Failure to prove readiness and willingness bars specific performance, but permits recovery of earnest money.

The appellant-plaintiff instituted a suit for possession by way of specific performance of an agreement to sell dated 07.06.2011, under which the respondent-defendant allegedly agreed to sell a 200-square-yard house situated within the Lal Dora of Village Ladhot, District Rohtak, for ₹2,50,000.

The plaintiff claimed to have paid ₹1,00,000 as earnest money, with the sale deed to be executed by 06.06.2012.

The defendant denied execution of the agreement and receipt of earnest money.

The Trial Court nevertheless found that the agreement had been duly executed and that the earnest money had been paid, but dismissed the suit because the plaintiff failed to establish readiness and willingness to perform her obligations.

The first appellate court affirmed that decision.

Whether the plaintiff had proved continuous readiness and willingness to perform her part of the agreement so as to be entitled to specific performance?

Whether, despite refusal of specific performance, the plaintiff was entitled to recovery of the earnest money paid under the proved agreement?

A party seeking specific performance must prove both the valid execution of the agreement and readiness and willingness to perform its contractual obligations.

The initial burden rests on the plaintiff and does not shift to the defendant merely because execution of the agreement is proved, admitted, or the defendant remains ex parte.

Readiness and willingness must be established through pleadings supported by evidence, including the plaintiff’s capacity and conduct in performing the contract. Pleadings cannot substitute proof.

Specific performance is a discretionary relief, and failure to establish readiness and willingness disentitles the plaintiff to that relief.

Where the agreement and payment of earnest money are proved, the agreement has not been cancelled or forfeited, and specific performance is refused, the purchaser may receive the lesser relief of refund of the earnest money, particularly where time was not of the essence of the contract.

The Court upheld the concurrent finding that the agreement dated 07.06.2011 and payment of ₹1,00,000 were proved.

However, the plaintiff produced no independent oral or documentary evidence showing that she had appeared before the Sub-Registrar on 06.06.2012 with the balance consideration and registration expenses.

She also failed to establish her financial capacity to pay the remaining ₹1,50,000.

Her evidence concerning readiness on 04.05.2015 pursuant to the legal notice dated 16.04.2015 did not prove continuous readiness and willingness from 06.06.2012 to 16.04.2015.

The three-year period of silence and unilateral selection of a subsequent date for execution of the sale deed further undermined her claim.

Accordingly, no substantial error was found in the concurrent findings of the courts below, and specific performance was rightly refused.

Nevertheless, since the agreement was proved, the defendant had not cancelled it or forfeited the earnest money, and time was not the essence of the contract, the plaintiff was held entitled to restitution of the amount paid.

It affirmed the refusal of specific performance because the plaintiff failed to prove readiness and willingness to perform her part of the agreement.

However, it granted the lesser relief of recovery of ₹1,00,000, being the proved earnest money, together with interest at 6% per annum from the date of payment until realization.

Pending applications, if any, were disposed of accordingly.