A purchaser lacking continuous readiness and financial capacity cannot obtain specific performance.

On 31 March 2009, the parties entered into an agreement for sale of the defendant’s mortgaged house for ₹4,70,000. The plaintiff was to pay ₹3,86,000 towards the bank liability, in instalments or in a lump sum, and the sale deed was to be executed after the mortgage was discharged.

The plaintiff claimed to have made payments towards the liability and sought specific performance and an injunction. The defendant denied that the plaintiff had complied with the agreement and counterclaimed for possession.

The trial court dismissed the specific-performance claim, ordered the plaintiff to restore possession, and directed the defendant to refund ₹3,58,700, with interest in default.

The plaintiff appealed against dismissal of her suit and the possession order; the defendant appealed against the refund direction.

1. Whether the trial court was justified in dismissing the plaintiff’s claims for specific performance and permanent injunction

2. Whether the trial court was justified in allowing the defendant’s counterclaim and directing restoration of possession

3. Whether the trial court was justified in directing the defendant to refund ₹3,58,700, with interest in default

Section 16(c) of the Specific Relief Act, 1963 bars specific performance in favour of a plaintiff who fails to aver and prove performance, or continuous readiness and willingness to perform, the essential contractual terms required of them; readiness concerns financial capacity, while willingness is assessed from the plaintiff’s conduct.

The court relied on N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115, for the requirement of continuous readiness and willingness from the contract’s execution through the decree, assessed by conduct and surrounding circumstances.

R.C. Chandiok v. Chuni Lal Sabharwal, (1970) 3 SCC 140, for assessing readiness and willingness from the totality of the facts and circumstances; and M/s J.P. Builders v. A. Ramadas Rao, (2011) 1 SCC 429, for the distinction between financial readiness and conduct demonstrating willingness.

The court also referred to Telikicherla v. Kalli Raj Rao, (2014) 15 SCC 743, and U.N. Krishnamurthy v. A.M. Krishnamurthy, (2023) 11 SCC 775, in support of its conclusion on readiness and willingness.

The court treated the agreement’s execution and terms as undisputed, but found that the plaintiff had made payments towards the bank liability only up to 12 December 2012 and had not established that the full consideration was financially available to her.

It considered the instalment payments over several years and the absence of bank-account evidence demonstrating sufficient funds, and concluded that she had not proved continuous financial readiness and willingness to perform.

Because specific performance was unavailable, the plaintiff’s continued possession could not be sustained on the agreement, and the defendant was entitled to recover possession.

The court found no basis to disturb the trial court’s finding that ₹3,58,700 had been paid and its order directing repayment. It also rejected the defendant’s objection to the admissibility of the agreement, noting that it did not record delivery of possession pursuant to the agreement.

The parties were directed to bear their own costs.