision that justified granting leave. As a result, the plaintiff's petition for special leave was dismissed due to his negligence and hesitancy.

Click here to download the original copy of the judgement

 
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