SC Clarifies: Plaintiff Must Secure Consent of All Co-Owners in Joint Property Sale Agreements

By Legal Wires 5 Minutes Read

The Supreme Court recently delivered an important judgment regarding the Specific Relief Act, 1963, addressing cases where a property is under joint ownership. The Court emphasized that when a plaintiff seeks specific performance of a property sale agreement, it is their responsibility to secure the consent of all co-owners to demonstrate readiness and willingness to fulfill the contract. The case involved multiple co-owners, where the plaintiff’s reliance on oral assurances from some owners failed to secure the required consents, ultimately undermining their claim for specific performance.

Background

• The plaintiff sought specific performance of an agreement to sell a property jointly owned by five co-owners: two brothers and three sisters.
• Despite knowing that the sisters had not consented to the sale, the plaintiff filed the suit based on oral assurances from the brothers that they would secure the sisters’ participation for the execution of the sale deed.
• The plaintiff aimed to enforce the agreement after learning that a sale deed had been executed in favor of the appellant.

Lower Court Rulings

• Trial Court: Ruled against the plaintiff, finding insufficient evidence of readiness and willingness.
• High Court: Reversed the trial court’s decision, allowing specific performance of the agreement.
• Supreme Court: Set aside the High Court’s decision, emphasizing the plaintiff’s failure to secure the consent of all co-owners.

Supreme Court’s Observations

• The plaintiff had obligations under the agreement to ensure that Defendant Nos. 6 to 8 (the sisters) would participate in executing the sale deed within three months.
• The plaintiff relied solely on Defendant No. 1 and late Soumendra, who were co-owners, to obtain the sisters’ participation, even though the sisters were not signatories to the agreement and held a significant share in the property.
• The Supreme Court found this approach inadequate, observing:“Reliance on co-owners alone does not absolve the plaintiff of their duty to demonstrate readiness and willingness. In multi-party contracts, securing all necessary consents is critical, and the plaintiff’s passive approach undermines their claim.”
• The Court ruled that the plaintiff’s failure to establish continuous readiness and willingness, as mandated under Section 16(c) of the Specific Relief Act, was evident in their lack of effort to engage with the sisters or secure their consent.

Reasons for Supreme Court’s Decision

• The Supreme Court highlighted that the plaintiff did not make any attempt to secure the sisters’ consent, despite knowing its importance for the completion of the sale deed.
• It was noted that the plaintiff did not furnish evidence of the availability of the balance consideration amount, nor did they show preparation to pay upon execution of the sale deed.
• The Court agreed with the trial court’s finding that the plaintiff’s inaction and lack of diligence indicated an absence of readiness and willingness, which is a critical factor in specific performance claims under Section 16(c).
• The High Court was found to have erred by overlooking these essential aspects.

Outcome

• The Supreme Court allowed the appeal, upholding the trial court’s decision that the plaintiff’s failure to comply with the agreement’s terms and secure co-owners’ consent demonstrated a lack of readiness and willingness.
• The Court clarified that such failures are fatal to claims for specific performance.

Appearances

• Appellants: Mr. Umakant Misra, Adv., Mrs. Prabhati Nayak, Adv., Mr. Niranjan Sahu, AOR, Mr. Monomoy Basu, Adv., Ms. Apoorva Sharma, Adv.
• Respondents: Mr. S.R. Singh, Sr. Adv., Mr. A.C. Pradhan, Sr. Adv., Mr. Saurabh Mishra, AOR, Mr. Shrimay Mishra, Adv., Mr. Abhinav Pandey, Adv.

Click to read: Janardan Das & Ors. vs. Durga Prasad Agarwalla & Ors., Civil Appeal No. 613 of 2017

Legal Wires

Team @LegalWires