VALMIKI J. MEHTA, J.

RFA No. 436/2016 and C.M. Appl. Nos. 26409/2016 (for stay), 39689/2018 (under Section 340 (2) Cr.P.C. filed by the respondents)

1. This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the defendant in the suit impugning the Judgment of the Trial Court dated 14.05.2016 by which the trial court has decreed the suit for specific performance filed by the respondents/plaintiffs with respect to half undivided share of property no. A-3, Kirti Nagar, New Delhi-15 situated on a plot of 698 sq. yards and having 2½ storey built up structure. The subject Agreement to Sell is dated 26.08.2004.

2. The facts of the case are, that the parties entered into an Agreement to Sell on 26.08.2004 for the suit property for a total sale consideration of Rs. 55,00,000/-. Admittedly, only a sum of Rs. 5,00,000/- was paid by the respondents/plaintiffs to the appellant/defendant under the Agreement to Sell. Time fixed under the agreement to sell for completing the transaction was 31.03.2005 and the respondents/plaintiffs claimed that though they were ready to pay the balance sale consideration, but the sale transaction could not go through as income tax clearance certificate was not obtained by the appellant/defendant. The appellant/defendant is an NRI and therefore did not present himself for completion of the sale contract, although the respondents/plaintiffs claim to be always ready and willing to perform their part of the contract. It was also pleaded in the plaint that on the instructions of the appellant/defendant, the respondents/plaintiffs took possession of different parts of the property from the outgoing tenants.

3. The appellant/defendant contested the suit by filing a written statement. It was pleaded that it was not the appellant/defendant but the respondents/plaintiffs who were guilty of breach of contract because they did not complete the sale transaction by 31.03.2005, as they did not have the balance payment/amount to fulfill their end of the bargain. It was pleaded that on account of violation of the respondents/plaintiffs to complete their part of the obligation, hence the agreement to sell was cancelled, and the earnest money of Rs. 5,00,000/- was forfeited. The suit was also prayed to be dismissed because there was a clause in the agreement to sell which entitled the respondents/plaintiffs to seek a refund of double the amount paid. The suit for specific performance was also prayed to be dismissed on the ground that there was a delay of 18 months in filing of the present suit and therefore discretionary relief of specific performance should not be granted.

4. After the pleadings were complete, the trial framed the following issues:-

“(1) Whether the plaintiffs have been ready and willing to perform their part of the agreement to sell and if so, to what effect? OPP

(2) Whether the discretion in the grant of the relief of specific performance is to be exercised in favour of the plaintiff? OPP

(3) Whether time for payment of balance sale consideration was of the essence of the agreement and if so, whether the plaintiff has failed to pay the balance consideration and to what effect? OPD

(4) Relief.”

5. The subject agreement to sell is an admitted document and the same has been exhibited as Ex.PW1/2. There are two issues which arise for consideration and the first being whether the respondents/plaintiffs had the financial capacity and were thus ready to perform their part of the contract, this aspect of readiness/financial capacity is the sine qua non as per Section 16(c) of the Specific Relief Act, 1963. The second aspect is as to whether merely by having made a payment of Rs. 5,00,000/- only out of a total sale consideration of Rs. 55,00,000/- whether the respondents/plaintiffs were entitled to the discretionary relief of specific performance.

6. The trial court has held that the respondents/plaintiffs had the financial capacity because during the course of cross-examinati