Case Note & Summary
The dispute arose from an agreement of sale dated 21.07.2006 between the Plaintiff (Dr. Manohar Ganapathi Ravankar) and the Defendant (H. Gurunanda Raikar) for a property in Mangalore for Rs. 30,00,000. An earnest money of Rs. 26,000 was paid by cheque. The agreement required the Defendant to settle a pending civil suit within six months. The Plaintiff served a notice on 25.12.2006 stating readiness to pay the balance of Rs. 29,74,000 and sought execution of the sale deed. Later, the Plaintiff filed a suit for specific performance in 2007, claiming that he had paid an additional Rs. 6,75,000 to the Defendant, but no date or proof of such payment was provided. The trial court decreed specific performance, but the High Court reversed that, finding the Plaintiff not ready and willing to perform, and instead granted a decree for recovery of Rs. 7,01,000 (including the alleged Rs. 6,75,000 plus earnest money). The Supreme Court held that the High Court erred in granting recovery of Rs. 7,01,000 based on presumptions, as there was no evidence of the additional payment. The Court dismissed the Plaintiff's appeal for specific performance and allowed the Defendant's appeal, ordering only refund of the admitted earnest money of Rs. 26,000 with 9% simple interest from the date of payment till realization.
Headnote
A) Specific Relief Act, 1963 - Section 16(c) - Readiness and Willingness - Plaintiff failed to prove readiness and willingness to perform his part of the contract as he did not disclose payment of Rs. 6,75,000/- in the plaint or notice, and no evidence of such payment was produced - Held that the High Court correctly declined specific performance (Paras 8, 13). B) Contract Act, 1872 - Section 73 - Recovery of Money - High Court erred in granting decree for recovery of Rs. 7,01,000/- based on presumption that original title deeds were handed over when Rs. 6,75,000/- was paid, as there was no evidence of such payment - Held that the Plaintiff is only entitled to refund of earnest money of Rs. 26,000/- with interest (Paras 9-12, 14).
Issue of Consideration
Whether the Plaintiff is entitled to specific performance of the agreement of sale and whether the High Court erred in granting a decree for recovery of Rs. 7,01,000/- based on presumptions.
Final Decision
The Supreme Court dismissed the Plaintiff's appeal (Civil Appeal No. 3415 of 2019) and allowed the Defendant's appeal (Civil Appeal No. 3416 of 2019). The Court set aside the High Court's decree for recovery of Rs. 7,01,000 and ordered the Defendant to refund only the earnest money of Rs. 26,000 with simple interest at 9% per annum from the date of payment till realization.
Law Points
- Specific performance
- Readiness and willingness
- Burden of proof
- Payment of consideration
- Recovery of earnest money
