The Supreme Court ruled that the Court cannot decide on the willingness/readiness of the party to pay balance sale consideration without first framing a specific issue on the same to enable both parties to present evidence.
Brief Facts:
The Respondent entered into an agreement to sell with the Appellant for which the Appellant had issued a post-dated cheque. The Respondent deposited the said cheque and it was dishonored on account of “payment stopped by attachment order”. A raid was conducted by the Income Tax Department and the account linked with the post-dated cheque was attached by the IT department.
As per the Appellant, the Respondent issued a notice with respect to the dishonor of the cheque and the Appellant offered to pay the amount in cash, but the Respondent refused. Pursuant to this, the Respondent had terminated the agreement to sell/contract and forfeited some amount, and called upon the Appellant to take the rest of the amount back. However, the Appellant had issued notice to the Respondent to accept the remaining sale consideration and issued a notice to execute the sale deed after accepting the balance.
Brief History of the Case:
Subsequently, a suit was issued by the Appellant in the Trial Court for the specific performance of an agreement to sell.
The Learned Trial Court had denied granting the relief of specific performance as it found that the Appellant was never in possession of the said balance consideration and hence, there was no readiness or willingness on part of the Appellant to pay the remaining amount. The Trial Court at the same time had awarded the return of the advance with interest to the Appellant.
The order of the Learned Trial Court was challenged by both the Appellant and the Respondent. The High Court dismissed the appeal preferred by the Appellant and allowed the Respondent’s appeal. Therefore, the present appeal has been filed by the Appellant against the order and judgment passed by the High Court.
Contentions of the Respondent:
The Respondent contended that the Appellant did not act in consonance with the terms and conditions of the agreement to sell and therefore, the Respondent was justified in terminating the said contract.
Observations of the Court:
The Supreme Court observed that when the post-dated cheque was issued it was not a worthless cheque. The cheque was dishonored not on the grounds of insufficient funds but because of the attachment order issued by the IT Department. The Court did not agree with the finding of the High Court that the worthless cheque issued by the Appellant cannot be said to be made towards sale consideration.
It was further remarked that the Trial Court’s finding on the readiness and willingness of the appellant to pay the balance consideration could not have been made without first issuing a notice to the Appellant and then framing a specific issue on the same. The object of framing issues is to allow the parties to present evidence on the same. Since there was no such issue framed by the Learned Trial Court, the decree is liable to be set aside.
The decision of the Court:
The Bench opined that the parties must be permitted to produce evidence on whether the Appellant was willing to pay the balance consideration and had sufficient funds for the same. The matter was sent back to the Learned Trial Court and the Trial Court was instructed to frame specific issues with respect to this.
Therefore, the Apex court set aside the orders passed by both the Trial Court and the High Court and allowed the appeals accordingly.
Cause Title: V.S. Ramakrishnan v. P.M. Muhammed Ali
Bench: Hon’ble Mr. Justice M.R. Shah; Hon’ble Mr. Justice M.M. Sundresh
Decided on: November 09th, 2022
Read Judgment @LatestLaws.com
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