Case Note & Summary
The Supreme Court considered a special leave petition arising from a suit for specific performance of an agreement to sell 500 square yards of land in central Delhi. The agreement was executed on February 27, 1975. The respondent seller required cash urgently to celebrate his daughter's marriage on May 16, 1975, and the agreement stipulated that the draft sale deed was to be finalized within seven days and the sale deed registered. Time was expressly made the essence of the contract, and the seller insisted on cash payment. The buyer petitioner was required to supply the final draft sale deed within that period but failed to do so, allegedly because he had not obtained an income tax clearance certificate. The seller sent an approved draft immediately, but the buyer delayed on various pretexts and did not reply to two letters from the seller. The High Court's Single Judge and Division Bench both examined the evidence and held that the buyer was not ready and willing to perform his part of the contract. The buyer produced before the Division Bench by way of additional evidence an account showing he had over one lakh rupees, which fell short of the required amount. Before the Supreme Court, senior counsel for the petitioner contended that the essential term was returning the approved draft sale deed, which he had done, and that the amendments sought were not material. The Court rejected this argument, holding that the essential term was execution of the sale deed within the stipulated period, and the petitioner had not performed it. The Court reiterated the distinction between readiness and willingness: readiness includes financial capacity to pay the purchase price, while willingness relates to conduct. There was no documentary proof that the plaintiff ever had funds to pay the balance consideration. The facts demonstrated lack of financial capacity and an intention to bid for time, which disentitled him because time was of the essence. The High Court had exercised sound judicial discretion in refusing specific performance, which is a discretionary remedy. The special leave petition was dismissed.
Headnote
A) Specific Relief Act, 1963 - Specific Performance - Readiness and Willingness - Section 16(c) - The plaintiff in a suit for specific performance must prove continuous readiness and willingness to perform the contract; readiness includes financial capacity to pay the purchase price, and willingness is a separate mental element inferred from conduct. The petitioner failed to produce documentary proof of funds, did not have sufficient cash, and delayed execution; held not ready and willing (Paras Not mentioned). B) Contract Law - Time as Essence of Contract - Agreement for sale of land with seven-day deadline for draft approval and cash payment due to seller's daughter's marriage - Time held to be the essence of the contract; plaintiff's delay and failure to pay cash in terms of the agreement disentitled him to specific performance (Paras Not mentioned). C) Specific Relief Act, 1963 - Discretionary Relief - Specific performance is an equitable and discretionary remedy; High Court exercised sound judicial discretion in refusing relief where plaintiff lacked readiness and intentionally delayed performance (Paras Not mentioned). D) Evidence - Additional Evidence Before Division Bench - Account showing one lakh and odd fell short of required amount; no documentary proof of balance funds; additional evidence did not establish financial capacity (Paras Not mentioned).
Issue of Consideration
Whether the petitioner was ready and willing to perform his part of the contract as required under clause (c) of Section 16 of the Specific Relief Act, 1963, and whether time was the essence of the contract
Final Decision
Special Leave Petition dismissed; High Court's refusal to enforce specific performance upheld
Law Points
- For specific performance under Section 16(c) of Specific Relief Act
- 1963
- plaintiff must aver and prove continuous readiness and willingness to perform the contract
- readiness includes financial capacity to pay purchase price
- willingness is distinct and inferred from conduct
- time is essence of contract when expressly stipulated and circumstances show urgency
- failure to pay cash consideration and delayed approval of draft sale deed disentitles plaintiff
- specific performance is a discretionary remedy
