The Supreme Court of India,  overturned the High Court's decree for specific performance. The Court restored the Trial Court's decision dismissing the buyer's claim, citing failure to demonstrate readiness and willingness to perform contractual obligations and financial incapacity.

I. Background

• Facts: The buyer (respondent) sought specific performance of a sale agreement for a tenanted property, agreeing to pay ₹2.3 crores to the sellers (appellants). Initial advance of ₹10 lakhs was paid, with balance due in four months. Sellers undertook to deliver the property free of tenants at sale.
• Conflict: Despite the four-month period lapsing, the buyer alleged readiness while sellers claimed buyer failed to fulfill conditions.

II. Key Issues

1. Was time of the essence in the agreement?
2. Did the buyer demonstrate readiness and willingness to fulfill contractual obligations?
3. Was the High Court justified in granting specific performance?

III. Decisions by Lower Courts

Trial Court:

• Found the agreement valid but dismissed the suit for specific performance due to buyer's lack of readiness and willingness.

High Court:

• Reversed the decision, ruling time was not the essence of the contract and granted specific performance to the buyer.

IV. Supreme Court's Observations and Ratio

1. Time of the Essence:

   • The Court, while noting time was stipulated as essential, emphasized that the clause was qualified by the obligation to evict tenants.
   • Time was deemed not of the essence due to sellers’ acceptance of payments beyond the deadline.

2. Readiness and Willingness:

   • The buyer failed to prove financial capability, as her bank accounts lacked sufficient funds.
   • Discrepancies in buyer’s conduct, including delays in returning a refund draft, raised doubts about her genuine intent.

3. Equitable Relief:

   • Specific performance being discretionary, the Court denied relief, citing buyer’s non-performance and inability to fulfill obligations despite repeated opportunities.

V. Conclusion and Relief

• The appeals were allowed, restoring the Trial Court's dismissal. The sellers were directed to refund the ₹25 lakh advance payment.

Acts and Sections Discussed:

1. Specific Relief Act, 1963

   • Section 10: Enforces specific performance under valid circumstances.
   • Section 16(c): Mandates continuous readiness and willingness.
   • Section 20: Highlights discretionary nature of specific performance relief.

2. Civil Procedure Code (CPC), 1908

   • Section 96: First appeals procedure.
   • Order VII Rule 11: Rejection of plaint if the suit is barred by law.

Subjects:

#SpecificPerformance #PropertyDispute #EquitableRelief