The Punjab and Haryana High Court has affirmed that a plaintiff’s continuous readiness and willingness to perform a contract for sale of land remains a non-negotiable precondition for specific performance, even after a delay of nearly four decades. In a significant ruling, the Court upheld the decree for specific performance while introducing a critical equitable adjustment to balance the disproportionate gain in land value over time.
Background & Facts
The Dispute
The respondent-plaintiff instituted a suit for specific performance of an agreement to sell dated 12.11.1988, concerning 8 bighas 19 biswas of land owned by the appellant-defendant, Surti. The agreement was executed by Hari Ram, acting as attorney for Surti, under a power of attorney. The respondent paid Rs. 10,000 as earnest money and agreed to pay the balance sale consideration on or before 31.01.1989, upon which the sale deed was to be executed.
Key Facts
- The agreement to sell was executed on 12.11.1988.
- The respondent paid Rs. 10,000 as earnest money on the same date.
- The power of attorney in favour of Hari Ram was revoked by Surti via a revocation deed dated 20.01.1989.
- On 31.01.1989, the respondent appeared at the Sub-Registrar’s office in Kharar with the balance consideration, but the vendor did not appear.
- The respondent filed an application (Ex.P2) before the Sub-Registrar on 31.01.1989, which was declined.
- On the same day, the respondent obtained an affidavit (Ex.P3) attested by an Oath Commissioner affirming his readiness and willingness.
- A legal notice (Ex.P4) was issued to the defendants on 01.02.1989.
- The suit for specific performance was filed on 23.12.1989.
- Prior to this, the respondent had filed a suit for permanent injunction on 25.01.1980, which was dismissed on 22.03.1990.
- An alleged compromise (Ex.DW2/A) was purportedly executed on 30.05.1990 between Hari Ram and the respondent, wherein Hari Ram agreed to refund the earnest money and the respondent agreed to withdraw the suit.
- The compromise was never produced in court on the stipulated date (11.06.1990) and no refund was made.
- Surti, the true owner, was not a party to the compromise.
- The respondent’s suit was dismissed by the Trial Court on 04.08.1994.
- The First Appellate Court reversed the dismissal and decreed the suit on 31.01.2005.
- The present second appeal was filed in 2005 and reserved on 13.03.2026, with judgment pronounced on 18.03.2026.
Procedural History
- 12.11.1988: Agreement to sell executed.
- 20.01.1989: Power of attorney revoked by Surti.
- 31.01.1989: Plaintiff appeared at Sub-Registrar’s office; filed Ex.P2, Ex.P3, Ex.P4.
- 23.12.1989: Suit for specific performance filed.
- 25.01.1980: First suit for injunction filed (dismissed 22.03.1990).
- 30.05.1990: Alleged compromise Ex.DW2/A executed.
- 04.08.1994: Trial Court dismissed the suit.
- 31.01.2005: First Appellate Court reversed dismissal and decreed specific performance.
- 06.01.2006: Second appeal admitted by High Court.
- 18.03.2026: Judgment pronounced by High Court.
The Parties' Positions
Appellant (Defendant): Argued that the suit was barred by res judicata, that the power of attorney was revoked before the stipulated date, that Hari Ram had no authority to bind Surti, and that the compromise Ex.DW2/A demonstrated abandonment of the claim. Further contended that enforcing the contract after 38 years would be inequitable due to massive appreciation in land value.
Respondent (Plaintiff): Maintained that he remained continuously ready and willing to perform, as evidenced by his appearance on 31.01.1989, affidavits, and legal notice. Argued that Hari Ram had no authority to enter into any compromise after revocation of the power of attorney, and that the compromise was never acted upon.
Relief Sought
The respondent sought specific performance of the agreement to sell dated 12.11.1988. In the alternative, he sought recovery of Rs. 20,000 with 12% interest per annum. The appellant sought dismissal of the suit on grounds of limitation, res judicata, and inequity.
The Legal Issue
The central question was whether the respondent-plaintiff had established continuous readiness and willingness to perform his part of the agreement to sell, despite the revocation of the power of attorney and the lapse of nearly 38 years, and whether equity permits adjustment of the sale consideration to reflect market appreciation while granting specific performance.
Arguments Presented
For the Appellant
Counsel argued that the respondent failed to prove continuous readiness and willingness, relying on Sangita Sinha v. Bhawana Bhardwaj to contend that mere affidavit or notice cannot substitute actual performance. Emphasized that the compromise Ex.DW2/A, even if executed by an unauthorized agent, indicated abandonment of the claim. Further contended that enforcing the contract after 38 years, when land value had increased manifold, would result in unconscionable enrichment of the plaintiff and gross hardship to the defendant, rendering specific performance inequitable.
For the Respondent
Counsel submitted that the respondent’s actions on 31.01.1989 - appearing at the Sub-Registrar’s office, filing application Ex.P2, obtaining affidavit Ex.P3, and issuing notice Ex.P4 - conclusively established readiness and willingness. Argued that Hari Ram, having lost authority upon revocation of the power of attorney on 20.01.1989, could not bind Surti to any compromise. Contended that the compromise was never acted upon, as no refund was made, and thus could not be relied upon to defeat the claim.
The Court's Analysis
The Court examined the legal requirements for specific performance under Section 10 of the Specific Relief Act, 1963, and the established doctrine that a plaintiff must prove continuous readiness and willingness from the date of the agreement to the date of the decree. The Court found that the respondent’s conduct on 31.01.1989 - appearing with the balance consideration, filing an application before the Sub-Registrar, obtaining a sworn affidavit, and issuing a legal notice - constituted clear, contemporaneous, and credible evidence of readiness and willingness.
"The material available on record clearly demonstrates that the respondent - plaintiff continuously remained ready and willing to perform his part of the contract. He was present in the office of the Sub-Registrar along with the balance sale consideration, and upon the failure of the appellant - defendant to appear, he promptly moved application Ex.P2, got his affidavit attested as Ex.P3, and issued notice Ex.P4, though without eliciting any response."
The Court distinguished Sangita Sinha v. Bhawana Bhardwaj, noting that in that case, the buyer had encashed the refunded earnest money - a clear act of abandonment. Here, no such conduct occurred.
Regarding the compromise Ex.DW2/A, the Court held that Hari Ram, having been divested of authority by revocation on 20.01.1989, could not bind Surti. The compromise was not acted upon, as no refund was made, and it was never produced in court. Thus, it had no legal effect.
On the issue of delay, the Court acknowledged the substantial increase in land value over 38 years. While recognizing that specific performance is an equitable remedy, the Court held that denying it entirely would unjustly enrich the defendant. Instead, to balance the equities, the Court modified the decree to require the plaintiff to pay the balance consideration with interest at 12% per annum from 12.11.1988 until the date of the decree.
The Verdict
The appeal was dismissed. The judgment and decree of the First Appellate Court dated 31.01.2005 were affirmed. The suit for specific performance was decreed, subject to the condition that the respondent-plaintiff shall deposit the balance sale consideration along with 12% interest per annum from 12.11.1988 until the date of the High Court’s decree dated 18.03.2026. Upon such deposit, the appellant-defendant shall execute the sale deed and deliver vacant possession. In default, the respondent may apply for court-executed sale deed. The appellant is restrained from alienating the suit property to any third party. All pending applications stood disposed of by implication.
What This Means For Similar Cases
Readiness and Willingness Must Be Demonstrated Through Concrete, Timely Acts
- Mere assertion in pleadings is insufficient; courts require contemporaneous, verifiable conduct such as appearance at registrar offices, affidavits, and legal notices.
- Affidavits and applications filed on the stipulated date, even if unacknowledged, constitute strong evidence of readiness.
- Delay in filing suit does not automatically defeat readiness if the plaintiff’s conduct remains consistent.
Compromises by Unauthorized Agents Are Legally Inoperative
- A compromise executed by an agent after revocation of power of attorney cannot bind the principal.
- Courts will disregard such compromises if they are not acted upon - no refund, no court filing, no performance.
- The burden lies on the party alleging compromise to prove both execution and implementation.
Equity Permits Adjustment of Consideration in Delayed Specific Performance Cases
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Courts may adjust the sale price to reflect market appreciation if enforcing the original terms would cause gross inequity.
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Interest at market rates (here, 12%) from the date of agreement is a recognized equitable mechanism to balance parties’ positions.
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This approach preserves the remedy of specific performance while preventing unjust enrichment or hardship.
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Practitioners must now advise clients that in long-delayed specific performance suits, courts may impose interest on the balance consideration.
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Evidence of readiness must be meticulously documented - timestamps, receipts, affidavits, and registrar records are critical.
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Compromises involving third-party agents must be scrutinized for authority and actual performance.
