The Madras High Court has clarified that mere possession of property or delayed deposit of sale consideration during litigation cannot substitute the statutory requirement of proving continuous readiness and willingness to perform a sale agreement at the time of breach. This ruling reinforces the strict evidentiary burden under the Specific Relief Act and reshapes how courts assess contractual compliance in specific performance suits.
Background & Facts
The Dispute
The plaintiff sought specific performance of an unregistered sale agreement for land valued at Rs.13,00,000, executed on December 20, 2010. The agreement stipulated two payment milestones: Rs.3,00,000 by April 30, 2011, and the balance Rs.6,00,000 by April 30, 2012. The plaintiff paid Rs.4,00,000 as advance on execution and later remitted Rs.2,95,000 on February 25, 2012 - over a year late. The balance Rs.6,00,000 was never paid before the deadline. The defendant refused to execute the sale deed, prompting the plaintiff to file suit.
Procedural History
- December 20, 2010: Unregistered sale agreement executed
- April 30, 2011: First payment deadline missed
- February 25, 2012: Partial payment of Rs.2,95,000 made
- April 30, 2012: Final payment deadline missed
- March 6, 2014: Plaintiff files suit for specific performance
- January 3, 2017: Trial Court decrees specific performance
- 2019: Defendant files First Appeal under Section 96 CPC
- March 5, 2026: Madras High Court delivers judgment
Relief Sought
The plaintiff sought specific performance of the sale agreement. The defendant sought dismissal of the suit, contending the plaintiff was not ready and willing to perform, and alternatively offered to return Rs.7,00,000 received as advance.
The Legal Issue
The central question was whether the plaintiff discharged the burden under Section 16(c) of the Specific Relief Act, 1963 to prove he was ready and willing to perform his part of the contract during the stipulated period and continuously thereafter.
Arguments Presented
For the Appellant/Petitioner
The appellant argued that the plaintiff failed to meet two critical payment deadlines under the agreement, with no explanation for the delay. The payment of Rs.2,95,000 was made 10 months late, and the balance Rs.6,00,000 was deposited only during trial, not before suit filing. Reliance was placed on Gana Kannappan v. G. Mohanlal Patel and Krishnamoorthy v. Nagammal, which held that delay without justification negates readiness and willingness. The plaintiff’s failure to issue pre-suit notice or prove availability of funds further undermined his claim.
For the Respondent/Plaintiff
The respondent contended that the defendant accepted partial payment without objection, indicating waiver of strict timelines. He argued that time was not the essence of the contract and that his possession of the property since 2010 demonstrated performance. He relied on Ex-A.2 (Kist receipts) and Ex-A.3 (Adangal extract) to prove possession, though these were later held inadmissible.
The Court's Analysis
The Court conducted a rigorous analysis of Section 16(c) of the Specific Relief Act, 1963, which mandates that a plaintiff seeking specific performance must plead and prove readiness and willingness to perform throughout the contractual period. The Court emphasized that this is not a mere formality but a substantive condition precedent.
"The Plaintiff did not give any explanation for the delayed payments. The Plaintiff did not prove that he had a sum of Rs.6,00,000/- (Rupees six lakhs only) in his hand or in his bank account."
The Court rejected the plaintiff’s argument that payment during litigation cured prior default. It held that depositing funds during trial does not retroactively establish readiness at the time of breach. The absence of pre-suit notice, failure to demonstrate financial capacity, and two-year delay in filing suit further weakened the plaintiff’s case.
Regarding possession, the Court invalidated Ex-A.3 (Adangal extract) as inadmissible under Section 65B of the Indian Evidence Act and Board Standing Orders, noting that the Village Administrative Officer lacked authority to override official records. The Court also held that Section 53-A of the Transfer of Property Act, 1882, as amended in 2001, no longer protects unregistered agreements, rendering the plaintiff’s possession unlawful.
The Court distinguished between equitable relief and statutory compliance, stating that moral considerations cannot override legal requirements. However, it recognized the defendant’s unequivocal admission of receipt of Rs.7,00,000 and his willingness to return it, invoking Section 22 of the Specific Relief Act to grant a money decree as an alternative remedy.
The Verdict
The appellant won. The Court held that the plaintiff failed to establish readiness and willingness as required under Section 16(c) of the Specific Relief Act, 1963, and therefore denied specific performance. However, in the interest of justice, the Court granted a money decree of Rs.7,00,000 with 6% interest and a charge over the property.
What This Means For Similar Cases
Readiness Must Be Proven Before and During Breach
- Practitioners must now plead and prove financial readiness with bank statements, affidavits, or documentary evidence of funds available at the time of each payment deadline
- Delayed deposits during trial will not cure prior default
- Pre-suit notices expressing willingness to perform are now essential to rebut allegations of non-readiness
Adangal Extracts and Oral Endorsements Are Inadmissible for Possession
- Oral or unverified endorsements in revenue records cannot establish possession
- Certified copies under Board Standing Orders are mandatory for admissibility
- Possession under unregistered agreements cannot be protected post-2001 amendment to Section 53-A of the Transfer of Property Act
Moral Offers Can Trigger Alternative Relief
- Even if specific performance is denied, courts may grant money decrees where defendants make clear, voluntary admissions of receipt and willingness to refund
- This avoids multiplicity of proceedings and aligns with equitable principles under Section 22 of the Specific Relief Act
- Practitioners should always plead alternative reliefs (refund, damages) alongside specific performance
