Supreme Court Refuses Specific Performance Where Plaintiff Blew Hot and Cold on Relief Sought
A Division Bench of Justices Prashant Kumar Mishra and N.V. Anjaria restores the Trial Court decree, holding inconsistent conduct and absent proof of continuous financial readiness bars equitable specific performance relief.
The Supreme Court on 31 July 2026 set aside a 2011 Madras High Court decree granting specific performance of an agreement to sell a property in Udhagamandalam, Nilgiris District. The Court found that the plaintiffs had neither demonstrated continuous financial readiness throughout the period from agreement to decree, nor approached the Court with clean hands, having simultaneously sought recovery of the advance amount through a criminal complaint while pressing for specific performance in civil proceedings. The judgment, authored by Justice Prashant Kumar Mishra for a Division Bench also comprising Justice N.V. Anjaria, restores the Trial Court's refusal of specific performance and directs that the plaintiffs be permitted to withdraw the ₹1,40,00,000 deposited during the appeal.
The Property, the Agreement, and the Dispute
V.N.A.S. Chandran, the appellant and original Defendant No. 1, owns land and building at Door No. 6, Church Hill Road, Udhagamandalam, admeasuring 1 acre and 33 cents. He had purchased a larger parcel of 1 acre and 62 cents from M/s. Spencer & Company Limited on 09.06.1994, and sold off 0.29 cents on 06.07.1994, leaving him with the suit property.
On 01.04.2004, Chandran entered into an Agreement to Sell with Mrs. S. Venila (Plaintiff No. 1) for a total consideration of ₹2,25,00,000. On the same date, he executed a General Power of Attorney in favour of Venila's husband, V. Sowrirajan (Plaintiff No. 2), authorising him to sell the property, execute sale deeds, receive consideration, deliver possession, and evict tenants. Sowrirajan also issued an undertaking letter on that date, stating it was irrevocable and formed part of the agreement.
Clause 7 of the Agreement to Sell required the sale to be completed within 60 days from the date of setting aside an ex-parte preliminary decree in a partition suit (OS No. 403 of 2003) concerning the property. Clause 13 made time of the essence. The ex-parte decree was set aside on 06.04.2005.
Disputes arose quickly. The first advance cheque for ₹25,00,000 dated 01.04.2004 was dishonoured on 07.04.2004 for want of funds. A further cheque of ₹5,00,000 dated 24.05.2004 was also dishonoured. Chandran's letter of 10.04.2004 acknowledged actual receipt of ₹25,00,000 in cash instalments in lieu of the dishonoured cheque, and his letter of 13.01.2005 recorded the balance receivable as ₹1,40,00,000.
On 16.04.2004, Sowrirajan, acting under the Power of Attorney, executed a sub-agreement with Defendant No. 5, R.P. Rajan, for sale of the same property for ₹1,50,00,000, receiving ₹10,00,000 as advance. On 04.05.2005, Chandran revoked the Power of Attorney citing its misuse through this sub-agreement. On the same day, he demanded payment of the balance ₹1,65,00,000 within sixty days. On 24.06.2005, his counsel issued legal notices purporting to terminate the agreement with effect from 06.06.2005.
On 05.09.2005, Chandran lodged a criminal complaint against Sowrirajan before the Judicial Magistrate No. 2, Madurai. On 27.12.2005, Sowrirajan filed a counter-complaint before the Chief Metropolitan Magistrate, Egmore, alleging cheating and criminal breach of trust and requesting the Police to trace Chandran and recover ₹85,00,000. FIR No. 11/2006 was registered under Sections 420, 406 and 506 of the Indian Penal Code, 1860. Both complaints were eventually closed.
The civil suit was originally filed before the Madras High Court on 13.09.2005 and subsequently transferred and renumbered as OS No. 11 of 2006 before the District Judge, Nilgiris, Udhagamandalam. It sought specific performance or, alternatively, recovery of ₹2,00,00,000 with interest at 24% per annum.
Trial Court: Advance Proved, Specific Performance Refused
The District Judge, in his judgment dated 22.11.2007, found that Chandran had received an advance of ₹85,00,000 and that there had been no valid assignment of Venila's rights to Defendant No. 5, since the sub-agreement had been cancelled and Defendant No. 5's suit (OS No. 75 of 2005) had been dismissed. The Trial Court also found that time was not strictly of the essence, as performance depended on events outside the plaintiffs' control.
Despite these findings favouring the plaintiffs, the Trial Court refused specific performance. It observed that Sowrirajan's criminal complaint had explicitly sought recovery of ₹85,00,000 and had stated he would not have entered the agreement knowing of the injunction in the partition suit. Venila never disowned these averments and did not enter the witness box. The Trial Court held the plaintiffs were blowing hot and cold and had not approached the Court with clean hands. The suit was accordingly decreed only for refund of ₹85,00,000 with interest at 15% per annum from the date of suit, with a charge on the property under Section 55(6)(b) of the Transfer of Property Act, 1882.
High Court: Specific Performance Decreed
The plaintiffs appealed, and the Division Bench of the Madras High Court in AS No. 443 of 2008, vide judgment dated 11.10.2011, allowed additional evidence in the form of Chandran's own complaint dated 05.09.2005 (marked as Ex. A-48) and held it demonstrated the counter-complaint was a mere retaliatory measure.
The High Court found that since the complaint was filed by Sowrirajan (Plaintiff No. 2), not Venila (Plaintiff No. 1), the actual vendee, it did not impair her right to specific performance. It further held that Chandran had not specifically pleaded in his written statement that the plaintiffs lacked funds, and therefore could not raise this contention on appeal. On readiness and willingness, the High Court relied on a Memorandum of Understanding dated 28.04.2005 for sale of the plaintiffs' Mylapore flats and a demand draft for ₹1,40,00,000 produced at the hearing of the appeal itself on 14.06.2011. The High Court directed Venila to deposit ₹1,40,00,000 before the Trial Court within four weeks, upon which Chandran was to execute the sale deed, failing which the Trial Court was to execute it on his behalf.
What the Supreme Court Held on Readiness and Willingness
The Supreme Court found the High Court's approach on readiness and willingness erroneous on multiple grounds.
First, although the Trial Court had not separately framed an issue on readiness and willingness, it had, while deciding Issue (vi), found that the plaintiffs had no funds at the time of filing the suit, had not deposited the balance amount, and had not kept funds ready from the date of the agreement.
Second, the Court held that a defendant's denial during examination — that Plaintiff No. 1 never met the demand for funds and was not ready and willing to pay the balance — was itself a challenge to readiness and willingness, regardless of whether it appeared in the written statement.
Third, the demand draft of ₹1,40,00,000 produced only on 14.06.2011, at the close of High Court hearing, was insufficient. The Court applied the settled standard that in a suit for specific performance, the plaintiff must demonstrate continuous readiness and willingness from execution of the agreement through to the decree. Relying on N.P. Thirugnanam (Dead) by LRs. v. Dr. R. Jagan Mohan Rao and Others (1995) 5 SCC 115, the Court reiterated: “Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract.”
Fourth, the MoU dated 28.04.2005 with Dr. B.A. James Santhosam for sale of the Mylapore properties was not mentioned in Sowrirajan's reply letter of 23.05.2005, nor in the plaint filed on 12.09.2005. The MoU did not show money being transferred to the plaintiffs' account, and the sale deed under it was executed only on 29.05.2006, after the suit was filed. The dishonour of two cheques for ₹25,00,000 and ₹5,00,000 respectively for insufficient funds was taken as direct evidence that the plaintiffs lacked funds in their bank account at material times.
On Clean Hands and Inconsistent Positions
The Court upheld the Trial Court's clean hands finding. It rejected the High Court's characterisation of Sowrirajan's FIR as a benign counterblast, holding that even a retaliatory motive does not excuse a plaintiff from the consequences of expressly requesting police recovery of the advance and simultaneously asserting that the defendant had fraudulently suppressed the injunction — a fact that was expressly referred to in Clause 7 of the agreement itself.
The Court was equally unimpressed by the argument that the FIR was Sowrirajan's act, not Venila's. Sowrirajan was central to the transaction from its inception through the Power of Attorney, the undertaking letter, and his conduct throughout. Venila did not step into the witness box to disown his averments. The Court held that “Plaintiffs cannot seek to be treated as a composite unit when it benefits them, but resile from the position when it does not.”
The Court also found that the plaintiffs had adopted irreconcilable positions across proceedings. In their legal notices of 23.05.2005 and in pleadings in OS No. 75 of 2005 (Defendant No. 5's suit), the plaintiffs had asserted the sub-agreement was valid and that rights under the Agreement to Sell had been assigned to Defendant No. 5 with Chandran's knowledge. In the present suit, they consistently denied any such assignment. These contradictory stances, the Court found, could not be reconciled.
The observations of the Sub-Court in OS No. 75 of 2005 were also noted: that suit had been undervalued to invoke jurisdiction and that Defendant No. 5 was acting hand in hand with Sowrirajan and was no more than a “name-lender” or “puppet plaintiff.”
On the Need for a Declaratory Relief
Chandran had also urged that the suit was not maintainable because the plaintiffs did not seek a declaration that his termination of the Agreement to Sell was invalid. The Court, relying on the recent judgment in Annamalai v. Vasanthi and Others (2025 INSC 1267), held that where the agreement confers no contractual right on the vendor to unilaterally terminate it, such termination amounts to repudiation, and the aggrieved party may treat the contract as subsisting and sue directly for specific performance without seeking declaratory relief. Since the Agreement to Sell in this case conferred no such right on Chandran, no declaratory relief was required. In any event, the Trial Court had expressly framed and decided Issue (iv) on the validity and effect of the termination, so the question of maintainability could not survive.
The Passage of Time and Hardship
Beyond conduct, the Court noted that more than two decades had passed since the Agreement to Sell was concluded. Chandran was described as a man of highly advanced age, and Sowrirajan had passed away during the pendency of the appeals. Relying on Mrs. Saradamani Kandappan v. Mrs. S. Rajalakshmi & Ors. (2011 INSC 446) and Nanjappan v. Ramasamy & Anr. (2015 INSC 152), the Court held that such a long lapse of time militates against specific performance. Hardship to the defendant is a recognised factor in the exercise of discretion under Section 20 of the Specific Relief Act, 1963, as the Court had reiterated in Kamal Kumar v. Premlata Joshi & Ors.
Order
The Supreme Court allowed Civil Appeal Nos. 7825–7828 of 2013, set aside the Division Bench judgment and decree of the Madras High Court dated 11.10.2011, and restored the judgment and decree of the District Judge, Nilgiris, dated 22.11.2007. The plaintiffs were permitted to withdraw the sum of ₹1,40,00,000 deposited with the State Bank of India, Udhagamandalam Branch on 12.11.2011, which had been placed in a fixed deposit pursuant to a Supreme Court order dated 20.01.2012, together with accrued interest. No order as to costs was made.