2007 (2) TMI 712 - SC - Indian Laws

Summary

Issues Involved:
1. Agreement to Sell
2. Validity of Agreement
3. Readiness and Willingness to Perform Contract
4. Nature of Payment
5. Binding Nature of Agreement on Defendant No. 2
6. Relief

Summary:

1. Agreement to Sell:
The plaintiff filed a suit for specific performance of an agreement to sell dated 24.03.1978, alleging that the defendant No. 1 agreed to sell a plot for Rs. 85,000/- and received Rs. 8,500/- as part payment. The trial court decreed the suit, directing the defendant to execute the sale deed.

2. Validity of Agreement:
The defendants contended that the agreement was void as the plot was not saleable under Clause II Sub Clause (6)(a) and (6)(b) of the lease deed. The High Court, however, found that the defendant No. 1 was aware of the transfer restrictions and had attempted to sell the plot despite these restrictions.

3. Readiness and Willingness to Perform Contract:
The trial court and the High Court found that the plaintiff was ready and willing to perform his part of the contract. The High Court noted that the defendant No. 1 resiled from the agreement due to rising property prices and transferred the plot to his son.

4. Nature of Payment:
The defendants claimed that the Rs. 8,500/- was received as security for construction, not as part payment for the sale. The trial court did not accept this contention and held that the amount was part payment for the sale.

5. Binding Nature of Agreement on Defendant No. 2:
The High Court held that defendant No. 2, the son of defendant No. 1, could not claim to be a transferee without notice and was bound by the agreement.

6. Relief:
The High Court dismissed the appeal, directing the defendants to apply for necessary permissions for the sale. If permissions were not applied for, the plaintiff could apply and call upon the defendants to execute the sale deed. The Supreme Court upheld this decision, citing precedents that a decree for specific performance can be passed even if the transfer requires government permission. The Court directed the respondent to pay an additional sum of Rs. 5 lakhs to the appellant as a gesture of goodwill.

Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's decision and directing an additional payment to the appellant. The Court reiterated that lack of permission does not bar a decree for specific performance, and the plaintiff was found ready and willing to perform the contract.