Agreement to sell

Bank loan – Sale deed after discharge of loan – Contingent Contracts – Vendors have agreed to sell the property but agreed to execute the sale deed after discharge of the mortgage in favour of the defendants -- Agreement to discharge the loans of the Bank and handover the original title deeds to the plaintiff cannot be construed as impossible event and it would affect the terms of contract to become void, same cannot be termed as a contingent contract. M/s J.P. Builders & Another v. A. Ramadas Rao & Another, 2011(2) L.A.R. 12 (SC).

Specific performance of – Clause of damages – Effect of -- Agreement does not specifically provide for specific performance -- Nor does it bar specific performance -- It provides for payment of damages in the event of breach by either party -- Provision for damages in the agreement is not intended to provide the vendor an option of paying money in lieu of specific performance -- Therefore, plaintiff will be entitled to seek specific performance (even in the absence of a specific provision therefor) subject to his proving breach by the defendant and that he was ready and willing to perform his obligation under the contract, in terms of the contract. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Specific performance of -- Clause of damages – Effect of -- It is evident from section 23 of the Specific Relief Act, 1963 that even where the agreement of sale contains only a provision for payment of damages or liquidated damages in case of breach and does not contain any provision for specific performance, the party in breach cannot contend that in view of specific provision for payment of damages, and in the absence of a provision for specific performance, the court cannot grant specific performance -- But where the provision naming an amount to be paid in case of breach is intended to give to the party in default an option to pay money in lieu of specific performance, then specific performance may not be permissible. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Specific performance of -- For a plaintiff to seek specific performance of a contract of sale relating to immovable property, and for a court to grant such specific performance, it is not necessary that the contract should contain a specific provision that in the event of breach, the aggrieved party will be entitled to specific performance -- Act makes it clear that if the legal requirements for seeking specific enforcement of a contract are made out, specific performance could be enforced as provided in the Act even in the absence of a specific term for specific performance in the contract. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Suit for specific performance – Pleading -- Evidence of -- To succeed in a suit for specific performance, the plaintiff has to prove: (a) that a valid agreement of sale was entered by the defendant in his favour and the terms thereof; (b) that the defendant committed breach of the contract; and (c) that he was always ready and willing to perform his part of the obligations in terms of the contract. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Suit for specific performance – Pleadings – Evidence -- In a suit for specific performance, the plaintiff should not only plead and prove the terms of the agreement, but should also plead and prove his readiness and willingness to perform his obligations under the contract in terms of the contract. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Suit for specific performance – Ready and willingness to perform – Evidence of -- Marking the presence of plaintiff in the office of Sub-Registrar on 7.6.1979 was only to save the position of plaintiff -- Correspondence clearly established that plaintiff was not ready and willing to get the sale deed executed within the time prescribed or even as on 7.6.1979 which was the last day of the extended period -- Evidence also demonstrates that plaintiff was not in a position to perform the contract as the purchaser had to purchase the stamp paper and that on 7.6.1979, the stamp paper was not purchased; and that the plaintiff had in his bank account Rs.114000 but that amount was not drawn from the bank -- Such evidence is of no assistance in the absence of evidence as to availability of money for purchase and about the readiness and willingness of plaintiff to perform the contract. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Suit for specific performance – Ready and willingness to perform – Pleadings – Evidence 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 which are to be performed by him (other than the terms the performance of which has been prevented or waived by the defendant) is barred from claiming specific performance. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Suit for specific performance – Ready and willingness to perform – Pleadings – Evidence of -- Even assuming that the defendant had committed breach, if the plaintiff fails to aver in the plaint or prove that he was always ready and willing to perform the essential terms of contract which are required to be performed by him (other than the terms the performance of which has been prevented or waived by the plaintiff), there is a bar to specific performance in his favour. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Suit for specific performance – Ready and willingness to perform – Pleadings – Evidence of -- Take a case where there is a contract for sale for a consideration of Rs.10 lakhs and earnest money of Rs.1 lakh was paid and the vendor wrongly refuses to execute the sale deed unless the purchaser is ready to pay Rs.15 lakhs. In such a case there is a clear breach by defendant. But in that case, if plaintiff did not have the balance Rs.9 lakhs (and the money required for stamp duty and registration) or the capacity to arrange and pay such money, when the contract had to be performed, the plaintiff will not be entitled to specific performance, even if he proves breach by defendant, as he was not ‘ready and willing’ to perform his obligations. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).

Suit for specific performance – Ready and willingness to perform – Evidence of – Power of attorney – Witness of – Value of -- If a plaintiff has to prove that he was always ready and willing to perform his part of the contract, that is, to perform his obligations in terms of the contract, necessarily he should step into the witness box and give evidence that he has all along been ready and willing to perform his part of the contract and subject himself to cross examination on that issue -- A plaintiff cannot obviously examine in his place, his attorney holder who did not have personal knowledge either of the transaction or of his readiness and willingness -- A third party who has no personal knowledge cannot give evidence about such readiness and willingness, even if he is an attorney holder of the person concerned. Man Kaur (Dead) by Lrs v. Hartar Singh Sangha, 2011(2) L.A.R. 446 (SC).