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Default of the buyer but trial court decided in his favour

In a property sale the Buyer/Plaintiff did not honour his commitment of paying the Sale Consideration in full on the deadline date of 02-04-2009. We extended time for about 9 times and in the meantime registered around 4 acres of land in the name of the Buyer/Plaintiff in that around 2 acres 20 days after the deadline date. Total Sale consideration payable by the Buyer/Plaintiff was Rs. 41,24,000/- for 10 Acres and 31 Cents of Agriculture land @ Rs.4 lakh per acre. He made periodical payments of small amounts totaling Rs. 26,50,000/- over a period of 19 months. In the meantime he begged us to register a few acres of land and we had registered in his name 4 acres and 1 Cent. The value of which was Rs. 16 lakh & 4 thousand. Balance of amount remained with us was Rs.10,46,000/-. Even after 19 months he was due to pay us the balance sale consideration of Rs. 14,74,000/- Owing to the inordinate delay in paying the balance of sale consideration even after 19 months we sent a Lawyer Notice cancelling the Agreement for Sale dated 15-12-2008. Even by that time the rates had escalated in that area. As we were hard pressed for money to meet certain urgent need we had to take Personal loan of Rs. 10 lakh from SBI, Madanapalle in August 2010. In the meantime he sent a number of Lawyer Notices to delay paying the money stating imaginary lacunae in the Property even though it was not envisaged in the Suit Sale Agreement dated 15-12-08 and he entered into agreement after a thorough scrutiny of the docs. He filed a suit OS No. 46 of 2010 in the Hon. Ad. District Judge’s Court, Madanapalle, Chittoor Distr.(Now Annamayya District) AP, India for specific performance. We quoted 6 Supreme Court judgments in our favour that there was no need to adhere to specific performance as the Plaintiff himself was at fault and highlighted the absence of ‘readiness and willingness.’ In spite of strong case on our side the Trial Court decreed in favour of the Plaintiff. We have filed First Appeal AS 158 OF 2014 in the Hon. High Court of Andhra Pradesh, India. I have already asked this question in 2014 and got very favourable replies from the Legal luminaries. But, once again I am posting this question after 91/2 years in view of the recent Land Mark judgments by the Hon. Supreme Court. Kindly advise as to the chances of success of the suit

( Chennai, Tamil Nadu )

1 year ago

Reply

Dear Client,
A 2 (two) judge bench of the Supreme Court of India has in Gaddipati Divija and Another v. Pathuri Samrajyam & Ors. inter alia reiterated that specific performance of a contract under Section 16 (c) of the unamended Specific Relief Act, 1963 can only be allowed if the party seeking specific performance avers and proves that it has always been ready and willing to perform its obligations under the contract. The Supreme Court further reiterated that in a suit for specific performance of a contract concerning the sale of immovable property, time would not usually be of the essence unless it is shown from the express terms of the contract that time was of the essence. The Supreme Court dismissed the appeal and observed as follows: 1) Given the decision in Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd, which held that the Specific Relief (Amendment) Act, 20183 was prospective in nature, the provisions of the unamended Specific Relief Act would be applicable to the present case since the Agreement in question dated back to 2002. 2) As per Section 16 (c) of the unamended Specific Relief Act, the primary requirement for the plaintiff to seek specific performance is to aver and prove that he is ready and willing to perform his part of the contract. 3) The explanation to Section 16 of the Specific Relief Act clarifies that in a contract involving payment of money, the plaintiff need not actually deposit any money with the defendant and is only required to aver that he has performed or is ready and willing to perform the contract according to its true construction. 4) Respondent No. 1 had specifically averred and proved that she was always ready and willing to pay the balance consideration and perform her part of the Agreement, whereas the Appellants had failed to perform their obligation of having the land measured and demarcated. 5) A mere stipulation of time would not make time the essence of the contract and in cases of the sale of immovable property, normally time would not be of the essence. As such, when the specific performance of the terms of the contract has not been undertaken, the question of time being of the essence does not arise. In view of the above averments of the Apex Court with regard to specific performance, your stand in the Appeal before the High Court appears to be upheld by the High Court.

S. K. Dutta

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Helpful

Dear Client Without looking at the case documents and the order/judgement copy this opinion is provided on the basis of whatever you have mentioned here and a disclaimer. As it appears that the lower court has faltered in its judgement as the Buyer was certainly in default/breach of the agreement for sale. ( I hope you had brought this forward to the Ld. court). On that ground the Buyer did not have a good case in his favour and hence of you are able to prove the discrepancy that the lower court had in its proceedings and then for sure the appeal will be In your favour.