Specific Performance Denied for Lack of Continuous Readiness & Willingness, Minor Payment: Punjab & Haryana HC on S.16(c) Specific Relief Act - 2025-05-16

Punjab & Haryana High Court Denies Specific Performance, Emphasizes Plaintiff's Onus to Prove Continuous Readiness and Willingness

Chandigarh, India – In a significant ruling on property contract disputes, the High Court of Punjab and Haryana, on April 8, 2025, overturned a Lower Appellate Court's decision granting specific performance of an agreement to sell. The Hon'ble Mr. Justice Pankaj Jain , presiding over the Regular Second Appeal (RSA No.5027 of 2017) in Veena Rani vs. Suraj Bansal , restored the Trial Court's order, which had directed the refund of earnest money to the plaintiff. The High Court underscored that a plaintiff must unequivocally prove continuous readiness and willingness to perform their contractual obligations, particularly when only a minor portion of the sale consideration has been paid.

Background of the Dispute

The case revolved around an agreement dated February 3, 2006, where Veena Rani (the defendant-appellant) agreed to sell a residential house to Suraj Bansal (the plaintiff-respondent) for Rs. 30,51,000. Bansal paid Rs. 7,50,000 as earnest money, with the sale deed to be executed by May 3, 2006, upon payment of the balance amount.

Bansal claimed he was present at the Sub Registrar's office on the target date with the remaining sum, but Rani failed to appear. He subsequently issued a legal notice on August 12, 2008, and filed a suit for specific performance on April 24, 2009.

Rani admitted the agreement and receipt of earnest money but contended she was present at the Sub Registrar's office. She argued that time was of the essence as her husband had entered into a consequential agreement to purchase another property, contingent on the funds from this sale. She alleged Bansal failed to perform his part due to a dip in property rates.

Trial Court and Lower Appellate Court Divergence

The Trial Court, after examining evidence including affidavits from both parties claiming their presence at the Sub Registrar's office, found that while both proved their presence, the plaintiff ( Bansal ) was entitled only to the alternative relief of recovering the earnest money with 6% interest, not specific performance.

Dissatisfied, Bansal appealed to the Lower Appellate Court, which reversed the Trial Court's findings. The Lower Appellate Court held that Bansal had proven his readiness and willingness, partly because he had paid 25% of the consideration and served a legal notice. It granted him a decree for specific performance.

High Court's Reasoning: Focus on Readiness and Willingness

Veena Rani , the original defendant, then appealed to the High Court. Her counsel argued that the Lower Appellate Court erred in shifting the burden of proving readiness and willingness onto the defendant and that the plaintiff's conduct—sending a legal notice after two years and filing the suit just before the limitation period expired—demonstrated a lack of genuine willingness.

The respondent's counsel maintained that the suit was within the limitation period and that the plaintiff had deposited the balance amount with the Executing Court post the appellate decree.

Justice Pankaj Jain meticulously examined the core issue: whether the Lower Appellate Court correctly assessed the plaintiff's readiness and willingness as mandated by Section 16(c) of the Specific Relief Act, 1963. The Court noted:

> "Section 16(c) of the Specific Relief Act, 1963 mandates 'readiness and willingness' on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous 'readiness and willingness' to perform the contract on his part from the date of the contract. The onus is on the plaintiff." (citing J.P. Builders vs. A. Ramadas Rao )

The High Court found that the Lower Appellate Court erred by effectively placing the onus on the defendant. It observed:

> "If affidavit propounded by the plaintiff is ignored, his presence on the appointed date before the Sub Registrar, is not proved. The only evidence which is left, is in form of a legal notice sent after two years of the appointed date. The civil suit was filed almost a year thereafter. Thus, willingness of the plaintiff is also under cloud... plaintiff was atleast required to prove on record that he had capacity to pay the balance sale consideration of more than Twenty Three Lacs of rupees on 03.05.2006. Plaintiff failed to bring on record any cogent evidence. This Court finds that the Lower Appellate Court erred in law in holding that the plaintiff remained ready and willing to perform his part by observing that defendant failed to prove her readiness and willingness. Onus was on the plaintiff."

Impact of Delay and Partial Payment

The Court also considered the delay in pursuing the remedy. While acknowledging precedents like Mademsetty Satyanarayana v. G. Yelloji Rao , which state that mere delay within limitation is not fatal in India, the Court highlighted the principles from K.S. Vidyanadam vs. Vairavan and Saradamani Kandappan vs. S. Rajalakshmi :

> "The courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance... The courts will also “frown” upon suits which are not filed immediately after the breach/refusal."

The High Court noted the plaintiff's lack of urgency: > "Post agreed date i.e. 03.05.2006, there is no evidence adduced by the plaintiff to prove his willingness till legal notice dated 12.08.2008. The contents of the legal notice also exhibit that plaintiff was in no hurry to get the agreement performed... The present suit was thereafter instituted on 24.04.2009 i.e. eight months after service of legal notice."

Crucially, the Court applied the test from K.S. Vidyanadam regarding substantial payment: > "In the present case, only 25% of the total sale consideration was paid as earnest money on the date of agreement to sell which cannot be held to be major part of the consideration. Admittedly, possession was never delivered to the plaintiff in part performance. In view thereof, this Court finds that the Lower Appellate Court erred in granting discretionary relief to the plaintiff..."

Final Decision and Implications

Concluding that the plaintiff failed to establish continuous readiness and willingness and had not paid a major part of the consideration, the High Court allowed Veena Rani 's appeal. The judgment and decree of the Lower Appellate Court were set aside, and the Trial Court's decision—directing a refund of the earnest money (Rs. 7,50,000) with 6% per annum interest from the date of payment till realization—was restored.

This judgment reinforces the stringent requirements for plaintiffs seeking the discretionary relief of specific performance, emphasizing that the burden of proving consistent readiness, financial capacity, and genuine willingness throughout the contract period lies squarely on them. Delays in pursuing legal remedies, coupled with payment of only a minor portion of the agreed sum, can significantly weaken a claim for specific performance.