Late FDRs and 33-month delay sink specific performance claim, Supreme Court rules

A Division Bench dismissed the buyer’s appeal, holding that funds shown years after suit and a delayed filing defeat the readiness and willingness required under Section 16(c).

A buyer who wanted to enforce a 1990 agreement to sell a vacant plot in Mysore has lost his fight in the Supreme Court. In Mohammed Khaleel (D) through LRs & Ors. v. Jayamma, a Division Bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria dismissed the appeal on 23 June 2026 and left intact the Karnataka High Court’s reversal of a trial court decree of specific performance.

The Court held that the appellants failed to establish continuous readiness and willingness to perform their part of the contract, a condition precedent under Section 16(c) of the Specific Relief Act, 1963 as it stood before the 2018 amendment. Fixed deposits relied upon to prove financial capacity were created years after the suit was filed, and the suit itself came two years and nine months after the dispute crystallised. Both factors disentitled the buyer to discretionary equitable relief.

How the dispute reached the Court

Mohammed Khaleel, the original plaintiff, entered into an agreement to sell with Jayamma on 20 December 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, with the sale deed to be registered within four months and the balance Rs. 2,75,000 payable before the Sub-Registrar at registration.

The defendant handed over title documents, tax receipts, an encumbrance certificate dated 6 August 1989 and other papers. The plaintiff claimed possession was delivered and that the defendant had agreed an approach road would be formed. The defendant’s written statement asserted there was already an approach road and no space to carve out a separate one.

A chain of legal notices followed. The plaintiff’s notice dated 15 April 1991 was not served due to a wrong house number. The defendant’s notice dated 26 April 1991 rescinded the agreement and forfeited the earnest money, citing failure to obtain permission under the Urban Land (Ceiling and Regulation) Act, 1976 and expiry of time. The plaintiff issued further notices on 30 April 1991 and 30 July 1992.

The suit, O.S. No. 432 of 1993, was filed before the Principal Civil Judge (Senior Division), Mysore, on 20 December 1993. The plaintiff sought specific performance and possession, or alternatively compensation of Rs. 3,00,000.

What the trial court and High Court found

The trial court decreed the suit on 31 January 2002. It held that possession was delivered on 20 December 1990, that time was not of the essence, that the plaintiff was ready and willing, and that the defendant rescinded the contract without justifiable cause. The defendant led no oral evidence, did not enter the witness box and was not cross-examined.

The High Court at Bangalore, by judgment dated 9 December 2009 in R.F.A. No. 418 of 2003, reversed the decree. It found that the plaintiff failed to aver and prove readiness and willingness, that his failure to file an affidavit for ULCRA permission showed unwillingness, and that a delay of two years and nine months in filing the suit was critical even though the suit was within limitation.

The continuing nature of readiness and willingness

The Court framed a single question: whether the plaintiff established readiness and willingness, and whether the delayed filing undermined it. Section 16(c), as it stood before 1 October 2018, required the person seeking specific performance to aver and prove continuous readiness and willingness.

The Court separated the two limbs. “Readiness” refers to financial capacity; “willingness” reflects conduct and intention. Both must be shown cumulatively. The Bench relied on N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, which held that continuous readiness and willingness is a condition precedent, and that the consideration to be paid “must of necessity be proved to be available.”

The Court also drew on His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar on the distinction between readiness and willingness, Umabai v. Nilkanth Dhondiba Chavan on the mandatory nature of the Section 16(c) finding, and Man Kaur v. Hartar Singh Sangha, which held that a plaintiff barred for want of readiness cannot succeed even where the defendant commits breach.

Why the FDRs and the ULCRA conduct failed

The appellants argued they held Rs. 2,80,000 through four fixed deposit receipts of Rs. 70,000 each, sufficient to cover the balance of Rs. 2,75,000. The Court found the FDRs were dated 4 October 1999, 22 November 1999, 3 April 2001 and 23 August 2001 — all created years after the suit was filed in 1993.

While physical deposit of the consideration before the Court was not required, the appellants still had to place reliable evidence that funds existed at the relevant time. The Court found no material showing the balance was available at execution, within the four-month window, or even at the date of filing in 1993. Funds proved by documents generated long after the suit could not establish financial readiness for the relevant period.

On ULCRA permission, the Court read the record as showing both parties had to apply. The testimony of PW-1, the plaintiff’s son, made it evident that the plaintiff did not furnish the necessary affidavit or forms and instead remained passive, waiting for the defendant to act. That conduct, the Court held, showed a failure to prove continuous readiness and willingness.

The weight of unexplained delay

The Court held that for equitable relief, the plaintiff’s conduct must be beyond reproach, including approaching the Court promptly, not merely within limitation. It cited Rajesh Kumar v. Anand Kumar, decided by one of the judges on the Bench, which collected earlier authority. Those decisions — K.S. Vidyanadam v. Vairavan, Azhar Sultana v. B. Rajamani, Saradamani Kandappan v. S. Rajalakshmi and Atma Ram v. Charanjit Singh — hold that a suit need not be decreed simply because it is within limitation, and that courts frown on suits not filed soon after breach or refusal.

Applying this, the Court noted the first legal notice was issued on 15 April 1991, the defendant’s categorical refusal came on 26 April 1991, and yet the suit was filed only on 20 December 1993 — two years and nine months later. This reflected a lack of continuous readiness and willingness, which the Court described as a sine qua non for relief.

Outcome

The Court held that the appellants neither demonstrated readiness and willingness nor approached the Court with promptitude, and so were not entitled to the discretionary equitable relief of specific performance. The appeal was dismissed, leaving the High Court’s judgment in place.