S. B. SINHA, J, J.

( 1 ) LEAVE granted.

( 2 ) DEFENDANT in a suit for specific performance of contract is before us aggrieved by and dissatisfied with a judgment and order dated 15. 09. 2005 passed by the High Court of Karnataka in R. S. A. No. 238 of 2000 whereby and whereunder the appeal preferred by Respondent No. 1 herein arising out of a judgment and decree dated 25. 01. 2000 passed in R. A. No. 5 of 1992 was dismissed.

( 3 ) AN agreement for sale was entered into by and between the defendant- appellant and the plaintiff - Respondent No. 1 for sale of 4 acres, 4 guntas of land in Survey No. 112/a, Chhidri village. A suit for specific performance of contract was filed by the plaintiff - Respondent No. 1 on the premise that the appellant did not perform his part of contract. The said suit was dismissed. It was, however, inter alia held by the Trial Court that respondent No. 1 was all along ready and willing to perform its part of contract. An appeal preferred thereagainst by the respondent No. 1 was dismissed.

( 4 ) THE First Appellate Court in arriving at its decision inter alia held:

(i) Respondent No. 1 without any reason withheld payment of balance consideration of Rs. 13,100/- and, thus, failed to perform its part of contract.

(ii) Respondent No. 1 was not always ready and willing to perform its part of contract and somehow wanted to transfer liability on the defendant as regards conversion fine and measurement charges.

(iii) The findings of the Trial Court that the plaintiff Respondent No. 1 was always ready and willing to perform its part of contract was not correct.

(iv) The plaintiff Respondent No. 1 did not approach the court with clean hands and, thus, was not entitled to the discretionary relief of specific performance of contract.

( 5 ) ON a second appeal having been preferred by Respondent No. 1 before the High Court, the following substantial questions of law were framed:

"i) Whether both the courts have erred in refusing the specific performance although the respondents received full consideration amount and a sum of Rs. 8,000/- towards development charges?

ii) Whether the appellate court is justified in holding that the plaintiff was not ever ready and willing to perform his part of the contract?

iii) Whether the courts below have not committed any error in directing to refund the earnest money?"

( 6 ) THE High Court inter alia considering the stipulations made in agreement for sale and other evidences brought on records, opined:

(i) It was for the defendant to bear the conversion expenses. Admittedly when the amount of Rs. 94,000/- and odd was paid to him, he was bound to perform his part of contract by executing a deed of sale in favour of the plaintiff Respondent No. 1.

(ii) The First Appellate Court failed to interpret the clauses of the agreement in their proper perspective.

(iii) It applied the provisions contained in Section 22 of the Specific relief Act directing refund of the earnest amount only in a mechanical manner.

( 7 ) THE plea of Respondent No. 1 that it was ready and willing to forgo four guntas of land was held by the High Court sufficient to meet the demand of the defendant appellant stating:

"15. For the foregoing reasons, it is to be held that both the Court below have erred in interpreting Ex. P. 1 in the proper perspective and rejecting for specific performance. Hence, the substantial question No. 1 rests in favour of the appellant and further the finding of the lower appellate court for the plaintiff was not ready and willing to perform his part of contract is with a basis and as such the same is to be reversed and as also the 2nd substantial question of law to be held in favour of the appellant. In so far as the 3rd substantial question of law is concerned in the event if the courts below have considered the fact of hardship and in the event if the courts below would have ordered for specific performance, then order for refund of money instead of ordering for specific performance wo