Supreme Court of India
P. DAIVASIGAMANIversusS. SAMBANDAN
- Citation
- 2022 INSC 1070
- Decided
- 12 October 2022
- Disposal
- Dismissed
- Bench
- SANJIV KHANNA
Holding
A suit for specific performance is barred only if filed outside the period that begins when the plaintiff discovers the defendant’s refusal, and if filed within that period, delay alone cannot defeat the claim provided the plaintiff proves readiness and willingness under Section 16(c) and the court’s discretion under Section 20 is exercised in accordance with statutory principles.
Summary
The appellant, who owned a one‑acre wetland, entered into a 1989 agreement to sell the land to the respondent for Rs 6,50,000, with a six‑month completion clause. The respondent repeatedly notified the appellant to perform, demonstrated his readiness and willingness, and filed a suit for specific performance in 1993. The trial court dismissed the specific performance claim, holding the respondent had not deposited the balance consideration, but the High Court reversed that decision, granting specific performance. On appeal, the Supreme Court held that the limitation period under Article 54 of the Limitation Act begins when the plaintiff discovers the defendant’s refusal, so the suit was timely; mere delay cannot defeat specific performance if the plaintiff satisfies the readiness‑and‑willingness requirement under Section 16(c) of the Specific Relief Act. The Court affirmed the High Court’s decree, directing the respondent to deposit an additional amount and the appellant to execute the sale deed, and dismissed the appeal.
Issues considered
- The commencement of the limitation period for a suit for specific performance under the Limitation Act, 1963
- Whether mere delay in filing a specific performance suit, absent plaintiff misconduct, can bar the relief
- The requirement of "readiness and willingness" under Section 16(c) of the Specific Relief Act, 1963
- The proper exercise of discretion under Section 20 of the Specific Relief Act, 1963
- Whether the plaintiff must deposit the balance sale consideration at the time of filing the suit
Legislation cited
- Limitation Act, 1963s. Art. 54
- Specific Relief Act, 1963s. 10, s. 16, s. 20
Subjects
specific performancelimitation periodreadiness and willingnessSpecific Relief ActSection 16(c)Section 20delayimmovable propertycontract of saleequity
Judgment
[2022] 18 S.C.R. 199 199
P. DAIVASIGAMANI A
v.
S. SAMBANDAN
(Civil Appeal No. 9006 of 2011)
OCTOBER 12, 2022 B
[SANJIV KHANNA AND BELA M. TRIVEDI, JJ.]
Specific Relief Act, 1963 – Ss. 10, 16 & 20 – Agreement to
sell – default to perform contract – readiness and willingness –
delay in filing of suit – Appellant entered into an agreement to sale
C
with the respondent in the year 1989 with a stipulation for completion
of the sale transaction in 6 months – Despite respondent’s periodical
correspondences, appellant failed to respond or perform his part
of the contract – Respondent filed a suit for specific performance
before the trial court – Trial court allowed the suit partly, allowing
recovery of earnest money and refusing specific performance in D
view of the finding that the respondent could not prove readiness
and willingness as at the time of filing of suit, respondent did not
deposit the balance sale consideration amount in the court–
Respondent appealed before High Court – High Court reversed the
order of the trial court and allowed the appeal, thereby granting
E
the relief of specific performance to the respondent – On appeal,
held: The period of limitation had started running from the date the
respondent noticed that the performance was refused by the appellant
and not from the date of execution of agreement in question – The
suit was filed by the respondent was well within the prescribed time
u/Art.54 of the Limitation Act – Mere delay alone in filing the suit F
for specific performance, without reference to the conduct of the
plaintiff, could not be a ground for refusing the said relief, when
the suit was filed within the statutory time limit by the respondent-
plaintiff – Respondent-plaintiff had not only issued notices within
the period of six months of the agreement in question, calling
G
defendant to perform his part of contract and conclude sale, he
had also showed his readiness and willingness to perform the his
part of contract by proving same by stepping into witness box –
H
199
200 SUPREME COURT REPORTS [2022] 18 S.C.R.
A There was due compliance of s. 16(c) read with its explanation on
part of the respondent to perform – No illegality or infirmity in the
judgment of the High Court.
Delay/Laches – Limitation - There is a distinction between
limitation and delay and laches – Limitation is a ground for
B dismissing a suit even if the plaintiff is otherwise entitled to specific
performance, while delay operates to determine the discretion and
exercise under Section 20 of the Specific Relief Act, even if the suit
is not dismissed on account of limitation – However, not one but
several aspects have to be considered when the court, in terms of
section 20 of the Specific Relief Act, exercises discretion, guided by
C judicial principles, sound and reasonable.
Dismissing the appeal, the Court
HELD: 1.1 The period of limitation had started running
from the date the respondent noticed that the performance was
D refused by the appellant and not from the date of the execution of
agreement in question. Even though time is not considered as
the essence of the contract in case of immoveable property and
that the suit could be filed within three years as provided in Article
54 of the Limitation Act, the respondent - plaintiff had to perform
his part of the contract within the reasonable time having regard
E to the term of the agreement prescribing the time limit. The time
limit prescribed in the agreement cannot be ignored on the ground
that time was not made the essence of the agreement or that the
suit could be filed within three years from the date fixed for
performance or from the date when the performance is refused
F by the vendor. The suit having been filed by the respondent well
within the prescribed time limit under Article 54 of the Limitation
Act, the respondent could not have been non-suited on the ground
of the suit being barred by limitation. As regards, the delay in
filing the suit, it is very pertinent to note that the rule of equity
that exists in England, does not apply in India, and so long as a
G suit for specific performance is filed within the period of limitation,
delay cannot be a ground to refuse the relief of specific
performance to the plaintiff. Mere delay alone in filing the suit
for specific performance, without reference to the conduct of the
plaintiff, could not be a ground for refusing the said relief, when
H
P. DAIVASIGAMANI v. S. SAMBANDAN 201
the suit was filed within the statutory time limit by the respondent- A
plaintiff. [Paras 9, 10, 11 & 12][208-C-G; 209-E]
1.2 Readiness and willingness are not one, but two separate
elements. Readiness means the capacity of the plaintiff to perform
the contract, which would include the financial position to pay the
purchase price. Willingness refers to the intention of the plaintiff B
as a purchaser to perform his part of the contract. Willingness is
inferred by scrutinising the conduct of the plaintiff/purchaser,
including attending circumstances. Continuous readiness and
willingness on the part of the plaintiff/purchaser from the date
the balance sale consideration was payable in terms of the
agreement to sell, till the decision of the suit, is a condition C
precedent for grant of relief of specific performance.
[Para 15][212-G, 213-A]
1.3 Section 20 of the Specific Relief Act (Pre-amendment),
which confers discretion on the court to exercise jurisdiction to
decree of specific performance, states that this exercise should D
not be arbitrary, but guided by sound and reasonable judicial
principles. Sub-section (2) to Section 20 of the Specific Relief
Act (Pre-amendment) lists some of the principles that the court
should take into consideration while exercising discretion.
[Para 19][215-C-D; 216-G] E
1.4 Time, it is stated, is not the essence of the contract in
the case of immovable properties, unless there are grounds to
hold to the contrary. This doctrine is applied, without being unfair
and inequitable to the defendant/seller, as the court should not
ignore that a person sells the property when he needs money, F
and, therefore, expects the money in the stipulated or reasonable
time, which would meet the purpose of the sale. There has been
a steep rise in the prices of land in the last quarter of the 20th
Century in India. With the rise in property value, the value of
money has fallen. At times, delay in payment would defeat the
defendant/seller’s purpose. Therefore, the offer of the plaintiff/ G
purchaser in writing and the time and occasion when the offer to
pay the balance amount to the defendant/seller is an important
factor which would matter when the court examines the question
of discretion, that is, whether or not to grant a decree of specific
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202 SUPREME COURT REPORTS [2022] 18 S.C.R.
A performance. While examining these aspects, the quantum of
money paid by the plaintiff/seller to the defendant/purchaser may
become a relevant fact that merits due consideration. There is a
distinction between limitation and delay and laches. Limitation
is a ground for dismissing a suit even if the plaintiff is otherwise
entitled to specific performance, while delay operates to
B
determine the discretion and exercise under Section 20 of the
Specific Relief Act, even if the suit is not dismissed on account of
limitation. However, not one but several aspects have to be
considered when the court, in terms of Section 20 of the Specific
Relief Act, exercises discretion, guided by judicial principles,
C sound and reasonable. [Para 20][217-G; 218-A-D]
1.5 There was due compliance of Section 16(c) read with
its Explanation on the part of the respondent and that it was the
appellant who had failed to perform as per the terms of the
agreement, though called upon by the respondent to perform.
D The High Court also had rightly held that the plaintiff had complied
with the requirements of Section 16(c) of the said Act by making
a specific pleading with regard to his readiness and willingness
and also proving the same by reliable evidence. There is no
illegality or infirmity in the impugned judgment passed by
the High Court. Therefore, the same is confirmed. [Para 22]
E [219-C-D]
1.6 The agreement in question was entered into between
the parties in October 1989, and considering the steep rise in
the prices of land, interest of justice would be met if the respondent
is directed to pay some more amount. Respondent is directed to
F deposit a sum of Rupees One Crore in the Trial Court towards
the sale consideration, over and above the amount that might
have been deposited by him. On such deposit being made, the
appellant shall execute the sale deed in favour of the respondent
and shall also be at liberty to withdraw the said amount deposited
G by the respondent. [Para 23][219-F-H; 220-A]
Mademsetty Satyanarayana vs. G. Yelloji Rao AIR 1965
SC 1405 : [1965] SCR 221; R. Lakshmikantham V.
Devaraji (2019) 8 SCC 62 : [2019] 9 SCR 1009; Smt.
Katta Sujatha Reddy v. Siddamsetty Infra Projects Ltd.,
H
P. DAIVASIGAMANI v. S. SAMBANDAN 203
Civil Appeal No. 5822 of 2022; Syed Dastagir vs. T.R. A
Gopalakrishna Setty (1999) 6 SCC 337 : [1999] 1
Suppl. SCR 351; Sukhbir Singh v. Brij Pal Singh (1997)
2 SCC 200 : [1996] 2 Suppl. SCR 863; A. Kanthamani
v. Nasreen Ahmed (2017) 4 SCC 654 : [2017] 2 SCR
610; C.S. Venkatesh v. A.S.C. Murthy (2020) 3 SCC
B
280 : [2020] 2 SCR 676; Kamal Kumar v. Premlata
Joshi and Others (2019) 3 SCC 704 : [2019] 1 SCR
54; K.S. Vidyanadam and Others v. Vairavan (1997) 3
SCC 1 : [1997] 1 SCR 993; Saradamani Kandappan
v. S. Rajalakshmi and Others (2011) 12 SCC 18 : [2011]
8 SCR 874; Ritu Saxena vs. J.S. Grover & Another C
(2019) 9 SCC 132 : [2019] 13 SCR 349; Abdullakoya
Haji Vs. Rubis Tharayil (2019) 17 SCC 216 – referred
to.
Case Law Reference
[1965] SCR 221 referred to Para 11 D
[2019] 9 SCR 1009 referred to Para 12
[1999] 1 Suppl. SCR 351 referred to Para 16
[1996] 2 Suppl. SCR 863 referred to Para 18
E
[2017] 2 SCR 610 referred to Para 18
[2020] 2 SCR 676 referred to Para 18
[2019] 1 SCR 54 referred to Para 19
[1997] 1 SCR 993 referred to Para 19
F
[2011] 8 SCR 874 referred to Para 20
[2019] 13 SCR 349 referred to Para 21
(2019) 17 SCC 216 referred to Para 21
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9006
G
of 2011.
From the Judgment and Decree dated 15.06.2010 of the High
Court of Judicature at Madras in Appeal Suit No.196 of 2002.
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204 SUPREME COURT REPORTS [2022] 18 S.C.R.
A Anupamlal Das, Sr. Adv., S. Hariharan, Anirudh Singh, Ms. Jaikriti
S. Jadeja, Ms. Prapti Allagh, Vikash Singh, Advs. for the Appellant.
Basava Prabhu S. Patil, Sr. Adv., Ms. Promila, Geet Rajan Ahuja,
S. Thananjayan, Advs. for the Respondent.
The Judgment of the Court was delivered by
B
BELA M. TRIVEDI, J.
1. The present appeal is directed against the judgment and order
dated 15.06.2010 passed by the High Court of Judicature at Madras in
Appeal Suit No. 196 of 2002, whereby the High Court has allowed the
C said appeal, modified the decree passed by the Subordinate Judge,
Poonamallee (hereinafter referred to as the “Trial Court”) in O.S. 212
of 1993, and decreed the said suit by granting the prayer for specific
performance and also for permanent injunction against the present
appellant (original defendant) in respect of the suit property.
D 2. The respondent (original plaintiff) had filed the suit in the Trial
Court seeking specific performance of an agreement for sale dated
05.10.1989, against the appellant (original defendant) and had prayed in
the alternative for refund of the earnest (advance) money with interest,
and also for the compensation. The respondent had also prayed for
permanent injunction restraining the appellant – defendant from alienating
E or transferring the suit property to any third party. The Trial Court partly
decreed the suit granting prayer for refund of the earnest money with
interest at the rate of 12% per annum and dismissed the suit so far as
other prayers were concerned, vide the judgment and decree dated
28.06.2002.
F 3. The short facts given rise to the present appeal are that the
appellant Mr. P. Daivasigamani was the owner of the suit land i.e., the
land to an extent of 1 acre out of 1.80 acre of wetland comprised in
survey nos. 287 and 288, situated in No. 85 Ayanambakkam, District
Ambattur. He had entered into an agreement to sell the suit land with
the respondent Shri S. Sambandan on 05.10.1989. The appellant had
G
agreed to sell the said land for a sum of Rs. 6,50,000/-. On the
date of execution of the agreement, the respondent had paid a sum of
Rs. 50,000/- by way of earnest money as part of sale consideration. The
time for completion of sale transaction was stipulated to be 6 months in
the said agreement. As per the case of the respondent, though he had
H
P. DAIVASIGAMANI v. S. SAMBANDAN 205
[BELA M. TRIVEDI, J.]
periodically contacted the appellant requesting him to execute the sale A
deed, and had shown his readiness and willingness to perform his part of
the contract, the appellant failed to respond or to perform his part of the
contract. The respondent thereafter vide the letter dated 17.03.1990
sent by registered post, called upon the appellant to execute a deed of
power of attorney and to conclude the said transaction, however there
B
was no response from the appellant to the said letter. The respondent
thereafter again sent a notice through his lawyer on 26.03.1990, to the
appellant which was returned with an endorsement “refused”. The
respondent thereafter caused a public notice published in the Tamil daily
“Dhina Thanthi” on 02.05.1990 and in English daily “Indian Express” on
06.05.1990, informing the public at large not to enter into any sale C
transaction with the appellant in respect of the suit property. Despite the
said efforts having been made by the respondent, the appellant failed to
fulfill his obligation under the agreement. The respondent-plaintiff
thereafter filed the suit seeking specific performance of the said
agreement.
D
4. The suit was contested by the appellant-defendant by filing the
written statement. The appellant while admitting the execution of the
agreement in question had denied the receipt of Rs. 50,000/- as contended
by the respondent. The appellant also denied the readiness and willingness
on the part of the respondent to perform his part of the contract. The
appellant also denied to have received the letter dated 17.03.1990 sent E
by the respondent by registered post and also the notice dated 26.03.1990
sent by the respondent through his lawyer.
5. The Trial Court had framed as many as seven issues, pursuant
to which the respondent-plaintiff examined himself as PW-1 and adduced
the documents at Ex. A1 to A7. The appellant-defendant also examined F
himself as DW-1, however had not adduced any documentary evidence.
The Trial Court partly decreed the suit as stated hereinabove by observing,
inter alia, that though the plaintiff had paid Rs. 50,000/- by way of
earnest money/advance money to the defendant, the plaintiff had not
deposited the balance sale consideration of Rs. 6,00,000/- in the court at G
the time of filing of the suit, and that the plaintiff had also not proved that
he had got adequate financial strength to pay the balance sale
consideration of Rs. 6,00,000/- to the defendant within the time stipulated
in the sale agreement. The Trial Court, therefore, came to the conclusion
that the plaintiff had failed to prove his readiness and willingness to
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206 SUPREME COURT REPORTS [2022] 18 S.C.R.
A perform his part of the agreement, and therefore was not entitled to the
decree for specific performance of the agreement, however he was
entitled to recover from the defendant the amount of Rs. 50,000/- paid
by way of advance, together with interest at the rate of 12% per annum
from the date of sale agreement till the date of realization.
B 6. The High Court in the appeal, decreed the suit of the respondent-
plaintiff vide the impugned order, observing as under:
“26. As the appellant/plaintiff has made clear
averments to the effect that he was and has been
ready and willing to pay the balance
C consideration and get the sale deed registered
at his cost, there cannot be any inference
against the readiness and willingness, especially
in the absence of evidence adduced by the
respondent/defendant to the effect that any call
made by the respondent/defendant for
D accepting performance was not responded by
the appellant/plaintiff. Therefore, this Court
comes to the conclusion that the finding of the
Court below to the effect that the appellant/
plaintiff had not proved his continued readiness
E and willingness to perform his part of the
obligations under the agreement is not based
on sound reasoning and in fact it is perverse
finding, which deserves interference by this
Court. Accordingly, the said finding of the trial
court regarding Issue No. 4 framed in the suit
F is set aside and reversed. It is hereby held that
the appellant/plaintiff has complied with the
requirements of Section 16(c) of the Specific
Relief Act by making a specific pleading
regarding his readiness and willingness and
G proving the same by reliable evidence.”
7. While raising multiple contentions, the learned counsel appearing
for the appellant submitted that the suit having been filed by the
respondent – plaintiff after three years of the execution of the agreement,
it was barred by the Law of Limitation. Even otherwise, the time being
H the essence of the contract, and the respondent having failed to perform
P. DAIVASIGAMANI v. S. SAMBANDAN 207
[BELA M. TRIVEDI, J.]
the essential terms of the contract within the time limit stipulated in the A
agreement, the High Court had committed a gross error in granting the
discretionary relief of the specific performance in favour of the
respondent. According to him, there was no explanation given by the
respondent for the delay occurred in filing the suit. He further submitted
that as per the legal position settled by this Court, the respondent was
B
not only required to aver in the pleading but was also required to prove
by cogent evidence like producing statement of his bank account or
other document that he was financially capable of making payment of
the balance amount of sale consideration, which the respondent-plaintiff
had failed to prove. The respondent had also failed to deposit the remaining
amount of sale consideration in the court at the time of filing the suit. C
8. Per contra, the learned counsel appearing for the respondent
submitted that time is never considered to be an essence of the contract
in case of immoveable property, and even otherwise the respondent had
shown his readiness and willingness to perform the essential terms, namely
calling upon the appellant to execute a power of attorney and complete D
the sale transaction, by issuing three notices one after the other, within
the stipulated time limit, however, the appellant had failed to respond the
said notices and had also failed to execute the sale deed in favour of the
respondent. According to him, there was no requirement of law to deposit
the balance of the amount of sale consideration, at the time of filing of
the suit, as sought to be submitted by the learned counsel for the appellant. E
9. Now, adverting to the first contention raised by the learned
counsel for the appellant that the respondent – plaintiff having filed the
suit for specific performance of the agreement after the expiry of three
years of the agreement, it may be noted that as per Article 54 of the
Limitation Act, 1963, the suit for the specific performance of contract F
could be filed within three years from the date fixed for the performance,
or when no such date has been fixed, from the date when the plaintiff
has noticed that performance is refused. In the instant case, the execution
of the agreement on 05.10.1989 has not been disputed. It was also proved
by the respondent by leading the evidence that the respondent had sent G
a notice dated 17.03.1990 by registered post and called upon the appellant
to execute the power of attorney and to conclude the sale transaction in
view of Clause 10 of the agreement. However, there was no response
from the appellant to the said letter. The respondent thereafter had
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208 SUPREME COURT REPORTS [2022] 18 S.C.R.
A again sent a notice through his lawyer on 26.03.1990, which had come
back with the endorsement “refused”. Thereafter, again the respondent
caused a public notice published in the Tamil daily “Dhina Thanthti” on
02.05.1990 and in the English daily “Indian Express” on 06.05.1990.
The appellant having not responded to any of the said notices, the suit
was filed on 26.03.1993. Since the sale had to be completed within a
B
period of six months from the date of the execution of the agreement
dated 05.10.1989, the respondent had called upon the appellant to perform
his part of the contract by issuing the notices within six months of the
said agreement. However, the appellant having failed to respond to any
of the said notices, it was deemed that the appellant had refused to
C perform his part of contract. The period of limitation had started running
from the date the respondent noticed that the performance was refused
by the appellant and not from the date of the execution of agreement in
question.
10. It cannot be gainsaid said that even though time is not
D considered as the essence of the contract in case of immoveable property
and that the suit could be filed within three years as provided in Article
54 of the Limitation Act, the respondent - plaintiff had to perform his
part of the contract within the reasonable time having regard to the term
of the agreement prescribing the time limit. The time limit prescribed in
the agreement cannot be ignored on the ground that time was not made
E the essence of the agreement or that the suit could be filed within three
years from the date fixed for performance or from the date when the
performance is refused by the vendor. Nonetheless, as discussed above,
the suit having been filed by the respondent well within the prescribed
time limit under Article 54 of the Limitation Act, the respondent could
F not have been non-suited on the ground of the suit being barred by limitation
as sought to be submitted by learned counsel for the appellant.
11. As regards, the delay in filing the suit, it is very pertinent to
note that the rule of equity that exists in England, does not apply in India,
and so long as a suit for specific performance is filed within the period of
G limitation, delay cannot be a ground to refuse the relief of specific
performance to the plaintiff. In Mademsetty Satyanarayana vs. G.
Yelloji Rao AIR 1965 SC 1405 it has been observed as under:
“7. Mr Lakshmaiah cited a long catena of
English decisions to define the scope of a
H
P. DAIVASIGAMANI v. S. SAMBANDAN 209
[BELA M. TRIVEDI, J.]
court’s discretion. Before referring to them, A
it is necessary to know the fundamental
difference between the two systems—English
and Indian—qua the relief of specific
performance. In England the relief of specific
performance pertains to the domain of equity;
B
in India, to that of statutory law. In England
there is no period of limitation for instituting a
suit for the said relief and, therefore, mere
delay — the time lag depending upon
circumstances — may itself be sufficient to
refuse the relief; but, in India mere delay C
cannot be a ground for refusing the said relief,
for the statute prescribes the period of
limitation. If the suit is in time, delay is
sanctioned by law; it is beyond time, the suit
will be dismissed as barred by time; in either
D
case, no question of equity arises.”
12. The aforesaid ratio has also been followed recently by this
Court in R. Lakshmikantham V. Devaraji (2019) 8 SCC 62. We,
therefore, have no hesitation in holding that mere delay alone in filing the
suit for specific performance, without reference to the conduct of the
plaintiff, could not be a ground for refusing the said relief, when the suit E
was filed within the statutory time limit by the respondent- plaintiff.
13. This takes us to the next question as to whether the High
Court was justified in granting the relief of specific performance in favour
of the respondent – plaintiff? Now, before answering the said question,
it may be noted that some of the relevant provisions contained in the F
Specific Relief Act, 1963 (hereinafter referred to as the “Said Act”)
have undergone a substantive change by way of amendments made by
the Act 18 of 2018, which came into force with effect from 01.10.2018.
As per the recent decision of the three-judge bench of this Court, in
case of Smt. Katta Sujatha Reddy v. Siddamsetty Infra Projects Ltd., G
Civil Appeal No. 5822 of 2022 decided on 25th August, 2022, the said
Act 18/2018 amending the Specific Relief Act is prospective in nature
and cannot apply to those transactions that took place prior to its coming
into force. In the instant case, the subject agreement having taken place
prior to the said Amendment, we will have to take into consideration the
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210 SUPREME COURT REPORTS [2022] 18 S.C.R.
A legal position as it stood prior to the 2018 amendment. The relevant
provisions contained in Section 10, Section 16 and Section 20 as they
stood prior to the amendment are reproduced for ready reference.
“Section 10. - Cases in which specific performance
of contract enforceable –
B Except as otherwise provided in this Chapter,
the specific performance of any contract may, in
the discretion of the court, be enforced -
(a) when there exists no standard for ascertaining
actual damage caused by the non-performance of
C the act agreed to be done; or
(b) when the act agreed to be done is such that
compensation in money for its non-performance
would not afford adequate relief.
D Explanation - Unless and until the contrary is
proved, the court shall presume -
(i) that the breach of a contract to transfer
immovable property cannot be adequately
relieved by compensation in money; and
E (ii) xxx xxx xxx xxx
Section 16 – Personal bars to relief –
Specific performance of a contract cannot be
enforced in favour of a person -
F (a) xxx xxx xxx xxx xxx
(b) xxx xxx xxx xxx xxx
(c) who fails to aver and prove that
he has performed or has always
been ready and willing to perform
G the essential terms of the contract
which are to be performed by him,
other than terms the performance
of which has been prevented or
waived by the defendant.
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P. DAIVASIGAMANI v. S. SAMBANDAN 211
[BELA M. TRIVEDI, J.]
Explanation. —For the purposes of clause (c), — A
(i) where a contract involves the payment of money,
it is not essential for the plaintiff to actually tender
to the defendant or to deposit in court any money
except when so directed by the court;
(ii) the plaintiff must aver performance of, or B
readiness and willingness to perform, the contract
according to its true construction.
Section 20 - Discretion as to decreeing specific
performance.—
C
(1) The jurisdiction to decree specific performance is
discretionary, and the court is not bound to grant such relief
merely because it is lawful to do so; but the discretion of
the court is not arbitrary but sound and reasonable, guided
by judicial principles and capable of correction by a court of
appeal. D
(2) The following are cases in which the court may properly
exercise discretion not to decree specific performance:—
(a) where the terms of the contract or the conduct of the
parties at the time of entering into the contract or the
E
other circumstances under which the contract was
entered into are such that the contract, though not
voidable, gives the plaintiff an unfair advantage over the
defendant; or
(b) where the performance of the contract would involve
F
some hardship on the defendant which he did not foresee,
whereas its non-performance would involve no such
hardship on the plaintiff; or
(c) where the defendant entered into the contract under
circumstances which though not rendering the contract
voidable, makes it inequitable to enforce specific G
performance.
Explanation 1. Mere inadequacy of consideration,
or the mere fact that the contract is onerous to the
defendant or improvident in its nature, shall not be
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212 SUPREME COURT REPORTS [2022] 18 S.C.R.
A deemed to constitute an unfair advantage within the
meaning of clause (a) or hardship within the
meaning of clause (b).
Explanation 2. The question whether the performance of a
contract would involve hardship on the defendant within
B the meaning of clause (b) shall, except in cases where the
hardship has resulted from any act of the plaintiff
subsequent to the contract, be determined with reference
to the circumstances existing at the time of the contract.
(3) The court may properly exercise discretion to decree
C specific performance in any case where the plaintiff has done
substantial acts or suffered losses in consequence of a
contract capable of specific performance.
(4) The court shall not refuse to any party specific
performance of a contract merely on the ground that the
D contract is not enforceable at the instance of the party”.
14. From the bare reading of the afore-stated provisions, it clearly
emerges that the Specific Performance of the contract, may in the
discretion of the court, be enforced, when the act agreed to be done,
was such that compensation in money for its non-performance would
E not afford adequate relief, and that the breach of a contract to transfer
immoveable property could not be adequately relieved by compensation
in money. It also emerges that specific performance of a contract could
not be enforced in favour of a person, who failed to aver and prove that
he had performed or had always been ready and willing to perform the
essential terms of the contract, which were to be performed by him. It
F could also not be enforced in favour of a person who failed to aver in the
plaint the performance of, or readiness and willingness to perform the
contract according to its true construction.
15. Readiness and willingness are not one, but two separate
elements. Readiness means the capacity of the plaintiff to perform the
G contract, which would include the financial position to pay the purchase
price. Willingness refers to the intention of the plaintiff as a purchaser
to perform his part of the contract. Willingness is inferred by scrutinising
the conduct of the plaintiff/purchaser, including attending circumstances1.
1
See paragraph 2 in His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar,
(1996) 4 SCC 526
H
P. DAIVASIGAMANI v. S. SAMBANDAN 213
[BELA M. TRIVEDI, J.]
Continuous readiness and willingness on the part of the plaintiff/purchaser A
from the date the balance sale consideration was payable in terms of the
agreement to sell, till the decision of the suit, is a condition precedent for
grant of relief of specific performance2
16. The expression “readiness and willingness” used in Section
16 (c) of the said Act, has been interpreted in catena of decisions by this B
Court, in the light of facts and circumstances of the cases under
consideration for the purpose of granting or refusing to grant the relief
of Specific Performance of a contract. The said expression cannot be
interpreted in a straitjacket formula. In a very apt decision of this Court
in case of Syed Dastagir vs. T.R. Gopalakrishna Setty (1999) 6
SCC 337, a three-Judge Bench of this Court, construing a plea of C
“readiness and willingness to perform” in view of the requirement of
Section 16(c) and its explanation, observed as under:
“9. So the whole gamut of the issue raised is,
how to construe a plea specially with reference
to Section 16(c) and what are the obligations D
which the plaintiff has to comply with in reference
to his plea and whether the plea of the plaintiff
could not be construed to conform to the
requirement of the aforesaid section, or does
this section require specific words to be pleaded E
that he has performed or has always been ready
and is willing to perform his part of the contract.
In construing a plea in any pleading, courts must
keep in mind that a plea is not an expression of
art and science but an expression through words
to place fact and law of one’s case for a relief. F
Such an expression may be pointed, precise,
sometimes vague but still it could be gathered
what he wants to convey through only by reading
the whole pleading, depending on the person
drafting a plea. In India most of the pleas are G
drafted by counsel hence the aforesaid
difference of pleas which inevitably differ from
one to the other. Thus, to gather true spirit
2
See paragraph 5 in N.P. Thirugnanam(dead) by LRs v Dr. R. Jagan Mohan Rao and
Others, (1995) 5 SCC 115. Also see Ardeshir H. Mama v. Flora Sassoon, AIR 1928 PC
208. H
214 SUPREME COURT REPORTS [2022] 18 S.C.R.
A behind a plea it should be read as a whole. This
does not distract one from performing his
obligations as required under a statute. But to
test whether he has performed his obligations,
one has to see the pith and substance of a plea.
Where a statute requires any fact to be pleaded
B
then that has to be pleaded maybe in any form.
The same plea may be stated by different
persons through different words; then how
could it be constricted to be only in any
particular nomenclature or word. Unless a
C statute specifically requires a plea to be in any
particular form, it can be in any form. No specific
phraseology or language is required to take such
a plea. The language in Section 16(c) does not
require any specific phraseology but only that
the plaintiff must aver that he has performed or
D
has always been and is willing to perform his
part of the contract. So the compliance of
“readiness and willingness” has to be in spirit
and substance and not in letter and form. So to
insist for a mechanical production of the exact
E words of a statute is to insist for the form rather
than the essence. So the absence of form cannot
dissolve an essence if already pleaded”.
17. It was further observed therein that:
“It is significant that this explanation carves out
F a contract which involves payment of money as
a separate class from Section 16(c). Explanation
(i) uses the words “it is not essential for the
plaintiff to actually tender to the defendant or
to deposit in court any money except when so
G directed by the court”. (emphasis supplied) This
speaks in a negative term what is not
essential for the plaintiff to do. This is more in
support of the plaintiff that he need not tender
to the defendant or deposit in court any money
but the plaintiff must [as per Explanation (ii)] at
H
P. DAIVASIGAMANI v. S. SAMBANDAN 215
[BELA M. TRIVEDI, J.]
least aver his performance or readiness and A
willingness to perform his part of the contract”.
18. In Sukhbir Singh v. Brij Pal Singh3 this Court had laid down
that Law is not in doubt and it is not a condition that the respondents
(Plaintiffs) should have ready cash with them. It is sufficient for the
respondents to establish that they had the capacity to pay the sale B
consideration. It is not necessary that they should always carry the money
with them from the date of the suit till the date of the decree. The said
principle was followed in case of A. Kanthamani v. Nasreen Ahmed4,
in case of C.S. Venkatesh v. A.S.C. Murthy5etc.
19. Section 20 of the Specific Relief Act (Pre-amendment), which C
confers discretion on the court to exercise jurisdiction to decree of specific
performance, states that this exercise should not be arbitrary, but guided
by sound and reasonable judicial principles. Interpreting and elucidating
on Section 20 of the Specific Relief Act (Pre-amendment) and factors
to be considered, this Court in Kamal Kumar v. Premlata Joshi and
Others6 has also referred to Sections 16(c), 22, 23 and 24 of the Specific D
Relief Act and forms 47/48 of Appendix A to C of the Code of Civil
Procedure, 1908, to summarise:
“7. It is a settled principle of law that the grant
of relief of specific performance is a
discretionary and equitable relief. The material E
questions, which are required to be gone into
for grant of the relief of specific performance
are:
7.1 First, whether there exists a valid and
concluded contract between the parties for sale/ F
purchase of the suit property;
7.2 Second, whether the plaintiff has been ready
and willing to perform his part of contract and
whether he is still ready and willing to perform
his part as mentioned in the contract; G
3
(1997) 2 SCC 200
4
(2017) 4 SCC 654
5
(2020) 3 SCC 280
6
(2019) 3 SCC 704
H
216 SUPREME COURT REPORTS [2022] 18 S.C.R.
A 7.3 Third, whether the plaintiff has, in fact,
performed his part of the contract and, if so,
how and to what extent and in what manner he
has performed and whether such performance
was in conformity with the terms of the contract;
B 7.4 Fourth, whether it will be equitable to grant
the relief of specific performance to the plaintiff
against the defendant in relation to suit property
or it will cause any kind of hardship to the
defendant and, if so, how and in what manner
and the extent if such relief is eventually
C granted to the plaintiff;
7.5 Lastly, whether the plaintiff is entitled for
grant of any other alternative relief, namely,
refund of earnest money etc. and, if so, on what
grounds.
D
8. In our opinion, the aforementioned questions
are part of the statutory requirements [See
Sections 16 (c), 20, 21, 22, 23 of the Specific
Relief Act, 1963 and the Forms 47/48 of
Appendix A to C of the Code of Civil Procedure].
E These requirements have to be properly
pleaded by the parties in their respective
pleadings and proved with the aid of evidence
in accordance with law. It is only then the Court
is entitled to exercise its discretion and
F accordingly grant or refuse the relief of specific
performance depending upon the case made out
by the parties on facts.”
Sub-section (2) to Section 20 of the Specific Relief Act (Pre-
amendment) lists some of the principles that the court should take into
G consideration while exercising discretion. The factors to be considered
while exercising discretion include hardship to the defendant/seller which
he did not foresee, hardship to the plaintiff/purchaser in case of non-
performance, or whether the contract, even when not void, was entered
under the circumstances that make the enforcement of specific
H
P. DAIVASIGAMANI v. S. SAMBANDAN 217
[BELA M. TRIVEDI, J.]
performance inequitable, or whether the plaintiff has done substantial A
acts or suffered losses as a consequence of the contract, and the conduct
of the parties, including that of the defendant/seller and other
circumstances under which the contract was entered are such that they
give an unfair advantage over the defendant/seller. The court should
examine whether the plaintiff/purchaser had, in fact, performed his part
B
of the contract, and if so, how and to what extent, and in what manner
he has performed, and whether such performance was in conformity
with the terms of the contract. The status of the parties, and whether
the plaintiff/purchaser is a speculator in the property, who buys and sells
properties, and whether his conduct reflects an attempt to gain on account
of the rise in the price of the property, hoping that the delay in payment C
of full consideration would go to his advantage, will be a relevant
consideration7. Incapacity of the defendant/seller and whether the
plaintiff/purchaser is operating in property trade, or as a financer or
middleman and the defendant/seller is a typical property owner, may
also affect the exercise of discretion. In cases where the defendant/
D
seller claims that he was gullible and nescient, who got caught by entering
into the agreement to sell, facts like whether the sale consideration is
lower than the market price and the terms and conditions settled are
unfavourable, should be given due weightage. Sometimes the defendant/
seller, post the agreement to sell, in consultation with elders or family
members, wishes to back out because the decision to sell was a folly, E
unwise, or a result of trickery. In such cases, the conduct of the
defendant/seller would be of consequence. The defendant/seller would
be well advised to immediately and without delay write to the plaintiff/
purchaser reneging the agreement to sell and enclose a cheque for the
amount received. His offer to pay or payment of interest or damages
F
would be an added factor as the intending purchaser would then be
entitled to look for another property.
20. Time, it is stated, is not the essence of the contract in the case
of immovable properties, unless there are grounds to hold to the contrary.
This doctrine is applied, without being unfair and inequitable to the
defendant/seller, as the court should not ignore that a person sells the G
property when he needs money, and, therefore, expects the money in
the stipulated or reasonable time, which would meet the purpose of the
sale. The purpose of sale can vary from the need for liquid cash to be
7
See K.S. Vidyanadam and Others v. Vairavan, (1997) 3 SCC 1
H
218 SUPREME COURT REPORTS [2022] 18 S.C.R.
A invested to earn interest, medical, educational, child’s marriage or
purchasing another property. To save capital gains, the seller has to
purchase another immovable property, unless the proceeds are exempt.
There has been a steep rise in the prices of land in the last quarter of the
20th Century in India. With the rise in property value, the value of money
has fallen. At times, delay in payment would defeat the defendant/seller’s
B
purpose8. Therefore, the offer of the plaintiff/purchaser in writing and
the time and occasion when the offer to pay the balance amount to the
defendant/seller is an important factor which would matter when the
court examines the question of discretion, that is, whether or not to grant
a decree of specific performance. While examining these aspects, the
C quantum of money paid by the plaintiff/seller to the defendant/purchaser
may become a relevant fact that merits due consideration. There is a
distinction between limitation and delay and laches. Limitation is a ground
for dismissing a suit even if the plaintiff is otherwise entitled to specific
performance, while delay operates to determine the discretion and
exercise under Section 20 of the Specific Relief Act, even if the suit is
D
not dismissed on account of limitation. However, not one but several
aspects have to be considered when the court, in terms of Section 20 of
the Specific Relief Act, exercises discretion, guided by judicial principles,
sound and reasonable.
21. Having said that, let us examine the facts of this case. As
E discussed earlier, the respondent – plaintiff had not only averred in the
plaint about his issuing notices within the period of six months of the
agreement in question, calling upon the appellant – defendant to perform
his part of contract and conclude the sale transaction, also showing his
readiness and willingness to perform his part of the contract, but the
F respondent had also proved the same by stepping into the witness box.
Though much reliance was placed by the learned counsel for the appellant
on the decisions of this Court in case of Ritu Saxena vs. J.S. Grover &
Another (2019) 9 SCC 132, in case of Abdullakoya Haji Vs. Rubis
Tharayil (2019) 17 SCC 216, and other cases, to submit that the
respondent had failed to establish his financial capacity to pay the balance
G amount of consideration at the relevant time and had also failed to deposit
the said amount in the court at the time of filing of the suit, he was not
entitled to the discretionary relief of Specific Performance as granted
8
See Paragraphs 25, 36 & 37 in Saeadamani Kandappan v. S. Rajalakshmi and Others
H (2011) 12 SCC 18.
P. DAIVASIGAMANI v. S. SAMBANDAN 219
[BELA M. TRIVEDI, J.]
by the Court, we do not find any substance in any of the said submissions. A
As per the ratio of judgment laid down by the three-judge bench in case
of Syed Dastagir (supra), the compliance of “readiness and willingness”
has to be in spirit and substance and not in letter and form, while making
averments in the plaint. As per the Explanation (i) to Section 16(c), he
need not tender to the defendant or deposit the amount in the court, but
B
he must aver performance of, or readiness and willingness to perform
the contract according to its true construction.
22. Having regard to the facts and circumstances of the case and
to the conduct of the parties, we have no hesitation in holding that there
was due compliance of Section 16(c) read with its Explanation on the
part of the respondent and that it was the appellant who had failed to C
perform as per the terms of the agreement, though called upon by the
respondent to perform. The High Court also had rightly held that the
plaintiff had complied with the requirements of Section 16(c) of the said
Act by making a specific pleading with regard to his readiness and
willingness and also proving the same by reliable evidence. This Court D
does not find any illegality or infirmity in the impugned judgment passed
by the High Court. We, therefore confirm the same, so far as granting of
decree for specific performance of the agreement in question is
concerned.
23. At this juncture, the Court cannot be oblivion to the fact that E
there has been a steep rise in the price of immovable properties since
last few decades. Before the final hearing of the appeal, the parties
were sent to the Mediation Centre for exploring the possibility of
settlement, however, the mediation remained unsuccessful. Having regard
to the fact that the agreement in question was entered into between the
parties in October 1989, and considering the steep rise in the prices of F
land, we are of the opinion that interest of justice would be met if the
respondent is directed to pay some more amount. It is also noted that the
appellant had enjoyed the possession of the suit land all through out.
Hence in the facts and circumstances of the case, the respondent is
directed to deposit a sum of Rupees One Crore in the Trial Court towards G
the sale consideration, over and above the amount that might have been
deposited by him, within a period of eight weeks from today. On such
deposit being made, the appellant shall execute the sale deed in favour
H
220 SUPREME COURT REPORTS [2022] 18 S.C.R.
A of the respondent and shall also be at liberty to withdraw the said amount
deposited by the respondent.
24. The appeal is dismissed subject to the aforesaid directions.
Ankit Gyan and Anurag Bhaskar Appeal dismissed.
B (Assisted by : Adnan Khan, LCRA)
C
D
E
F
G
H
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