Specific Relief Act, 1963 — Sections 16(c), 20 — Agreement of Sale — Cancellation of Agreement — Necessity of Declaratory Relief — Maintainability of Suit
Civil Procedure Code — Order VII Rule 7 — Relief — Suit for Specific Performance simpliciter — Not maintainable after termination of contract without prayer for declaration
A. Specific Performance — Termination of Agreement — Declaratory Relief Mandatory
Where the agreement of sale is terminated by issuance of a cancellation notice, a suit seeking specific performance simpliciter, without seeking a declaration that the termination is illegal or void, is not maintainable in law.
Failure to seek such declaratory relief renders the agreement unenforceable.
(Paras 35–41)
Relied on:
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I.S. Sikandar (Dead) v. K. Subramani — (2013) 15 SCC 27
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Mohinder Kaur v. Sant Paul Singh — (2019) 9 SCC 358
B. Suppression of Material Facts — Clean Hands Doctrine
Specific performance being an equitable and discretionary relief, the plaintiff must approach the Court with clean hands.
Where:
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termination notice was received prior to filing of suit, and
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receipt of such notice was denied in plaint and evidence,
the plaintiff is guilty of suppression of material facts, disentitling him to equitable relief.
(Paras 42–50)
C. Readiness and Willingness — Mandatory Proof — Section 16(c)
In a suit for specific performance:
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readiness relates to financial capacity,
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willingness relates to conduct throughout the transaction.
A mere pleading that the plaintiff is ready and willing is insufficient.
The plaintiff must plead and prove availability of funds and continuous readiness from the date of agreement till decree.
(Paras 51–57)
Failure to adduce evidence of financial capacity is fatal to the suit.
D. Time Not Essence — Yet Readiness Mandatory
Even where time is held not to be the essence of the contract, the plaintiff is not absolved from proving:
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continuous readiness, and
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financial ability to perform obligations.
(Paras 35–36, 51–57)
E. Agreement of Sale — Not Binding on Non-Signatories
An agreement of sale executed by one co-sharer:
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does not bind other co-owners,
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unless executed with their express consent or authority.
Where property is joint family property and other sharers are not parties, decree for specific performance in respect of entire property cannot be granted.
(Paras 58–63)
F. Revenue Records — Not Proof of Title
Pattadar Pass Book and Title Deed:
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are not documents of title,
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do not conclusively establish ownership.
(Para 62)
Relied on:
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P. Kishore Kumar v. Vittal K. Patkar — 2023 LiveLaw (SC) 999
G. Expert Evidence — Handwriting — Weak Evidence
Evidence of handwriting expert under Section 45 of the Evidence Act:
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is a weak type of evidence,
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cannot be sole basis for finding execution,
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requires independent corroboration.
(Paras 66–68)
H. Joint Family Property — Manager’s Power Limited
Manager or karta cannot alienate joint family property without:
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legal necessity, or
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benefit of estate, or
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consent of coparceners.
(Paras 58–65)
Relied on:
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Balmukand v. Kamla Wati — AIR 1964 SC 1385
I. Equitable Relief — Alternative Restitution
Where specific performance is refused:
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Court may direct refund of amounts paid,
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with appropriate interest,
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to prevent unjust enrichment.
(Paras 73–75)
ANALYSIS OF FACTS AND LAW
Facts
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Agreement of Sale dated 24.07.2003 executed for Ac.6.03 cents.
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Sale consideration: ₹91,65,600/-.
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Advance paid: ₹30,00,000/-.
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Plaintiff alleged further payments of ₹49,00,000/- via DDs.
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Vendor issued termination notice dated 16.04.2004.
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Plaintiff denied receipt but evidence proved service.
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Plaintiff filed suit without challenging termination.
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Trial Court decreed specific performance.
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Defendants preferred appeals.
Core Legal Issues Considered
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Whether suit for specific performance is maintainable without seeking declaration against termination?
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Whether suppression of cancellation notice defeats equitable relief?
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Whether readiness and willingness were proved?
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Whether agreement binds non-signatory co-owners?
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Whether trial court decree warranted interference?
Findings of the Division Bench
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Termination notice was served and proved.
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Plaintiff suppressed receipt of termination notice.
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No declaratory relief sought → suit not maintainable.
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Plaintiff failed to prove financial readiness.
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Property was not exclusive property of vendor.
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Agreement not binding on mother and children.
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Trial Court ignored binding Supreme Court precedents.
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Decree for specific performance legally unsustainable.
RATIO DECIDENDI
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After termination of an agreement of sale, a suit for specific performance is not maintainable unless a declaration is sought that such termination is illegal or void.
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Specific performance being an equitable relief, suppression of material facts and false pleadings disentitle the plaintiff from relief.
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Readiness and willingness under Section 16(c) must be pleaded and proved by cogent evidence of financial capacity; mere assertions are insufficient.
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An agreement executed by one co-owner does not bind other co-owners who are not signatories.
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Revenue records such as pattadar pass books are not proof of title.
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Handwriting expert evidence without corroboration cannot form sole basis for enforcement of contract.
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Where specific performance is refused, restitution with interest is an appropriate equitable relief.
FINAL DECISION
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Specific performance decree set aside.
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Plaintiff entitled only to refund of amounts paid.
