Specific Relief Act, 1963 – s.16 (prior to amendment w.e.f 1.10.2018) – Readiness and willingness to perform – Both ingredients necessary for the relief of specific performance – Suit for specific performance of an agreement for sale – Certain amount paid in advance, failure to pay balance within stipulated time – Grant of relief – Not justified – Held: There is a distinction between readiness and willingness to perform the contract and both ingredients are necessary for the relief of Specific Performance – Plaintiff has to prove that all along and till the final decision of the suit, he was ready and willing to perform his part of the contract – Mere statement or averment in plaint of readiness and willingness would not suffice – In the present case, the respondent-plaintiff failed to prove his readiness to perform his part of contract from the date of execution of the agreement till date of decree, a condition precedent for grant of relief of specific performance – Respondent deposited the balance sale consideration in the court seven years after the date by which the sale had to be concluded – He did not have sufficient funds to discharge his part of contract – No evidence was adduced as to how he was in a position to pay or make arrangements for payment of the balance sale consideration within time – Making subsequent deposit of balance consideration after lapse of seven years would not establish the respondent’s readiness to discharge his part of contract – Respondent was not entitled to the relief of specific performance as he was not ready with funds though may have been willing to perform his part of contract – Impugned judgment of High Court and the decree of Trial court set aside – Appellants-defendant to return the earnest money to the respondent with interest @ 7% p.a from the date of deposit of the same, till the date of refund.
Suit – For specific performance of an agreement – Certain amount paid in advance, balance to be paid within a stipulated time – Held: In a suit for Specific Performance of an agreement, it is for the Plaintiff to prove his readiness and willingness to perform his obligations under the agreement – Where a certain amount has been paid in advance and the balance is required to be paid within a stipulated time, it is for the Plaintiff to show that he was in a position to pay the balance money – Plaintiff has to prove that he has the money or has alternatively made necessary arrangements to get the money.
Suit – For specific performance– Continuous readiness and willingness of plaintiff – Held: Even in a first appeal, the first Appellate Court is duty bound to examine whether there was continuous readiness and willingness on the part of the Plaintiff to perform the contract.
Allowing the appeal, the Court
HELD: 1.1 The primary question for determination is whether the Respondent Plaintiff has proved his readiness and willingness to perform his part of the contract or not? In a suit for Specific Performance of an agreement, it is for the Plaintiff to prove his readiness and willingness to perform his obligations under the agreement. Where a certain amount has been paid in advance and the balance is required to be paid within a stipulated time, it is for the Plaintiff to show that he was in a position to pay the balance money. The Plaintiff has to prove that he has the money or has alternatively made necessary arrangements to get the money. In this case, the Original Defendant/Appellants have all along contended that the Plaintiff Respondent neither offered to pay nor was in a position to pay the balance consideration of Rs.15,00,000/-. [Paras 21, 22][260-F-H]
1.2 Section 16 (c) of the Specific Relief Act, 1963 bars the relief of specific performance of a contract in favour of a person, who fails to aver and prove his readiness and willingness to perform his part of contract. In view of Explanation (i) to clause
(c) of Section 16, it may not be essential for the plaintiff to actually tender money to the defendant or to deposit money in Court, except when so directed by the Court, to prove readiness and willingness to perform the essential terms of a contract, which involves payment of money. However, explanation (ii) says the plaintiff must aver performance or readiness and willingness to perform the contract according to its true construction. To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract. If the plaintiff does not have sufficient funds with him to discharge his obligations in terms of a contract, which requires payment of money, the plaintiff would have to specifically plead how the funds would be available to him. To cite an example, the plaintiff may aver and prove, by adducing evidence, an arrangement with a financier for disbursement of adequate funds for timely compliance with the terms and conditions of a contract involving payment of money. [Paras 24, 25][261-F-H; 262-A-C]
1.3 In a suit for Specific Performance of a contract, the Court is required to pose unto itself the following questions, namely:(i) Whether there is a valid agreement of sale binding on both the vendor and the vendee and (ii) Whether the Plaintiff has all along been and still is ready and willing to perform his part of the contract as envisaged under Section 16(c) of the Specific Relief Act, 1963. There is a distinction between readiness and willingness to perform the contract and both ingredients are necessary for the relief of Specific Performance. Even in a first appeal, the first Appellate Court is duty bound to examine whether there was continuous readiness and willingness on the part of the Plaintiff to perform the contract. [Paras 33-35][265-B-E]
1.4 In this case, the suit property is located in the industrial town of Hosur located about 30/40 kms. from Bengaluru. The Court is obliged to take judicial notice of the phenomenal rise in the price of real estate in Hosur. It was argued that the Plaintiff had only paid an insignificant amount of Rs.10,001/- as advance when the consideration was Rs.15,10,000/-. Having paid an insignificant amount the Plaintiff was not entitled to discretionary equitable relief of Specific Performance. The fact that the suit had been filed after three years, just before expiry of the period of limitation, was also a ground to decline the Respondent Plaintiff the equitable relief of Specific Performance for purchase of immovable property. The Respondent Plaintiff has relied upon the notice dated 13.02.2003 and evidences of PW2 & PW3 to prove that he was always ready and willing to perform his part of the contract. Even though it may be true that the Respondent Plaintiff had deposited the balance sale consideration in court on 06.04.2010, it cannot be ignored that such deposit was made by him seven years after 15.3.2003, being the date by which the sale had to be concluded. No evidence has been adduced on behalf of the Respondent Plaintiff as to how the Respondent Plaintiff was in a position to pay or make arrangements for payment of the balance sale consideration within time. The Courts below also erred in not adjudicating upon this vital issue except to make a sweeping observation that, given that the Respondent Plaintiff was a businessman he had sources to arrange the balance funds. Careful study of balance sheet dated 31.03.2003 of the Respondent Plaintiff would demonstrate that he did not have sufficient funds to discharge his part of contract. [Paras 38-40, 45][267-C-E; 268-E]
1.5 For relief of specific performance, the Plaintiff has to prove that all along and till the final decision of the suit, he was ready and willing to perform his part of the contract. It is the bounden duty of the Plaintiff to prove his readiness and willingness by adducing evidence. This crucial facet has to be determined by considering all circumstances including availability of funds and mere statement or averment in plaint of readiness and willingness, would not suffice. In this case, the Respondent Plaintiff has failed to discharge his duty to prove his readiness as well as willingness to perform his part of the contract, by adducing cogent evidence. Acceptable evidence has not been placed on record to prove his readiness and willingness. Further, it is clear from the Respondent Plaintiff’s balance sheet that he did not have sufficient funds to discharge his part of contract in March 2003. Making subsequent deposit of balance consideration after lapse of seven years would not establish the Respondent Plaintiff’s readiness to discharge his part of contract. The Respondent Plaintiff has failed to prove his readiness to perform his part of contract from the date of execution of the agreement till date of decree, which is a condition precedent for grant of relief of specific performance. The Respondent Plaintiff was not entitled to the relief of specific performance. The Respondent Plaintiff may have been willing to perform his part of contract. It however appears that he was not ready with funds. He was possibly trying to buy time to discharge his part of contract. The Respondent Plaintiff was not entitled to the relief of specific performance. The Trial Court and the High Court erred both in law and on facts in granting such relief. The impugned judgment of the High Court and the judgment and decree of Trial court are set aside. The Appellants shall return the earnest money to the Respondent Plaintiff, within
4 weeks from today with interest at the rate of 7% per annum from the date of deposit of the same, till the date of refund. It will also be open to the Respondent Plaintiff to withdraw the deposit if any of the balance consideration in Court. [Paras 46-49, 51 and 52][271-D-G; 272-B-C, G]
Bhavyanath v. K. V. Balan (2020) 11 SCC 790 – held inapplicable.
Man Kaur v. Hartar Singh Sangha (2010) 10 SCC 512 : [2010] 12 SCR 515; In Pt. Prem Raj v. D.L.F. Housing and Construction (Private) Ltd. And Anr. AIR 1968 SC 1355 : [1968] 3 SCR 648; N. P. Thirugnanam v.
Dr. R. Jagan Mohan Rao and Ors (1995) 5 SCC 115 : [1995] 2 Suppl. SCR 53; Umabai v. Nilkanth Dhondiba Chavan (2005) 6 SCC 243 : [2005] 3 SCR 521; K.S. Vidyanadam v. Vairavan (1997) 3 SCC 1 : [1997] 1 SCR 993; His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar (1996) 4 SCC 526 : [1996] 2 Suppl. SCR 111; Kalawati v. Rakesh Kumar (2018) 3 SCC
658 : [2018] 1 SCR 482; Balraj Taneja v. Sunil Madan (1999) 8 SCC 396 : [1999] 2 Suppl. SCR 258; H.P. Pyarejan v. Dasappa (2006) 2 SCC 496 : [2006] 2 SCR 120; Malluru Mallappa v. Kuruvathappa (2020)
4 SCC 313; Saradamani Kandappan v. S. Rajalakshmi (2011) 12 SCC 18 : [2011] 8 SCR 874; P.R. Deb and Associates v. Sunanda Roy (1997) 3 SCC 1; Manjunath Anandappa v. Tammanasa (2003) 10 SCC 390 : [2003]
2 SCR 1068; Azhar Sultana v. B. Rajamani (2009) 17 SCC 27 : [2009] 2 SCR 537; Atma Ram v. Charanjit Singh (2020) 3 SCC 311 : [2020] 3 SCR 697 – relied on.
Ardeshir Mama v. Flora Sassoon 55 IA 300, at pg. 372 : AIR 1928 PC 208; Cort v. Ambergate etc. and Rly. Co (1851) 117 ER 1229 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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