1. Suit for specific enforcement of an agreement to sell the property. (Para 3 )
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2026 Supreme(Kar) 834
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
V Srishananda, J.
Smt. Kanakalakshmi, W/o Shivanna - Appellant
Versus
Smt. Mahadevamma, W/o Late M. Madashetty - Respondent
Regular Second Appeal No. 2078 of 2021 (SP)
Decided On : 03-07-2026
Advocates Appeared:
For the Appellant :Sri. M.J. Alva, Advocate
For the Appellant :Sri. M.J. Alva, Advocate
Under Section 16(c) of the Specific Relief Act, a plaintiff must prove continuous readiness and willingness. Failure to pay agreed installments or deposit the balance sale consideration in court indicates a lack of such readiness, justifying the denial of specific performance.
Headnote:(A) Specific Relief Act - Section 16(c) - Suit for specific performance of agreement to sell - Readiness and willingness - Plaintiff failed to pay the stipulated installment of sale consideration - Subsequent delay in filing the suit and failure to deposit the balance consideration in court - Requirements of Section 16(c) not fulfilled - Relief of specific performance rightly denied. (Paras 12, 19, 20)
(B) Specific Performance - Readiness and willingness must be continuous from the date of execution of the agreement until the date of conclusion of the contract - Mere claim of readiness without attending circumstances to substantiate willingness is insufficient. (Para 7)
Facts of the case:
A suit for specific enforcement of an agreement to sell was filed where a sum was paid as earnest money. The agreement required a further installment to be paid by a specific date, which the plaintiff failed to perform. The defendants issued legal notices forfeiting the earnest money and cancelling the agreement. The plaintiff filed the suit for specific performance several years later, claiming readiness and willingness, although the balance consideration was not paid during the interregnum nor deposited in court at the time of filing the suit.
Findings of Court:
The courts below were justified in denying specific performance. The order for the refund of the advance amount with interest was just and proper, as unilateral forfeiture of earnest money would result in unjust enrichment.
Issues: Whether the plaintiff fulfilled the requirements of readiness and willingness as mandated under Section 16(c) of the Specific Relief Act to entitle them to specific performance of the contract.
Ratio Decidendi: To obtain a decree for specific performance, the plaintiff must prove continuous readiness and willingness. The failure to pay a scheduled installment, the lack of immediate action following cancellation notices, and the failure to deposit the balance sale consideration upon filing the suit are indicative of a lack of readiness and willingness under Section 16(c) of the Specific Relief Act.
Result: Admission declined. Appeal is dismissed.
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2. Plaintiff argued readiness and willingness; defendant argued plaintiff failed to perform the contract and suit was time-barred. (Para 4 , 5 )
3. Plaintiff failed to pay the installment as agreed and did not file suit promptly after the defendant's notices. (Para 7 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 )
4. Merely pleading readiness is insufficient without actual payment or deposit of balance consideration. (Para 17 , 19 , 20 )
5. Appeal dismissed; trial court's order for refund of earnest money with interest was upheld. (Para 21 )
6. What constitutes readiness and willingness to perform a contract for specific performance?
Readiness and willingness must be continuous from the agreement's date to the suit's conclusion, demonstrated by actual payment or deposit, not mere claims. (Para 17 , 19 , 20 )
7. Is a separate demand notice required before filing a suit for specific performance?
No, a separate demand notice is not mandatory if the plaintiff's reply notice itself demanded execution of the sale deed. (Para 9 )
8. What is the effect of a plaintiff's silence and delay in filing a suit after a defendant's notice of forfeiture?
Failure to immediately contest the forfeiture or file suit within a reasonable time after the defendant's notice indicates a lack of readiness and willingness. (Para 14 , 15 , 17 )
9. Can a plaintiff succeed in a suit for specific performance without depositing the balance sale consideration?
No, the plaintiff must at least deposit the balance consideration in court by the time of filing the suit to prove genuine readiness. (Para 19 )
JUDGMENT :
V Srishananda, J.
1. Heard Sri.M.J.Alva, learned counsel for the appellant. None appears for the respondents.
2. Present second appeal is filed by the plaintiff being aggrieved by the order passed by both the Courts in decreeing the suit in part and ordering refund of advance sale consideration/earnest money in a sum of Rs.1,05,000/- with interest at the rate of 9% p.a.
3. Facts of the case are as under:
3.1. A suit for specific enforcement of the agreement to sell dated 19.04.2007 came to be filed in O.S.No.162/2010.
3.2. Plaint averments would reveal that on 19.04.2007 an agreement came into being between the plaintiff and defendant and , a sum of Rs.1,05,000/- was paid as earnest money as against the sale consideration of Rs.2,35,000/-. Plaintiff had to pay next installment of the sale consideration in a sum of Rs.1,20,000/- on or before June, 2007 which he was ready to pay but for the reasons best known, parties did not see eye to eye and payment was not made.
3.3. Left with no alternative, on 06.10.2007, defendants got issued a legal notice intimating the plaintiff that since the next installment of sum of Rs.1,20,000/- was not paid on or before June, 2007, defendants have forfeited sum of Rs.1,05,000/- as per the terms of the contract and cancelled the agreement. Thereafter, plaintiff instituted the present suit on 01.04.2010.
4. Pursuant to the suit summons, defendants entered appearance and resisted the suit by contending that plaintiff did not adhere to the terms of the contract despite issuing two legal notices one on 06.10.2007 and yet another notice on 03.11.2007. Belatedly a suit is filed after the suit agreement was cancelled and advance amount was forfeited.
5. Learned Trial Judge in the light of the rival contentions of the parties, raised necessary issues and decreed the suit of the plaintiff in part and directed the refund of Rs.1,05,000/- earnest money with interest at the rate of 9% p.a. noting the fact that there could not have been unilateral forfeiture of the advance amount and also noting the fact that earnest money retained by the defendants would result in unjust enrichment.
6. Being aggrieved by the same, plaintiff filed an appeal before the First Appellate Court in RA No.94/2016.
7. Learned Judge in the First Appellate Court after securing the records, heard the arguments of the parties in detail and on reappreciation of the material evidence placed on record, dismissed the appeal inter alia holding in paragraph Nos.15 to 18 as under:
“15. The terms of Ex.P1 clearly discloses that, in addition to the advance consideration paid at the time of the execution of the agreement, the plaintiff ought to have paid Rs.1,20,000/ in the month of June 2007 in favour of the defendant, even the execution of the registered sale deed. Had the plaintiff made that payment in time, only Rs.10,000/ would have remained as balance sale consideration at the time of registration of sale deed. The said condition found in page No.2 of Ex.P1 is as follows :
16. The defendant initiated the correspondence, but not the plaintiff. The Ex.P2 is the legal notice got issued by the defendants to the plaintiff on 06.10.2007. They have stated there in that the plaintiff has failed to perform her part of contract and that the defendant would forfeit the advance amount paid by the plaintiff under the agreement. Whether the defendant is entitled to forfeit the amount need not be considered, as already the decree for refund of advance consideration has remained unchallenged by the defendants. The Ex.P3 is the reply notice got issued by the plaintiff. The plaintiff was demanding that the defendant should make ready the documents necessary for registration and then she would pay the balance consideration. Thereafter, the defendants got issued Ex.P7 legal notice dated 03.11.2007 therein they have demanding specifically as follows :
“Therefore, you are hereby called upon to pay further advance amount of Rs.1,30,000/ to our client within 10 days fr
