Supreme Court Upholds Readiness and Willingness Requirement in Specific Performance Suit: Jagjit Singh vs. Amarjit Singh (2018) INSC 763 (13 September 2018)

Date of the Judgment: 13 September 2018
Citation: (2018) INSC 763
Judges: Madan B. Lokur, J., Deepak Gupta, J.

Can a party seeking specific performance of a contract succeed if they fail to demonstrate continuous readiness and willingness to fulfill their obligations? The Supreme Court of India addressed this critical question in a recent case, emphasizing the necessity for plaintiffs to prove their commitment to the contract from its inception until the filing of the suit. This judgment reinforces the established legal principle under the Specific Relief Act, 1963, regarding the essential requirements for obtaining specific performance.

Case Background

The case revolves around a suit for specific performance filed by Amarjit Singh (the plaintiff) against Jagjit Singh (the defendant). The plaintiff claimed that he had entered into an agreement with the defendant on 17 October 2000, to purchase a half share of a shop for a total consideration of Rs. 1,50,000. According to the plaintiff, he paid Rs. 1,30,000 in cash at the time of the agreement, with the remaining balance to be paid by 30 March 2003, the date set for the execution and registration of the sale deed. The plaintiff further contended that this date was extended to 9 October 2003 by mutual consent. The defendant denied the execution of the agreement and claimed that no money was paid.

Timeline

Course of Proceedings

The trial court dismissed the plaintiff’s suit, concluding that no agreement to sell had been executed. The first appellate court reversed the trial court’s finding on the execution of the agreement but held that the agreement was not an agreement to sell. Furthermore, the first appellate court concluded that even if it was an agreement to sell, the plaintiff failed to prove his readiness and willingness to perform his part of the contract. The first appellate court noted that the plaintiff had not shown any steps taken to perform his part of the contract between 17 October 2000 and 9 October 2003. The High Court, in a second appeal, set aside the findings of the first appellate court, stating that the findings were “erroneous, fallacious and perverse” solely based on the fact that the suit was filed after the extended date and a legal notice was sent. The Supreme Court noted that the High Court did not frame any substantial question of law, which is a requirement in second appeals.

Legal Framework

The Supreme Court referred to Section 16(c) of the Specific Relief Act, 1963, which states:

“16. Personal bars to relief. – Specific performance of a contract cannot be enforced in favour of a person –
(a) …
(b) …
(c) 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 terms the performance of which has been prevented or waived by the defendant.”

The Court emphasized that this provision mandates that a plaintiff seeking specific performance must demonstrate continuous readiness and willingness to perform their part of the contract. This requirement is a condition precedent for obtaining relief. The Court also cited previous judgments that have upheld this principle.

Arguments

The arguments presented by both sides are as follows:

Plaintiff’s Arguments:

• The plaintiff argued that the filing of the suit on 9 January 2004, after the extended date of 9 October 2003, and the issuance of a legal notice on 13 October 2003, demonstrated his readiness and willingness to perform his part of the contract.

Defendant’s Arguments:

• The defendant argued that the plaintiff had failed to prove his readiness and willingness to perform his part of the contract from the date of the agreement until the date of filing the suit.
• The defendant contended that the first appellate court’s finding was based on evidence and law and should not have been disturbed by the High Court in a second appeal.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues, but the core issue was whether the High Court was correct in overturning the first appellate court’s decision, which held that the plaintiff had failed to prove his readiness and willingness to perform his part of the contract.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

• Gomathinayagam Pillai and Ors. v. Pallaniswami Nadar [(1967) 1 SCR 227] – Supreme Court of India: The Court reiterated that in a suit for specific performance, the plaintiff must plead and prove readiness and willingness from the date of the contract until the date of filing the suit.
• J.P. Builders and Anr. v. A. Ramadas Rao and Anr. [(2011) 1 SCC 429] – Supreme Court of India: This case reaffirmed the principle that the plaintiff must demonstrate continuous readiness and willingness to perform the contract.
• P. Meenakshisundaram v. P. Vijayakumar & Ors. [Civil Appeal No.3353-3354 of 2018 decided on 28.03.2018, 2018(5) SCALE 229] – Supreme Court of India: This case further reiterated the requirement of continuous readiness and willingness for specific performance.
• Section 16(c) of the Specific Relief Act, 1963 – The Court emphasized that the plaintiff must prove continuous readiness and willingness to perform the contract.

Authority Consideration Table

Judgment

The Supreme Court held that the High Court had erred in overturning the decision of the first appellate court. The Court reiterated that the plaintiff must prove continuous readiness and willingness to perform their part of the contract from the date of the agreement until the filing of the suit. The Court found that the High Court had not framed any substantial question of law and had disturbed a pure finding of fact without giving any cogent reasons. The Supreme Court restored the judgment of the first appellate court, which had dismissed the plaintiff’s suit.

Treatment of Submissions

How Authorities Were Viewed by the Court

• Gomathinayagam Pillai and Ors. v. Pallaniswami Nadar [(1967) 1 SCR 227]*: The Court relied on this case to emphasize that readiness and willingness must be proven from the date of the contract until the date of filing the suit.
• J.P. Builders and Anr. v. A. Ramadas Rao and Anr. [(2011) 1 SCC 429]*: This case was used to reiterate the principle that the plaintiff must demonstrate continuous readiness and willingness.
• P. Meenakshisundaram v. P. Vijayakumar & Ors. [Civil Appeal No.3353-3354 of 2018 decided on 28.03.2018, 2018(5) SCALE 229]*: The Court used this recent judgment to further support its view on the requirement of continuous readiness and willingness.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the established legal principle that a plaintiff seeking specific performance must demonstrate continuous readiness and willingness to perform their part of the contract. The Court emphasized that this is a mandatory requirement under Section 16(c) of the Specific Relief Act, 1963. The Court was also swayed by the fact that the High Court had overturned a finding of fact by the first appellate court without any cogent reasons or framing a substantial question of law, which is a requirement in second appeals. The Court reiterated that the mere filing of the suit and the issuance of a legal notice does not prove readiness and willingness, which must be demonstrated from the date of the agreement to the date of filing of the suit.

Fact:Law Ratio

The Court’s reasoning was that the High Court had disturbed a pure finding of fact without any cogent reasons. The court held that the plaintiff had failed to demonstrate that he was ready and willing to perform his part of the contract from the date of the agreement till the date of filing of the suit. The Supreme Court emphasized that the High Court should not have interfered with the findings of the first appellate court without framing a substantial question of law. The Court also noted that the mere fact that the suit was filed after the extended date and that a legal notice was sent does not prove the plaintiff’s readiness and willingness.

The Supreme Court quoted from the judgment:

“It is settled law that a plaintiff who seeks specific performance of contract is required to plead and prove that he was always ready and willing to perform his part of the contract.”

“Section 16(c) of the Specific Relief Act mandates that the plaintiff should plead and prove his readiness and willingness as a condition precedent for obtaining relief of grant of specific performance.”

“It is the duty of the plaintiff to plead and then lead evidence to show that the plaintiff from the date he entered into an agreement till the stage of filing of the suit always had the capacity and willingness to perform the contract.”

There were no dissenting opinions in this case, and the bench consisted of two judges.

Key Takeaways

• A plaintiff seeking specific performance of a contract must prove continuous readiness and willingness to perform their part of the contract from the date of the agreement until the filing of the suit.
• The mere filing of a suit and issuance of a legal notice do not demonstrate readiness and willingness.
• High Courts should not overturn findings of fact by lower appellate courts in second appeals without cogent reasons or framing a substantial question of law.
• Section 16(c) of the Specific Relief Act, 1963, is a mandatory provision that must be strictly adhered to.

Directions

No specific directions were given by the Supreme Court in this judgment.

Development of Law

The ratio decidendi of this case is that a plaintiff seeking specific performance of a contract must demonstrate continuous readiness and willingness to perform their part of the contract from the date of the agreement until the filing of the suit. This judgment reinforces the existing legal position and does not introduce any new legal principles. It emphasizes the strict adherence to Section 16(c) of the Specific Relief Act, 1963, and reiterates the importance of not disturbing findings of fact in second appeals without valid reasons.

Conclusion

The Supreme Court’s decision in Jagjit Singh vs. Amarjit Singh reinforces the established legal principle that a plaintiff seeking specific performance of a contract must prove continuous readiness and willingness to fulfill their obligations from the date of the agreement until the filing of the suit. The Court set aside the High Court’s judgment and restored the first appellate court’s decision, emphasizing the importance of adhering to Section 16(c) of the Specific Relief Act, 1963, and the need for cogent reasons to overturn findings of fact in second appeals. This judgment serves as a reminder of the strict requirements for obtaining specific performance and the importance of demonstrating a continuous commitment to the contract.