Supreme Court Reiterates Importance of Readiness and Willingness in Specific Performance Cases

In a recent judgment, the Supreme Court of India dismissed an appeal concerning the denial of specific performance, upholding a decision by the Karnataka High Court. The case centered on the mandatory requirements under Section 16(c) of the Specific Relief Act, 1963, which governs the granting of specific performance in contractual disputes. The Apex Court reaffirmed that both readiness and willingness to perform contractual obligations are crucial prerequisites for seeking such relief.

Case Background

The dispute arose from an agreement of sale dated March 3, 2005, wherein the total consideration for the property was fixed at ₹30,00,000. The petitioner paid ₹12,50,000 as earnest money and claimed to have been ready and willing to execute the agreement. Alleging that the respondent (original defendant) refused to execute the sale deed, the petitioner filed Original Suit No. 1101 of 2008, seeking either specific performance of the contract or a refund of the earnest money.

While the trial court decreed in favor of the petitioner, granting specific performance, the Karnataka High Court reversed this decision. The High Court held that the petitioner had failed to prove readiness and willingness as required under Section 16(c) of the Specific Relief Act. Aggrieved by this decision, the petitioner approached the Supreme Court.

Supreme Court Observations

The Apex Court carefully analyzed the requirements under Section 16(c), which mandates that:

1. Readiness refers to the financial and practical capability of the plaintiff to perform their obligations under the contract.
2. Willingness pertains to the conduct and intent of the plaintiff to fulfill their part of the agreement.

The Court emphasized that these two elements must be:

• Explicitly stated in the pleadings, and
• Substantiated by oral and documentary evidence.

The Court observed:

“The plaintiff is obliged not only to make specific statements and averments in the plaint but also to adduce necessary oral and documentary evidence to show the availability of funds to make payment in terms of the contract in time.”

Further, the Court distinguished between the two concepts:

• Readiness: Relates to the capacity to perform the contract, including financial standing.
• Willingness: Relates to the intent and conduct of the plaintiff in fulfilling the contractual obligations.

Findings of the Court

The Supreme Court reviewed the High Court’s judgment, which meticulously evaluated the evidence. The High Court had found that the petitioner failed to establish both readiness and willingness, particularly regarding financial capability. The Apex Court endorsed these findings, remarking:

“The finding of fact cannot be termed as perverse or arbitrary, and hence there is no good reason for us to interfere with the impugned judgment.”

It further underscored that these factual determinations are integral to the judicial process and cannot be presumed without substantive evidence.

Implications of the Judgment

This ruling reinforces the principle that specific performance is an equitable remedy, not an automatic right. Plaintiffs must comprehensively demonstrate their financial preparedness and genuine intent to honor contractual commitments. The judgment also serves as a cautionary note to litigants, emphasizing that incomplete or vague pleadings and insufficient evidence will not suffice to secure relief under Section 16(c).

The Court reiterated the importance of maintaining the integrity of contractual obligations and ensuring judicial consistency in granting equitable relief.

Conclusion

The Supreme Court’s decision is a reminder that adherence to procedural and evidentiary requirements is critical in claims for specific performance. The ruling upholds the sanctity of contractual obligations while emphasizing judicial scrutiny in such disputes. For litigants, it highlights the necessity of meticulous preparation and robust evidence to succeed in claims under the Specific Relief Act.

Keywords: Specific Performance, Section 16(c), Readiness, Willingness, Supreme Court, Specific Relief Act.

Stay tuned for live updates on the rupee’s movement and real-time business news on Kanishk Social Media—your go-to source for comprehensive stock market and legal news.