1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 512 OF 2009
B. VIJAYA BHARATHI Appellant(s)
VERSUS
P. SAVITRI & ORS. Respondent(s)
J U D G M E N T
R.F. NARIMAN, J.
1) The present appeal arises out of a judgment dated
26.10.2005, delivered by a single Judge of the Andhra
Pradesh High Court, by which an appeal filed by the
original Defendant No.3 was allowed and a suit for
specific performance was dismissed.
2) The brief facts necessary for deciding this case are
as follows:
On 21.02.1992, an agreement to sell was entered into
between one Smt. P. Savitri, Respondent No.1 before us,
and B. Vijaya Bharati, by which the schedule property
was agreed to be sold for a consideration of Rs.
1,80,000/-. Rs. 1,30,000/- had already been paid in
advance. The balance consideration of Rs. 50,000/- was
to be paid later as and when the vendee gives notice
2
that she is ready to get the property registered, and on
intimation from the vendor to pay the balance
consideration.
3) Para 3 & 5 of the Agreement provided for necessary
permissions from the society for transfer of the
membership in the name of the vendee, which was to be
obtained by the vendor, and clearances required from the
Income Tax, Urban Land Ceiling Authorities and other
Authorities were also to be obtained by the vendor. The
said Agreement, though it was an agreement to sell only,
was registered by way of abundant caution.
4) On 13.03.1992, the first defendant appeared before
the Registering Authority to execute a General Power of
Attorney in favour of the husband of the plaintiff in
order to obtain the permissions referred to above. It
has been concurrently found that on this date, she
resiled from such execution of General Power of Attorney
in favour of the plaintiff's husband and left the
Sub-Registrar's office without registering the General
Power of Attorney.
5) Thereafter, the property was sold by Defendant No.1
on 12.05.1992 to Defendant No.2 for a sale consideration
of Rs. 1,20,000/-. Defendant No.2, in turn, sold the
property on 05.07.1993 to Defendant No.3 for a sum of
3
Rs. 1,95,000/-. Both the sales were by registered
conveyance.
6) The plaintiff issued the necessary notice stating
that she was ready to pay the balance Rs.50,000/- on
18.02.1994. Since the reply to the said notice was that
the agreement was no longer valid, the plaintiff filed a
suit for specific performance on 13.04.1994.
7) The trial Court decreed the said suit for specific
performance, finding that the agreement of 21.02.1992
was prior in point of time to both the registered sale
deeds. It found, as a matter of fact, that the
purchasers of the property could not be said to be bona
fide purchasers given the fact that no encumbrance
certificate was called for before any such purchase.
8) Defendant No.3 appealed to the High Court, and the
High Court set aside the decree of the trial Court
stating that the plaintiff was not ready and willing
through out as was required by Section 16(c) of the
Specific Relief Act, 1963 and held that the suit was
filed long after, in fact, more than two years after the
repudiation on 13.03.1992. A single Judge of the High
Court held thus:
“Till Ex.A-2 notice was issued, the Plaintiff
has not made any endeavour to pay the balance
sale consideration, particularly, when the 1st
4
Defendant having appeared before the
registering authority to execute the GPA in
favour of the husband of the Plaintiff on
13-3-1992 and resiled from execution of such
GPA in favour of the Plaintiff and left the
Sub-Registrar's Office without registering the
GPA. Any prudent person, who obtained the
registered agreement of sale by paying 2/3rd of
the sale consideration, will not keep quiet for
a period of nearly one year eleven months after
the vendor repudiated the contract and refused
to register the GPA to complete the sale
transaction, which clearly discloses that the
total inaction is on the part of the plaintiff.
Even after such refusal, she has not issued any
notice to the 1st Defendant to execute the sale
deed by offering balance sale consideration and
expressing her readiness and willingness to
complete the transaction. Thus, the plaintiff
waived the right obtained under the agreement
of sale and allowed the 1st Defendant to execute
the sale deed in favour of the 2nd Defendant.
Only on such execution of the sale deed in
favour of the 2nd Defendant, the Plaintiff got
issued the legal notice to the Defendants and
the same was suitably replied by them under
Exs. A-3 and A-4. She has nowhere stated about
her readiness and willingness to perform her
part of the contract all along from the date of
the agreement till her deposition in the
Court.”
5
9) Mr. M.N. Rao, learned Senior Counsel appearing on
behalf of the appellant, has argued before us that an
appeal at the behest of Defendant No.3 was allowed,
Defendant No.1 having gone out of the picture
altogether. He further argued before us that it is
clear that Defendant Nos. 1 and 2 were in collusion with
each other because the property which had been sold for
Rs.1,80,000/- in February, 1992 could not possibly be
sold in May, 1992 for a lesser amount of Rs.1,20,000/-.
The fact that no encumbrance certificate was also taken
was an important pointer to the fact that there was no
bona fides in either Defendant Nos. 1 and 2 or Defendant
No.3 and that therefore, the High Court was in error in
stating that this vital requirement is of secondary
importance once the requirement of readiness and
willingness is not proved. He also argued, citing
Madamsetty Satyanarayana vs. G. Yellogi Rao and two
others, AIR 1965 SC 1405 = (1965) (2) SCR 221 in which
Subba Rao, J. held that the English practice of coming
to the Court without any delay for the relief of
specific performance cannot possibly apply to India when
a period of limitation of three years is granted for
approaching the Court. That decision, therefore, held
that mere delay by itself cannot be a bar to specific
6
performance, and this was also pressed with some force
by Mr. Rao.
10) Mr. A. Subba Rao, on the other hand, supported the
judgment of the High Court and argued that not only was
there delay in the present case, but it was coupled with
the fact that there was no readiness and willingness, as
is correctly held by the High Court. Further, he also
stated that the present suit in its present form would
not be maintainable for the added reason that despite
the fact that it came to the plaintiff's knowledge that
there were two registered conveyances prior to the suit,
the plaintiff did not amend the suit to ask for a decree
of cancellation of the said sale deeds.
11) Having heard the learned counsel appearing for the
parties, we are of the view that the High Court judgment
is correct and does not require to be interfered with.
12) One crucial fact that stares us in the face is that
on 13.03.1992 the first defendant ran away from the
Registering Authority making it clear that she did not
want to act in furtherance of the Agreement in executing
a General Power of Attorney in favour of the plaintiff's
husband. The High Court was right in stating that no
prudent person would stay quiet for a period of one year
and eleven months after such an unequivocal repudiation
7
of the agreement if they were really interested in going
ahead with the sale transaction. The only inference,
therefore, from this is that the plaintiff cannot
possibly be said to be ready and willing throughout to
perform their part of the agreement.
13) However, Mr. Rao has pressed into service a judgment
of this Court in M.M.S. Investments, Madurai and Others
vs. V. Veerappan and Others, (2007) 9 SCC 660. While
stating the background facts, the learned Judges
referred to a suit for specific performance which
resulted in a decree passed by the trial Court. After
the decree was passed, defendants through their Power of
Attorney sold a large extent of properties, including
the subject-matter of the suit, in favour of certain
other persons, who happened to be the appellants before
this Court. In that case, the High Court held that
there would be no bar for the appellant to raise any
issue on merits of the appeal on the facts of that case
except the defence of readiness and willingness as
provided under Section 16(c) of the Specific Relief Act.
14) This Court went on to distinguish a three-Judge Bench
judgment in Ram Awadh (dead) by Lrs. And Others vs.
Achhaibar Dubey and Another, (2000) 2 SCC 428 and held
as follows:-
8
“6. Questioning the plea of readiness and
willingness is a concept relatable to an
agreement. After conveyance the question of
readiness and willingness is really not
relevant. Therefore, the provision of the
Specific Relief Act, 1963 (in short “the Act”)
is not applicable. It is to be noted that the
decision in Ram Awadh case relates to a case
where there was only an agreement. After the
conveyance, the only question to be adjudicated
is whether the purchaser was a bona fide
purchaser for value without notice. In the
present case the only issue that can be
adjudicated is whether the appellants were bona
fide purchasers for value without notice. The
question whether the appellants were ready and
willing is really of no consequence. In Ram
Awadh case the question of the effect of a
completed sale was not there. Therefore, that
decision cannot have any application so far as
the present case is concerned. Once there is a
conveyance the concept would be different and
the primary relief could be only cancellation.”
15) Ram Awadh (supra) is a judgment by three Judges of
this Court overruling Jugraj Singh vs. Labh Singh, (1995)
2 SCC 31, in which it was held that the plea that the
plaintiff is not ready and willing to perform the
contract is personal only to the seller-defendant.
Subsequent purchasers cannot take this plea. This was
stated to be an erroneous view of the law by the three
9
Judge Bench, and the judgment in Jugrag Singh was set
aside as follows:-
“6. The obligation imposed by Section 16 is upon
the Court not to grant specific performance to a
plaintiff who has not met the requirements of
clauses (a),(b) and (c) thereof. A court may
not, therefore, grant to a plaintiff who has
failed to aver and to prove that he has
performed or has always been ready and willing
to perform his part of the agreement the
specific performance whereof he seeks. There is,
therefore, no question of the plea being
available to one defendant and not to another.
It is open to any defendant to contend and
establish that the mandatory requirement of
Section 16(c) has not been complied with and it
is for the Court to determine whether it has or
has not been complied with and, depending upon
its conclusion, decree or decline to decree the
suit. We are of the view that the decision in
Jugraj Singh Case is erroneous.”
16) In the facts of the M.M.S. Investments case, after
the Trial Court decreed the suit, the property was
conveyed to the plaintiff. It is only thereafter that
the appellants in that case purchased the property. In
the facts of the present case, the Defendants 2 and 3
purchased the property even before the suit for specific
performance was filed. In the present case there is no
conveyance in favour of the plaintiff after which the
10
Defendants 2 and 3 purchased the property. The ratio of
M.M.S. Investments would therefore be of no assistance
to the appellant herein. On the other hand, the three
Judge Bench decision in Ram Awadh would apply on all
fours.
17) It must also be noted that though aware of two
conveyances of the same property, the plaintiff did not
ask for their cancellation. This again, would stand in
the way of a decree of specific performance for unless
the sale made by Defendant No. 1 to Defendant No.2, and
thereafter by Defendant No.2 to Defendant No.3 are set
aside, no decree for specific performance could possibly
follow. While Mr. Rao may be right in stating that mere
delay without more would not dis-entitle his client to
the relief of specific performance, for the reasons
stated above, we find that this is not such a case. The
High Court was clearly right in finding that the bar of
Section 16(c) was squarely attracted on the facts of the
present case, and that therefore, the fact that
Defendant Nos. 2 and 3 may not be bona fide purchasers
would not come in the way of stating that such suit must
be dismissed at the threshold because of lack of
readiness and willingness, which is a basic condition
for the grant of specific performance.
11
18) The appeal accordingly, stands dismissed.
.......................... J.
(ROHINTON FALI NARIMAN)
.......................... J.
(SANJAY KISHAN KAUL)
New Delhi;
August 10, 2017.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 512 OF 2009
B. VIJAYA BHARATHI Appellant(s)
VERSUS
P. SAVITRI & ORS. Respondent(s)
J U D G M E N T
R.F. NARIMAN, J.
1) The present appeal arises out of a judgment dated
26.10.2005, delivered by a single Judge of the Andhra
Pradesh High Court, by which an appeal filed by the
original Defendant No.3 was allowed and a suit for
specific performance was dismissed.
2) The brief facts necessary for deciding this case are
as follows:
On 21.02.1992, an agreement to sell was entered into
between one Smt. P. Savitri, Respondent No.1 before us,
and B. Vijaya Bharati, by which the schedule property
was agreed to be sold for a consideration of Rs.
1,80,000/-. Rs. 1,30,000/- had already been paid in
advance. The balance consideration of Rs. 50,000/- was
to be paid later as and when the vendee gives notice
2
that she is ready to get the property registered, and on
intimation from the vendor to pay the balance
consideration.
3) Para 3 & 5 of the Agreement provided for necessary
permissions from the society for transfer of the
membership in the name of the vendee, which was to be
obtained by the vendor, and clearances required from the
Income Tax, Urban Land Ceiling Authorities and other
Authorities were also to be obtained by the vendor. The
said Agreement, though it was an agreement to sell only,
was registered by way of abundant caution.
4) On 13.03.1992, the first defendant appeared before
the Registering Authority to execute a General Power of
Attorney in favour of the husband of the plaintiff in
order to obtain the permissions referred to above. It
has been concurrently found that on this date, she
resiled from such execution of General Power of Attorney
in favour of the plaintiff's husband and left the
Sub-Registrar's office without registering the General
Power of Attorney.
5) Thereafter, the property was sold by Defendant No.1
on 12.05.1992 to Defendant No.2 for a sale consideration
of Rs. 1,20,000/-. Defendant No.2, in turn, sold the
property on 05.07.1993 to Defendant No.3 for a sum of
3
Rs. 1,95,000/-. Both the sales were by registered
conveyance.
6) The plaintiff issued the necessary notice stating
that she was ready to pay the balance Rs.50,000/- on
18.02.1994. Since the reply to the said notice was that
the agreement was no longer valid, the plaintiff filed a
suit for specific performance on 13.04.1994.
7) The trial Court decreed the said suit for specific
performance, finding that the agreement of 21.02.1992
was prior in point of time to both the registered sale
deeds. It found, as a matter of fact, that the
purchasers of the property could not be said to be bona
fide purchasers given the fact that no encumbrance
certificate was called for before any such purchase.
8) Defendant No.3 appealed to the High Court, and the
High Court set aside the decree of the trial Court
stating that the plaintiff was not ready and willing
through out as was required by Section 16(c) of the
Specific Relief Act, 1963 and held that the suit was
filed long after, in fact, more than two years after the
repudiation on 13.03.1992. A single Judge of the High
Court held thus:
“Till Ex.A-2 notice was issued, the Plaintiff
has not made any endeavour to pay the balance
sale consideration, particularly, when the 1st
4
Defendant having appeared before the
registering authority to execute the GPA in
favour of the husband of the Plaintiff on
13-3-1992 and resiled from execution of such
GPA in favour of the Plaintiff and left the
Sub-Registrar's Office without registering the
GPA. Any prudent person, who obtained the
registered agreement of sale by paying 2/3rd of
the sale consideration, will not keep quiet for
a period of nearly one year eleven months after
the vendor repudiated the contract and refused
to register the GPA to complete the sale
transaction, which clearly discloses that the
total inaction is on the part of the plaintiff.
Even after such refusal, she has not issued any
notice to the 1st Defendant to execute the sale
deed by offering balance sale consideration and
expressing her readiness and willingness to
complete the transaction. Thus, the plaintiff
waived the right obtained under the agreement
of sale and allowed the 1st Defendant to execute
the sale deed in favour of the 2nd Defendant.
Only on such execution of the sale deed in
favour of the 2nd Defendant, the Plaintiff got
issued the legal notice to the Defendants and
the same was suitably replied by them under
Exs. A-3 and A-4. She has nowhere stated about
her readiness and willingness to perform her
part of the contract all along from the date of
the agreement till her deposition in the
Court.”
5
9) Mr. M.N. Rao, learned Senior Counsel appearing on
behalf of the appellant, has argued before us that an
appeal at the behest of Defendant No.3 was allowed,
Defendant No.1 having gone out of the picture
altogether. He further argued before us that it is
clear that Defendant Nos. 1 and 2 were in collusion with
each other because the property which had been sold for
Rs.1,80,000/- in February, 1992 could not possibly be
sold in May, 1992 for a lesser amount of Rs.1,20,000/-.
The fact that no encumbrance certificate was also taken
was an important pointer to the fact that there was no
bona fides in either Defendant Nos. 1 and 2 or Defendant
No.3 and that therefore, the High Court was in error in
stating that this vital requirement is of secondary
importance once the requirement of readiness and
willingness is not proved. He also argued, citing
Madamsetty Satyanarayana vs. G. Yellogi Rao and two
others, AIR 1965 SC 1405 = (1965) (2) SCR 221 in which
Subba Rao, J. held that the English practice of coming
to the Court without any delay for the relief of
specific performance cannot possibly apply to India when
a period of limitation of three years is granted for
approaching the Court. That decision, therefore, held
that mere delay by itself cannot be a bar to specific
6
performance, and this was also pressed with some force
by Mr. Rao.
10) Mr. A. Subba Rao, on the other hand, supported the
judgment of the High Court and argued that not only was
there delay in the present case, but it was coupled with
the fact that there was no readiness and willingness, as
is correctly held by the High Court. Further, he also
stated that the present suit in its present form would
not be maintainable for the added reason that despite
the fact that it came to the plaintiff's knowledge that
there were two registered conveyances prior to the suit,
the plaintiff did not amend the suit to ask for a decree
of cancellation of the said sale deeds.
11) Having heard the learned counsel appearing for the
parties, we are of the view that the High Court judgment
is correct and does not require to be interfered with.
12) One crucial fact that stares us in the face is that
on 13.03.1992 the first defendant ran away from the
Registering Authority making it clear that she did not
want to act in furtherance of the Agreement in executing
a General Power of Attorney in favour of the plaintiff's
husband. The High Court was right in stating that no
prudent person would stay quiet for a period of one year
and eleven months after such an unequivocal repudiation
7
of the agreement if they were really interested in going
ahead with the sale transaction. The only inference,
therefore, from this is that the plaintiff cannot
possibly be said to be ready and willing throughout to
perform their part of the agreement.
13) However, Mr. Rao has pressed into service a judgment
of this Court in M.M.S. Investments, Madurai and Others
vs. V. Veerappan and Others, (2007) 9 SCC 660. While
stating the background facts, the learned Judges
referred to a suit for specific performance which
resulted in a decree passed by the trial Court. After
the decree was passed, defendants through their Power of
Attorney sold a large extent of properties, including
the subject-matter of the suit, in favour of certain
other persons, who happened to be the appellants before
this Court. In that case, the High Court held that
there would be no bar for the appellant to raise any
issue on merits of the appeal on the facts of that case
except the defence of readiness and willingness as
provided under Section 16(c) of the Specific Relief Act.
14) This Court went on to distinguish a three-Judge Bench
judgment in Ram Awadh (dead) by Lrs. And Others vs.
Achhaibar Dubey and Another, (2000) 2 SCC 428 and held
as follows:-
8
“6. Questioning the plea of readiness and
willingness is a concept relatable to an
agreement. After conveyance the question of
readiness and willingness is really not
relevant. Therefore, the provision of the
Specific Relief Act, 1963 (in short “the Act”)
is not applicable. It is to be noted that the
decision in Ram Awadh case relates to a case
where there was only an agreement. After the
conveyance, the only question to be adjudicated
is whether the purchaser was a bona fide
purchaser for value without notice. In the
present case the only issue that can be
adjudicated is whether the appellants were bona
fide purchasers for value without notice. The
question whether the appellants were ready and
willing is really of no consequence. In Ram
Awadh case the question of the effect of a
completed sale was not there. Therefore, that
decision cannot have any application so far as
the present case is concerned. Once there is a
conveyance the concept would be different and
the primary relief could be only cancellation.”
15) Ram Awadh (supra) is a judgment by three Judges of
this Court overruling Jugraj Singh vs. Labh Singh, (1995)
2 SCC 31, in which it was held that the plea that the
plaintiff is not ready and willing to perform the
contract is personal only to the seller-defendant.
Subsequent purchasers cannot take this plea. This was
stated to be an erroneous view of the law by the three
9
Judge Bench, and the judgment in Jugrag Singh was set
aside as follows:-
“6. The obligation imposed by Section 16 is upon
the Court not to grant specific performance to a
plaintiff who has not met the requirements of
clauses (a),(b) and (c) thereof. A court may
not, therefore, grant to a plaintiff who has
failed to aver and to prove that he has
performed or has always been ready and willing
to perform his part of the agreement the
specific performance whereof he seeks. There is,
therefore, no question of the plea being
available to one defendant and not to another.
It is open to any defendant to contend and
establish that the mandatory requirement of
Section 16(c) has not been complied with and it
is for the Court to determine whether it has or
has not been complied with and, depending upon
its conclusion, decree or decline to decree the
suit. We are of the view that the decision in
Jugraj Singh Case is erroneous.”
16) In the facts of the M.M.S. Investments case, after
the Trial Court decreed the suit, the property was
conveyed to the plaintiff. It is only thereafter that
the appellants in that case purchased the property. In
the facts of the present case, the Defendants 2 and 3
purchased the property even before the suit for specific
performance was filed. In the present case there is no
conveyance in favour of the plaintiff after which the
10
Defendants 2 and 3 purchased the property. The ratio of
M.M.S. Investments would therefore be of no assistance
to the appellant herein. On the other hand, the three
Judge Bench decision in Ram Awadh would apply on all
fours.
17) It must also be noted that though aware of two
conveyances of the same property, the plaintiff did not
ask for their cancellation. This again, would stand in
the way of a decree of specific performance for unless
the sale made by Defendant No. 1 to Defendant No.2, and
thereafter by Defendant No.2 to Defendant No.3 are set
aside, no decree for specific performance could possibly
follow. While Mr. Rao may be right in stating that mere
delay without more would not dis-entitle his client to
the relief of specific performance, for the reasons
stated above, we find that this is not such a case. The
High Court was clearly right in finding that the bar of
Section 16(c) was squarely attracted on the facts of the
present case, and that therefore, the fact that
Defendant Nos. 2 and 3 may not be bona fide purchasers
would not come in the way of stating that such suit must
be dismissed at the threshold because of lack of
readiness and willingness, which is a basic condition
for the grant of specific performance.
11
18) The appeal accordingly, stands dismissed.
.......................... J.
(ROHINTON FALI NARIMAN)
.......................... J.
(SANJAY KISHAN KAUL)
New Delhi;
August 10, 2017.
