2009 (11) TMI 993 - HC - Indian Laws

Summary

Issues Involved:
1. Readiness and willingness of the plaintiff to perform his part of the contract.
2. Entitlement of the plaintiff to the discretionary remedy of specific performance.
3. Entitlement of the plaintiff to the alternative remedy of refund of the advance consideration with interest.

Issue-wise Detailed Analysis:

1. Readiness and Willingness of the Plaintiff to Perform His Part of the Contract:

The core question was whether the plaintiff, who failed to deposit the balance sale consideration for four years, was always ready and willing to perform his part of the contract. The agreement stipulated that the balance amount of Rs. 25,000 was to be paid within one year. The plaintiff paid an additional Rs. 10,000 but failed to pay the remaining Rs. 15,000 within the stipulated time. The plaintiff argued that he was always ready and willing to perform his part of the contract and had sufficient funds. However, the trial court found that he did not deposit the balance amount despite obtaining a lodgment schedule. The appellate court noted that the plaintiff's failure to deposit the amount, despite obtaining a challan, indicated a lack of readiness and willingness. Furthermore, the plaintiff did not produce any evidence to substantiate his financial capacity. The court concluded that the plaintiff was not ready and willing to perform his part of the contract.

2. Entitlement of the Plaintiff to the Discretionary Remedy of Specific Performance:

Specific performance is an equitable remedy, and the plaintiff must come to the court with clean hands. The trial court granted specific performance based on the plaintiff's contention that he was ready and willing to perform his part of the contract. However, the appellate court found that the plaintiff had not approached the court with clean hands. The plaintiff misled the court by stating that he had applied for a lodgment schedule to deposit the balance amount but failed to deposit the amount. The court emphasized that the plaintiff's conduct was not trustworthy, and he failed to comply with the mandatory conditions of the agreement. The court held that the plaintiff was not entitled to the equitable remedy of specific performance due to his lack of readiness and willingness and his attempt to mislead the court.

3. Entitlement of the Plaintiff to the Alternative Remedy of Refund of the Advance Consideration with Interest:

The plaintiff sought an alternative relief of refund of the advance consideration with interest at 18%. The court noted that the plaintiff had paid Rs. 1,50,000 as advance and Rs. 10,000 subsequently. Although the plaintiff was not entitled to specific performance, he was entitled to a refund of the advance amount with interest. The court awarded the plaintiff a refund of Rs. 1,60,000 with simple interest at 18% per annum from the date of the plaint until realization.

Conclusion:

The appellate court set aside the trial court's judgment and decree granting specific performance. The court found that the plaintiff was not ready and willing to perform his part of the contract and had not approached the court with clean hands. The plaintiff was granted an alternative decree for refund of the advance amount with interest at 18% per annum from the date of the plaint until realization. The appeal was allowed, and the judgment and decree of the trial court were set aside.