Case Note & Summary
The appeal arose from a suit for specific performance of an agreement to sell dated 18.07.1988, where the plaintiff agreed to purchase agricultural land from the defendant company. The total sale consideration was Rs. 15,41,000, with Rs. 7,75,000 allegedly paid in advance. The agreement stipulated time as essence, with the sale deed to be executed by 15.12.1988, later extended to 30.06.1989. The plaintiff claimed readiness and willingness, attending the Sub-Registrar's office on the last date, but defendants failed to appear. The trial court dismissed the specific performance suit on 10.12.1999, holding the plaintiff failed to prove continuous readiness and willingness, but decreed refund of Rs. 2,75,000 admitted as paid by cheque with interest. The first appellate court allowed the plaintiff's appeal on 23.04.2003, decreeing specific performance, finding the plaintiff paid Rs. 7,75,000 and was ready and willing. The High Court upheld this in second appeal. The defendants appealed to the Supreme Court, challenging the decree. During litigation, defendants transferred portions of the suit land to third parties in 2009 and 2025, and the plaintiff got a sale deed executed on 08.01.2010 based on the decree. The legal issues included the effect of pendente lite transfers, the plaintiff's readiness and willingness, proof of cash payments, and the finality of appellate findings. The defendants argued the relief became inequitable due to time lapse and price increase, the plaintiff lacked continuous readiness, cash payments were unproven, and the High Court erred in not re-appraising evidence. The plaintiff contended the agreement was admitted, cash payments were evidenced by signed receipts, notices were given, attendance was proven, and findings of fact were final. The court analyzed that transfers during litigation are governed by lis pendens under Section 52 of the Transfer of Property Act, 1882, and are subject to the appeal's outcome. On merits, the court found the plaintiff proved readiness through documentary evidence and witness testimony, cash payments were sufficiently proven, and the first appellate court's findings were not perverse. The court held the decree for specific performance should be upheld, with transfers subject to it. The appeal was dismissed, affirming the decree.
Headnote
A) Civil Procedure - Specific Performance - Readiness and Willingness - Specific Relief Act, 1963 - Plaintiff's continuous readiness and willingness to perform contract is essential for decree of specific performance - Court examined evidence including attendance at Sub-Registrar's office and notices to defendants - Held that plaintiff proved readiness and willingness through documentary evidence and witness testimony, despite non-appearance in witness box (Paras 6, 9, 21-22, 24-27). B) Property Law - Transfer Pendente Lite - Doctrine of Lis Pendens - Transfer of Property Act, 1882, Section 52 - Transfers made during pending litigation are subject to ultimate decree - Defendants transferred suit land to third parties during appeal pendency - Court applied principle that such transfers are neither illegal nor void ab initio but remain subservient to court's decision - Held that transfers would abide by decree in appeal (Paras 13-14, 16-17). C) Evidence Law - Proof of Payment - Authority to Receive - Indian Evidence Act, 1872 - Cash payments to attesting witness require proof of authority - Plaintiff alleged cash payments to defendant No.3 who was attesting witness - Defendants denied authority and receipt - Court considered evidence including signed receipts and expert testimony - Held that evidence sufficiently proved cash transactions were on behalf of company (Paras 7, 20, 24). D) Civil Procedure - Appellate Jurisdiction - Findings of Fact - Code of Civil Procedure, 1908 - First appellate court's findings of fact are final unless perverse - High Court in second appeal dismissed appeal holding no substantial question of law - Supreme Court examined whether findings were perverse - Held that first appellate court's findings were based on evidence and not perverse, thus binding (Paras 9-10, 23, 28). E) Contract Law - Time as Essence - Extension of Time - Indian Contract Act, 1872 - Time was essence of contract per agreement - Time for execution extended twice by mutual consent - Plaintiff attended on last extended date - Defendants failed to appear - Held that plaintiff complied with extended timeline and defendants breached contract (Paras 5-6, 21).
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Issue of Consideration: Whether the decree for specific performance of the agreement to sell should be upheld, considering the plaintiff's readiness and willingness, the effect of transfers made during pendency of litigation, and the correctness of the appellate courts' findings.
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Final Decision
Supreme Court dismissed the appeal, upholding the decree for specific performance passed by the first appellate court and affirmed by the High Court. The court held that transfers made during litigation are subject to the doctrine of lis pendens and would abide by the decree. The plaintiff proved readiness and willingness, and the findings of fact were not perverse.
