Trial Court

The purchaser (plaintiff) filed a suit seeking specific performance of the agreement.

The suit, however, was instituted only on 20 December 1993, nearly three years after the agreement and approximately two years and nine months after the agreement had been rescinded.

The Trial Court decreed the suit in favour of the plaintiff in 2002 and directed specific performance of the contract.

Karnataka High Court

The seller challenged the decree before the Karnataka High Court.

The High Court reversed the Trial Court’s judgment and held that the plaintiff had failed to establish continuous readiness and willingness to perform his part of the contract.

Consequently, the suit for specific performance was dismissed.

Appeal Before the Supreme Court

Aggrieved by the High Court’s decision, the plaintiff approached the Supreme Court seeking restoration of the Trial Court’s decree.

Core Legal Issue

The primary question before the Supreme Court was:

“Whether the plaintiff had satisfactorily established continuous readiness and willingness to perform his obligations under the agreement to sell, as required under the Specific Relief Act?”

Legal Requirement of Readiness and Willingness

Specific performance is not granted automatically merely because a valid contract exists.

Under the Specific Relief Act, a plaintiff seeking specific performance must prove:

Readiness

Readiness refers to the financial capacity and preparedness of the purchaser to perform contractual obligations, particularly payment of the consideration amount.

Willingness

Willingness relates to the conduct of the purchaser demonstrating a genuine intention to complete the transaction.

Both requirements must coexist and continue throughout the relevant period.

Indian courts have consistently held that mere assertions in pleadings are insufficient. The plaintiff must produce convincing evidence demonstrating actual readiness and willingness.

Plaintiff’s Argument Before the Supreme Court

The appellants argued that they possessed adequate financial resources to complete the transaction.

To support this contention, they relied upon four Fixed Deposit Receipts (FDRs) worth approximately ₹70,000 each, totalling ₹2,80,000.

According to them, these FDRs demonstrated their financial capability and proved readiness to pay the balance sale consideration.

Supreme Court’s Analysis

The Supreme Court carefully examined the dates of the FDRs relied upon by the appellants.

The Court found that the FDRs had been created on:

• 04 October 1999
• 22 November 1999
• 03 April 2001
• 23 August 2001

The suit itself had been instituted on 20 December 1993.

Therefore, all the FDRs came into existence approximately six to eight years after the filing of the suit.

The Court held that these documents were wholly irrelevant for determining whether the plaintiff possessed financial capacity during the crucial period between:

• Execution of the agreement in December 1990,
• Expiry of the four-month performance period, and
• Filing of the suit in December 1993.

The Court observed that readiness must be assessed with reference to the relevant time and cannot be retrospectively established through documents created years later.

Importance of Relevant Financial Evidence

The Supreme Court clarified an important legal principle.

A plaintiff is not required to physically deposit the sale consideration before the Court.

However, the plaintiff must produce reliable evidence demonstrating that sufficient funds were available when performance was due.

Examples of such evidence may include:

• Bank account statements
• Contemporary fixed deposits
• Income records
• Financial statements
• Loan sanction letters
• Other documentary proof showing availability of funds

In the present case, no such evidence existed for the relevant period.

As a result, the plaintiff failed to discharge the burden of proof.

Delay in Filing the Suit

Another significant factor considered by the Court was the plaintiff’s delay in approaching the Court.

Although the suit was technically filed within the limitation period prescribed by law, the Supreme Court emphasized that limitation and entitlement to equitable relief are distinct concepts.

Specific performance remains a discretionary and equitable remedy.

Consequently, courts examine whether the plaintiff acted diligently and promptly.

In the present case:

• Agreement executed: December 1990
• Contract rescinded: Approximately March-April 1991
• Suit filed: December 1993

The Court noted that the plaintiff waited nearly two years and nine months after rescission before filing the suit.

No satisfactory explanation for this delay was offered.

According to the Court, such conduct reflected a lack of genuine eagerness to perform the contract.

Equitable Nature of Specific Performance

The judgment reiterates a long-standing principle of contract law.

Specific performance is not a matter of right.

Even where a contract is valid and enforceable, the Court may refuse relief if:

• The plaintiff lacks bona fides;
• The plaintiff fails to prove readiness and willingness;
• There is unexplained delay;
• The conduct of the plaintiff is inequitable.

The remedy remains subject to judicial discretion and equitable considerations.

Supreme Court’s Final Findings

The Supreme Court concluded that:

1. The plaintiff failed to prove financial readiness during the relevant period.
2. The FDRs relied upon were created years after the filing of the suit and were therefore irrelevant.
3. No evidence showed availability of funds when performance was due.
4. The plaintiff delayed approaching the Court for nearly three years.
5. Such delay reflected absence of continuous readiness and willingness.

The Court observed that continuous readiness and willingness constitute a “sine qua non” (indispensable condition) for obtaining specific performance.

Accordingly, the appeal was dismissed.

Key Legal Principles Emerging from the Judgment

1. Continuous Readiness Is Mandatory:

Readiness must exist from the date of the agreement until the final adjudication of the dispute.

2. Financial Capacity Must Be Proved Through Contemporary Evidence:

Subsequent financial documents cannot establish readiness retrospectively.

3. Mere Pleadings Are Not Enough:

A plaintiff must produce documentary evidence showing actual capability to perform the contract.

4. Delay Can Defeat Specific Performance:

Even if a suit is within limitation, unexplained delay may persuade courts to deny equitable relief.

5. Specific Performance Is Discretionary:

The remedy is governed by principles of equity, fairness, and bona fide conduct.

Significance of the Judgment

This decision serves as an important reminder for purchasers seeking specific performance of property transactions.

Parties often assume that proving the existence of an agreement alone is sufficient. However, the Supreme Court has reaffirmed that courts require convincing evidence showing both the intention and capacity to perform contractual obligations throughout the relevant period.

The judgment strengthens the principle that plaintiffs must maintain and preserve contemporaneous evidence of financial readiness. It also discourages speculative litigation where parties seek enforcement years later without demonstrating genuine preparedness to complete the transaction.

For property disputes and specific performance suits across India, this ruling will likely serve as a significant precedent in evaluating claims of readiness and willingness under the Specific Relief Act.