A purchaser who fails to prove readiness and willingness is not entitled to specific performance.

The appellants, tenants of the suit properties, entered into a sale agreement with the respondents on 10 May 1997 for a total consideration of ₹49 lakh and paid ₹13 lakh towards it.

The agreement allowed 18 months for completion.

The appellants alleged that the respondents failed to meet contractual conditions and execute the sale deed; the respondents maintained that the appellants were not ready and willing to complete the purchase.

After first filing a suit for injunction, the appellants filed a suit for specific performance, alternatively seeking repayment of the amount paid.

The Single Judge refused specific performance but ordered repayment of ₹12 lakh, deducting ₹1 lakh as liquidated damages, with interest at 9% per annum from the date of plaint.

The appellants appealed against the refusal of specific performance.

Whether the appellants proved that they were ready and willing to perform their part of the agreement, entitling them to specific performance

Whether the respondents were entitled to deduct ₹1 lakh as liquidated damages from the amount to be refunded

A party seeking specific performance must prove readiness and willingness to perform its contractual obligations; the court assesses this by considering the party’s conduct and the evidence over the relevant period.

In contracts for sale of immovable property, time is not ordinarily presumed to be of the essence unless the agreement expressly states or clearly implies otherwise.

The Court also considered the contractual claim for liquidated damages against the respondents’ conduct in retaining the advance and failing to complete the sale.

The appellants’ cited authorities were treated as distinguishable on the facts.

Although the agreement, the ₹49 lakh consideration, and receipt of ₹13 lakh were admitted, the appellants did not establish sustained readiness and willingness.

They knew of the mortgage affecting the title documents, had themselves occupied the properties as tenants, failed to pay rent until rent-control proceedings were initiated, and waited approximately 2½ years after filing the injunction suit before seeking specific performance.

The Court therefore upheld the refusal of specific performance.

However, the respondents had retained the full ₹13 lakh and, after receiving the appellants’ legal notice, sought to deduct ₹1 lakh without prior notice.

The Court held that they were not entitled to that deduction.

The decree was modified to entitle the appellants to recover the full ₹13 lakh, with interest at 9% per annum from the date of plaint until realization.

The appellants were also permitted to withdraw any balance sale consideration deposited in court; there was no order as to costs.