1. Specific performance of agreement of sale — Plaintiff sued for execution of sale deed for agricultural land. (Para 2 , 3 , 4 )
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2026 Supreme(Telangana) 348
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT: HYDERABAD
K. LAKSHMAN, B.R. MADHUSUDHAN RAO, JJ.
M/s Pooja Crafted Homes Pvt. Ltd. - Appellant
Versus
Mr Riazuddin Ahmed – Respondent
Appeal Suit No.95 of 2022
Decided On : 05-05-2026
Advocates Appeared:
For the Petitioner: V. Ravinder Rao rep. Atla Abhinandhan Reddy
For the Respondent: M. Narender Reddy rep. P. Raghavendra Reddy
For the Petitioner: V. Ravinder Rao rep. Atla Abhinandhan Reddy
For the Respondent: M. Narender Reddy rep. P. Raghavendra Reddy
Specific performance requires the plaintiff to prove continuous readiness (financial capacity) and willingness (conduct) from the agreement date to the decree. Valid termination notices sent to the contractual address and the fundamental physical alteration of the property render such equitable relief unenforceable.
Headnote:(A) Specific Relief Act, 1963 - Section 16(c) - Specific performance of agreement of sale - Readiness and willingness - To obtain the equitable relief of specific performance, the plaintiff must aver and prove continuous readiness and willingness to perform the essential terms of the contract from the date of the agreement until the decree - "Readiness" refers to the financial capacity of the purchaser, while "willingness" refers to the intention and conduct - Mere assertions in pleadings without cogent evidence of fund availability are insufficient (Paras 51, 57, 59, 62, 69).
(B) Contract Law - Time as essence of contract - In contracts for the sale of immovable property, there is no general presumption that time is of the essence; however, the court must examine the express terms of the contract, the nature of the property, and the surrounding circumstances - Where the conduct of the purchaser demonstrates a lack of diligence and failure to adhere to agreed timelines, the vendor is justified in terminating the agreement (Paras 34, 37, 40, 43-47).
(C) General Clauses Act - Section 27 - Service of notice - Sending a legal notice to the address explicitly mentioned in the agreement of sale is considered sufficient service, even if the notice is returned with an endorsement such as "insufficient address" (Paras 77, 94-95).
(D) Contract Law - Frustration and Equitable Relief - Where the subject matter of the contract has been fundamentally altered by intervening events, such that performance cannot be secured with precision (e.g., conversion of open land into a completed villa project), the contract may be deemed unenforceable or the grant of specific performance inequitable (Paras 102, 105).
Facts of the case:
The plaintiff entered into an agreement for the purchase of agricultural land, paying an advance. The balance was to be paid within three months, subject to survey, boundary demarcation, and verification of a marketable title. The plaintiff failed to conduct the survey or pay the balance within the stipulated period. After the deadline, third-party objections were raised. The defendant issued demand and subsequent cancellation notices to the address provided in the agreement. The defendant then entered into a development agreement, and villas were constructed on the land. The plaintiff eventually filed a suit for specific performance after a significant delay.
Findings of Court:
The court found that the plaintiff failed to establish continuous readiness and willingness under Section 16(c) of the Specific Relief Act. The plaintiff did not perform its primary obligations (survey and payment) within the agreed time. The cancellation notices issued by the defendant were validly served according to law. Additionally, since the open land had been developed into villas, the relief of specific performance was no longer feasible.
Issues: Whether time was the essence of the contract; whether the plaintiff proved continuous readiness and willingness; whether the agreement was validly cancelled via notice; and whether the contract remained enforceable after the land was developed into villas.
Ratio Decidendi: Specific performance is a discretionary and equitable remedy. A plaintiff's failure to demonstrate both the financial capacity and clear intention to perform the contract, combined with a failure to act within agreed timelines and the fundamental alteration of the property's nature, precludes the grant of such relief. Valid service of termination notices to the address specified in the contract is legally sufficient to terminate the agreement.
Result: Appeal dismissed.
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2. Plaintiff claimed readiness and willingness; defendant alleged non-payment of balance consideration within stipulated time and valid cancellation. (Para 4 , 5 , 10 , 11 )
3. Plaintiff failed to perform obligations within agreed time, did not demonstrate continuous readiness and willingness, and contract was validly terminated. (Para 18 , 28 , 29 , 31 , 33 , 44 , 48 , 52 , 70 , 71 , 119 )
4. Under Section 16(c) of the Specific Relief Act, plaintiff must aver and prove continuous readiness and willingness; failure disentitles specific performance. (Para 51 , 52 , 54 , 55 , 57 )
5. Appeal dismissed — Trial court judgment refusing specific performance upheld. (Para 121 )
6. Under Section 16(c) of the Specific Relief Act, 1963, what must a plaintiff prove to be entitled to specific performance of an agreement of sale?
The plaintiff must aver and prove continuous readiness and willingness to perform essential terms of the contract from the date of agreement till decree, including financial capacity. (Para 51 , 52 , 54 , 55 , 57 )
7. When is a unilateral termination of an agreement to sell for non-payment of balance consideration considered valid?
A termination is valid if the agreement contains a clause permitting such termination upon non-performance and the terminating party complies with conditions stipulated therein. (Para 73 , 79 , 80 )
8. Is time generally considered the essence of the contract in agreements for the sale of immovable property?
Ordinarily time is not the essence; but intention of parties can be inferred from express terms, nature of property, and surrounding circumstances. (Para 34 , 36 , 40 , 41 , 42 )
9. Is a plaintiff required to seek a declaration that a termination notice is invalid before suing for specific performance?
Not always; if termination amounts to breach by repudiation, plaintiff can directly seek specific performance, but where contract confers a right to terminate, a declaration may be necessary. (Para 85 , 86 , 88 , 90 )
10. Under Article 54 of the Limitation Act, 1963, when does limitation begin for a suit for specific performance where a date is fixed for performance?
Limitation begins from the date fixed for performance, or if no date is fixed, from when the plaintiff has notice that performance is refused. (Para 111 )
JUDGMENT :
Heard Sri V. Ravinder Rao, learned senior counsel representing Sri Atla Abhinandhan Reddy, learned counsel for the appellant and M. Narender Reddy, learned Senior Counsel representing Sri P.Raghavendra Reddy, learned counsel for the respondent.
2. This appeal is filed under Section 96 of CPC assailing the judgment and decree dated 09.12.2021 passed in O.S. No.412 of 2015 by the learned Special Sessions Judge for Trial of Cases under SC & ST (POA) Act – cum – VII Additional District Judge, Ranga Reddy District at L.B.Nagar.
(for sake of convenience, the parties hereinafter are referred to as plaintiff and defendant)
3. The appellant – plaintiff filed the suit O.S.412 of 2015 against the respondent herein – defendant for specific performance of agreement of sale dated 01.08.2011 and for delivery of possession of the suit schedule property i.e. agricultural land admeasuring Ac.2-19 guntas in Sy.No.163/A, situated at Kismathpur village, Rajendra Nagar, Ranga Reddy District.
4. Plaintiff filed the aforesaid suit contending:-
i. The plaintiff is a company.
ii. The defendant is the absolute owner and possessor of the suit schedule property having purchased from Md. Muktedan Khan S/o Late Md. Mustaffa Khan under a registered sale deed bearing No.3622/1988 dated 15.05.1987.
iii. The defendant offered to sell the suit schedule property to the plaintiff for sale consideration of Rs. 90,00,000/- per acre subject to the measurements and other terms and conditions.
i. The plaintiff and the defendant entered into an agreement of sale on 01.08.2011 on specific terms and conditions mentioned therein, on payment of an advance of Rs.25,00,000/- vide two cheques bearing No.567757 dated 04.08.2011 for Rs. 10,00,000/- and a cheque No. 567758 dated 20.08.2011 for Rs.15,00,000/- drawn on HDFC Bank, Himayathnagar Branch. The defendant had received, acknowledged and encashed the said cheques.
ii. As per the Clause No.4 of the agreement of sale, the plaintiff agreed to pay the balance sale consideration within three months from the date of the agreement of sale basing on the measurements of the land physically, and the defendant agreed to execute register sale deed in respect of the suit schedule property.
iii. As per Clause No.6 of the agreement, the balance sale consideration amount is to be paid for finalizing the sale deed only on the demarcation of boundaries and making out clear marketable title by the defendant.
iv. As per Clause No.10 of the agreement of sale, the plaintiff got published a public notice on 04.12.2011 in two local daily newspapers in ‘Eenadu’ and ‘Siasat’.
v. Mr. Tausif Kureshi got published reply notice on 27.11.2012 in ‘Siasat’ Delhi, raising serious dispute with regard to the property.
vi. As per Clause No.10 of the agreement, the plaintiff demanded the defendant to rectify the said objection so as to finalize the same transaction.
vii. The plaintiff came to know that the defendant and said Tausif Kureshi are close relations and in collusion with each other, they brought the said objection with an intention to postpone the execution.
viii. The plaintiff got issued a letter dated 02.02.2015 to the defendant stating that it is ready and willing to perform its part of contract, requested him to clear the objections raised by Mr. Tausif Kureshi and to execute register sale deed by receiving the balance sale consideration. But the defendant postponed the same saying that a suit in O.S.No.533 of 2013 filed by said Mr. Tausif Kureshi, his brother-in-law, is pending and the defendant has to clear the said litigation.
ix. On 21.12.2015, the plaintiff demanded the defendant for execution and registration of the sale deed but the defendant did not respond.
x. The plaintiff realized that the defendant with mala fide intention to defraud him, entered into the agreement of sale with the third parties.
xi. On 04.03.2015, the Director (operations) of the plaintiff company approached the defendant and asked to receive the balance sale consideration an
