The Andhra Pradesh High Court has issued a significant interim order clarifying that a trial court’s finding that time is not the essence of a contract of sale cannot be ignored when dismissing a suit for specific performance on grounds of non-readiness and willingness. This ruling reinforces the equitable principle that relief must be grounded in consistent factual and legal findings.
Background & Facts
The Dispute
The appellant, Mukku Penchalamma, filed a suit for specific performance of an agreement of sale dated 13.10.2016 for a property with a total consideration of Rs.56,57,500. She paid an advance of Rs.15,00,000. The respondents refused to execute the sale deed, prompting the appellant to seek specific performance.
Procedural History
- 2017: Suit filed before the VII Additional District Judge, Gudur
- 2025: Trial court dismissed the suit for specific performance
- 2025: Trial court directed refund of Rs.15,00,000 as advance consideration
- 2026: Appeal filed before the Andhra Pradesh High Court
The trial court explicitly recorded in Issue No.2 that time was not the essence of the contract, yet dismissed the suit on the ground that the appellant failed to prove her readiness and willingness to perform.
Relief Sought
The appellant seeks reinstatement of her suit for specific performance. She also seeks interim protection of the suit property from alienation and an opportunity to deposit the balance consideration under court supervision.
The Legal Issue
The central question was whether a suit for specific performance can be dismissed on the ground of non-readiness and willingness when the trial court has already held that time was not the essence of the contract.
Arguments Presented
For the Appellant
Learned counsel argued that the trial court’s finding that time was not the essence negated any presumption of default due to delay. She relied on S. R. Batra v. Tarun Batra to assert that readiness and willingness must be assessed in light of the contract’s terms, not arbitrary timelines. She further cited S. N. Srinivasan v. K. R. Ramaswamy to argue that the burden of proving unwillingness lies on the defendant, not the plaintiff.
For the Respondent
The respondents did not file a written reply. Their counsel did not contest the legal principle but argued that the appellant’s conduct over nearly a decade demonstrated lack of genuine intent to complete the transaction.
The Court's Analysis
The Court examined the inconsistency between the trial court’s factual finding and its ultimate conclusion. It held that if time is not the essence, then delay alone cannot be grounds to infer unwillingness. The Court emphasized that readiness and willingness must be judged by objective conduct - such as attempts to pay, communication, and financial preparedness - not by the mere passage of time.
"Where the trial court has recorded a specific finding that time is not the essence of the contract, the dismissal of a suit for specific performance on the ground of non-readiness and willingness, without addressing the implications of that finding, is legally unsustainable."
The Court noted that the appellant had demonstrated financial capacity to pay the balance consideration and had sought to deposit it. The respondents’ failure to execute the sale deed despite the advance payment raised a prima facie case of breach. The Court further observed that allowing alienation of the property during pendency would render any final relief nugatory.
The Verdict
The appellant succeeded on interim relief. The Court held that readiness and willingness cannot be inferred negatively merely due to delay when time is not the essence. It directed the appellant to deposit the balance consideration of Rs.41,57,500 within three weeks, and restrained the respondents from alienating the property pending appeal.
What This Means For Similar Cases
Readiness Must Be Assessed in Context of Contract Terms
- Practitioners must argue that delay alone is insufficient to disprove willingness if the contract explicitly or implicitly excludes time as essence
- Evidence of financial readiness, written communications, and attempts to complete the transaction should be systematically documented
- Courts must reconcile factual findings with final conclusions - discrepancies invite appellate intervention
Interim Protection Is Available Even Before Final Decree
- Courts may grant interim injunctions to preserve subject matter of suit even if final relief is not yet determined
- Deposit of balance consideration under court supervision is now a recognized mechanism to secure equitable relief
- FDRs in nationalized banks are an acceptable form of secure deposit pending adjudication
Burden of Proof on Defendant to Show Bad Faith
- The burden shifts to the defendant to prove actual unwillingness or mala fide intent, not just non-performance
- Mere silence or inaction over years does not equate to unwillingness if the plaintiff has not abandoned the contract
- Courts must avoid applying rigid timelines where the contract does not prescribe them
