Patna High Court
Prusottam SwaroopversusUmesh Kumar Sahu
- Decided
- Disposal
- PARTLY ALLOWED (DISPOSAL)
- Bench
- JITENDRA KUMAR
Holding
The Court held that the plaintiff’s failure to pay the stipulated instalments barred specific performance, and the appellant is liable to refund only the advance amount after a 10% deduction, with interest at 6% per annum.
Summary
The appellant, Prusottam Swaroop, appealed a trial court decree that ordered him to refund Rs.43,30,000 with interest at 9% and pay Rs.5 lakh compensation, while denying specific performance of a sale deed. The plaintiff, Umesh Kumar Sahu, had sued for specific performance of a sale agreement dated 23‑08‑2010 and alternatively for return of the advance amount with interest. The trial court found the sale agreement valid but held that the plaintiff failed to pay the stipulated Rs.25 lakh instalments, thereby barring specific performance under Section 16 of the Specific Relief Act, 1963, and granted only a part‑decree for refund. On appeal, the High Court examined the contract terms, noting a clause allowing the seller to deduct 10% of the advance in case of the buyer's default. The Court concluded that the plaintiff’s default precluded specific performance and that the appellant should refund only Rs.38,97,000 (the advance minus 10%) with interest at 6% per annum from 23‑12‑2010, with penal interest thereafter. Consequently, the appellate decree set aside the trial court’s order for full repayment and compensation, partially allowing the appeal.
Issues considered
- Whether the plaintiff performed his essential obligations under the sale agreement, thereby qualifying for specific performance.
- Whether Section 16 of the Specific Relief Act, 1963 bars specific performance when the plaintiff fails to perform his part.
- Whether the appellant is liable to refund the entire advance amount with interest or only after deducting the contractual 10% penalty.
- Appropriate rate of interest and penal interest applicable to the refund.
Legislation cited
- Specific Relief Act, 1963 — s. 16
Subjects
- contract
- specific performance
- Specific Relief Act
- breach of contract
- refund
- interest
- deduction
- sale deed
- title suit
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
FIRST APPEAL No.67 of 2017
======================================================
Prusottam Swaroop Son of Late Bhagwan Swaroop, resident of Mohalla-
Bhagirathi Lane, Mahendru, P.O. Mahendru, P.S. Sultanganj, Patna- 800006,
District and Town of Patna.
... ... Appellant/Defendant
Versus
Umesh Kumar Sahu Son of Sri Ram Narayan Sahu, resident of Village
Piprahi, P.S. Ladaniya, District- Madhubani, at present 'Physical Chemistry to
the Point' Bazar Samitee, Main gate, Near Hanuman Mandir, Bahadurpur,
Patna- 800016.
... ... Respondent/Plaintiff
======================================================
Appearance :
For the Appellant : Mr. Dhiraj Sagar, Advocate
Mr. Santosh Kumar Singh, Advocate
For the Respondent : Mr. P.N. Shahi, Sr. Advocate
Mr. Bipin Bihari, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE JITENDRA KUMAR
CAV JUDGMENT
Date : 15-06-2026
Introduction
The present Appeal has been preferred by the
Appellant (Defendant before the Trial Court) against the
impugned judgment and decree dated 07.02.2017, passed by
learned Sub-Judge -Ist, Patna in Title Suit No. 564 of 2011,
whereby the Suit of the Respondent/Plaintiff was part decreed
directing the Appellant/Defendant to pay back the total paid
amount of Rs. 43,30,000/- along with interest @ 9% per annum
since 31.12.2010. Additional compensation of Rs.5 lakh was
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also directed to be paid by the Defendant/Appellant to the
Plaintiff/Respondent. However, the execution of sale deed as
sought by the Plaintiff/Respondent was denied by learned Trial
Court.
Cross-Appeal not pressed
2. Here, it is also pertinent to mention that the
Respondent herein, who was Plaintiff before the Trial Court, had
also preferred Cross-Appeal against the impugned judgment
seeking specific performance by way of execution of the sale
deed in pursuance of the agreement for sale between the parties
in regard to the subject landed property. However, the Cross-
Appeal has not been pressed by the Respondent as it transpires
from the order dated 14.07.2025, passed by this Court in this
proceeding. In course of the hearing, the appellant had informed
this Court that the whole subject property has been sold out to
third party. Hence, the purchaser of the subject landed property
was required to be impleaded in the Cross-Appeal for effective
decision. However, such impleadment would have led to delay
in disposal of the Cross-Appeal. Therefore, learned counsel for
the Respondent/Plaintiff stated before the Court that the
Respondent did not want to press the Cross-Appeal, because
there would be inordinate delay in disposal of the appeal.
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Title Suit No.564 of 2011
3. Coming back to the present appeal, it transpires that
the Title Suit No. 564 of 2011 was filed by the
Respondent/Plaintiff for specific performance of the contract
dated 23.08.2010 for sale of the house property built over the
land measuring 3 katha and 10 dhurs for total consideration
amount of Rs. 1 crore 55 lakhs.
Case of the Plaintiff/Respondent
4. The case of Respondent/Plaintiff was that despite
performance of his part of the contract and his readiness and
willingness to perform the rest part of the contract, the
Appellant/Defendant failed to execute the sale deed.
5. The Respondent/Plaintiff had also sought
alternative relief of return of Rs. 43 lakh and 30 thousand with
interest @ 18% per annum which was paid to the
Appellant/Defendant towards consideration amount.
Case of the Defendant/Appellant
6. However, the Appellant/Defendant contested the
Suit of the Respondent/Plaintiff by filing his written statement
and claimed that the Respondent/Plaintiff failed to perform his
part of the contract and hence, the sale deed could not be
executed. The prayer was made by the Appellant/Defendant to
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dismiss the Suit with exemplary costs.
Issues framed during trial
7. On the basis of the pleadings of the parties, the
following issues were framed :
“(i) Is the suit as framed maintainable?
(ii) Has the plaintiff got cause of action for the suit?
(iii) Is the suit barred by estoppel, acquiescence and
waiver?
(iv) Is the suit barred by Specific Relief Act?
(v) Is the agreement for sale dated 23.08.2010 legal,
valid and operative?
(vi) Is the plaintiff ready and willing to perform his
part of contract?
(vii) Is the plaintiff entitled to a decree for Specific
Performance of Contract in suit as sought for or is the plaintiff
entitled to an alternative decree for Rs.41,30,000/- with interest
@ 18% per annum as sought for?
(viii) To what other relief or reliefs, if any, the
plaintiff is entitled?”
Evidence of the Plaintiff/Respondent
8. During the Trial, three witnesses were examined on
behalf of the Respondent herein/Plaintiff : (i) P.W.1 - Umesh
Kumar Sahu, who was the plaintiff himself, (ii) P.W. 2 –
Pramod Mishra and (iii) P.W. 3 – Shashibhushan Kumar
9. The documentary evidence brought on record by
the Respondent/Plaintiff are as follows : (i) Ext.1 - Original
agreement for sale dated 28.08.2010, (ii) Ext.2- Endorsement of
defendant Prushottam Swarup, (iii) Ext.2/A- Endorsement of
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money received on 31.12.2010, (iv) Ext.3- Advocate Notice
dated 21.04.2011 on behalf of Umesh Kumar Sahu, (v) Ext.3/A-
Advocate Notice dated 16.06.2011 on behalf of Umesh Kumar
Sahu, (vi) Ext.3/B- Advocate Notice dated 26.07.2011 on behalf
of Umesh Kumar Sahu, (vii) Ext.3/C- Reply Notice dated
05.08.2011 on behalf of Purushottam Swaroop, (viii) Ext.3/D-
Advocate Notice dated 19.04.2011 on behalf of Purushottam
Swaroop, (ix) Ext.4- Registered Envelope bearing a postal
stamp dated 20.04.2011 sent by Hare Ram Sah to Umesh Kumar
Sahu and (x) Ext.5- Signature of Pramod Mishra on Ext.1.
Evidence of the Defendant/Appellant
10. Defendant/Appellant has also examined the
following four witnesses in support of his case: (i) D.W.1-
Purusattom Swarup, the defendant himself, (ii) D.W.2- Dilip
Kumar Sinha, (iii) D.W.3- Barhan Prasad and (iv) D.W.4-
Anand Raj.
11. The documentary evidence adduced by the
Defendant/Appellant are as follows: (i) Ext.A- Legal notice
dated 23.02.2011 on behalf of Purushottam Swaroop, (ii)
Ext.A/1- Legal notice dated 16.06.2011 on behalf of Umesh
Kumar Sahu, (iii) Ext.B- Postal receipt dated 26.02.2011sent to
Umesh Kumar Sahu.
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Findings and Decree of the Trial Court
12. After trial, the Suit filed by the Respondent
herein/Plaintiff was part decreed and part dismissed. The
Appellant/Defendant was directed to refund Rs. 43,30,000/-
with interest @ 9% per annum from 31.12.2010 till the payment
of the same and additional compensation of Rs. 5 lakh within
three months from the date of the judgment. However, execution
of sale deed as sought for by the Respondent/Plaintiff was
denied by the learned Trial Court by the impugned judgment
and decree dated 07.02.2017.
13. Learned Trial Court found that there is no dispute
regarding the agreement for sale between the parties dated
23.08.2010.
14. However, learned Trial Court found that the
Respondent/Plaintiff herein had failed to perform his part of
contract and there was no readiness and willingness in spirit and
substance on the part of the Respondent/Plaintiff to perform his
part of the contract.
15. However, learned Court below found that there is
vagueness in the terms and conditions in regard to encumbrance
on the subject property.
16. However, alternative relief was granted to the
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Respondent/Plaintiff on the ground that there was some
vagueness in the terms and conditions making the contract
difficult to be enforced as per terms of the agreement.
Submissions of the Parties
17. I heard learned counsel for the Appellant and
learned counsel for the Respondent.
Submissions on behalf of the Defendant/Appellant
18. Learned counsel for the Appellant submits that
there was no vagueness in the terms and conditions of the
agreement for sale. As per the agreement, the
Plaintiff/Respondent/Umesh Kumar Sahu was required to pay
Rs. 25 lakh within four months, besides the payment already
made at the time of execution and only then the Appellant was
required to take steps to redeem the property from mortgage and
clear the dues regarding holding tax, electric bill and land
revenue in regard to property. But the Respondent/Plaintiff had
failed to pay Rs. 25 lakh within the stipulated time and even
thereafter, and, hence, the Appellant/Defendant was constrained
to cancel/rescind the agreement for sale and offered to pay back
the total advance money after deduction of 10% from the same.
He also points out that even learned Trial Court has found that
the Respondent/Plaintiff had failed to perform his part of
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contract and there was no readiness and willingness to perform
his part of contract and hence, learned Trial Court denied the
specific performance of the contract by directing the execution
of sale of the subject property by the Appellant in favour of the
Respondent.
19. He further submits that the impugned judgment is
contradictory in itself, as much as it finds, on the one hand, that
the Plaintiff/Respondent had failed to perform his part of
contract, but on the other hand, he directed the
Appellant/Defendant to return the whole advance money with
interest @ 9% per annum and to pay additional compensation of
Rs. 5 lakh. As a matter of fact, learned Trial Court has rightly
denied the execution of sale of the subject property in favour of
the Respondent, but has erroneously penalized the
Appellant/Defendant by directing him to return the whole
advance money with interest, besides additional compensation
of Rs. 5 lakh.
20. Hence, in view of learned counsel for the
Appellant, the impugned judgment is not sustainable to the
extent that the Appellant is directed to pay the whole advance
money with interest @ 9% per annum, besides additional
compensation of Rs. 5 lakh. Learned Trial Court should have, at
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most, directed the Appellant to pay advance money after
deduction of 10% to the Respondent. There is no sustainable
reason to return the whole advance money with interest and
additional compensation of Rs. Five Lakh.
Submission on behalf of the Plaintiff/Respondent
21. However, learned counsel for the
Respondent/Plaintiff defends the impugned judgment submitting
that there is no illegality or infirmity in it.
22. He further submits that time as stipulated in the
contract was not of essence. Moreover, the Respondent has
performed his part of contract and he was ready and willing to
perform his rest part of the contract and the Appellant was
required to execute the sale deed in regard to the subject
property in favour of the Respondent/Plaintiff or alternatively,
the Appellant was duty bound to return the whole advance
money with interest @ 9% per annum, besides additional
compensation of Rs. 5 lakh, because it was the Appellant who
was at fault and not the Respondent.
Point for determination by this Court
23. In view of the rival submissions of the parties, the
only point for determination by this Court is, whether the
Appellant is liable to pay the whole paid amount of
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Rs.43,30,000/- with an interest @ 9 per cent per annum from
31.12.2010, in addition to the compensation amount of
Rs.5,00,000/- or whether the Appellant/Defendant is liable to
pay back the total paid amount of Rs.43,30,000/- after deduction
of 10 per cent.
Consideration
24. Coming to the case on hand, I find that there is no
dispute regarding agreement for sale between the parties and the
terms thereof in regard to the subject landed property belonging
to the Defendant/Appellant.
25(i). I further find that as per terms and conditions of
the contract between the parties, out of the total consideration
amount of Rs. 1 crore 55 lakh, Rs. 35 lakh was already paid by
the Plaintiff/Respondent to the Appellant/Defendant and
thereafter, the Plaintiff/Respondent was required to pay Rs. 25
lakh within four months from the date of the execution of the
agreement for sale. Thereafter, further Rs. 25 lakh was required
to be paid by the Plaintiff/Respondent within eight months from
the date of the execution of the agreement for sale. But prior to
the payment of the next installment of Rs. 25 lakh, the
Defendant/Appellant was required to redeem the subject
property which was mortgaged in C.C. Loan Account No.
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30208722531 of State Bank of India, Bhikhna Pahadi, Patna.
25(ii). It was further stipulated that the balance
consideration amount was to be paid at the time of execution of
the sale deed, subject to the holding tax, electric bill and land
revenue in regard to the subject property having been paid.
25(iii). The rent received by the Defendant/Appellant
from the tenants of the subject house property was to be
adjusted against the balance consideration amount.
25(iv). It was further stipulated that in case of refusal
to execute the sale deed by the Defendant/Appellant, the
Plaintiff/Respondent could resort to legal remedy for execution
of the sale deed.
25(v).It was also stipulated that in case of default on
the part of the Plaintiff/Respondent to pay the money as per
stipulation, the Appellant/Defendant was entitled to deduct 10%
of the advance money given to him and pay back the rest
amount to the Respondent/Plaintiff.
26. From perusal of the aforesaid terms and
conditions of the agreement for sale (Ext.1), the
Plaintiff/Respondent was required in unambiguous term to pay
Rs.25,00,000/- without any condition to the
Defendant/Appellant within four months of the execution of the
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agreement for sale, which was executed on 23.08.2010, but I
find that there is no pleading or evidence, whatsoever, that he
paid Rs.25,00,000/- to the Defendant/Appellant or he was
willing and ready pay this amount to the Defendant/Appellant.
27. It clearly transpires that the whole consideration
amount for the sale of the subject landed property was
Rs.1,55,00,000/- and at the time of the execution of the
agreement for sale, Rs. 35,00,000/- was already paid by the
Plaintiff/Respondent to the Defendant/Appellant and subsequent
to the execution of agreement for sale, the Plaintiff/Respondent
paid Rs.6,00,000/- on 06.12.2010 and subsequently,
Rs.2,30,000/- on 31.12.2010 and thereafter, no payment was
made by the Plaintiff/Respondent to the Defendant/Appellant
despite demand on his part, nor was any willingness and
readiness to pay it.
28. Hence, it clearly shows that the
Plaintiff/Respondent did not perform his part of the contract as
required, rendering him disentiteled to get equitable relief of
specific performance by the Defendant/Appellant.
29. Here, it would be relevant to refer to Section 16 of
the Specific Relief Act, 1963 which provides personal bars to
Specific Relief. It reads as follows, as prevailing at the time of
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the execution of the contract between the parties or filing the
suit:
“16. Personal bars to relief: Specific performance of a
contract can not be enforced in favour of a person-
(a) …………………..
(b)…………………….
(c) who fails to aver and prove that he has performed
or has always been ready and willing to perform the
essential terms of the contract which are to be
performed by him, other than terms of the
performance of which has been prevented or waived
by the defendant.
Explanation.- For the purpose of clause (c) –
(i) Where a contract involves the payment of money, it
is not essential for the plaintiff to actually tender to
the defendant or to deposit in Court any money except
when so directed by the Court;
(ii) the plaintiff must aver performance of, or readiness
and willingness to perform, the contract accordingly to
its true construction.”
(Emphasis supplied)
30. Here, Sub-Section (c ) of Section 16 of the Act
clearly shows that if the Plaintiff fails to perform his part of the
essential terms and conditions of the contract, which was
required to be performed by him, he cannot enforce the specific
performance of the contract.
31. I further find that as per the terms of the contract
between the parties, the Defendant/Appellant was entitled to
deduct 10 per cent of the advance money given to him before
paying back the rest amount to the Respondent/Plaintiff in case
of default on the part of the Plaintiff/Respondent to pay the
consideration money as per stipulation. As such, the
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Plaintiff/Respondent was entitled to get back the paid amount of
Rs.43,30,000/- only after deduction of 10 per cent from the
same.
32. However, I further find that even the
Defendant/Appellant has not paid back the amount payable by
him to the Plaintiff/Respondent after deduction in view of the
failure of the agreement for sale, nor has he ever offered.
33. Hence, the Defendant/Appellant is required to pay
back the paid amount after deduction of 10 per cent of it. He is
also required to pay reasonable interest on the amount due to be
paid to the Plaintiff/Respondent to avoid unjust enrichment.
34. I further find that 10 per cent of Rs.43,30,000/-
comes to Rs.4,33,000/- which is liable to be deducted from the
paid amount of Rs. 43,30,000/-. Hence, the due amount payable
by the Defendant/Appellant to the Plaintiff/Respondent comes
to Rs.43,30,000/- minus Rs.4,33,000/- i.e Rs.38,97,000/-
35. I further find that the agreement for sale was
executed on 23.08.2010 and Rs.25,00,000/- was required to be
paid by 23.12.2010. Hence, after 23.12.2010, the paid amount
was required to be returned by the Appellant to the Respondent.
Hence, the Appellant is required to pay to the Respondent
Rs.38,97,000/- with interest @ 6 per cent per annum since
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23.12.2010 within two months, failing which he will be required
to pay penal interest @ 12 per cent per annum.
36. In view of the default on the part of the
Respondent/Plaintiff to perform his part of contract, the
Appellant/Defendant cannot be penalized by directing him to
pay any compensation. In fact, the Appellant/Defendant is liable
to return the total paid amount to him only after deduction of 10
per cent from it.
Relief
37. Hence, the impugned judgment/decree is not
sustainable. Accordingly, it is set aside and the Appellant is
directed to pay only Rs.38,97,000/- with interest @ 6 per cent
per annum since 23.12.2010 within two months. If the payment
is not made along with the interest within the stipulated time,
the Appellant would be liable to pay penal interest @ 12 per
cent thereafter.
38. The Appeal stands part allowed, accordingly.
(Jitendra Kumar, J.)
ravishankar/shoaib
AFR/NAFR N.A.F.R.
CAV DATE 14.05.2026
Uploading Date 15.06.2026
Transmission Date 15.06.2026
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