The trial court’s inability to address the issue of whether the suit is maintainable regarding a jurisdictional fact does not limit the higher court’s authority to check if that jurisdictional fact is present, according to the Supreme Court.
The Supreme Court explained that if the Trial Court fails to address an issue about the maintainability of a suit related to a jurisdictional fact, it does not limit the higher Court’s ability to check if the jurisdictional fact existed for granting the requested relief, as long as no new facts need to be presented and no new evidence is introduced. The sellers appealed to the Supreme Court against a Madras High Court decision that granted specific performance of a sale agreement to the buyer regarding land and a tenanted building. Additionally, another appeal was filed by a company that bought the property from the sellers while the first appeal was still ongoing in the High Court.
The Division Bench, consisting of Justice Dipankar Datta and Justice Sanjay Karol, stated, “No higher court, especially the Supreme Court, should hesitate to intervene in a decree that provides relief simply because the parties were not specifically informed about a certain argument or defense that could affect the outcome of the suit, particularly regarding whether the trial court had the authority to grant relief if the necessary ‘jurisdictional fact’ was not met.”
The case details indicated that the parties signed an Agreement for the sale of the property. The buyer agreed to pay Rs. 2.3 crore to the sellers as part of the deal. However, the sellers canceled the Agreement, stating that the 4-month period had lapsed and the buyer showed no interest in finalizing the transaction. They claimed the buyer had no right to pursue the property since the Agreement was canceled. The sellers also argued that the buyer, who was previously unwilling, was now trying to take advantage of the increased property value. This situation led to a legal dispute between the buyer and seller, resulting in a suit for specific performance.
The sellers argued that the buyer failed to make the agreed payment, and since time was crucial in the contract, the Trial Court was right to dismiss the suit, even though it had ruled differently on the importance of time. The buyer contended that both the Trial Court and High Court found that time was not essential to the contract. The buyer’s obligation to pay the remaining amount depended on the sellers fulfilling their part by providing vacant possession of the property after evicting the tenants. The Supreme Court referenced its ruling in A. Kanthamani v. Nasreen Ahmed (2017) 4 SCC 654, stating that unless the Trial Court addresses the issue of maintainability, the suit cannot be deemed unmaintainable at the appellate level just because the necessary declaratory relief was not requested. The Bench clarified that a suit for specific performance typically relies on a written agreement between the parties, indicating a mutual understanding.
The Bench reviewed the relevant clauses and confirmed that both the Trial Court and the High Court were correct in stating that time was not crucial, even though the Agreement stated that “time mentioned in this agreement shall be of the essence.” It was noted that the buyer, despite knowing that all tenants had vacated the property, began to complain about the sellers not providing the ‘encumbrance certificate.’ Additionally, the buyer failed to proceed with the sale deed despite several reminders. The buyer’s cross-examination showed she admitted to not having sufficient funds in her bank accounts to pay the remaining sale price. This indicated her inability to fulfill her part of the contract. The Bench concluded that the buyer’s actions did not inspire confidence in granting her the discretionary relief of specific performance, leading to the approval of the appeal.
The Bench also acknowledged the differing opinion in the A. Kanthamani case while distinguishing it from I.S. Sikandar v. K. Subramani (2013) 15 SCC 27. Both cases emphasize that if a vendor cancels a sale agreement unilaterally, the vendee seeking specific performance should request a declaration that the cancellation is invalid. However, the Kanthamani case noted that if maintainability was not an issue in the trial or appellate court, a suit should not be dismissed on those grounds.
It was explained that even if the trial court did not address a jurisdictional issue, a higher court can still make a decision in a suitable case. This is based on the ruling in Shrisht Dhawan (Smt) v. Shaw Bros. (1992) 1 SCC 534, which states that whether a court has jurisdiction depends on the presence of a jurisdictional fact. The Bench stated, “…we clarify that any failure or omission by the trial court to address the maintainability of a suit related to a jurisdictional fact does not limit the higher court’s ability to check if the jurisdictional fact existed for the requested relief, as long as no new facts or evidence are needed.” Therefore, the appeal was granted, and the Bench dismissed the buyer’s suit, ordering the sellers to return the advance payment of Rs. 25 lakh to the buyer.
Cause Title: R. Kandasamy(Since Dead) v. T.R.K.Sarawathy [Neutral Citation: 2024 INSC 884]
