Case at a glance: In a dispute over a 1984 agreement to sell four acres, the Supreme Court has restored the trial court’s dismissal of a suit for specific performance. It held that the appellate courts brushed aside suspicious circumstances surrounding the agreement and that the plaintiffs never proved readiness and willingness, directing a refund of the earnest money with 12.5% simple interest instead.
The plaintiffs relied on an agreement dated 16.08.1984 for four acres at Rs 12,000 an acre with earnest money of Rs 27,300, and claimed the time for the sale was extended at the defendant’s request to 19.06.1987. The defendant denied the agreement, said the transaction was a loan from the plaintiffs’ father and that papers were signed in blank, and produced a receipt dated 27.05.1987.
The trial court dismissed the 1987 suit, pointing to stamp paper bought before the deal was struck, a tampered extension date and an attesting witness from another village. The first appellate court decreed specific performance and the High Court affirmed it in second appeal.
The Key Question Before the Court
Can a decree for specific performance stand when suspicious circumstances around the agreement are not properly answered and readiness and willingness is unproved?
Suspicion, Onus and Readiness
The Court found that the appellate courts brushed aside the suspicious circumstances without proper analysis; such a doubt “should have been properly debunked before shifting the onus of proof”. It also found “nothing to show the readiness or willingness of the plaintiffs to pay the balance consideration”: only one plaintiff was shown at the Sub-Registrar’s office and he did not testify.
On the receipt, the Court noted it was issued just before the extended date, that the plaintiffs’ explanations about family funds were inconsistent, and that there was no good reason for the plaintiffs’ father to accept an amount exceeding the balance consideration. It was therefore “persuaded to restore the Trial Court’s order.”
What the Court Actually Held
- The trial court’s order dismissing the suit for specific performance was restored.
- The earnest money is to be refunded with 12.5% simple interest, or deposited in the trial court.
- The Rs 20,700 deposited in the Treasury is to be reimbursed and adjusted against the refund.
- If payment is not made, the amount becomes a charge on the property.
Why This Judgment Matters
- It reminds appellate courts to grapple with suspicious features before shifting the onus.
- It reaffirms that readiness and willingness must be proved by evidence.
- It shows the Court balancing equities through refund with interest.
What Should Advocates Take Away From the Judgment?
For Plaintiffs in Specific Performance Suits
- Lead evidence from each plaintiff on readiness and willingness.
- Explain any irregularities in stamp paper, dates or witnesses.
For Defendants
- Highlight suspicious circumstances and demand they be addressed before the onus shifts.
- Produce receipts and documents supporting an alternative transaction.
Key Takeaways
- Suspicion must be dispelled first.
- Readiness and willingness was unproved.
- Trial court’s dismissal restored.
- Refund with 12.5% interest.
Frequently Asked Questions
No. The specific performance decree was set aside.
A refund with 12.5% simple interest, secured as a charge on the property if unpaid.
They did not properly address suspicious circumstances or the lack of proof of readiness and willingness.
Conclusion
After four decades, the case ends with a refund rather than a conveyance, underscoring how carefully courts examine contested agreements to sell.
Practical takeaway: Specific performance requires clean proof of the agreement and of readiness and willingness; unresolved suspicious circumstances can defeat the claim.
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