Punjab & Haryana High Court Upholds Decree for Specific Performance; Holds Unilateral Cancellation of Agreement to Sell Based on False Premise Unsustainable

Case Name: Mahender Singh v. Rakesh Singh
Citation: RSA-504-2016
Bench: Hon’ble Ms. Justice Nidhi Gupta

Held: The Punjab and Haryana High Court dismissed a Regular Second Appeal and upheld concurrent decrees granting specific performance of an agreement to sell. The Court held that unilateral cancellation of an agreement to sell on an incorrect factual premise does not render the agreement non-existent so as to require a declaratory relief. It further held that payment of substantial consideration, prompt institution of the suit, and proved presence before the Sub-Registrar sufficiently establish readiness and willingness under Section 16(c) of the Specific Relief Act. No substantial question of law was found to arise.

Summary: The dispute arose from an agreement to sell agricultural land under which the defendant admitted execution of the agreement and receipt of earnest money but denied receiving an additional amount endorsed on the agreement. The plaintiff alleged repeated readiness to perform the contract and asserted that despite his presence before the Sub-Registrar with balance consideration, the defendant avoided execution of the sale deed and later issued a legal notice purporting to cancel the agreement and forfeit the earnest money.

The defendant argued that once the agreement was cancelled by notice, the suit for specific performance was not maintainable without a declaratory prayer. He further contended that the plaintiff failed to establish financial capacity and readiness, and that affidavits marking presence before the Sub-Registrar were insufficient proof.

The High Court rejected these submissions. It held that the cancellation notice itself was founded on an incorrect factual assertion that the plaintiff was absent on the target dates. This assertion stood conclusively disproved by documentary evidence and even by the testimony of the defendant’s own witness from the Sub-Registrar’s office. Since the very basis of cancellation was false, the agreement could not be treated as legally terminated, and no declaration was required.

On the issue of readiness and willingness, the Court noted that the plaintiff had paid nearly half of the sale consideration shortly after execution of the agreement, proved the endorsement of payment through witnesses and handwriting expert evidence, and instituted the suit promptly after refusal by the defendant. The Court held that proof of actual possession of cash at the Sub-Registrar’s office is not mandatory where overall conduct, substantial payments, and consistent evidence demonstrate readiness and willingness.

The Court further reiterated the limited scope of interference in second appeal and held that the concurrent findings of fact recorded by the courts below were based on proper appreciation of evidence and did not suffer from perversity or legal infirmity.

Decision: The Regular Second Appeal was dismissed. The decrees passed by the trial court and the first appellate court granting specific performance of the agreement to sell were affirmed.