Supreme Court affirms decision on property sale contract dispute, dismisses suit for specific performance

The Supreme Court affirmed the High Court's decision in a case involving a contract for sale of property. The Court held that the Plaintiff-Appellant was not ready and willing to perform the contract, leading to the dismissal of the suit for specific performance. The Court granted a decree for refund of the advance amount with interest. The Appellant's claim for damages was also dismissed as they were found to be in breach of the contract by insisting on additional security for municipal taxes, despite the Respondent being ready to perform her obligations.

---

---

Issues Involved:
1. Readiness and willingness of the Plaintiff to perform the contract.
2. Entitlement of the Plaintiff to damages.

Summary:

Issue 1: Readiness and Willingness to Perform the Contract
The Respondent entered into an agreement of sale dated 26.10.1988 with the Appellant, agreeing to sell her property for Rs. 43,50,000/- and received Rs. 9,50,000/- as advance. The agreement required the sale to be completed by paying the balance consideration of Rs. 34 lakhs within 30 days from the date of issue of a letter/telegram by the vendor informing the vendee that necessary NOC u/s 269(UL) of the Income Tax Act, 1961 and Income Tax Clearance Certificate had been received. The Respondent canceled the agreement on 27.2.1989 but subsequently entered into a fresh agreement on 2.5.1989, treating the cancellation as withdrawn. The sale had to be completed by 19.6.1989. The Respondent alleged that the Appellant was in breach for not completing the sale and terminated the agreement on 22.6.1989, leading to a suit for specific performance by the Appellant.

The High Court dismissed the suit, holding that the Plaintiff-Appellant was not ready and willing to perform the contract and had failed to tender Rs. 34,00,000/- within the stipulated date. The court granted a decree for refund of Rs. 9,50,000/- with interest at 10% per annum. The Division Bench affirmed this decision, dismissing the appeal with costs of Rs. 10,000/-. The Supreme Court noted that the suit was dismissed based on concurrent findings of fact that the Appellant was in breach.

The Appellant, a builder, argued that the Respondent failed to furnish the mutation certificate and up-to-date tax paid receipts, demanding an affidavit and bank guarantee confirming that all municipal taxes had been paid. The Respondent contended that there was an arbitrary assessment of tax by the Municipal authorities, and she had filed a suit which was decreed, directing a fresh assessment. She informed the Appellant that she would bear and pay the taxes up to the date of sale once the final assessment was made. The Appellant insisted on additional security, which the Respondent refused, leading to the termination of the contract.

The Supreme Court found that the Appellant admitted in its notice dated 24.6.1989 that the Respondent attended the Sub-Registrar's Office on 14.6.1989 and 19.6.1989. The evidence showed that the Respondent was ready to execute the sale deed, but the Appellant insisted on additional security. The High Court's findings that the Appellant was in breach were based on appreciation of evidence and did not call for interference.

Issue 2: Entitlement to Damages
The Appellant sought damages for loss of profits and interest on the advance amount. The High Court dismissed the claim for specific performance and damages, granting only the refund of the advance amount with interest. The Supreme Court upheld this decision, noting that the Appellant was not ready and willing to perform the contract and could not claim damages.

Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's decision that the Appellant was in breach and not entitled to specific performance or damages. The Appellant's insistence on additional security for municipal taxes was not justified, and the Respondent was ready and willing to perform her part of the contract.

---