Wednesday, May 29, 2024

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CASE LAWSLEGAL AFFAIRSSRA

SEC 16(c) SRA

KADUPUGOTLA VARALAKSHMI vs. VUDAGIRI VENKATA RAO, SC 2021

FACTS – A Civil suit seeking specific performance of agreement dated 09.10.2004 was dismissed by the Trial Court holding inter alia that the plaintiff had failed to prove the genuineness of the agreement dated 09.10.2004 and that the appellant herein was a bonafide purchaser for consideration without notice of said agreement dated 09.10.2004.

In the first appeal arising therefrom, the matter was considered by the High Court and the High Court held that plea is specifically available to the vendor/defendant. It is personal to him. The subsequent purchasers have got only the right to defend their purchase on the premise that they have no priorknowledge of the agreement of sale with theplaintiff. They are bona fide purchasers forvaluable consideration. Though they are necessaryparties to the suit, since any decree obtained bythe plaintiff would be binding on the subsequentpurchasers, the plea that the plaintiff mustalways be ready and willing to perform his part of the contract must be available only to the vendoror his legal representatives, but not to the subsequent purchasers.Therefore, in the light of the above legal position, it is not open for the 3rd respondent to raise this plea. Thus, on the material it has to be held that the appellant did succeed in making out that he was ready and willing to perform his part of the contract under at all material times against the 1st respondent.

CAUSE – The submissions advanced on behalf of the appellant i.e.subsequent purchaser were not taken into account on the premise that it would not be open to a subsequent purchaser to challengethe readiness and willingness on part of the plaintiff.

ARGUMENTSLearned counsel appearing for the plaintiff – respondent no.1 sought to support on facts the conclusion arrived by the High Court on the issue of readiness and willingness.

ISSUE – Whether subsequent purchaser is allowed to raise any submissions on the issue of readiness and willingness?

DECISION – The court reiterated the decision laid down in Ram Awadh (Dead) by Lrs. and Others vs.Achhaibar Dubey and Another [(2000) 2 SCC428] obligation imposed by Section 16 is upon the court not to grant specific performance to a plaintiff who has not met the requirements of clauses (a), (b)and (c) thereof. A court may not, therefore, grant to a plaintiff who has failed to aver and to prove that he has performed or has always been ready and willing to perform his part of the agreement the specific performance whereof he seeks. There is, therefore, no question of the plea being available to one defendant and not to another. It is open to any defendant to contended and establish that he mandatory requirement of Section 16(c) has not been complied with and it is for the court to determine whether it has or has not been complied with and, depending upon its conclusion,decree or decline to decree the suit.

However, the fact remains that the entire perspective with which the matter was considered by the High Court was clearly erroneous and as the observations made by the High Court in paragraph 76 disclose, the High Court went on the footing that it was not open to the appellant i.e. subsequent purchaser to raise any submissions on the issue of readiness and willingness. Thus,the judgment under challenge clearly fell in serious error.

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