Specific Relief Act, 1963 — Section 16(c) (prior to 2018 amendment) — Specific performance — Readiness and willingness — Continuous obligation.
(A) Specific Relief Act, 1963, S.16(c) — Specific performance — Readiness and willingness — Continuous requirement — Mandatory condition precedent.
A plaintiff seeking specific performance must both plead and prove continuous readiness and willingness to perform his part of the contract from the date of agreement till the date of decree. Failure to establish either financial readiness or conduct indicating willingness disentitles the plaintiff from obtaining the equitable relief of specific performance. (Paras 29 to 34)
(B) Specific performance — Readiness — Meaning of.
“Readiness” refers to the financial capacity of the plaintiff to perform the contract, whereas “willingness” relates to the conduct, intention and bona fide desire to complete the transaction. Both requirements must coexist and are to be examined cumulatively. (Para 30)
(C) Specific performance — Financial capacity — Fixed Deposit Receipts created long after institution of suit — Evidentiary value.
FDRs created several years after institution of the suit cannot establish the plaintiff’s financial readiness during the relevant period, namely from the date of agreement till filing of the suit. Availability of funds must be proved with reference to the period during which contractual obligations were required to be performed. (Paras 35 to 37)
(D) Specific performance — Plaintiff not possessing balance consideration at relevant time — Effect.
Though actual deposit of sale consideration in Court is unnecessary, the plaintiff must adduce reliable evidence showing possession of sufficient funds at the relevant time. Absence of such evidence is fatal to a claim for specific performance. (Paras 36 and 37)
(E) Urban Land (Ceiling and Regulation) Act, 1976 — Permission required from both parties — Failure of purchaser to cooperate — Effect.
Where statutory permission under ULCRA was required to be obtained by both vendor and purchaser, failure of the purchaser to furnish necessary affidavits and forms and his passive conduct amounted to failure to establish continuous readiness and willingness. (Para 38)
(F) Specific performance — Delay in filing suit — Limitation and equitable considerations — Distinction.
Mere institution of a suit within the prescribed period of limitation does not automatically entitle a plaintiff to specific performance. The Court may consider whether the plaintiff approached the Court with reasonable promptitude and diligence. Delay, though within limitation, may disentitle the plaintiff to the equitable relief of specific performance. (Paras 39 to 42)
(G) Equitable relief — Conduct of plaintiff — Importance.
Specific performance being a discretionary and equitable remedy, the conduct of the plaintiff must be beyond reproach. Delay in seeking relief, lack of financial readiness, failure to take contractual steps, and passive conduct are relevant circumstances in refusing relief. (Paras 40 to 43)
Specific Relief Act, 1963 — Section 16(c) — Twin requirements.
The statutory requirements of “readiness” and “willingness” constitute twin mandates under Section 16(c). A plaintiff must establish:
- Financial ability to perform the contract.
- Continuous conduct demonstrating intention to perform.
Absence of either condition is sufficient to deny the relief of specific performance. (Paras 30, 34 and 43)
Delay — Suit filed at the fag end of limitation.
Although the suit was instituted within the limitation period, the plaintiff waited nearly two years and nine months after the defendant's refusal to perform the contract. Such unexplained delay reflected absence of continuous readiness and willingness and disentitled the plaintiff from obtaining equitable relief. (Paras 41 and 42)
Held:
The appellants failed to establish continuous readiness and willingness to perform their obligations under the agreement. The FDRs relied upon were created long after institution of the suit and did not establish financial readiness at the relevant time. The plaintiff also failed to cooperate in obtaining statutory permission and approached the Court after considerable delay. Consequently, the discretionary relief of specific performance was rightly refused by the High Court. (Paras 35 to 43)
Ratio Decidendi
A plaintiff seeking specific performance must establish continuous readiness and willingness from the date of agreement until decree. Financial capacity must exist at the relevant point of time and not be demonstrated by subsequent acquisition of funds. Further, a suit filed at the end of the limitation period, coupled with lack of diligence and absence of prompt action, may disentitle the plaintiff to the equitable relief of specific performance.
Cases Referred
- N.P. Thirugnanam (Dead) by LRs. v. Dr. R. Jagan Mohan Rao
- His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar
- Umabai v. Nilkanth Dhondiba Chavan
- Man Kaur v. Hartar Singh Sangha
- Rajesh Kumar v. Anand Kumar
- K.S. Vidyanadam v. Vairavan
- Azhar Sultana v. B. Rajamani
- Saradamani Kandappan v. S. Rajalakshmi
- Atma Ram v. Charanjit Singh
Result
Appeal Dismissed.
The judgment of the High Court setting aside the decree for specific performance was affirmed. The plaintiffs were held not entitled to the equitable and discretionary relief of specific performance owing to failure to prove continuous readiness and willingness and because of their delayed approach to the Court. (Para 44)
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