Continuous Financial Capacity and Intent to Perform are Mandatory to Prove Readiness and Willingness Under Section 16(c).

The appellant entered into an Agreement to Sell (ATS) dated 19th June 2008 for a property in Delhi for Rs. 55.5 Lacs, paying Rs. 20 Lacs (Rs. 10 Lacs earnest money, Rs. 10 Lacs part-payment).

The sale was to be completed by 1st August 2008. While both parties appeared at the Sub-Registrar's office on the stipulated date, the sale deed was not executed.

The appellant issued a legal notice on 2nd August 2008 and later filed a police complaint seeking a refund of money rather than execution.

The Trial Court dismissed the suit for specific performance, holding that the appellant failed to prove continuous readiness and willingness to pay the balance of Rs. 35.5 Lacs.

The appellant appealed, also filing an application (CM 8298/2017) to produce additional bank statements as evidence.

1. Whether the plaintiff/appellant was ready and willing at all times to perform his part of the obligations as per Section 16(c) of the Specific Relief Act.

2. Whether the appellant is entitled to a decree of specific performance or, in the alternative, a refund of earnest money.

3. Whether additional evidence regarding bank capacity can be admitted at the appellate stage under Order XLI Rule 27 of the CPC.

The court applied Section 16(c) of the Specific Relief Act, 1963 (pre-2018 amendment), which mandates that a plaintiff must "aver and prove" continuous readiness and willingness from the date of contract until the decree.

The 2018 amendment is prospective and inapplicable to older transactions as established in Pydi Ramana v. Davarasety Manmadha Rao.

The court cited J.P. Builders v. A. Ramadas Rao and C.S. Venkatesh v. A.S.C. Murthy to distinguish "readiness" (financial capacity) from "willingness" (conduct).

Regarding additional evidence, the court applied Order XLI Rule 27 of the CPC and the principles in Sanjay Kumar Singh v. State of Jharkhand, stating that additional evidence is only permissible if the court requires it to pronounce judgment or for substantial cause.

The court found that while the appellant proved his presence at the Sub-Registrar's office, he failed to prove "continuous" financial readiness.

The cheques produced were third-party account-payee cheques, which carried no guarantee of encashment on the execution date and belonged to accounts that lacked sufficient funds during the cheques' validity periods.

The court observed that willingness was absent because the appellant’s police complaint dated 29th August 2008 sought a "refund," which is inconsistent with an intent to perform the contract.

The court determined that the proposed bank statements (from 2011) would not rectify the failure to show capacity in 2008 and were not necessary for the court to reach a decision.

The final order rejected the application for additional evidence (CM 8298/2017) and directed the respondent to refund the Rs. 10 Lacs earnest money to the appellant within four weeks, disposing of the appeal.