Specific Performance Pleas Can Be Rejected If Suit Not Filed Immediately After Breach: Supreme Court Of India

CASE NAME:

Rajesh Kumar vs Anand Kumar and Ors

CASE DATE:

17th May, 2024

PARTIES:-

Appellant: Rajesh Kumar

Respondent: Anand Kumar

BENCH/JUDGE:

Justice Prashant Kumar Mishra

IMPORTANT PROVISIONS:-

1.    Section 12 of the Specific Relief Act, 1963:- 

Pertains to the specific performance of part of a contract, requiring the plaintiff to prove readiness and willingness to perform their contractual obligations.

SUBJECT:-

The appellant challenged the High Court’s reversal of a Trial Court ruling on a land sale. Despite agreements and payments, the land was sold to others. The High Court cited issues with co-owner signatures and the appellant’s failure to testify personally. The Supreme Court upheld the High Court’s decision, dismissing the appeal.

OVERVIEW:-

The appellant challenged the High Court of Madhya Pradesh’s judgment, which reversed the Trial Court’s decree favoring him in a land sale dispute. The appellant had an agreement to purchase 145.60 acres of land from respondent nos. 2 to 11 through respondent no. 4, the Power of Attorney holder, paying Rs. 41,000 as earnest money and later making additional payments. The sale deed execution date was extended twice. However, the land was sold to respondent nos. 1 to 3 on 14.05.1997 without the appellant’s knowledge. The High Court ruled against the appellant due to the lack of signatures from all co-owners and his failure to personally testify, instead relying on his Power of Attorney holder. The appellant filed the suit on 19.06.2000 after various legal notices and objections.

ISSUES RAISED BEFORE THE COURT:-

1. Whether the initial agreement to sell was valid, given that it was executed by only one co-owner and not signed by all co-owners?
2. Whether the appellant’s non-appearance in the witness box and reliance on his Power of Attorney holder’s testimony impacted the validity of his claim?
3. Whether the suit was barred by limitation?
4. Whether the sale deed executed in favor of the other respondents, despite the existing agreement with the appellant, was legally valid?

CONTENTIONS RAISED ON BEHALF OF THE APPLELLANT:-

• The learned counsel for the appellant, Mr Dhruv Agrawal argued that High Court erred in overturning the Trial Court’s well-reasoned judgment and decree.
• He asserted that the sale agreement, executed by defendant no. 1 as the Power of Attorney holder for defendant nos. 2 to 11, was duly proven.
• He contended that the High Court incorrectly found that defendant nos. 2 to 11 had not signed the agreement, despite the execution by their Power of Attorney holder.
• It was argued that the appellant’s non-appearance as a witness should not adversely impact the case, as the readiness and willingness to perform the contract could be established through the Power of Attorney holder’s testimony.

CONTENTIONS RAISED ON BEHALF OF THE RESPONDENT:-

• The learned counsel for the respondent, Mr. Gagan Gupta, claimed that the initial agreement to sell was void ab initio because it was not executed by all co-owners of the property, making it legally invalid.
• He argued that the appellant’s non-appearance as a witness was detrimental to his case, as he needed to personally prove his readiness and willingness to perform the contract.
• He contended that the suit was barred by limitation, as the appellant delayed filing the suit despite being aware of the subsequent sale to respondents nos. 12 to 14.
• He defended the respondents by claiming that they were bona fide purchasers for value, having paid for the land through a registered sale deed without knowledge of the appellant’s prior agreement. The advance payment of Rs. 40,000 was returned to the appellant, indicating he was not ready or able to complete the purchase.

ANALYSIS BY COURT:-

• The court found that the initial agreement lacked signatures from all co-owners, rendering it invalid.
• It observed that the appellant’s failure to personally testify impacted the validity of his claim, especially regarding readiness and willingness to perform the contract.
• The suit was filed on the last date of limitation, but the delay in filing was noted.
• The court noted that the sale deed executed in favor of other respondents was legally valid, as they were bona fide purchasers without knowledge of the prior agreement.
• It observed that the appellant’s reliance on his Power of Attorney holder's testimony was insufficient to prove essential contract terms.

JUDGMENT:-

The Court affirmed the findings that the initial agreement lacked signatures from all co-owners, the appellant’s failure to personally testify affected the validity of his claim and the suit was filed with undue delay. The sale deed executed in favor of other respondents was deemed legally valid. Consequently, the appellant’s suit for specific performance was dismissed.

CONCLUSION:-

From the case, it is evident that despite an initial agreement and partial payments, the appellant’s failure to ensure all co-owners’ signatures and personally testify impacted the validity of his claim for specific performance. The Court emphasized the importance of timely filing of suits and adhe