Long Unexplained Delay And Inaction Disentitles For Equitable Relief Of Specific Performance: Supreme Court

In a significant judgment, the Supreme Court has set aside the orders of the High Court and the First Appellate Court, and restored the decision of the trial court dismissing a suit for specific performance of a property sale agreement.

The case, Civil Appeal No. 434 of 2013, was heard by a bench comprising Justices Pamidighantam Sri Narasimha and Aravind Kumar. The appellant, Pydi Ramana @ Ramulu, was represented by senior counsel B. Adinarayana Rao, while the respondent, Davarasety Manmadha Rao, was represented by counsel D. Bharat Kumar.

The key legal issues examined by the Supreme Court were:

1. Whether the plaintiff (respondent) had sufficiently proved the existence of a valid sale agreement and the defendant’s (appellant) breach of the same.

2. Whether the plaintiff had established his continuous readiness and willingness to perform his part of the contract.

Background of the Case

The respondent-plaintiff had filed a suit for specific performance of a sale agreement dated June 7, 1993, wherein the appellant-defendant had allegedly agreed to sell a property measuring 1.38 acres for a total consideration of ₹705 per cent. The plaintiff claimed to have paid an advance of ₹2,005 on the execution date and an additional ₹17,000 on June 23, 1993.

The plaintiff alleged that despite his demand, the defendant delayed the execution of the sale deed. The plaintiff issued a legal notice on May 30, 1996, to which the defendant allegedly did not reply. The suit for specific performance was subsequently filed on June 9, 1997.

The trial court had rejected the plaintiff’s claim for specific performance and instead ordered the refund of the advance amount with interest. Aggrieved, the plaintiff filed an appeal, which was allowed by the First Appellate Court, granting the relief of specific performance.

The defendant then filed a second appeal before the High Court, which was partly allowed, directing the plaintiff to pay an additional sale consideration of twice the original amount.

Supreme Court’s Observations and Findings

The Supreme Court noted that the plaintiff had successfully proved the existence of the sale agreement dated June 7, 1993, and the payment of the advance amount. However, the Court found that the plaintiff had failed to establish his continuous readiness and willingness to perform his part of the contract.

The Court observed that the plaintiff remained silent for almost three years after the expiry of the one-year period specified in the agreement for the execution of the sale deed. The plaintiff only issued the legal notice on May 30, 1996, and filed the suit on June 9, 1997, without any satisfactory explanation for the delay.

Relying on the principles laid down in previous judgments, the Supreme Court held that the long unexplained delay and inaction on the part of the plaintiff disentitled him to the equitable relief of specific performance. The Court noted that the plaintiff’s conduct was not consistent with the terms of the agreement and the requirement of continuous readiness and willingness.

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