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Dr. Manohar Ganapathi Ravankar v. H. Gurunanda Raikar

Civil Appeal · 2019 INSC 526Decided 15 Apr 2019
Civil Appeal No. 3415 of 2019
Dr. Justice D.Y. Chandrachud · Justice Hemant Gupta

Background

A buyer (plaintiff) entered into a 2006 agreement to purchase a Mangalore property for Rs. 30 lakhs, paying Rs. 26,000 as earnest money, with the sale to be completed once the seller settled a pending family property dispute. When the sale did not go through, the buyer sued for specific performance, also claiming, only in a later additional affidavit, not in the original plaint or legal notice, that he had separately paid the seller a further Rs. 6,75,000 in cash. The trial court decreed specific performance in the buyer's favour, but the High Court reversed that, holding the buyer had failed to prove he was ready and willing to perform the contract, while still ordering the seller to refund Rs. 7,01,000 based on a presumption that the extra cash payment had occurred.

Decision Breakdown

The Supreme Court held that the High Court was correct in refusing specific performance, since the buyer's own conduct, never making the claim of the extra Rs. 6,75,000 cash payment in his plaint or in his pre-suit legal notice, and introducing it only later without any proof of date or manner of payment, showed he had not been ready and willing to perform his obligations under the contract. However, the Court found the High Court had erred in ordering a refund of Rs. 7,01,000 based merely on speculation (that title documents being handed over suggested an unproven cash payment), when there was no credible evidence for that payment at all. The Court dismissed the buyer's appeal for specific performance, allowed the seller's appeal against the Rs. 7,01,000 refund order, and directed the seller to repay only the proven and admitted sum of Rs. 26,000 (the actual earnest money paid by cheque) with 9% interest, to settle equities between the parties.

Lesson Learnt

A claim of having paid money under a contract must be consistently and credibly pleaded from the very start, introducing a significant payment claim for the first time only in a later affidavit, without any supporting evidence of date or mode of payment, will not be believed by courts, and relief cannot be granted on mere presumption or guesswork.

Official source (sci.gov.in)View Judgment (PDF)

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