2009 (2) TMI 880 - SC - Indian Laws

Summary

Issues Involved:
1. Entitlement for specific performance of agreement.
2. Bar of limitation on the suit.
3. Bona fide purchaser status of defendant No. 6.
4. Binding nature of the suit agreement on defendants.
5. Discretionary jurisdiction for specific performance.

Summary:

1. Entitlement for Specific Performance of Agreement:
The Supreme Court examined whether the plaintiff was entitled to specific performance of the agreement dated 4.12.1978. The Court emphasized that the plaintiff must demonstrate continuous readiness and willingness to perform her part of the contract as required u/s 16(c) of the Specific Relief Act, 1963. The plaintiff did not examine herself, and her husband, who was her General Power of Attorney holder, testified on her behalf. The Court held that the plaintiff failed to prove readiness and willingness, as no evidence was provided to show the availability of the consideration amount. The legal notice (Ex.A3) was deemed insufficient to establish readiness and willingness.

2. Bar of Limitation on the Suit:
The Court considered whether the suit was barred by limitation. The agreement stipulated that the sale would be executed within two months after obtaining permission from the Ceiling Officer. The application for permission was filed but rejected. The Court noted that the plaintiff did not file the suit within a reasonable time, considering the backdrop of events and the delay in impleading subsequent purchasers as parties.

3. Bona Fide Purchaser Status of Defendant No. 6:
The Court examined whether defendant No. 6 was a bona fide purchaser for value without notice of the original contract. The High Court found that defendant No. 6 had no knowledge of the agreement for sale and had been in possession of the property since 1981. The Supreme Court agreed that the plaintiff failed to prove that defendant No. 6 was not a bona fide purchaser, as required u/s 19(b) of the Specific Relief Act.

4. Binding Nature of the Suit Agreement on Defendants:
The Court addressed whether the suit agreement was binding on the defendants, including defendant Nos. 5 and 6. The trial court had opined that defendant Nos. 5 and 6 had knowledge of the agreement between the plaintiff and Khanna. However, the Supreme Court found that the plaintiff did not raise any question regarding the bona fides of the transaction in her notice or plaint. The Court held that the trial court erred in concluding collusion between the defendants without sufficient evidence.

5. Discretionary Jurisdiction for Specific Performance:
The Court emphasized that the grant of specific performance is discretionary. Given that the respondents had been living in the property since 1981, the Court found no reason to exercise discretionary jurisdiction in favor of the plaintiff. The Court directed the defendants to pay a sum of Rs. 60,000 to the plaintiff, including the advance amount paid by her.

Conclusion:
The Supreme Court refused to grant specific performance of the contract, considering the plaintiff's failure to establish readiness and willingness and the bona fide purchaser status of defendant No. 6. The appeal was disposed of with no order as to costs.