Mohammed Khaleel v. Jayamma
“Readiness Must Be Proved for the Relevant Time, Not Years Later: Supreme Court Denies Specific Performance Where Funds and Promptness Were Missing”
TL;DR
The Supreme Court dismissed an appeal by the legal representatives of a purchaser who sought specific performance of a 1990 agreement to sell a vacant site in Mysore for Rs. 3,00,000/-. The Court upheld the Karnataka High Court's reversal of the Trial Court's decree, holding that the plaintiff failed to prove continuous readiness and willingness under Section 16(c) of the Specific Relief Act, 1963. The four Fixed Deposit Receipts of Rs. 70,000/- each, relied on as proof of funds, were dated between 1999 and 2001, years after the suit was filed on 20.12.1993, and so could not show financial capacity at the relevant time. The plaintiff had also remained passive about the ULCRA permission that both parties had to obtain, and filed the suit two years and nine months after the first notice, which reflected a lack of continuous readiness and promptness.
The Bottom Line
A buyer who wants a court to force a sale must show, with reliable evidence, that he had the money and the intent to complete the deal at the relevant time, and must come to court promptly. Here, the proof of funds was created years after the suit was filed, the buyer waited for the seller to obtain statutory permission instead of doing his own part, and the suit was filed after a long gap. The Supreme Court held that the equitable relief of specific performance was therefore rightly refused.
Case Timeline
The journey from FIR to Supreme Court verdict
Agreement to Sell Executed
Agreement to sell a vacant site measuring 100 ft by 78 ft for Rs. 3,00,000/-; Rs. 25,000/- paid as earnest money, with the sale deed to be registered within four months.
Agreement to Sell Executed
Agreement to sell a vacant site measuring 100 ft by 78 ft for Rs. 3,00,000/-; Rs. 25,000/- paid as earnest money, with the sale deed to be registered within four months.
Plaintiff's First Notice
The plaintiff's notice calling on the defendant to perform was not served because of a wrong house number; it allegedly mentioned that the property was unmeasured and the road not formed.
Plaintiff's First Notice
The plaintiff's notice calling on the defendant to perform was not served because of a wrong house number; it allegedly mentioned that the property was unmeasured and the road not formed.
Defendant Rescinds the Agreement
The defendant's legal notice stated that the plaintiff had not obtained ULCRA permission and time had expired, and that she was rescinding the agreement and forfeiting the earnest money.
Defendant Rescinds the Agreement
The defendant's legal notice stated that the plaintiff had not obtained ULCRA permission and time had expired, and that she was rescinding the agreement and forfeiting the earnest money.
Plaintiff Replies, Threatens Suit
The plaintiff admitted receiving the documents, said permission was not obtained since no approach road was made, and stated he would sue for specific performance.
Plaintiff Replies, Threatens Suit
The plaintiff admitted receiving the documents, said permission was not obtained since no approach road was made, and stated he would sue for specific performance.
Further Notice by Plaintiff
The plaintiff alleged forcible possession by the defendant and said he was ready and willing to perform provided ULCRA permission was obtained; the defendant replied on 11.08.1992.
Further Notice by Plaintiff
The plaintiff alleged forcible possession by the defendant and said he was ready and willing to perform provided ULCRA permission was obtained; the defendant replied on 11.08.1992.
Suit for Specific Performance Filed
O.S. No. 432 of 1993 was filed before the Principal Civil Judge (Senior Division), Mysore, two years and nine months after the first notice.
Suit for Specific Performance Filed
O.S. No. 432 of 1993 was filed before the Principal Civil Judge (Senior Division), Mysore, two years and nine months after the first notice.
Trial Court Decrees the Suit
The Trial Court held that the plaintiff was ready and willing, time was not of the essence, and the defendant rescinded the contract without justifiable cause.
Trial Court Decrees the Suit
The Trial Court held that the plaintiff was ready and willing, time was not of the essence, and the defendant rescinded the contract without justifiable cause.
High Court Reverses the Decree
In R.F.A. No. 418 of 2003, the Division Bench held that readiness and willingness were not proved and that the delay was critical, and dismissed the suit.
High Court Reverses the Decree
In R.F.A. No. 418 of 2003, the Division Bench held that readiness and willingness were not proved and that the delay was critical, and dismissed the suit.
Supreme Court Dismisses the Appeal
The Supreme Court upheld the High Court, holding that readiness and willingness were not proved and the plaintiff did not approach the Court promptly.
Supreme Court Dismisses the Appeal
The Supreme Court upheld the High Court, holding that readiness and willingness were not proved and the plaintiff did not approach the Court promptly.
The Story
The original plaintiff, Mohammed Khaleel, and the defendant, Jayamma, entered into an agreement to sell on 20.12.1990 for a vacant site measuring 100 feet by 78 feet for a total consideration of Rs. 3,00,000/-. He paid Rs. 25,000/- as earnest money; the sale deed was to be registered within four months and the balance Rs. 2,75,000/- was to be paid before the Sub-Registrar. The defendant handed over the original title documents, including the original will deed, settlement deed, katha extract, encumbrance certificate and tax paid receipts. The plaintiff alleged that the defendant also agreed that her brothers and sisters would execute an interim agreement for an approach road from T. Narasipura Main Road up to the end of the schedule property. In her written statement, the defendant said an approach road already existed and that there was no other land to carve out a separate road.
On 15.04.1991 the plaintiff sent a notice calling on the defendant to perform; it was not served because of a wrong house number, and in it he allegedly admitted that the property had not been measured and the road not formed. On 26.04.1991 the defendant issued a legal notice stating that the plaintiff held the original documents, that he had failed to obtain permission under the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA), that time had expired, and that she was rescinding the agreement and forfeiting the earnest money. The plaintiff replied on 30.04.1991 admitting receipt of the documents, stating that no approach road had been made and permission had therefore not been obtained, and that he would sue for specific performance. A further notice dated 30.07.1992 said the defendant had forcibly taken possession and that he was ready and willing, provided ULCRA permission was obtained. The defendant replied on 11.08.1992 that she did not own the adjoining lands where he wanted a road and that his subsequent conditions showed unwillingness to perform.
The plaintiff filed O.S. No. 432 of 1993 before the Principal Civil Judge (Senior Division), Mysore, on 20.12.1993, seeking specific performance and possession, or alternatively Rs. 3,00,000/- as compensation. His son, PW-1, deposed and twenty-nine documents were exhibited, including four Fixed Deposit Receipts of Rs. 70,000/- each. The defendant led no oral evidence and did not enter the witness box. The Trial Court decreed the suit on 31.01.2002, holding that possession was delivered on 20.12.1990, time was not of the essence, the plaintiff was ready and willing, and the defendant had rescinded the contract without justifiable cause.
By judgment dated 09.12.2009 in R.F.A. No. 418 of 2003, a Division Bench of the High Court at Bangalore reversed the decree. It held that the plaintiff failed to aver and prove readiness and willingness, that his failure to submit an affidavit for ULCRA permission showed lack of willingness, and that though the suit was within limitation, the delay of two years and nine months was critical. The plaintiff's legal representatives appealed to the Supreme Court.
Legal Issues
Click each question to reveal the Supreme Court's answer
Arguments
The battle of arguments before the Supreme Court
Petitioner
Vihaan Kumar
Financial readiness was shown by four FDRs totalling Rs. 2,80,000/-
The appellants argued that the High Court wrongly noted only two FDRs of Rs. 70,000/- each. Ex.-29 reflected four FDRs of Rs. 70,000/- each dated 04.10.1999, 22.11.1999, 03.04.2001 and 23.08.2001, totalling Rs. 2,80,000/-, sufficient to pay the balance of Rs. 2,75,000/-.
Request for demarcation does not show unwillingness; ULCRA permission was the defendant's primary burden
A purchaser insisting on demarcation and measurement facilitates a valid conveyance, and the agreement obliged the defendant to do all acts needed to convey a perfect title. As transferor, the defendant had the primary obligation to initiate ULCRA permission, and the plaintiff, who undertook in his reply of 30.04.1991 to sign necessary documents, was always ready to cooperate; the defendant took no steps for nearly eighteen months.
Delay was not in issue and the suit was within limitation
No issue on delay was framed or argued before the Trial Court and it could not be raised for the first time in appeal; in any event the suit was filed within the limitation period.
Respondent
State of Haryana
No proof of funds for nine years; only Rs. 1,40,000/- in 1999
The respondent argued that from the agreement until the first FDR dated 04.10.1999, nothing was on record to show sufficient funds, and even in 1999 the plaintiff was ready with only Rs. 1,40,000/- and not Rs. 2,75,000/-.
ULCRA permission was a joint obligation which the plaintiff did not discharge
No permission under ULCRA was obtained by the plaintiff, and there was nothing to show that only one person was responsible for obtaining it. The first legal notice made performance conditional on construction of a road, indicating unwillingness, and the defendant rescinded by notice dated 26.04.1991.
Unexplained delay in filing the suit
The agreement required completion within four months, yet the suit was filed only on 20.12.1993 at the very end of the limitation period, which disentitles the plaintiff to specific performance.
Court's Analysis
How the Court reasoned its decision
The Court framed the single question as whether the High Court rightly concluded that readiness and willingness were not established and whether delayed filing undermined them. It began with the statutory mandate: Section 16(c) of the Specific Relief Act, 1963 (as it stood before the amendment of 01.10.2018) required the plaintiff to aver and prove continuous readiness and willingness. Readiness refers to financial capacity, while willingness reflects conduct and intention; both must be seen cumulatively. It relied on N.P. Thirugnanam, Ganesh Dassji, Umabai and Man Kaur to restate that continuous readiness and willingness is a condition precedent, to be judged by the plaintiff's conduct before and after filing of the suit and the surrounding circumstances. Applying this, the Court found that the four FDRs post-dated the suit by several years and therefore could not show financial capacity during the relevant period. Though physical deposit of the consideration in court is not necessary, reliable and acceptable evidence of funds at the relevant time is. On ULCRA, the record showed permission was to be obtained by both parties, yet PW-1 admitted that the plaintiff did not furnish the necessary affidavit or forms; he remained passive. On delay, the Court stressed that equitable relief demands conduct beyond reproach and promptness beyond mere compliance with limitation, referring to the extract in Rajesh Kumar v. Anand Kumar of K.S. Vidyanadam v. Vairavan, Azhar Sultana, Saradamani Kandappan and Atma Ram. The plaintiff had issued notice on 15.04.1991, received a categorical refusal, and filed suit only on 20.12.1993. The Court concluded that the plaintiff failed both limbs and was not entitled to the discretionary relief.
The term 'readiness' refers to the financial capacity, and the term 'willingness' reflects the conduct and intention of the party seeking the relief to perform the contract.
Para 30
States the two-part test that both conditions cumulatively have to be seen for specific performance.
they must nevertheless have to place reliable and acceptable evidence on record to show that they possessed sufficient funds to complete the transaction at the relevant time.
Para 36
Even without depositing money in court, the plaintiff must prove availability of funds through reliable evidence.
the availability of funds must be proved with reference to the relevant point of time and not by relying upon financial documents generated long after the filing of the suit.
Para 37
Explains why FDRs created years after the suit could not help the plaintiff.
the conduct of the party claiming it must be beyond reproach.
Para 40
Sets the standard for a plaintiff seeking the equitable relief of specific performance, including approaching the Court with diligence.
reflects lack of continuous readiness and willingness to perform his part of the contract, which is a sine qua non for the grant of relief of specific performance.
Para 42
The Court's conclusion on the plaintiff's conduct, including the delay of two years and nine months in filing suit.
The Verdict
Relief Granted
No relief was granted to the legal representatives of the original plaintiff, and the suit for specific performance stands dismissed, as held by the High Court.
Directions Issued
- The appeal against the High Court judgment dated 09.12.2009 in R.F.A. No. 418 of 2003 is dismissed
- Specific performance of the agreement to sell dated 20.12.1990 is not granted as the appellants failed to demonstrate readiness and willingness and failed to approach the Court with promptitude
Key Legal Principles Established
Specific performance is an equitable and discretionary remedy; a valid agreement of sale does not entitle the plaintiff to the relief automatically.
Under Section 16(c) of the Specific Relief Act, 1963 (as it stood before 01.10.2018), the plaintiff must aver and prove continuous readiness and willingness to perform his part of the contract.
Readiness refers to financial capacity and willingness refers to conduct and intention; both must be shown cumulatively.
Availability of funds must be proved by reliable evidence for the relevant point of time, not by financial documents generated long after the suit was filed.
Where a statutory permission such as ULCRA clearance has to be obtained by both parties, a purchaser who remains passive and waits for the seller to act may fail to prove willingness.
A plaintiff seeking equitable relief must approach the Court promptly, not merely within the limitation period; unexplained delay can defeat the claim.
Key Takeaways
What different people should know from this case
- If you want a court to order the sale of a property under an agreement, you must be able to show that you had the money ready when it mattered, not just later.
- Keep proof of your funds, such as bank statements or deposits, from the time of the agreement until the suit is filed; deposits made years after filing may not count.
- If a government permission is needed for the sale and both parties have to apply, do your share instead of waiting for the other side.
- If the other side refuses to perform, act quickly: filing near the end of the limitation period can weaken your case for specific performance.
- Specific performance is a discretionary remedy, so courts look at your overall conduct, not just whether a valid agreement existed.
Legal Framework
Applicable laws and provisions
Statutory Provisions
Section 16(c) (as it stood prior to 01.10.2018)
Specific Relief Act, 1963
“A person who fails to aver and 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 is not entitled to specific performance.”
Relevance: The central statutory requirement; the Court held that the plaintiff failed to prove continuous readiness and willingness.
Sections 10 and 20
Specific Relief Act, 1963
“Provisions on cases in which specific performance is enforceable and on the discretion of the court.”
Relevance: Referred to through the quoted authorities to underline that specific performance is discretionary and the court is not bound to grant relief just because a valid agreement exists.
Permission requirement for transfer
Urban Land (Ceiling and Regulation) Act, 1976
“Statute under which permission was required before the sale of the suit property could be completed.”
Relevance: The Court held that both parties had to obtain permission and that the plaintiff's passivity showed lack of willingness.
Related Cases & Precedents
N.P. Thirugnanam (Dead) by LRs. v. Dr. R. Jagan Mohan Rao & Ors.
followed(1995) 5 SCC 115
Held that continuous readiness and willingness is a condition precedent to the grant of specific performance, to be judged by conduct and circumstances.
His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar
followed(1996) 4 SCC 526
Distinguished readiness (capacity including financial position) from willingness (conduct to be scrutinised).
Umabai & Anr. v. Nilkanth Dhondiba Chavan (Dead) by LRs. & Anr.
followed(2005) 6 SCC 243
A finding on readiness and willingness is a mandatory requirement under Section 16(c).
Man Kaur (Dead) by LRs. v. Hartar Singh Sangha
followed(2010) 10 SCC 512
Even if the defendant commits breach, a plaintiff who fails to aver and prove readiness and willingness is barred from specific performance.
Rajesh Kumar v. Anand Kumar & Ors.
followed(2024) 13 SCC 80
Denied specific performance on account of long delay; also extracted K.S. Vidyanadam, Azhar Sultana, Saradamani Kandappan and Atma Ram on delay and conduct.
K.S. Vidyanadam v. Vairavan
cited(1997) 3 SCC 1
A suit for specific performance need not be decreed merely because it is filed within limitation, ignoring the time-limits stipulated in the agreement.
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