2026 Supreme(Mad) 1317

IN THE HIGH COURT OF JUDICATURE AT MADRAS
C.V. Karthikeyan, K.Rajasekar, JJ.
A.Angappa Gounder (died) – Appellant
Versus
V.Gurusamy (died) – Respondent
AS No.847 of 2018
Decided On : 22-04-2026

An unregistered agreement for the sale of immovable property is enforceable for specific performance provided the plaintiff proves readiness and willingness and pays substantial consideration, especially when subsequent alienation of the property is found to be a malafide attempt to defeat the subsisting contractual obligations.

Headnote:(A) Specific Relief Act, 1963 - Sections 10 and 16 - Transfer of Property Act, 1882 - Section 53-A - Registration Act, 1908 - Section 17(1)A - Limitation Act, 1963 - Article 54 - Suit for specific performance of agreement of sale - Unregistered agreement - Enforceability - Readiness and willingness - Whether an unregistered agreement is enforceable for specific performance - Whether plaintiff is entitled to relief of specific performance in presence of subsequent transfer by defendants - Courts have consistently held that readiness and willingness must be demonstrated throughout the pendency of the suit - If the contract is genuine and the plaintiff has performed substantial obligations, the court is empowered to grant specific performance - Delay in seeking judicial remedy is excusable where supervening factors, such as property disputes within the defendant's family or subsequent litigation, create valid grounds for the plaintiff to wait. (Paras 41, 42, 45, 46)

Facts of the case:
The plaintiff entered into an agreement to purchase land and paid a significant portion of the total consideration. Possession of the property was purportedly handed over for the purpose of development into house sites. Disputes arose after the defendants failed to complete the registration, despite the plaintiff continuously expressing readiness to fulfill his obligations. The defendants subsequently sold the property to a related third party for substantially inadequate consideration, claiming the original agreement was invalid due to it being unregistered and contending that the plaintiff was guilty of laches.

Findings of Court:
The court observed that the defendants failed to demonstrate that the plaintiff lacked readiness or willingness. The sale to the third party, occurring shortly after the notice of termination, was deemed an act of bad faith, particularly given the familial relationship and the stark undervaluation of the property relative to the original agreement. The court held that the suit was filed well within the three-year limitation period under the relevant statute, rejecting the claim of unreasonable delay.

Issues: 1. Whether the unregistered agreement of sale was legally enforceable. 2. Whether there was delay and laches on the part of the plaintiff in performing his contractual duties. 3. Whether the plaintiff remained ready and willing to pay the balance consideration throughout the proceedings.

Ratio Decidendi: An unregistered agreement for the sale of immovable property is enforceable for specific performance when the plaintiff provides evidence of substantial part-payment and proves continuous readiness and willingness to perform. The conveyance of the subject property to a related party at an extremely inadequate price, during the pendency of a prior contract, justifies a finding that the defendants acted in bad faith to evade their contractual obligations.

Result: Appeal dismissed; judgment and decree of the trial court confirmed.