Kerala High Court Denies Specific Performance, Orders Refund with Interest in Property Sale Dispute

Court finds plaintiff lacked financial readiness, denies specific performance, and mandates return of advance payment with interest.

In a significant ruling, the Kerala High Court has denied the plea for specific performance in a property sale agreement case, ordering instead the refund of the advance sale consideration with interest. The judgment came as a relief to the defendants in the case titled "T.K. Vasudevan Nair v. T. Vrij Mohan," heard by a division bench comprising Justices Sathish Ninan and P. Krishna Kumar.

The dispute arose from an agreement dated May 1, 2007, in which the defendants had agreed to sell 4 acres and 30 cents of property to the plaintiff. However, complications emerged regarding the extent of the defendants’ title to the property, prompting the plaintiff to seek specific performance for the actual extent the defendants could convey.

The court found that the plaintiff failed to demonstrate the necessary readiness and willingness to perform the agreement, a prerequisite under the Specific Relief Act, 1963, for obtaining a decree of specific performance. The judgment highlighted the plaintiff's inability to prove financial capacity throughout the transaction period, a critical factor in such cases.

The court also addressed the issue of whether a decree could be granted for a lesser extent of property than stipulated in the agreement. It concluded that the defendants held possession of the entire property under a partition deed and that no rival claims existed. Consequently, the court deemed it inappropriate to grant specific performance for only a part of the property, as the defendants were capable of fulfilling the entire agreement.

Furthermore, the court exercised its discretion under Section 20 of the Specific Relief Act, declining to grant specific performance due to the plaintiff's lack of readiness and willingness. It instead directed the defendants to refund the advance payment of Rs. 26 lakhs with interest at 12% per annum until the decree date, and 6% thereafter.

The judgment emphasized that while the plaintiff's claim for damages was noted, it was unsupported by sufficient pleading or proof, particularly given the plaintiff's failure to demonstrate readiness and willingness.

This ruling underscores the importance of demonstrating financial preparedness and consistency in contractual obligations, setting a precedent for future property sale disputes in the region.

Bottom Line:

Specific Relief Act - Plaintiff's readiness and willingness to perform an agreement for sale is essential for granting a decree for specific performance - Failure to prove readiness and willingness disentitles the plaintiff from obtaining such a decree.

Statutory provision(s): Specific Relief Act, 1963 Section 12, Specific Relief Act, 1963 Section 20

T.K.Vasudevan Nair v. T.Vrij Mohan, (Kerala)(DB) : Law Finder Doc Id # 2805270