Source: Supreme Court  

Why in News?

The Supreme Court ruled that a plaintiff seeking specific performance of a property sale must secure consent from all co-owners. In a case involving five joint owners, the plaintiff's reliance on the brothers' assurances without the sisters' consent was deemed insufficient.  

• Justices Vikram Nath, Pankaj Mithal, and Prasanna B. Varale held in the matter of Janardan Das & Ors. v. Durga Prasad Agarwalla & Ors . 
• The trial court denied the claim, but the High Court had allowed it, prompting the appellant to appeal to the Supreme Court. 

What was the Background of Janardan Das & Ors. v. Durga Prasad Agarwalla & Ors ? 

• The case involves a property dispute in Baripada, Odisha, originally owned by Late Surendranath Banerjee. 
• After Surendranath's death on 3rd July 1980, the property was inherited equally by his five heirs: 
  • Two sons: Binayendra Banerjee (Defendant No. 1) and late Soumendra Nath Banerjee 
  • Three daughters: Smt. Rekha Mukherjee, Smt. Sikha Das, and Smt. Monila Pal (Defendant Nos. 6-8) 
• On 14th April, 1993, there was an oral agreement between all co-owners and Defendant Nos. 9-11 (appellants) to sell the property for ₹4,20,000. 
•  On 6th June, 1993, the plaintiffs (who operated a petrol pump on the property under a dealership with Hindustan Petroleum) entered into another agreement with only Defendant No. 1 and late Soumendra to purchase the property for ₹5,70,000, paying ₹70,000 as earnest money. 
• Key points about the 6th June agreement: 
  • Only two brothers signed it, not the three sisters 
  • It stipulated that the sisters would come within three months to execute the sale deed 
  • The sale deed was to be executed before 30th September, 1993 
• There was an unregistered General Power of Attorney (GPA) from 30th December, 1982, which allegedly gave Defendant No. 1 authority to act for his sisters. 
• However, a registered partition deed from 17th February, 1988, had limited Defendant No. 1's authority to only collecting rent. 
• On 27th September, 1993, all five co-owners (including the three sisters) executed a registered sale deed in favor of Defendant Nos. 9-11 for ₹4,20,000. 
• Following this, the plaintiffs filed a suit (T.S. No. 103 of 1994) seeking: 
  • Specific performance of their June 6, 1993 agreement 
  • Alternatively, specific performance for the shares of Defendant No. 1 and late Soumendra 
• The Trial Court dismissed the suit, but the High Court reversed this decision and granted specific performance, leading to the present appeal before the Supreme Court. 

What were the Court’s Observations? 

• The Supreme Court observed that in contracts involving multiple parties with distinct interests, particularly when some parties are absent or non-signatories, the onus lies on the plaintiff to ensure all necessary consents and participations are secured to demonstrate readiness and willingness. 
• The Court held that mere reliance on co-owners (Defendant No. 1 and late Soumendra) to procure their sisters for execution cannot absolve the plaintiffs of their responsibility to demonstrate readiness and willingness under Section 16(c) of the Specific Relief Act, 1963. 
• The Court found that the plaintiffs' failure to contact the sisters, who are co-owners of a 3/5th share in the suit property, and their passive approach in not taking any proactive steps to secure their consent within the stipulated three-month period, demonstrated a lack of continuous readiness and willingness. 
• Regarding the General Power of Attorney (GPA), the Court observed that it was effectively revoked by the subsequent registered partition deed of 1988, which specifically limited Defendant No. 1's authority to rent collection, with no power to sell the property on behalf of the sisters. 
• The Court obser5ved that in contracts involving multiple owners of property, all co-owners must either personally execute the agreement to sell or duly authorize an agent through a valid and subsisting power of attorney, noting that an agent's authority must be clear and unambiguous. 
• The Court observed that since the plaintiffs were cognizant that Defendant Nos. 6-8 were not parties to the agreement and their participation was necessary for a valid sale, they cannot claim belief in Defendant No. 1's authority to bind the sisters without their explicit consent. 

What is 16 (c) of The Specific Relief Act, 1963? 

• About : 
  • Section 16 deals with Personal bars to relief. 
  • It states that specific performance of a contract cannot be enforced in favour of a person 
  • Section 16(c) states that who fails to 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 the performance of which has been prevented or waived by the defendant. 
• Burden of Proof: 
  • The onus lies on the plaintiff to prove readiness and willingness 
  • Must be demonstrated through evidence, not mere assertions 
  • Continuous readiness throughout the contract period must be shown 
• Essential Terms: 
  • Readiness must relate to essential terms of the contract 
  • Must be terms specifically to be performed by the plaintiff 
  • Performance must be substantial and meaningful 
• Exceptions: 
  • Terms prevented by defendant's actions 
  • Terms waived by the defendant 
  • Such terms need not be proved by the plaintiff 
• Explanations to Section 16(c): 
  • First Explanation: 
    • Mere averment of readiness and willingness in the plaint is insufficient 
    • Must be supported by evidence 
    • The court must be satisfied about the genuine readiness 
  • Second Explanation: 
    • Requires the plaintiff to prove readiness according to the true construction of the contract 
    • Must align with the actual terms and intent of the contract 
    • Subjective interpretation by plaintiff is insufficient 

What is General Power of Attorney (GPA) ? 

• About: 
  • A General Power of Attorney is a legal instrument through which a person (the principal) grants comprehensive authority to another person (the agent) to act on their behalf in various matters.  
  • This document enables the agent to make binding decisions and execute transactions for the principal, particularly useful during the principal's illness, disability, or absence.  
  • The authority granted is broad in scope and covers multiple aspects of legal, financial, and personal matters. 
• Essential Elements 
  • Clear identification of both principal and agent with material particulars 
  • Comprehensive listing of powers granted to the agent 
  • Requirement for two witnesses 
  • Clear scope of authority 
  • Declaration of sound mind and voluntary execution 
• Scope and Purpose 
  • GPA provides broad authority, not limited to specific transactions 
  • Covers varied matters unlike specific power of attorney 
  • Can include financial, legal, and business decisions 
  • Must clearly enumerate authorized powers and limitations 
  • Particularly useful during principal's absence or incapacity 
• Legal Requirements for Validity 
  • Must contain material particulars of both principal and agent 
  • Requires attestation by two witnesses 
  • Should specify clear scope of delegated authority 
  • Must be executed while principal has legal capacity 
  • Should follow proper format and documentation requirements